Arkansas Democrat-Gazette, Brooke Anderson
Published August 26, 2005
Arland "Bill" Blanton, a former manager for the W.R. Grace Manufacturing Co. plant in North Little Rock, has been told by his doctor that he has signs of asbestosis, a lung disease, after working with vermiculite for 20 years. Grace mined the material in Libby, Mont., then shipped it across the country, including to several sites in Arkansas.
"No one [at Grace] told us the vermiculite had asbestos. Everyone I know of who took my place at the plant is dead," said Blanton, 88. Most of his former Grace workers died from asbestos-related diseases, he said.
The proposed Fairness in Asbestos Injury Resolution Act of 2005 (U.S. Senate Bill 852), approved by a Senate committee in May, sets up a fund for companies to contribute to compensate asbestos victims and, by precluding lawsuits, to help keep manufacturing companies from having to go out of business.
But compensation awards in Arkansas would not be nearly as significant as those in Libby, even though the company's ore was processed at plants in this state.
Asbestos is still in use, most often for fireproofing and insulation, and has been found to cause cancer and other diseases.
The Columbia, Md.-based Grace, under indictment on a range of criminal charges related to asbestos, refused repeated requests by the Arkansas Democrat-Gazette for a statement.
According to a study by the Environmental Working Group, between 1948 and 1993, Grace sent 64,637 tons of Libby vermiculite to a site in North Little Rock. Vermiculite is a lightweight insulating material that expands when heated.
Grace shipped smaller amounts of the material to Arkansas plants in Nashville, Hope, Pine Bluff and Little Rock. During the 45-year period,
70,048 tons arrived in Arkansas in 826 shipments.
Approximately 730,000 people in the United States filed asbestos-related compensation claims from the early 1970s through 2002, costing businesses and their insurance companies $70 billion, according to a study by the RAND Corp., a nonprofit Los Angeles-based organization.
At least 70 of the companies whose contributions would constitute the $140 billion fund have filed for Chapter 11 bankruptcy reorganization.
COMPENSATION DIFFERENCES
The main beneficiaries from the fund stand to be the people of Libby, Mont., because of the prevalence of asbestos contamination in that area.
The differences in compensation between Libby asbestos victims and those in other states, including Arkansas, are the following: People with noncancerous asbestos disease but no occupational history linking them to the material: Libby residents - automatic $400,000.
Other states - no assistance.
Nonsmokers with asbestoscaused lung cancer, no occupational history:
Libby residents - guaranteed $800,000 to $1.1 million.
Other states - no assistance.
An asbestos worker's family member with noncancerous asbestos disease:
Libby residents - automatic $400,000.
Other states - no ensured compensation; case-by-case review.
Asbestos worker's family member with asbestos-caused cancer: Libby
residents - automatic $200,000 up to $1.1 million depending on type of cancer.
Other states - no ensured compensation; case-by-case review.
In other states, asbestos workers must have advanced noncancerous asbestos disease to receive compensation. Compensation ranges from medical monitoring to $850,000.
Only asbestos workers with mesothelioma (pronounced
messo-the-lee-OH-mah) - a virulent cancer in the lining of the lungs and chest cavity, caused solely by asbestos - would get the same compensation under the bill, with awards of $1.1 million.
"Our main issue is nonworkers outside of Libby getting nothing," said Richard Wiles, senior vice president at the Environmental Working Group, a Washington, D.C.-based nonprofit organization. "Anyone living within 20 miles of Libby gets $400,000 compensation - even if they have noncancerous asbestosis. But people from North Little Rock living within one mile of the plant would not get that same compensation. Why should they penalize people because they're from Arkansas. Why is that fair?"
There is no known limit to the distance that airborne asbestos particles can be carried, says Michael Harbut, co-director for the National Center for Asbestos Cancers at the Karmanos Cancer Institute in Detroit.
In the United States, there are an estimated 10,000 deaths per year from asbestos exposure, and that number is on the rise, according to the Environmental Working Group. In Arkansas, at least 273 people died from mesothelioma or asbestosis caused from the inhalation of asbestos as reported to the federal government from 1979 through 2001.
The federal Environmental Protection Agency says it is difficult to track the sources of asbestos-related diseases. Nevertheless, by 2030, the American Lung Association estimates, asbestos will have caused 60,000 instances of mesothelioma that result in death.
STILL USED IN PRODUCTS
Despite public awareness of the dangers of asbestos, products containing the substance are still manufactured and sold in the United States. Those include brake linings, roofing, pipes, tile and insulation.
The EPA has been trying to ban asbestos since the late 1970s.
On May 22, 2003, the Asbestos Ban Act (SB1115) was reintroduced - the same day the Fairness in Asbestos Injury Resolution Act (SB1125), a similar bill with the same name as the current legislation, was introduced. Both bills died in the Senate. For people in Libby, SB852 is good news because it recognizes the severity of the toxic material in that area, making it relatively simple to qualify for compensation.
Charles Green, spokesman for the Atlanta-based Agency for Toxic Substance and Disease Registry, part of the U.S. Department of Health and Human Services, which is conducting a national asbestos exposure review, thinks Libby could be exceptional. "The environment in Libby is different because the town and the mine are in a valley."
But Harbut said: "This trust fund doesn't have anything to do with science. The bill was developed by lawyers and insurance companies - not doctors. Sen. Bill Frist [majority leader and surgeon] said he wanted to bring everyone to the table, but he didn't invite the sick people and the doctors treating them."
Arkansans should absolutely be compensated as much as anyone else, said Blanton, who worked as manager at the North Little Rock plant from 1951-63.
The story of W.R. Grace's largescale mining and shipments of asbestos is widely known, having generated at least two nonfiction books and two documentaries.
ASBESTOS COMPENSATION FUND
Grace and many other large companies that have processed asbestos would finance the compensation fund.
But a cost estimate study by the Congressional Budget Office released Thursday cast doubt about the fund's solvency. According to the report, "The maximum actual revenues collected under the bill would be around $140 billion, but could be significantly less." The report also stated that the fund's resources "may be insufficient to pay all such claims." Regarding a cost to the federal government, the report estimated that the bill would add about $6.5 billion to federal deficits from 2011-15.
Both Arkansas' U.S. senators say they would support the bill contingent on how it is written.
Sen. Mark Pryor, a Democrat, has stressed that there have been improvements in the first asbestos reform bill in May 2003. "There have been drastic changes in the Senate legislation to make the compensation system more fair, and I am hopeful that this bill will be strengthened further when it is considered this fall," he said in an e-mail sent to the Arkansas Democrat-Gazette.
Sen. Blanche Lincoln, also a Democrat, told the Democrat-Gazette in an e-mail that she has not made a final decision because she is still seeking input from Arkansans. "Companies who are attempting to fairly compensate victims in good faith should not be driven into bankruptcy," Lincoln said in the e-mail.
The Coalition for the Future of Manufacturing has held two "fly-ins" in Washington, D.C., in the past two years to lobby for the legislation and other issues. The coalition's Web site shows a photograph of its members meeting with Pryor in Washington.
VETERANS' SUPPORT
Some veterans groups, including the Veterans of Foreign Wars, support the bill, but advocates for veterans differ over what is the best way to compensate for asbestosis exposure. "We support the bill because it makes sense to us," says Dennis Cullinan, national legislative director for the VFW based in Washington, D.C. "If a veteran gets mesothelioma, he gets money from the trust fund in addition to VA compensation." Cullinan says the VFW passed a resolution supporting the legislation in August 2004.
Yet, Texas-based trial lawyer Roger Worthington says nearly 40 percent of his asbestos clients are veterans. "We continue to sue, settle with and try cases against companies who manufactured and sold to the Navy asbestos,"
says Worthington.
Proponents of the bill say that if the current trend of litigation continues, large companies will be forced into bankruptcy and possibly out of business.
Yet Grace reported that its second-quarter profit increased from two insurance settlements and an 18.2 percent jump in sales.
Grace's quarterly income rose 53 percent to $32.7 million, from $21.3 million in the year-ago period. Revenue increased to $676.5 million from
$572.4 million during the earlier period.
According to a financial analysis by business professor George J. Benston of Emory University in Atlanta on the seven largest companies, including Grace, that filed for Chapter 11 bankruptcy in 2000 and 2001 as a result of asbestos obligations, "each of the seven companies remained profitable after bankruptcy" and "total employment at these companies increased or did not decline materially."
Under the current system, companies that have processed asbestos and have recently filed for Chapter 11 protection must establish their own company trust fund to pay asbestos victims who have filed claims. Under the national plan for asbestos claims, companies would no longer have to create individual trust funds.
"Over 90 percent of those getting paid now will not get paid under the new bill," Little Rock lawyer Ed Moody predicted. "In theory, they won't need lawyers," he said, "but people won't be able to understand [how to use the trust fund] without one, so most won't file."
Under the proposed national plan, lawyers of asbestos claimants would get only 5 percent of the award regardless of the contracts with their clients. Lawyers with private practices normally receive one-third to 40 percent of the award.
The current law allows people who have been exposed to asbestos to make claims before they have gotten sick, while the proposed legislation would only let people sue if they can prove that they already have health problems caused by asbestos.
To meet the medical criteria of the proposed national fund, applicants would have to arrange for and pay for their own medical tests - including breath tests, pulmonary tests, and lung X-rays read by a specialist called a B reader.
'B READER' REQUIRED
"How many laymen will know what a B reader is?" asks Moody, who says he has represented thousands of asbestos plaintiffs since 1978.
The Environmental Working Group's Wiles said, "There will be incredible confusion. The medical criteria [have] been made complicated to minimize claims. This is a public health crisis. We should be helping people."
But those from the Asbestos Alliance, a coalition that includes companies, trade associations and other parties, say the bill would help asbestos victims, large corporations and might only be a disadvantage to trial lawyers - whom they contend have taken too much money from victims and companies in lawyers' fees.
"The asbestos litigation scandal is a $250 billion-$300 billion drag on the companies that are being sued," says Michael Baroody, executive vice president of the National Association of Manufacturers, which leads the Asbestos Alliance. Baroody, who has been advocating an end to asbestos litigation for years, is encouraged by the new piece of legislation. He adds, "I don't know any other legislation that would rival [the asbestos bill] with its positive impact on the American economy."
"It might sound like people are filing claims that shouldn't be filed, but those who've experienced health problems and the loss of loved ones need to be compensated," said John Blakley, now of Jackson Hole, Wyo., an exemployee at the North Little Rock Grace plant. His father, Don, died in 1990 of lung cancer after working at the North Little Rock facility from 1963 to 1986.
John Blakley, who worked at the plant as a teenager in the late 1970s, said his doctor has told him he has signs of asbestosis on his lungs. Under the proposed trust fund, Blakley and his family would not be guaranteed compensation, including his mother, who also has asbestosis spots on her lungs after washing the family's asbestos dust-covered clothes for over 20 years.
"It's scary," says Harbut. "If this law passes, it will be the first time the federal government will have developed criteria for diagnosing a disease."
