Testimony on Asbestos Litigation

Testimony on Asbestos Litigation
September 22, 2002

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)

September 23, 2002


Sen. Patrick Leahy

Chairman of the Committee on the Judiciary

United States Senate

224 Dirksen Senate Office Building

Washington, DC 20510


Dear Chairman Leahy:

The following comments are submitted to the Senate Committee on the Judiciary as testimony for the Committee’s meeting scheduled for September 25, 2002 on asbestos litigation. Please make these comments part of the official record of that meeting.

I am the managing editor of Environment & Climate News, a monthly newspaper published by The Heartland Institute, a nonprofit organization based in Chicago. The following testimony is based on research I conducted while working on a news story that ran in the July 2002 issue of E&CN. The story was prompted by the role asbestos played in the collapse of the World Trade Center twin towers. Now that clean-up efforts at the twin towers are completed, it is appropriate to turn our attention to the legal crisis asbestos litigation has created and what should be done to end it.


The most effective fireproofing

In the 1940s, the late Herbert Levine invented spray fireproofing with wet asbestos. A remarkably strong flame retardant, asbestos was used to insulate steel building materials, and particularly floor supports, from melting in the event of a fire. Asbestos treatment made steel construction safer and more affordable for everything from school buildings to large office towers.

Asbestos was widely acclaimed for its fire safety qualities until the 1970s, when asbestos workers began reporting illness after long exposure to asbestos fibers. Lung cancer was the most serious condition allegedly associated with asbestos exposure.

As concerns mounted, the material was used less and less frequently, culminating in the Asbestos Hazard Emergency Response Act of 1986. Under the Act, the Environmental Protection Agency (EPA) has supervised the mandatory inspection and removal of asbestos from hundreds of thousands of U.S. buildings.


Jumping ahead of science

As is often the case with environmental scares, the asbestos “cure” was pushed well ahead of a complete diagnosis. Research has confirmed that asbestos workers who do not use protective breathing apparatus suffer increased health risks. For the remaining 99+ percent of the U.S. population, however, asbestos health risks are virtually nil.

Asbestos products that do not emit airborne dust particles pose no risk to human health. Persons who do not work directly with asbestos installation breathe in a very limited amount of asbestos, even when they spend significant amounts of time in buildings with asbestos insulation. Moreover, 90 percent of airborne asbestos fibers take on a curly chrysotile form that is easily intercepted by the body’s defense mechanisms before penetrating the lungs.

Rhodes College professors Ben Bolch and Harold Lyons, in their book Apocalypse Not , note the risk to schoolchildren from airborne asbestos is perhaps one-thousandth the risk entailed in receiving a whooping cough vaccination.

Even among asbestos installers, the health risk is directly correlated with the unrelated act of smoking. A 1990 study published in Science surveyed 17,800 installation workers with mixed fiber exposure. Of this total, 471 (2.65 percent) were found to have developed lung tumors. Of these 471, 467 (99.17 percent) were smokers, and only four were nonsmokers. Keeping in mind that many smokers and some nonsmokers develop lung tumors regardless of asbestos exposure, the study presents a remarkable picture of exaggerated claims for asbestos risk, even among those few persons most at risk.


Designed to prevent the tragedy

New York City in 1971 banned the use of asbestos in fire insulation. According to Steve Milloy, Cato Institute adjunct scholar and author of the book Junk Science Judo, One World Trade Center was insulated with asbestos, but the 1971 ban meant only the bottom 64 floors of Two World Trade Center were insulated with asbestos. The floors above were treated with a less-effective substitute. After asbestos inventor Levine learned of this, he was frequently heard saying, “if a fire breaks out above the 64th floor, that building will fall down.”

The steel girders of One World Trade Center lasted one hour and forty minutes before collapsing. Two World Trade Center lasted just 56 minutes, roughly half the time of its twin. We can only speculate how many more people would have survived if given another 44 minutes to escape Two World Trade Center. But there is no doubt that building collapse due to catastrophic fire was exactly the calamity asbestos was intended to prevent or delay.


The price is still being paid

The price of the asbestos ban is not merely in the dangers associated with using less-effective substitutes. A flood of asbestos lawsuits is swamping the courts and bankrupting scores of U.S. companies.

According to Roger Parloff of Fortune magazine, more than 200,000 asbestos tort claims are pending nationwide against more than 1,000 corporations. Most of the plaintiffs show no evidence of having been harmed by asbestos exposure, and many of the companies never even made asbestos products. Nevertheless, the plaintiffs are being awarded huge sums of money based on highly speculative future harm, suspect science, and juries’ preconceived notions regarding asbestos.

“Total corporate asbestos liability to U.S. plaintiffs is now expected to reach $200 billion,” notes Parloff.

Actual victims of asbestos exposure will see little of this money. Already 65 percent of the funds generated by asbestos litigation, according to a RAND Corporation study, doesn’t reach the people who are supposed to benefit, but go instead to legal costs. The success of so many marginal plaintiffs is encouraging other marginal plaintiffs to file suspect suits. “At least 43 companies have been driven into bankruptcy,” observes Houston attorney Richard Faulk in the January 2002 Quarterly Journal of Public Policy in Texas. Some of the companies were among America’s most recognizable—including Owens Corning, Celotex, and W.R. Grace.

The unfortunate effect of so many questionable tort awards extends far beyond the bankruptcy of many of America’s landmark companies. Increasingly, firms only tangentially related to asbestos manufacturing are being sued, as so few asbestos makers remain to be sued. Even if asbestos were a significant public health threat, which science clearly refutes, the punishment is being imposed on companies two and three steps removed from culpability.

Furthermore, and perhaps more significantly, the piling-on by plaintiffs with only minimal exposure to asbestos and no apparent health effects has left precious little money for the compensation of asbestos workers who experienced measurable harm.

“The system is bad for almost everyone involved,” maintains Faulk, “particularly the sick
claimants. Absent some changes in the way asbestos claims are resolved, claimants who become truly sick in the future may not receive adequate compensation. Changing the current asbestos compensation system would be pro-claimant.”


Legal changes required

Faulk recommends creating a separate docket for persons who have yet to experience any asbestos-related health impairments. Rather than exhausting the system by giving millions of dollars to plaintiffs who will likely never be harmed by their minimal exposure, plaintiffs who can show current health impairments should be first in line in their attempt to show asbestos was the culprit.

Faulk also recommends an end to punitive damages against prior manufacturers of asbestos. “Punitive damages serve to punish a defendant for wrongdoing and to deter others that might engage in similar conduct,” he explains. In asbestos litigation, however, punitive damages serve neither purpose. Fire protection was hardly a pernicious motive, and even if it were, nobody will be manufacturing asbestos anytime in the foreseeable future.

Finally, companies only marginally connected with the manufacture and installation of asbestos should not be liable for alleged asbestos harm. Faulk points out that in Texas, a defendant generally cannot be held jointly liable for tort damages unless the defendant is more than 50 percent at fault. But the state carves out an exception for environmental and toxic tort cases, in which defendants can be held liable for full damages even if they are only 15 percent to blame.


Conclusion

While the collapse of the twin towers brought asbestos temporarily into the spotlight, sound science and a sense of justice demand we not forget the full range of lessons to be learned. Congress can and should intervene to fix a situation that currently fails to render justice to any of the participating parties, but that imposes a huge and growing cost on consumers and businesses.

Faulk and other experts have identified the outline of reform. Limit litigation to real victims and companies with direct involvement in the manufacture of asbestos products, and limit or prohibit punitive awards. Creation of a trust fund financed by private corporations has also been proposed and merits consideration.

Congress, plainly, must act to end the asbestos liability crisis. I hope this meeting is a small step in this direction.

Sincerely,


James Taylor

Managing Editor, Environment & Climate News

The Heartland Institute

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)