Press Release
CPMV Remains Opposed to Specter Bill, Despite Changes
Senate Encouraged to Vote Against Asbestos Bill
WASHINGTON, D.C. — The Committee to Protect Mesothelioma Victims (CPMV) adds its voice to the AFL-CIO in remaining strongly opposed to U.S. Sen. Arlen Specter's asbestos trust fund bill, as currently amended. The Committee laid out its points of contention today in a letter to Senators Specter and Leahy, as the Senate prepares to consider the legislation.
The amended bill that will soon be considered by the U.S. Senate will take asbestos victims' claims out of the court system and force them into a federal trust fund. The latest bill, voted out of committee yesterday, came as a result of months of negotiations among stakeholders, but is far from getting a consensus.
The CPMV agrees with Sen. Specter and others that federal legislation is necessary to deal with the high volume of litigation stemming from asbestos poisoning across the country, but adds that the "trust fund" approach advocated by Sen. Specter falls short in many areas — particularly in its ability to fairly compensate the sickest victims of asbestos poisoning.
In its letter to Specter, Chairman of the Judiciary Committee, and Leahy, Ranking Member, the CPMV notes that the bill is unfair because: it fails to provide adequate total and start-up funding to guarantee that all victims are fairly and fully compensated in a timely manner; it will leave out lung cancer victims with any history of smoking; it does not provide enough transparency where the public will be able to determine that corporations at fault are paying an appropriate amount into the fund; most victims of environmental and neighborhood exposure will not be treated fairly; pending claims will be pre-empted and previous settlements may be eliminated; and the exposure criteria for victims remains unfair, among many other reasons.
In the letter, Susan Vento, Chairperson of the CPMV and wife of the late Congressman Bruce Vento, who died of mesothelioma, says, "The problems with your legislation represent the difficulties with the trust fund approach and reflect an inappropriate way to resolve the asbestos lawsuit crisis. It is an attempt to transform a complex judicial system into a singular federal bureaucracy, while taking away victims' constitutional right to seek legal recourse."
The group plans to do all that they can to inform the public of the bill's unfairness and to stop its passage (see letter below for details).
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Text of May 27, 2005 Letter to Senators Specter and Leahy on Proposed Draft Asbestos Compensation Legislation:
May 27, 2005
Honorable Arlen Specter, Chairman
Senate Committee on the Judiciary
224 Dirksen Senate Office Building
Washington, D.C. 20510
Honorable Patrick J. Leahy
Ranking Minority Member
Senate Committee on the Judiciary
152 Dirksen Senate Office Building
Washington., D.C. 20510
Dear Chairman Specter and Senator Leahy:
I am writing to you on behalf of the Committee to Protect Mesothelioma Victims (CPMV) regarding the asbestos reform legislation (S. 852) that was reported by the Senate Judiciary Committee on May 26, 2005. You frequently noted during the Committee's markup that the bill's central purpose is to ensure that mesothelioma and other seriously impaired persons of asbestos-related diseases are fairly compensated and done so in a timely fashion. CPMV represents the tens of thousands of persons who have contracted and are suffering from mesothelioma. Therefore, I am certain that you value and can appreciate our views about the legislation.
When the Senate Judiciary Committee began its markup of S.852, we wrote to you expressing our disappointment with the legislation. We believed at that time the bill fell far short of meeting its stated goal of providing efficient and fair compensation to asbestos victims. We had hoped that the markup proceedings would be used to correct these shortfalls. We believe, however, based on the bill that has been reported, the proceedings not only failed to improve upon the legislation for victims — but in almost every aspect of the bill — has made it worse for victims.
Our specific concerns are as follows:
We believe that the proposed funding of $140 billion over 30 years is insufficient to guarantee that victims will be fairly compensated. This includes a wholly inadequate amount of up-front funding concerning the first five years. The proposed $42 billion for this period is well below what will be needed to meet the award levels in the bill itself. And it is important to note that we believe those proposed award levels are too low to ensure sufficient compensation for victims. The predicted medical cost of asbestos diseases alone is expected to be several times the overall and up-front funding figures.
The funding levels are obviously based on the most minimal prediction of those who might seek compensation from the fund. We do not believe that this is a rational projection. The history of previously judicially or legislatively created trusts, including the Manville Trusts and Black Lung Fund, demonstrates that claims always substantially exceed initial projections and funding limits. Obviously, this occurs because the businesses pursuing the Funds always seek to set the projections, and in turn, their payment obligations, as low as possible. This helps to reduce their costs in the short term, leaving open the possibility that if there are shortfalls, the program can be reformed to reduce eligible recipients or the government will bailout the program. This was the history of the Black Lung Fund, which cost taxpayers tens of billions of dollars. Because the number of asbestos victims is ten times the number of black lung victims, the Black Lung Fund bailout would pale in comparison to an Asbestos Compensation Fund bailout. We do not believe that this burden should be placed on Federal taxpayers. The obligation to provide adequate funding for the trust fund mechanism rests with the companies that caused the problem and are seeking the legislation.
The legislation continues to lack needed transparency of company obligations and payments. It is important that victims know which corporations are at fault and what amounts they are paying into the fund. This bill has yet to solve the issues of transparency. Without full disclosure of the funding scheme, any trust fund legislation remains irresponsible. Currently there is no definitive list of defendants paying into the fund, so it is unclear how the legislation's sponsors plan to raise the $140 billion they have promised.
In addition, several small businesses have objected to the proposal because they would have to contribute to the Fund while losing their insurance coverage. Meanwhile, large businesses may pay less to the Fund, while keeping their insurance. It was recognized by several Members at the Committee's May 26, 2005 session that there is going to be substantial litigation from businesses over this issue. This raises even more doubt as to whether the proposed $140 billion of overall funding and proposed $42 billion of up-front funding will be raised, notwithstanding the inadequacy of these funding amounts to provide fair and full compensation to victims.
The legislation includes provisions to allow for massive Federal borrowing. Because of the funding levels set in the bill are insufficient to meet the compensation levels set in the bill itself, the strong likelihood that projections will far exceed these funding levels, and a lack of transparency and the enormous business goals, this legislation will cause massive federal borrowing. It is estimated that the borrowing will be from $40 to $50 billion within the first 5 years, and every dollar spent on interest is less money allocated to victims. Ironically, this borrowing authority has been included because of the major doubts the sponsors themselves have about the ability of the Fund to meet its necessary funding targets and for enough money to be available to compensate victims. Even worse, it is very likely that the Fund will never be able to repay the funds borrowed, and consequently, the Federal Government will be stuck with the bill.
The restrictive exposure criteria in the bill are potentially going to leave hundreds of thousands of victims without any means of recovery or recourse. This includes unsound dates for weighted occupational exposure criteria. Some include 15 years of exposure, while others include 12 years. Some include exposures before 1976, and others before 1986. These assumptions are arbitrary. No one can assume that exposure during any one time period was worse than that in any other.
Why should those who worked at a plant years ago be treated any differently than those who work in the same environment today? Why should a drywaller or painter who installed drywall prior to 1976 be treated any differently than the same tradesman who removes it today? Why should someone who built the World Trade Center be treated any differently than someone who breathed in asbestos after its destruction? Additionally, the bill makes an exception for Libby, Montana to ensure the criteria do not keep Libby victims from receiving compensation. Yet there are reports of numerous other communities where innocent people have potentially been harmed by neighborhood contamination. The Libby language must be applied to ALL neighborhoods contaminated by asbestos and not just to one area of the country.
We are also concerned about pending claims being removed from the court system and forced into the trust fund. Individuals would be forced to start the process over and shift their efforts to seek recovery from the new federal program. This will cause many financial and time-consuming setbacks for victims who have very little time left.
Although the legislation provides certain exemptions on pending claims — in the event the new system is not operational after 180 days for mesothelioma victims — we believe that there are two major problems with the exception. First, the threshold for meeting the operational requirements are very minimal and the time period given to accomplish them, six months, is too extensive for persons with mesothelioma who may not have that long to live. Second, even if a claim meets the exemption, it is returned to the tort system as a new claim, meaning the litigant has to go to the back of the line and start the litigation process all over again, absent any recovery for the costs and delays that the trust fund system would have imposed on them.
We also have concerns about the sunset provision, which intends to move claims from the trust fund back into the court system when the fund goes bankrupt. The Administrator will be given the opportunity to develop more restrictive criteria to keep the trust fund from failing. The legislation does not have a self-executing sunset, like the Biden amendment, when the fund becomes bankrupt. Instead, the legislation provides the Administrator with a number of victim-unfriendly alternatives to ending the program. The bill requires the Administrator to suggest tightened medical and exposure criteria, elimination of medical screening and monitoring as well as reduction in awards. These measures would have the effect of watering down or even eliminating compensation for victims. Such alternatives put bill supporters in the position of agreeing in advance to a system of diluted compensation that they would never agree to at the enactment stage.
The latest draft has eliminated smokers or Level VII (under S. 1125 and S. 2290) lung cancer claims. Workers with millions of asbestos fibers in their lungs and over15 years of asbestos exposure will not be able to file claims with the trust or in court. Some critics claimed the original Level VII cancer claims converted the legislation into a smoker's compensation bill. Sen. Specter has not only excluded smokers and ex-smokers within this group, but he has also prevented non-smokers with lung cancer from obtaining compensation.
It is the medical consensus that people with heavy asbestos exposure are at a substantially increased risk of lung cancer, regardless of whether they also have asbestosis or pleural disease.
The "one size fits all" approach to mesothelioma compensation under the bill will result in a grave injustice to many asbestos victims. New, radical treatments offer these victims a chance for extended life and cost as much as, or more than, the scheduled award. The court system currently allows these victims to require the asbestos companies to pay all of the cost of this treatment, plus other losses they have suffered.
The problems with your legislation represent the difficulties with the trust fund approach and reflect an inappropriate and inefficient way to resolve the asbestos lawsuit crisis. It is an attempt to transform a complex judicial system into a singular federal bureaucracy, while taking away victims' constitutional rights to seek legal recourse. The trust fund approach has failed to satisfy many important principles, and we believe that it will be impossible to solve the asbestos lawsuit crisis through a national trust fund policy.
Accordingly, the CPMV urges Congress to consider other policy options as an alternative to the trust fund approach to asbestos reform that would provide a fair solution for victims. This bill is a bailout for the large corporations at fault while harming asbestos victims, workers, small businesses, and eventually taxpayers.
The CPMV greatly respects the work you, personally, and the Committee, as a whole, have done on this issue, but we cannot embrace this legislation because it is simply unfair to victims. This is a very complex issue that the Senate is working to resolve. We do not believe that the revised legislation can adequately compensate victims or serve as an appropriate resolution. In this regard, we propose that you, and the Senate as a whole, consider an alternative solution to the asbestos lawsuit crisis. We welcome the opportunity to work with you and the U.S. Senate to come up with a fair solution.
Sincerely,
Susan Vento
Chairperson
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The Committee to Protect Mesothelioma Victims (CPMV) is an organization founded by asbestos victims and their families and friends. CPMV works to raise awareness on national asbestos issues and ensure that victims' rights are properly represented and protected on both a local and national level. For more information, www.asbestostruth.org.
