Asbestos Bill to Pass Senate Judiciary Committee

Below are the statements of Senator Kennedy, a member of the Sentate Judiciary Committee , in which he urges his fellow Senators to vote "NO" on the FAIR Act/Asbestos Bill of 2005.

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STATEMENT OF SENATOR EDWARD M. KENNEDY AT HEARING ON ASBESTOS LEGISLATION

Senators Specter and Leahy have devoted an enormous amount of time and effort to negotiating this revised Asbestos Trust Fund legislation. They deserve great credit for their work. But, the bill before us still contains serious flaws, which make it both unfair and unworkable. It does not provide a reliable guarantee of just compensation to the enormous number of workers who are suffering from asbestos-induced disease.

The problem is that powerful corporate interests responsible for the asbestos epidemic have fought throughout this process to escape full accountability for the harm they have inflicted. The Republican leadership has given these corporate wrongdoers a virtual veto over the terms of this legislation. As a result, the focus has shifted from what these companies should pay victims to what they are willing to pay them. That is preventing the Senate from enacting Trust Fund legislation that will truly help the workers who have been seriously injured by this industrial plague.

The real crisis which confronts us is not an "asbestos litigation crisis," it is an asbestos-induced disease crisis. Asbestos is the most lethal substance ever widely used in the workplace. Between 1940 and 1980, there were 27.5 million workers in this country who were exposed to asbestos on the job, and nearly 19 million of them had high levels of exposure over long periods of time. That exposure changed many of their lives. Each year, 10,000 of them die from lung cancer and other diseases caused by asbestos. Each year, hundreds of thousands of them suffer from lung conditions which make breathing so difficult that they cannot function at all.

Even more have become unemployable due to their medical condition. And, because of the long latency period of these diseases, all of them live with fear of a premature death due to asbestos-induced disease. These are the real victims. They deserve to be the first and foremost focus of our concern.

All too often, the tragedy these workers and their families are enduring becomes lost in a complex debate about the economic impact of asbestos litigation. We cannot allow that to happen. The litigation did not create these costs. Exposure to asbestos created them. They are the costs of medical care, the lost wages of incapacitated workers, and the cost of providing for the families of workers who died years before their time. Those costs are real. No legislative proposal can make them disappear. All legislation can do is shift those costs from one party to another.

Any proposal which would shift more of the financial burden onto the backs of injured workers is unacceptable to me, and it should be unacceptable to every one of us.

The legislation before us would close the courthouse doors to asbestos victims on the day it passes, long before the Trust Fund will be able to pay their claims. Their cases will be stayed immediately. Seriously ill workers will be forced into a legal limbo for up to two years. Their need for compensation to cover medical expenses and basic family necessities will remain, but they will have nowhere to turn for relief. Even those victims who have less than a year to live will be forced to stop their cases for nine months. Nine months is an eternity for those with only a year to live. Many of them will die without receiving either their day in court or compensation from the Trust Fund.

Experts tell us that the Asbestos Trust created by this legislation is seriously underfunded. It is $13 billion less than the amount provided in the Committee's 2003 legislation, even though many of the award values have been increased. The funding plan in this bill relies on very substantial borrowing in the early years as the only way to pay the flood of claims. The result will be huge debt service costs over the life of the Trust that could reduce the $140 billion intended to pay claims by 40% or more according to testimony we will hear today. The amount remaining would be far too little to pay claims to cover all of those who are entitled to compensation under the terms of the bill.

In addition, there is a strong constitutional argument that the existing bankruptcy trusts cannot be forced to turn over all their assets, which will place $7.6 billion in jeopardy. Many companies are also likely to challenge their obligation to finance the Asbestos Trust. It is not at all clear how much will actually be available to pay eligible victims what the legislation promises they will receive.

There is likely to be a serious shortfall in the early years, when nearly 300,000 pending cases will be transferred to the Trust for payment. The Trust may not have the resources to pay those claims in a timely manner. Payments to critically ill people may be delayed for years.

One way to reduce the enormous financial burden on the fund in the early years would be to leave many of those cases in the tort system, especially cases which were close to resolution. That would be fair to the parties in those cases and it would greatly improve the financial viability of the fund. Unfortunately, that proposal has also been rejected.

If the Trust Fund does become insolvent, a very real possibility, workers will not have an automatic right to immediately return to the court system. The process outlined in the current bill could take years. Workers could end up trapped in the Trust with reduced benefits and long delays in receiving their payments. There needs to be a clear, objective trigger -- inability of the Trust to pay a certain percentage of claims within a set period of time -- that will automatically allow victims to pursue their claims in court if the Trust runs out of money. The Committee's 2003 legislation contained such a provision, but this bill does not. We cannot allow seriously injured workers with valid claims who are not paid in a timely manner by the Trust to be denied their day in court. That would be a shameful injustice.

I am particularly upset by the change in the way lung cancer victims are treated. Under the medical criteria adopted by this Committee overwhelmingly two years ago, all lung cancer victims who had at least 15 years of weighted exposure to asbestos were entitled to receive compensation from the Fund. That provision remained in every draft of the bill written since, until the Specter-Leahy legislation introduced last week. Under this bill, lung cancer victims who have had very substantial exposure to asbestos over long periods of time are denied any compensation unless they can show asbestos scarring on their lungs. The Committee heard expert medical testimony that prolonged asbestos exposure dramatically increases the probability that a person will get lung cancer even if they do not have scarring on their lungs. Deleting the "Level VII" category will deny compensation to approximately forty thousand victims suffering with asbestos-related lung cancers. Under the legislation as now drafted, these victims are losing their right to go to court, but receiving nothing from the Fund. How can any of us support such an unconscionable provision?

This bill also tampers with the agreed-upon medical criteria by raising the standard of proof for each disease category. The new language requires the workers to prove that asbestos was "a substantial contributing factor" to their disease, instead of just "a contributing factor." This is a major increase in the burden workers must overcome to receive compensation. It is significantly higher than most states currently require in a court of law. Rather than having to show that asbestos exposure contributed to their illness, they will now have to address the relative impact of asbestos and other potential factors. This change is a serious step in the wrong direction, raising the bar even higher on injured workers.

While this legislation does contain some improvements -- increasing some compensation values, protecting workers from subrogation, and providing medical screening for high-risk workers -- they are outweighed by the bill's weaknesses.

This is a bill that shifts more of the financial burden of asbestos-induced disease to the injured workers by unfairly and arbitrarily limiting the liability of defendants. It does not establish a fair and reliable system that will compensate all those who are seriously ill due to asbestos. It lacks a dependable funding stream which can ensure that all who are entitled to compensation actually receive full and timely payment. These are very basic shortcomings.

We cannot allow what justice requires to be limited by what the wrongdoers are willing to pay. Unless substantial improvements are made to the legislation at the Committee's markup, I intend to vote "no" and I urge my colleagues to do the same.