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Asbestos Trust Fund Bill (SB 852) Bogged Down

To:

RGW, PC Clients, Former Clients, Family, Friends and Advocates

Fr:

Roger G. Worthington

Dt:

April 29, 2005

Re:

Asbestos Trust Fund Bill (SB 852) Bogged Down

Momentum is everything, and right now the asbestos trust fund bill has hit the skids. Sen. Spector wanted the bill to exit the Senate Judiciary Committee so it could eventually go to the senate floor for debate and a vote. But after senators offered up 82 amendments, the judiciary bogged down after only a few hours. They will take up argument on May 12th.

Several key developments have given opponents of the bill reason to smile.

Sen. Diane Feinstein (D-CA), a co-sponsor of the bill, has offered three amendments which would effectively undermine the business friendly bill. First, Feinstein wants to ensure that mesothelioma patients get compensated within 3 months. Feinstein has now acknowledged that at least in California the tort system is not broken. In California, claimants with mesothelioma (and other life-shortening diseases) can obtain a trial setting with 120 days, as long as they produce a doctor's letter in support. We provided the senator with court orders granting expedited trials on three of my mesothelioma clients, along with medical affidavits from Dr. Cameron (UCLA) and Dr. Vallieres (Seattle). Now the Senator understands that by supporting SB 852 she would be doing a great disservice to her own constituents, who would have a much greater likelihood of obtaining much greater compensation much sooner than under the monolithic and mythic asbestos trust fund. Feinstein said her amendment to ensure fast track compensation was a "deal breaker."

In addition, Sen. Feinstein now wants to mandate that manufacturers and insurance companies must publicly disclose how much they owe and their timetable for payment before the government can abolish lawsuits currently pending in the tort system.

Finally, sending a message that she understood the 306 page bill is fraught with constitutional defects, Sen. Feinstein proposed a fast track schedule for sending the bill straight to the U.S. Supreme Court to review the legality of having the U.S. Government essentially "take" the money now set aside by several asbestos settlement trusts (e.g., Manville, Eagle Picher, Celotex, National Gypsum) for use by the new federal trust. [Manville has projected the combined future value of pending Chapter 11 asbestos bankruptcy trusts to exceed $65 billion; most of which would be confiscated by the federal trust; see Slide 17). This amendment was granted.

Sen. Dick Durbin (D-IL) offered an amendment which gives the widows and widowers of mesothelioma patients who pass away the right to continue to pursue the claim started by their husbands or wives. Sadly but tellingly, the bill proponents strongly opposed this measure aimed at helping care for widows and orphans. Durbin was upset that asbestos-injured patients had not been invited to the hearings. "This is about more than money, it's about fairness. It's about innocent people" who were unknowingly exposed to asbestos. Sen. Durbin recognized mesothelioma survivor Paul Zygielbaum, who traveled to DC to lobby against the bill (and he did a super job, way to go Paul!).

Sen. Feingold (D-WI) and Kennedy (D-MA) continue to oppose the bill. Feingold said he didn't vote for the bill two years ago and because SB 852 was worse in many respects, he would not support a bill that failed to adequately and fairly compensate victims. Sen. Kennedy condemned the bill for shifting the financial burden of asbestos-induced diseases on the backs of injured workers by unfairly and arbitrarily limiting the liability of responsible companies. "Powerful corporate interests responsible for the asbestos epidemic have fought throughout this process to escape full accountability for the harm they inflicted.''

Sen. Cornyn (R-TX) agreed that the bill was woefully silent on who contributes to the fund and how much. Without that critical information, he agreed nobody could safely assume the trust fund would stay solvent more than a few years. As of now, Cornyn is opposed to SB 852, along with Jon Kyl (R-AZ), Tom Coburn (R-OK), Sam Brownback (R-KS), and Jeff Sessions (R-AL), the so called "Gang of Five." Sen. Kyl said he had concerns about the way the trust fund is "using the heavy hand of government" to interfere with people's rights.

Sen.Kyl also raised the specter that the fund would actually force many small companies into bankruptcy. Small business owners are complaining that the bill is a bailout for the large companies with big asbestos tort liability who have weak insurance coverage, at the expense of smaller companies who have comparatively weaker tort liability but who had the foresight to buy strong insurance coverage. A rob the small but smart to pay the big but stupid ruse.

Neither Sen. Kohl (D-WI) nor Sen. Charles Schummer (D-NY) attended the "mark up" hearing. Sen. Kohl has advised the press that he is undecided on the bill. He is presenting several amendments, including an amendment that would create a national mesothelioma research and treatment program, which would be funded jointly by the NIH and the trust fund. The program would fund 10 research and treatment centers per year at $2.5 million per center per year, create a nationwide clinical registry and tissue/blood bank, and establish a center for mesothelioma education, which would help mesothelioma patients obtain information on treatment options and target research priorities. The program would be funded for 10 years at approximately $30 million per year, for a total projected allocation of $300 million.

Insiders speculate that both Senators Kohl and Schummer will oppose the bill, and we hope that is true. We are certainly grateful, however, for Sen. Kohl's leadership in advocating for a national mesothelioma research and treatment program. We hope that after SB 852 sinks, Sen. Kohl will continue to push his colleagues to appropriate federal funds through the DOD and/or NIH for the program. MARF (www.marf.org) has not taken a public position on SB 852, but MARF does believe that the need to help mesothelioma patients find a cure should be a priority that is not contingent on the passage of federal asbestos litigation abolishment law.

Meanwhile, in the House, a draft of a "medical criteria" bill is circulating in the House of Representatives, sponsored by Rep. Chris Cannon (R-UT). Rep Dick Armey (R-TX) contends that Leahy has moved as far to the right as he can, and Specter has moved as far to the left as he can, but neither has the votes to launch the trust fund bill out of committee. Armey supports the criteria bill, which we are told will have far stricter medical eligibility criteria than SB 852. I have not seen the bill and cannot comment on how it treats mesothelioma claimants. My assumption would be that it would allow mesothelioma patients to pursue their tort remedies in the civil court system, but install numerous procedural roadblocks to make the process as slow, arduous and unpleasant as possible.

"On second thought..." The International Union of Operating Engineers retracted their earlier endorsement of SB 852. "It was a mistake made in haste, without reading it thoroughly. We do not endorse the bill as it is currently drafted," said a union spokesman. The AFL-CIO continues to oppose the bill. The UAW has not retracted its snap endorsement, but we hold out hope that their light bulb will switch on.

The fortune tellers on Wall Street have reacted to the news from Specter's delayed mark-up with gloom. As one business news service put it: "With prospects for final passage in doubt, shares of perennial plaintiffs in asbestos suits sank by close of business Thursday. Armstrong Holdings (ACKHQ) fell 92 cents, or 27.2 percent, to $2.50. W.R. Grace (GRA) fell $1.81, or 16.6 percent, to $9.10. Owens Corning (OWEN) fell 88 cents, or 17.9 percent, to $4.02." USG was also down almost 10% on the news.

Please continue to write letters to the above senators on the Senate Judiciary Committee. In particular, let Sen. Feinstein know that you appreciate her amendments, that you have faith in the California court system, and that you and your family wish to continue to pursue your civil rights. If you live in Wisconsin, please let Sen. Kohl know that you strongly oppose SB 852 and he should, too. We appreciate his concern for the medical plight of mesothelioma patients and the need to fund a cure, but he should vote against the bill and later work towards a separate line item appropriation for a mesothelioma research program.

For more information on how to contact your senators, news on SB 852, sample protest letters and a list of defects in the bill, see Asbestos Advocacy Alert!

In Solidarity There Is Strength!

Roger Worthington

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* From news story on the web: " ADAO Legislative Director Paul Zygielbaum said the award levels in the bill are too low for people who are ill from asbestos exposure. The top award under the bill, at $1.1 million, would barely cover the cost of the medical bills, he said. Zygielbaum, who has mesothelioma, said his most recent surgery cost in excess of $300,000. He said he would likely undergo the same treatment, at the same cost, several times "before I die in two years." Note that we presented medical records to senators for mesothelioma patients ranging from $600,000 to $2 million.

Much of the above was summarized from news reports on the internet.

For a videotape of a TV commercial opposing SB 852 that we have run in several states, including Montana, Nebraska and Arkansas, see http://www.senateproject.com/ (The Senate Accountability Project).

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Here is a letter from Col. James Zumwalt, who father, Admiral Elmo Zumwalt, passed away from malignant mesothelioma in 2000.

Thursday, April 28, 2005

As a veteran who has witnessed the horrors of an asbestos-related disease, I am concerned that the April 19 editorial "Asbestos Milestone" failed to accurately represent the asbestos reform issue being negotiated in the Senate. While I agree with the majority of stakeholders that a federal initiative is necessary to resolve the asbestos crisis, I do not agree with the suggestion that the asbestos trust fund bill sponsored by Sen. Arlen Specter (R-PA) represents what may be the "last, best chance" for Congress to resolve the asbestos litigation crisis. In addition, this editorial failed to recognize the most important stakeholders in the negotiations -- asbestos victims.

In reality, Mr. Specter's bill represents the best chance for Congress to pass a bill that will help corporations and insurers while shortchanging asbestos victims, particularly those suffering from mesothelioma. It is clear that the editorial viewed the bill from a corporate perspective, de-emphasizing asbestos victims' rights to compensation and their constitutional right to pursue claims in court.

The bill would not provide victims with "prompt and predictable payments" but rather would cause them major financial setbacks. They would receive far less than what is needed to cover their medical expenses, loss of wages, and pain and suffering.

This bill may be "significantly better than past bills" for corporations and insurers but not for asbestos victims. They deserve far more than what Mr. Specter is offering them.

JAMES ZUMWALT

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