According to the U.S. Chamber of
Commerce, companies have paid out
an estimated $70 billion on more
than 700,000 asbestos injury claims, making it the most expensive type of litigation
in U.S. history. Rife with fraud and abuse,
the asbestos litigation system is clogged
with questionable lawsuits.
“You may be struck by the tenuous nature
of the connection to asbestos, but it may
nevertheless be real,” says Timothy Batton,
partner at Secrest Wardle. “Size is no deterrent: Fortune 500 companies to mom-andpop hardware stores have been sued.”
Smart Business spoke with Batton about
asbestos liability reform, who can be sued
due to the presence of asbestos and how to
proceed in the event that a claim is filed.
What should businesses know about
asbestos liability reform?
It is important to realize that changes have
been jurisdictional and incremental. On a
national level, all manner of reform has
been attempted, including individual non-bankruptcy class settlements. However, the
U.S. Supreme Court overturned a class settlement in 1999. This decision made it much
more difficult to obtain approvals of such
settlements in a nonbankruptcy setting.
Before that decision, companies with significant exposure to asbestos cases nationwide had to consider bankruptcy in order to
put the cases behind them.
In response to the burden that litigation
was perceived to be imposing on businesses, Congress has repeatedly attempted to
get involved to find a solution. This has
usually involved the establishment of some
sort of national trust fund that would be
designed to compensate each claimant
according to preset criteria. However, the
proposed plans have not been passed into
law. With the failure of national reform,
individual states and jurisdictions have
taken center stage.
How has the landscape of asbestos litigation
in Michigan changed in recent years?
Within the last several years, there has
been an attempt to convince the Michigan
Supreme Court to impose so-called inactive dockets. Asbestos cases can be divided into two categories: asbestotic and
those involving cancer. Under these inactive dockets the asbestotic cases, which
are typically the least injured plaintiffs and
account for nearly 95 percent of the docket, would be rendered inactive. They would
remain so until the more serious cancer
cases have been resolved. Such a plan
shifts the risk of bankruptcy and exhaustion of funds to the less injured plaintiffs.
Although some states have adopted this
approach, it has not been approved in
Michigan.
More recently, the Michigan Supreme
Court has imposed an ‘anti-bundling’ rule,
which prevents trial judges from ordering
more than one case to trial simultaneously.
Previously, several cases could be tried at
once, which translated to increased costs
and risk for defendants.
Who can be sued due to the presence of
asbestos?
The types of companies who find themselves sued by asbestos claimants have
broadened considerably since the litigation’s inception. At first, the defendants
were the major asbestos insulation manufacturers. With bankruptcies and global
settlements, those have gone away. This
has caused plaintiff attorneys to be very
creative in finding and targeting new classes of defendants. They can now include
manufacturers of all types of asbestos insulation or parts, including valves, pumps,
floor tiles, ceiling tiles, fans, automobile
parts and all types of construction materials. Any type of contractor who worked
with asbestos can be sued, whether the
contractor was involved in construction,
repair or maintenance. If your premises
contained asbestos, nonemployees who
worked or visited there may sue you.
In the event that a claim is filed, how should
one proceed?
If your company receives an asbestos
personal injury lawsuit, it is important that
you retain an attorney skilled in this area of
the law. It is vital that you select someone
with experience in the jurisdiction in
which you are sued and who is familiar
with local plaintiff counsel. The complaint
will probably not have much information
and may not even notify you of what products your firm is allegedly associated with
or the form of the alleged liability. It will be
important to perform a full review of company history, operations and records to
determine what, if any, historical relationship to asbestos existed. Your attorney
should be closely involved in this review
and be adept at identifying paths of
asbestos exposures of which you may not
be aware.
It is usually not desirable to seek an early
settlement. For individual cases, the possible settlement amounts can be deceivingly
low. However, entering into those types of
settlements can mark you as willing to settle, motivating plaintiff attorneys to sue
you in many more cases, leading to an
exponential increase in costs and making it
more difficult to extricate you later.
Attention then should be paid to retaining
and developing records that will support a
defense to the claim(s), while your attorney seeks methods of curtailing the filing
of new cases.
TIMOTHY BATTON is a partner at Secrest Wardle. Reach him at (248) 539-2823 or [email protected].
