News Coverage
AFL-CIO Urges Lawmakers To Vote Against Asbestos Bill
Published April 15, 2004
WASHINGTON -- The AFL-CIO said Friday it was strongly opposed to an asbestos litigation reform bill the Senate is scheduled to take up next week.
In a letter to addressed to senators, the powerful union said it was writing to express its "strong opposition" to the measure, which would establish a federal fund to pay asbestos claims, moving them out of the courts.
The AFL-CIO's stance will likely keep the measure from going very far. Any controversial measure needs 60 votes to overcome procedural hurdles, which is difficult in the closely divided Senate. Another powerful group, the Association of Trial Lawyers of America is also opposed to the bill.
Most insurance companies and businesses back the measure, although they aren't unified either. The National Association of Wholesaler-Distributors says its members would be worse off under the measure than under the current system.
The fund of about $114 billion would pay claims filed by people who have been sickened by asbestos, which was once widely used in insulation and fire-proofing materials. Unlike a previous version of the bill, this one would allow a person to sue in federal court if the federal fund were to become exhausted.
The AFL-CIO said the proposed fund is too small and won't be able to cover current and future claims, and it said the amount of money given to people with various asbestos-related diseases is inadequate.
Kim Wallace, chief political analyst for Lehman Brothers, said in a note to clients earlier this month that the bill isn't likely to get far.
"Absent a breakthrough agreement on the size of the fund, this bill remains unlikely to pass this year," he said.
The various parties involved in the asbestos legislation discussions and members of both parties believe that the current system is flawed but they don't agree on how to fix the problem. Litigation surrounding asbestos has grown to envelop companies that never mined asbestos or produced products with it. More than 100,000 court claims were filed in 2003 alone that related to asbestos.
Despite the difficulty in getting a measure approved, the Asbestos Alliance, which represents many companies affected by asbestos litigation, urged lawmakers to try.
"After more than 25 years of trying, we simply cannot afford to let this opportunity pass," said Mike Baroody, chairman of the Asbestos Alliance steering committee and the executive vice president of the National Association of Manufacturers. "We urge Congress to finish the job and pass asbestos legislation."
As part of the Senate proposal, insurers would contribute over the next 27 years about $46 billion. Defendant companies would contribute about $57 billion over the next 23 years. Another $1.5 billion would come from existing bankruptcy trusts. The fund would reach about $114 billion due to investment earnings.
The bill would also create a $10 billion contingency account funded by defendants to provide money in the event the asbestos fund is insufficient to meet claims.
Asbestos has been linked to a particular type of lung cancer and other diseases.