Pennsylvania Record

Wednesday, February 19, 2020

House Judiciary Committee puts off vote on asbestos transparency legislation

By W.J. Kennedy | Jun 8, 2017

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HARRISBURG - The state House Judiciary Committee on Wednesday passed over a scheduled vote on legislation that would require plaintiffs’ attorneys to reveal to a court any claims they intend to make to an asbestos bankruptcy trust involving the same case.

The non-vote in Pennsylvania was similar to one in California in late April in which the Assembly Judiciary Committee there postponed a scheduled vote on asbestos transparency legislation.

In both instances, business officials working for passage of the bills cited the inordinate influence of the trial bar over the legislative process for keeping the bills locked up in committee.

“Even minor attempts to create a little more balance between the trial bar and the business community don’t get considered in the Judiciary Committee,” said Kim Stone of Stone Advocacy, who lobbies for the Civil Justice Association of California.

The Pennsylvania and California bills would prevent plaintiffs’ attorneys from concealing claims made on behalf of their clients to bankruptcy trusts established by companies once targeted by asbestos lawsuits.

Companies not in the bankruptcy trust system that are still being sued would like to be able to use those claims as proof they aren't entirely liable for asbestos-related injuries.  

While the trial bar says its opposition to the legislation is a“victims’ rights” issue (that termed was used by one of the Republican lawmakers on the committee contacted about her opposition to the bill), business officials say the double-dipping reduces the amount of money available for those truly injured.

In Pennsylvania, Curt Schroder, executive director of the recently formed Pennsylvania Coalition for Civil Justice Reform (PCCJR), vowed to move the bill forward.

“In the weeks and months ahead you can expect to see the PCCJR actively leveraging our network to move members and ultimately this legislation,” Schroder said in a statement.

As evidence of the need for the legislation, Schroder cited the recent filing in federal court in Pennsylvania by an Illinois-based sealing and gasket manufacturer against the Philadelphia-based Shein Law Center. The manufacturer, John Crane Inc., is alleging that Shein violated the Racketeer Influenced and Corrupt Organizations Act (RICO) as well as common-law fraud and conspiracy by manipulating the evidence in asbestos cases.

In the complaint, JCI says that Shein concealed evidence in court that would point to who was responsible for their clients' asbestos exposure, but then turned around and cited the evidence concealed in court as the basis for its claims before the bankruptcy trusts.

The case is similar to a 2014 case involving Garlock Sealing Technologies in which a federal judge’s opinion documented what the business community has long argued.

North Carolina bankruptcy Judge George Hodges found that Garlock’s settlements of mesothelioma claims in the tort system were “infected by the manipulation of exposure evidence by plaintiffs and their lawyers.” 

Hodges described an effort by plaintiffs and their lawyers to “withhold evidence of exposure to other asbestos products and to delay filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries from Garlock (and other viable defendants).”

In short, the judge said that the alleged victims had different stories for different venues. The lawyers first targeted Garlock in court, Hodges wrote, then told a different story to the trusts - one that linked the manufacturers with the exposure.

In March, the U.S. House cleared the Furthering Asbestos Claim Transparency (FACT) Act, which would require lawyers to reveal awards from the trusts when pursuing civil action in court. The language in the bill was folded into class action reform legislation. Its prospects in the Senate are unclear.

Ten state legislatures have approved versions of FACT Act legislation.

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