Asbestos has not always been illegal. For many years it was used in numerous products. The book “How Policy Shapes Politics” talks about asbestos was first made illegal.
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In response to calls for legislative action, new reform measures targeting asbestos litigation began to reappear on Congress’ radar. The first serious effort was the Hyde-Ashcroft bill, which (among other thing) proposed to create Asbestos Resolution Corporation (ARC) that would review the medical eligibility of claimants and create an alternative dispute resolution process. Under the bill, claimants could not proceed in court until ARC issued medical certificate and released them from mediation. If claimant received payment from ARC, the Corporation would seek to recover costs from asbestos defendants. This bill failed in part because the publicity surrounding the devastating effects of asbestos in Libby, Montana- the small rural town that was eventually designated a toxic waste site by the EPA- made it difficult to limit access to the courts for asbestos victims, and in part because Congress had little interest in creating an entity that would make medical decisions.
The election of a unified Republican government in 2000 created a fresh impetus for action. A coalition emerged between industry, insurers and plaintiff lawyers like Steve Kezan, who specialized in bringing cancer cases. They came together on what was called “medical criteria” legislation, whose core idea was to give the most sick the highest priority for compensation. The initial momentum of this effort reflected a shift in perceptions about the asbestos problem. According to one interviewee, the perception that any attempt to reform litigation would favor unscrupulous companies was changing. By the late 1990s, litigation often targeted companies that had little to do with concealing health risks, like Pacor, and the plaintiffs were often the “worried well”; claimants who had been exposed to asbestos but had not (yet) fallen ill. meanwhile, Nobel Laureate Joseph Stiglitz and his colleagues published a assessment of the costs of bankruptcies that showed both management and workers financially suffered (Stiglitz et al. 2002). In this environment, where fault did not clearly reside in a handful of reckless companies, it was easier to propose asbestos litigation reform without it being branded a “bailout.”
The medical criteria approach, however had significant policy limitations At its core, it sought to regulate claims by the worried well while allowing other types of claims to proceed. Businesses facing large numbers of lawsuits feared that controlling theses cases would not provide them sufficient certainty over their liability. Others argues that the medical criteria approach had to be joined with significant limitations of forum shopping that would prevent trial lawyers from bringing cases in jurisdiction such as Madison.
Moreover, defendant were growing increasingly concerned about lung cancer suits, which the new bill would not limit their ability to sue in these venues. Moreover, defendants were growing increasingly concerned about lung cancer suits, which the new bill would not limit and, indeed, might facilitate bringing to trial. Finally, lawyers who did not specialize in cancer cases opposed any regulation of their access to the courts, partly because theses lawyers, unlike cancer specialists who tended to brink individual cases, tended to engage in group settlements, which benefited from combining a few cancer cases with claims of unimpaired claimants. IF the worried well could not credibly sue for compensation, this strategy might lose it potency.
Thus the first plaintiff/defendant coalition effort disintegrated, and reform advocates advanced an alternative approach; instead of seeking to regulate the flow of litigation, they sought to replace litigation with bureaucratic compensation program. The 2005 FAIR (Fairness in Asbestos Injury Compensation) Act proposed supplanting the court-bases system of asbestos injury compensation with a 140$ billion federal trust fund that would compensate claimants according to a specific medical criteria and cap attorneys’ fees at 5%.
At least from the perspective of the academic literature the conditions seemed ripe for passing a replacement reform. The literature on legal reform identifies an array of factors that should set the stage for building winning coalition that can overcome expected opposition to tort reform from trial lawyers, who predictably resist any attempt to lessen the flow of litigation that provided their meal ticket. These factors are (a) support from strategically placed policy entrepreneurs, (b) Republican majorities, (c) bipartisan support, (d) judicial calls for legislation, (e) high legal costs and legal uncertainty , and (f) expert consensus on the lack of secondary policy benefits of litigation (see Burke 2002; Hausegger and Baum 1999; Ignagni and Meernik 1994; Campbell et al. 1995; Nolan and Ursin 1995; Elliot and Talarico 1991; Epstein 1988; O’Connell 1979;see also Esterling 2004; Patashnik 2000; Steinmo and Watts 1995). All were present during the 109th Congress(Barnes 2011)
Initially the prospects for reform seemed good. President George W. Bush convened a conference on improving the economy soon after his reelection and, in his opening remarks, the President insisted that a “cornerstone of any good program is legal reform.” he added “I intend to take a legislative package to Congress which says that we expect the House and the Senate to pass meaningful liability reform on asbestos.” Several weeks later, Bush dedicated precious presidential time to visit Michigan and moderate a roundtable discussion specifically devoted to asbestos litigation reform.
keep it on the “front burner” and expressed confidence that “we can get something done.” Senator Arlan Specter (R-PA) echoed this sentiment, reporting that he was “very close” to reaching an agreement on a major reform proposal. Senator Patrick Leahy (D-VT) sounded even more optimistic; “I think we are, very very close to a bill” (Higgins 2005).
It might be tempting to dismiss these statements as cheap talk following an election, and it is probably true that President Bush’s commitment to reform faded over time. Nevertheless, optimism about reform following the 2004 elections was not limited to politicians’ sound bites in the media. Wall Street was also bullish. Stock values of companies with significats asbesto-litigation exposure, such as Armstrong Holdings and Owens Corning, jumped more than 80% at the outset of the 109th Congress (Higgins 2005). Others companies enjoyed a similar boost. From April 1, 2004. When the Senate filibustered a major asbestos reform effort in the 108th Congress, to mid-November 2004 following the 2004 elections when reform efforts regained momentum, stock prices of other major asbestos litigation defendants soared by double digits while the Dow Jones Industrial Average remained relatively flat, gaining about 1.7% (Barnes 2011)
Reform advocates capitalized on this momentum at the start, as Senator Specter managed a bipartisan vote for the bill out of the Judiciary Committee, picking up support from all the GOP senators and three Democrats- Senators Leahy, Feinstein, and Kohl (Stern 2005). Almost immediately, however, opposition emerged (Stern 2006a, 2006b). Conservative Republican Senators, including Senators Cornyn (R-TX), Coburn (R-OK) and Kyl (R-AZ), who voted the bill out of committee, began to question its substance, fearing that Congress would be forced to rescue the trust from insolvency and taxpayer’s expense and create a permanent fixture in the federal bureaucracy. their position was supported by the Congressional Budget Office’s scoring of the FAIR Act, which stressed the difficulty of assessing its final price tag; a Government Accounting Office report on existing federal compensation trusts such as the Black Lung Disability TRust Fund, which emphasized their long history of cost overruns; and report by Bates White, a private consultancy recruited by businesses that opposed the FAIR Act, which predicted that the trust would dissolve within three years and accumulate a $45 billion debt (Hanlon 2006)
Meanwhile, liberal- including Senators Kennedy (D-MA), Feingold (D-WI), Biden (D-DE), Schumer (D-NY), and Durbin (D-IL) on the Judiciary Committee- feared that the FAIR Act was overly restrictive, underfunded, and tilted toward big business. Over time, opposition began to harden on both sides of the aisle (Inside OSHA 2005)