Why FAIR isn't fair

The FAIR Bill, which as of this writing, is currently pending in the Senate Judiciary Committee, deserves some comment. FAIR is the acronym for the “Fairness in Asbestos Injury Resolution” Act, which the committee is working on in an effort to make compensating victims of asbestos-related diseases a more-streamlined process, similar to the “no-fault” workers’ compensation laws.

The problem with the bill, despite its acronym, is that it is anything but fair. It’s not fair to claimants and it’s not fair to industry. In one sense, it’s like treating a migraine with a placebo: “Here, take this, it’ll make you feel better.” The person administering the placebo takes the position that the placebo will work when, in fact, it is entirely unlikely that the placebo will actually solve, or even improve, the problem. In another sense, the FAIR Act is like painting every room in the house orange because they had a sale on orange paint at the hardware store. Sure, the house is freshly painted, but orange doesn’t go with the decor or solve all of the interior design problems.

I know that these analogies may seem simplistic. However, that’s part of the problem with this legislation. It’s too simplistic. It doesn’t look at the realities of asbestos, asbestos claimants, asbestos manufacturers, and companies that, at one time in their history, may have used one form or another of asbestos. Instead, the legislation paints with a very broad brush, coloring everyone with the same tint. All asbestos is the same. All claimants are the same. All companies that every used (or may have used) asbestos are the same. All insurance companies that insure these companies are the same. Thus, one size of legislation fits all. However, as we all know, the world just isn’t that simple.

Now, I’m not going to pretend to be an expert. However, I’ve had some dealings with asbestos litigation in my career. I’ve had the opportunity to research the issues involved in litigating these cases, I’ve had the opportunity to review medical and scientific testimony relating to asbestos-related diseases, and I’m familiar with the motivations of claimants, defendants, and attorneys in prosecuting and defending asbestos claims.

As a bit of background, there’s no denying that “asbestos,” which was once dubbed the miracle mineral because of all of its beneficial uses, found its way into everyday products during most of the twentieth century. Asbestos was used in everything from insulation to welding gloves to cement to fireproofing to joint compound to floor tiles to shingles to brake pads to dining room table covers to, well, the list is practically endless. It is also beyond dispute that certain types of exposure to certain types of asbestos can cause a host of “asbestos-related diseases,” from mesothelioma to asbestosis to lung cancer. As a result, an entire industry based on litigating these asbestos-related disease claims has sprung up and continues to grow to the extent that asbestos litigation has become a serious drag on the courts across the country.

The last information I have is that there are over 730,000 asbestos claims pending throughout the country, with tens of thousands more added each year. All you have to do is watch afternoon television to see the many commercials from law firms soliciting people who may have been exposed to asbestos to understand why this litigation field continues to grow.

Don’t get me wrong. I’m not saying that people who have legitimate asbestos-related diseases shouldn’t get compensated. I’m also not defending those companies that willfully and knowingly subjected their employees to the hazards of exposure to asbestos when the company knew that the exposure was hazardous. However, I am taking issue with legislation that will not solve the problems that plague asbestos litigation in its present form.

Most of the pending claims these days fall into the category of second- and third-level exposures, asserted by claimants who allege exposure to products made by companies that incorporated some form of asbestos into a manufactured item, such as a floor tile. For instance, in some cases, a claimant these days may include in his complaint the assertion that, forty years ago, he remodeled his kitchen and, in doing so, pulled up old floor tiles that the homeowner has come to learn may have contained asbestos. Now that the homeowner has lung cancer, the homeowner blames the manufacturer of the floor tile, even though it’s not at all clear that: (a) the lung cancer was caused by asbestos, or (b) that by pulling up the floor tiles, the homeowner was exposed to enough asbestos to be the cause in fact of his lung cancer. But that doesn’t stop the claim from being asserted, because, to some, the word “asbestos” means “lawsuit,” which translates into “lottery ticket.” The FAIR Act does not really address these types of claims.

In fact, there are several serious deficiencies in the FAIR Act. One of the little secrets of “asbestos,” which claimants and their lawyers don’t like to talk about, is that there are at least nine different types of asbestos and asbestos fibers, all of which are recognized in the FAIR act. They are: chrysotile, amosite, crocidolite, tremolite, winchite, richterite, anthophyllite, actinolite, and amphibole. Although medical experts disagree as to the specific effect of each type of fiber, I am unaware of any disagreement about the fact that the fibers are definitely and distinctly different in many ways, including shape and size, and have different impacts based on the type of exposure, the proximity of the exposure, and the duration of the exposure. Nevertheless, despite these acknowledged differences in asbestos fibers, claimants, their lawyers, and now the Senate in the FAIR Act, all paint “asbestos” with a single brush, perpetuating the notion that all asbestos fibers are the same. They are not.

Another fact about asbestos, or more particularly, the use of it in products, is that different companies and different manufacturers used different types of fibers, depending on the particular application. Some manufacturers processed the asbestos used in its products in such a way that it was not, and could not become, friable (susceptible to easy crumbling) or free-flying. Thus, for example, even if you worked everyday cutting floor tiles that contained asbestos, if the manufacturer processed the floor tiles in an appropriate way, you could not become exposed to any asbestos fibers because the fibers could not be released into the air.

The reality is that not all asbestos products are created equal. The state courts have recognized this fact and have incorporated it into their decisions. The Supreme Court of New Jersey has specifically recognized that “asbestos-containing products are not uniformly dangerous” and thus should not be treated alike. Becker v. Baron Bros., 138 N.J. 145, 154 (1994). The Supreme Court of New Jersey has also specifically held that “asbestos products are not uniformly harmful and thus should not be treated by courts as a monolithic group.” James v. Bessemer Processing Co., 155 N.J. 279, 309-310 (1998). The Supreme Court of New Jersey has also recognized that the term “‘asbestos-containing product’ describes a variety of materials with differing amounts of asbestos and different built-in safeguards.” Becker v. Baron Bros., 138 N.J. 145, 160 (1994).

New Jersey is not alone in its clear and well-reasoned analysis of asbestos and asbestos products. However, the FAIR Act completely ignores the facts about asbestos products. Under the FAIR Act, no matter what product was made, no matter what safeguards were employed, and no matter what proofs exist about the manufacturing process, under FAIR, all asbestos products are treated as “a monolithic group.” The FAIR Act is not premised on fact; it is premised on assumption, speculation and conjecture unsupported by any scientific or medical evidence.

One of the arguments that claimants in asbestos litigation make is that any exposure to any type of asbestos is enough to prove causation of the claimant’s disease. In other words, the mere cutting of a single floor tile that contained any type of asbestos was enough to prove that the floor tile caused the claimant’s condition. However, courts in many states, including New Jersey, have specifically rejected the “exposure = causation” argument. Instead, the state courts require actual scientific or medical proof that the claimant’s particular exposure to the particular product involved was scientifically or medically capable of causing the particular disease complained of. This is the standard of proof required in every other type of tort claim; a claimant must prove that the instrument he or she claims caused his injury did, in fact, cause the injury.

The FAIR act proposed in the Senate eliminates this defense and these proof requirements. If a manufacturer used asbestos -- any kind of asbestos in any kind of product -- there is no defense to a claim. Liability and causation are not issues under the FAIR Act. The manufacturer is automatically required to contribute many millions of dollars to the Fund established under the FAIR Act -- each and every year for thirty years. Thus, even if you are able to scientifically establish that the product that your company made in 1968 was incapable of causing any asbestos-related disease of any kind, you have no defense under FAIR. You are liable, and you will pay.

Under the FAIR Act, all companies that used asbestos must be treated alike. Thus, a company that, from 1960 through 1968, made floor tiles containing a single type of asbestos fiber, which was encapsulated in the floor tile, must be treated the same as another company that mined all types of asbestos fibers from 1920 through 1970, despite scientific proof that would establish that the floor tiles were incapable of causing any asbestos-related disease. Under the FAIR Act, each company that ever used asbestos is liable.

The solution is not a “no-fault,” anyone-who-ever-used-asbestos-is-liable system. The solution is more complicated than that. The solution would require progressive, forward-thinking legislation that could address all of the issues involved in asbestos litigation. For what its worth, here’s a simple proposal.

Start by creating a separate Federal court, much like the Bankruptcy court, with exclusive but limited jurisdiction over asbestos claims. Appoint fifty or so judges, who each have at least five years’ experience in handling asbestos litigation, to the Federal Asbestos Court. All pending asbestos claims must be removed to the Federal Asbestos Court within 120 days of creation of the Court or be forever barred. Preempt all state remedies. Eliminate procedural anomalies, such as the “reverse bifurcation” disaster employed in Pennsylvania. Establish a uniform set of proof requirements for every case. Cap attorney fees at 5% of any award. Require the loser to pay the winner’s attorney fees in Federal Asbestos Court. I suspect that enacting legislation that would incorporate these changes would go much farther towards clearing the court system of baseless asbestos claims, streamlining the process for those claims with actual merit, and protecting the rights of all parties involved, than anything contemplated under the FAIR act.