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Asbestos: The $200 Billion Miscarriage of Justice
February 18, 2002 8:50 AM   Subscribe

Asbestos: The $200 Billion Miscarriage of Justice The original "mass tort" is bringing down companies faster than you can say "Enron." Since January 2000, 16 asbestos defendant companies have filed for Chapter 11 protection, including Owens Corning, Federal Mogul, W.R. Grace, and USG Corp. Here’s a disaster that’s so screwed-up, and gathering such momentum, that "lawyers who represent the truly ill are teaming up with asbestos defendants to demand reform. They fear that the marginally impaired plaintiffs will drive so many defendants bankrupt that the genuinely sick and dying will have no one left to collect from." And if you’re tempted to dismiss this as just deserts for "evil corporations," bear in mind that, like Enron, asbestos defendants are made up of thousands of workers, many of whom staked their future on pensions and company stock: "At the time of Federal-Mogul's bankruptcy filing this past October, all-too-loyal employees held 16% of the company's stock, which had lost 99% of its value since January 1999. About 14% of Owens Corning's shares--which lost 97% of their value in the two years before its filing--were owned by employees. But those employees' losses have thus far gone unbemoaned by Congress." [more inside…]
posted by pardonyou? (26 comments total)

 
The problem is increasing exponentially for two reasons: (1) there are more and more cases being filed on behalf of employees with non-existent or minor conditions, and (2) the pool of defendants keeps shrinking because of the bankruptcies. The (momentarily) solvent companies are left holding the entire bag (and the bag is growing). This, of course, leads to a domino effect of more bankruptcies. Is it in society’s best interest to bankrupt huge corporations, put tens of thousands out of work, and devalue retirement accounts to near-zero, all to compensate thousands of individuals who may never notice ill effects of asbestos exposure? This is a consequence of our tort system, which has its problems, but is perhaps the best possible solution. But this scenario was clearly never envisioned. Should Congress step in and do something before the remaining companies have folded?

In the interest of full disclosure, in another job I briefly represented W.R. Grace (along with dozens of other young lawyers in my firm) in a set of hundreds of lawsuits arising out of a single work location. All of the plaintiffs had seen the same doctor on the same day. In fact, they had been driven by bus to see this doctor. Each of them saw the doctor for less than 5 minutes. All were diagnosed as having “asbestosis.” But few had ever suffered so much as a winded breath in their life. I’ve also represented the good people of Federal Mogul in another context, and seen first hand the hardship that this has caused.

For more on this topic, check out overlawyered.com’s asbestos page.
posted by pardonyou? at 8:51 AM on February 18, 2002


One thing that really interests me is the aftereffect of September 11th. As I recall (I don't have the link at hand), a part of the One and Two World Trade Center towers used asbestos. It was apparently common practice at the end of the 60's, beginning of the 70's when they were built, but the wrapping columns in asbestos stopped when it no longer appeared safe to do that kind of thing.

Since 9/11 created huge clouds of dust and smoke laden with asbestos, the legal implications as they relate to this link are pretty interesting.
posted by ebarker at 9:01 AM on February 18, 2002


ebarker, the city of New York has already been put on notice that as many as 1,700 rescue workers may sue to recover from exposure (although not limited only to asbestos).
posted by pardonyou? at 9:12 AM on February 18, 2002


Aaahhh ... the irony. Wondering what those on the list that insist that "corporate" interests are in direct opposition to the interests of "the people". Here we have "the people" winning against the evil corporations - but it turns out it is simply "the people" in fact badly damaging the lives of another group of "the people".

Remember now, the initial victories in the asbestos situation were considered victories for the poor working man against large selfish corporations. And we now have lawyers trying to help preserve the remaining few companies ... so their gravy train won't entirely end.

Interesting to see one of the central questions Ayn Rand asked unfolding in such a graphic way: What will looters do when there's no one left to loot?
posted by MidasMulligan at 9:13 AM on February 18, 2002


Wondering what those on the list that insist that "corporate" interests are in direct opposition to the interests of "the people".

(sic)

Here we have "the people" winning against the evil corporations - but it turns out it is simply "the people" in fact badly damaging the lives of another group of "the people".

No, here we have a group of plaintiffs winning a questionable lawsuit, and an attempt by you to spin it into yet another Randian homile.

Remember now, the initial victories in the asbestos situation were considered victories for the poor working man against large selfish corporations.

And so they were, to the extent that corporations knew of the dangers and continued to produce and sell a dangerous product up until the moment it ceased to be profitable to do so.

And we now have lawyers trying to help preserve the remaining few companies ... so their gravy train won't entirely end.

Yes we do, dirty, evil, bad lawyers, no argument here. This doesn't change the fact that corporations continued to profit from a product known to be dangerous. Explain, please, how one refutes the other? (And hey, aren't these lawyers just working in their own rational self-interest? What could be wrong with that?)

Interesting to see one of the central questions Ayn Rand asked unfolding in such a graphic way: What will looters do when there's no one left to loot?

Isn't it amazing how everything seems to confirm what you already knew?
posted by Ty Webb at 9:55 AM on February 18, 2002


if there is a problem with out of control damage awards in this country, the problem is not with the tort system. Tort law merely sets out a set of principles that determine whether a person that causes an injury ought to compensate the victim. (e.g. If negligently drop a hammer out of my apartment window and it hits someone on the street, tort law requires that I pay the cost of the victim's injuries.) Tort law has little to say about how much is enough to compensate a victim for their injuries. Rather, tort law leaves that calculation to juries.

The problem is that jurors are extremely sympethetic to victims, particularly when the defendant is a nameless company that probably has insurance and, as far as the jurors know, bottomless pockets. So they tend to overcompensate victims because they feel sorry for them. (of course, nearly all of the more ridiculous awards are overturned or reduced on appeal, but that's another story)

So my question to all you anti-tort people is, why aren't you arguing for the abolishment of the jury system rather than legislative capping of damages and other forms of direct subsidy to the corporations? After all, nobody would seriously argue that there are no cases where companies ought to be forced to compensate people for injuries that they cause, would they?
posted by boltman at 10:11 AM on February 18, 2002


" ... Isn't it amazing how everything seems to confirm what you already knew?"

"Hello pot. I'm kettle. You're black".
posted by MidasMulligan at 10:33 AM on February 18, 2002


boltman, you're kind-of-right-and-kind-of-wrong. There is admittedly a problem with runaway damage awards, but there's also a problem with tort law itself in this context. Specifically, it is impossible to prove who manufactured a particular asbestos fiber that lodged in a particular plaintiff's lung 20 years ago (when that plaintiff may have been exposed to 50 different sources of asbestos). A strict requirement of proof would force the plaintiff to do the impossible -- identify the manufacturer of the asbestos fiber that injured him. But tort law has been interpreted to allow "market liability," whereby all manufacturers that the plaintiff might have been exposed to are jointly liable. When those manufacturers die out, it leaves fewer defendants, and makes the remaining companies' liability totally out of proportion to any damage they could possibly have actually caused.

It also leads to the fun game of 50 lawyers sitting around a deposition table while the plaintiff tries to remember the names of all the products his lawyer told him to say he was exposed to, since he can't recover from any that he doesn't name. It's funny to watch the lawyer's face as the guy sits there trying to remember what he was told to say (cheat sheets aren't allowed).
posted by pardonyou? at 10:42 AM on February 18, 2002


People do die from asbestosis, lung cancer and mesothelioma, but it takes 15-20 years to develop after exposure, and generally those who fall ill are those who worked in clouds of the stuff over a long period of time, or their wives who regularly did their laundry, therefore breathing it in as they handled the clothes.

We all likely have asbestos fibers in our lungs, just from walking on the street and breathing the air that has fibers from brake liniings.

I'm skeptical about transitory exposures, although possibly there were heavy enough exposures in the immediate aftermath of the collapse to cause disease at some time in the future.

The WTC appears to have asbestos-coated girders on the lower floors, then they changed to a non-asbestos coating in that the city banned it during the contruction. This link explains some of the history although I do not vouch for the slant or politics implied in it.
posted by Danf at 10:52 AM on February 18, 2002


Excellent post, pardonyou?...I especially enjoyed the link to overlawyered.com, there is a lot of interesting information there. I never thought about the 'domino' effect of such lawsuits on retirees, etc. and how it can get to the point where no resources are left to pay claims, regardless of their validity. Can this happen to the Tobacco industry, or did that big settlement cover them forever?
posted by Mack Twain at 11:04 AM on February 18, 2002


For a couple of years I worked as a clerk for a law firm here in Seattle. One of their big cash cows was asbestos suits - tons of them from ex-navy men for some reason or another. (Lots of asbestos on those old ships). The interesting thing to me was that our lawyers were always set up to defend the big asbestos companies - so it was never a question of whether the companies were responsible or not - just one of how responsible they were, and how big the individual settlements would be. They (the lawyers) were paid handsomely to lose in the least painful way. I never have seen so much paperwork in my life either (they sometimes subpoenaed things like entire blueprints and government specifications for WWII-era Navy gunships - sheesh!)

I can totally see - from a self-preservation aspect - why the lawyers from all sides would want to preserve the defendant companies.
posted by kokogiak at 11:20 AM on February 18, 2002


Thanks, Mack. The big settlement I think protects tobacco from a lot of huge, mass claims. But it doesn't protect them from individual suits. Most people have had trouble collecting on those suits. However, if they get too many awards like the $3 billion hit they took in June, it doesn't take a mathematician to realize they'll be wiped out sooner rather than later. And not to get on too much of a tangent, but by far the largest portion of that award was "punitive" damages (i.e., punishment). But is it fair for one guy to reap all of the "punishment" for himself, probably to the detriment of anyone who will follow him?
posted by pardonyou? at 11:24 AM on February 18, 2002


As a former OWC shareholder who took a big hit when the stock dropped twenty bucks in one day. I feel both sides of this issue.

Its not that I enjoy watching "evil corporations" punished. However, I do like evil corporations who then go on and make a bad decision to suffer for their bad decision. Not out of a sadistic desire to see corporate barons punished, but out of a (what I think is a reasonable) hope that it will send a strong message to companies in the future.

If we argue that we shouldn't punish to teach a lesson because innocents may be hurt, we'd be letting a lot go, we would simply be ensuring that corporations would make bad decisons. In a way, we would be requiring it -- because any drop in stock value would hurt people.

Also move to strike the Enron comparison. I don't know what the intended rhetorical value of adding an Enron reference to the post is but as Enron involves fraud and these companies were not so accused, I don't see the logic.
posted by brucec at 11:49 AM on February 18, 2002


The interesting thing to me was that our lawyers were always set up to defend the big asbestos companies - so it was never a question of whether the companies were responsible or not - just one of how responsible they were, and how big the individual settlements would be.

I think the real reason for this is that the matter has been settled. The companies were found to aware of the health effects, and did not take actions that would have helped their employees.
posted by brucec at 11:52 AM on February 18, 2002


" ... Isn't it amazing how everything seems to confirm what you already knew?"

"Hello pot. I'm kettle. You're black".


Wow. I just can't argue with incisive rhetoric like that...

While I'm certainly not one of those who "insist that "corporate" interests are in direct opposition to the interests of "the people" ", despite your odd and unsupportable conviction that I am, I responded to your troll bait with specific questions, none of which you answered. Wanna try again?

Also, will those who "insist that "corporate" interests are in direct opposition to the interests of "the people" please speak up, so Midas can give a name to his pain?
posted by Ty Webb at 12:43 PM on February 18, 2002


Just the price of doing business.
posted by Bag Man at 12:50 PM on February 18, 2002


Wow. I just can't argue with incisive rhetoric like that...

Apparently you're unable to argue with any rhetoric, and prefer personal attacks.

" ...While I'm certainly not one of those who "insist that "corporate" interests are in direct opposition to the interests of "the people" ", despite your odd and unsupportable conviction that I am ..."

The "odd and unsupportable conviction" here is that I placed you in that category. Please do show me where Ty Webb was named? Better question is why you would instantly respond as though you are. Very curious.

I responded to your troll bait with specific questions, none of which you answered. Wanna try again?

Hardly seemed worth the time, but ok - Yes we do, dirty, evil, bad lawyers, no argument here. This doesn't change the fact that corporations continued to profit from a product known to be dangerous. Explain, please, how one refutes the other?

Where again did I say that one refuted the other?

(And hey, aren't these lawyers just working in their own rational self-interest? What could be wrong with that?)

Been a long time since you read Ayn Rand, eh? (Though apparently not long enough to have shaken off the apparently deep bitterness you have towards her work). Simply because you produce a crude, childish reduction of Rand into "anyone that works in their own self interest is doing what Ayn Rand said to do" doesn't mean it has anything to do with Rand. Atlas Shrugged draws a pretty clear line between those who produce, and those who help loot those who produce.

Apparently, you are fine with companies being held responsible for their actions, and have no problem with lawyers providing a check on their behavior. Odd that the same concern isn't evident when there is no check on the lawyers behavior.

"Also, will those who "insist that "corporate" interests are in direct opposition to the interests of "the people" please speak up, so Midas can give a name to his pain?"

Worry not little boy, I'm certainly not in any pain - I'm laughing my ass off. This whole situation is nothing but a massive, self-destructive feeding frenzy. The full value system of the anti-corporate crowd being exposed for what it is: As utterly self-serving as the corporations they complain about. And it is posing a classical Rand question: What happens to the looters when there's no one left to loot?
posted by MidasMulligan at 2:36 PM on February 18, 2002


But tort law has been interpreted to allow "market liability," whereby all manufacturers that the plaintiff might have been exposed to are jointly liable. When those manufacturers die out, it leaves fewer defendants, and makes the remaining companies' liability totally out of proportion to any damage they could possibly have actually caused.

but that's only one way of many to calculate damages in these mass torts. a most sensible approach (actually employed in some jurisdictions) is to limit the percentage of a damage award that a plaintiff can get from any one company to the size of that company's market share.

For example:
Company A manufactured 70% of the aesbestos on the market and Company B manufactured 30%. Company A goes out of business. Plaintiff has a claim for $1 million. Under your system, Plaintiff recovers $1 million from Company B. Why not simply limit Plaintiff A's damages from Company B to $300,000? It's not ideal from the plaintiff's perspective, but it protects against the domino effect you are speaking of while still allowing plaintiffs to recover some damages.
posted by boltman at 2:39 PM on February 18, 2002


Please do show me where Ty Webb was named?

Your opening statement was: Wondering what those on the list that insist that "corporate" interests are in direct opposition to the interests of "the people". Even though it was an incomplete statement, I could see what you were trolling for. According to the construction of your statement, anyone who responded would be "those... that insist that "corporate" interests are in direct opposition to the interests of "the people"." Thus, it was correct for me to state that, while responding to your points, such as they were, I don't fall into said category.

Where again did I say that one refuted the other?

Remember now, the initial victories in the asbestos situation were considered victories for the poor working man against large selfish corporations. And we now have lawyers trying to help preserve the remaining few companies ... so their gravy train won't entirely end.

Again, how does the fact that some sheister lawyers are riding the gravy train refute the fact that companies showed criminal negligence in the first place?

Been a long time since you read Ayn Rand, eh? (Though apparently not long enough to have shaken off the apparently deep bitterness you have towards her work).

Would that I thought enough of her work to be bitter about it. But I enjoy playing with her followers, as one doesn't come across that many in the wild.

Simply because you produce a crude, childish reduction of Rand...

...As if anyone could reduce Randism into something more childish than it already is.

Odd that the same concern isn't evident when there is no check on the lawyers behavior.

Um, I was pretty clear above that I disapprove the lawyers' activities. Again: dirty, evil, bad lawyers, no argument here.

The full value system of the anti-corporate crowd being exposed for what it is: As utterly self-serving as the corporations they complain about.

Wow, you got that from an article about asbestos lawsuits? Isn't it amazing how everything seems to confirm what you already knew?
posted by Ty Webb at 3:26 PM on February 18, 2002


I agree with boltman. The disproportionate punishment relative to guilt is the problem. If this was visited upon individuals it would eventually be judged unconstitutional due to the unusual and cruel aspects.
posted by Real9 at 3:50 PM on February 18, 2002


Hopefully in some distant future people will remember that the value of those "big evil faceless corporations" are going to pay for their parents' retirement... hope y'all weren't planning on spending that nest egg moolah on yourselves.
posted by clevershark at 5:36 PM on February 18, 2002


Wow, you got that from an article about asbestos lawsuits? Isn't it amazing how everything seems to confirm what you already knew?

Oh good! My little anti-Rand stalker is back. Again little boy, the pot calls the kettle black. Cozy little world you live in there. Interesting how, in a long post, you manage to say nothing ("Ayn Rand is childish, naner naner naner!" appears to be the best you can do). Even more interesting that you attempt to pass off your now almost continual and immediate personal attacks on anything I write that even mentions Rand as being "oh, I just like playing with them ...".

I think I'll just let your posts - and their fairly clear intentions and emotional undertones - speak for themselves. Careful dude, you're exposing yourself a bit too plainly here ...
posted by MidasMulligan at 7:25 PM on February 18, 2002


I think I'll just let your posts - and their fairly clear intentions and emotional undertones - speak for themselves.

That would probably be a good idea, considering you can't back up any of your objectivist trolls.
posted by Ty Webb at 8:03 AM on February 19, 2002


Thus, it was correct for me to state that, while responding to your points, such as they were, I don't fall into said category.

Indeed, it was, but you continued with:

While I'm certainly not one of those who "insist that "corporate" interests are in direct opposition to the interests of "the people" ", despite your odd and unsupportable conviction that I am, I responded to your troll bait.

Talk about trolling... Your odd and unsupportable conviction that Midas believes you are a member of said group is, well, odd.

Again, how does the fact that some sheister lawyers are riding the gravy train refute the fact that companies showed criminal negligence in the first place?

I dunno to what you're responding, but I'm almost certain it's not Midas' post. Nowhere in his post did I see a suggestion that the lawyers' present behaviour somehow refutes the validity of the initial judgement.

Isn't it amazing how everything seems to confirm what you already knew?
posted by syzygy at 8:55 AM on February 19, 2002


Your odd and unsupportable conviction that Midas believes you are a member of said group is, well, odd.

supported here and here.

Nowhere in his post did I see a suggestion that the lawyers' present behaviour somehow refutes the validity of the initial judgement.

Midas' statement:
Remember now, the initial victories in the asbestos situation were considered victories for the poor working man against large selfish corporations. And we now have lawyers trying to help preserve the remaining few companies ... so their gravy train won't entirely end.

I guess I gave too much credit to what is actually two non- sequiturs strung together.
posted by Ty Webb at 9:23 AM on February 19, 2002


It might be better if you two jokers not converse with each other. You don't seem inclined to agree with any of each other's points, and the repetitive nature of your argument is sort of irritating.

I don't really care who the pot is, who the kettle is, or who's black. If you must continue this ugly and fruitless debate, you might want to do so where the audience truly cares. That would be email.
posted by websavvy at 9:42 AM on February 19, 2002


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