Mired in asbestos
When Tommy Malot founded an environmental cleanup company five years ago, it made sense to his customers and to his accountant.
Among the Central Point business’ major components was asbestos abatement and removal.
In the years since, Malot discovered even a remote association with asbestos can be financially vexing given the mass of litigation that has piled up for nearly four decades.
Last month, Malot journeyed to Capitol Hill where he asked a Senate panel to support legislation that would establish a $140 billion industry-financed trust fund. The Fairness in Asbestos Injury Resolution Act of 2005 bill by Sen. Arlen Specter, R-Pa., would push tens of thousands of asbestos-exposure claims out of the court system and allow victims to directly apply for compensation.
"We never produced, installed or sold any asbestos related material, and yet even our small, local company has been threatened with the potential of lawsuits," Malot told a congressional committee. "Of particular concern is that the legal system is now focusing on businesses which, like ours, are not responsible for the problem. Yet sympathetic juries are awarding multi-million dollar settlements to individuals who have yet to show any symptoms of any disease."
The bill failed a procedural test by one vote in February, but appears back on its way to the floor according to a March 1 report in CongressDaily AM.
"The threat of getting sued scares small-business owners to even be in this kind of work," Malot said. "We’re in this business to remove product so (customers) don’t injure themselves or anyone around them. If we can’t do it, then people are going to do it wrong and expose others to harm."
Asbestos, made from silicate minerals, is used in many industrial processes because of its fire-resistant properties. Easily inhaled asbestos fibers, however, can cause an incurable cancer called mesothelioma. It can also impair lung function without causing cancer.
During its heyday, asbestos was a standard ingredient in the making of thousands of products including textiles, auto brake linings, insulation and ship hulls.
"I’m regulated so highly by the state and federal government that it’s unbelievable," Malot said. "But if something is done wrong, somebody should pay for it. What I’m trying to do is to get money to people who deserve it."
A RAND Corp. study released in May 2005 found that more than 730,000 people in the United States filed compensation claims for asbestos-related injuries through the end of 2002, costing businesses and insurance companies more than $70 billion.
According to the Cato Institute, the first claims were filed in 1966 and lawsuits against asbestos manufacturers and suppliers shot up in the early 1970s, even as use of the product was phased out.
The RAND report said claimants have received about 42 cents of every dollar spent on asbestos litigation, according to the study, while 31 cents has gone to defense costs and 27 cents to plaintiffs’ attorneys. At least 8,400 entities were named as defendants in asbestos claims through 2002. At least 73 companies named in a substantial number of asbestos claims filed for bankruptcy through mid-2004.
Even companies on the periphery of the industry have been hit hard.
Crown Cork & Seal Co., a Philadelphia bottle cap and can maker with holdings in Oregon, acquired a company with an insulation division in 1963 before spinning it off three months later.
The company said in June 2002, its $7 million investment in Mundet Cork Co. has resulted in an expense of more than $350 million in asbestos-related payments. That was after a Pennsylvania court dismissed 376 pending asbestos cases against the company.
"Crown is simply in the bottle cap and can business," William Gallagher, General Counsel for Crown, told Productiondaily.com in 2002. "Yet, through the technical application of corporate merger successor liability law, thousands of asbestos claims have been filed against Crown because of Crown’s brief connection nearly 40 years ago with Mundet Cork Co., a manufacturer of cork-lined bottle caps that had also owned a small insulation division."
Among the Central Point business’ major components was asbestos abatement and removal.
In the years since, Malot discovered even a remote association with asbestos can be financially vexing given the mass of litigation that has piled up for nearly four decades.
Last month, Malot journeyed to Capitol Hill where he asked a Senate panel to support legislation that would establish a $140 billion industry-financed trust fund. The Fairness in Asbestos Injury Resolution Act of 2005 bill by Sen. Arlen Specter, R-Pa., would push tens of thousands of asbestos-exposure claims out of the court system and allow victims to directly apply for compensation.
"We never produced, installed or sold any asbestos related material, and yet even our small, local company has been threatened with the potential of lawsuits," Malot told a congressional committee. "Of particular concern is that the legal system is now focusing on businesses which, like ours, are not responsible for the problem. Yet sympathetic juries are awarding multi-million dollar settlements to individuals who have yet to show any symptoms of any disease."
The bill failed a procedural test by one vote in February, but appears back on its way to the floor according to a March 1 report in CongressDaily AM.
"The threat of getting sued scares small-business owners to even be in this kind of work," Malot said. "We’re in this business to remove product so (customers) don’t injure themselves or anyone around them. If we can’t do it, then people are going to do it wrong and expose others to harm."
Asbestos, made from silicate minerals, is used in many industrial processes because of its fire-resistant properties. Easily inhaled asbestos fibers, however, can cause an incurable cancer called mesothelioma. It can also impair lung function without causing cancer.
During its heyday, asbestos was a standard ingredient in the making of thousands of products including textiles, auto brake linings, insulation and ship hulls.
"I’m regulated so highly by the state and federal government that it’s unbelievable," Malot said. "But if something is done wrong, somebody should pay for it. What I’m trying to do is to get money to people who deserve it."
A RAND Corp. study released in May 2005 found that more than 730,000 people in the United States filed compensation claims for asbestos-related injuries through the end of 2002, costing businesses and insurance companies more than $70 billion.
According to the Cato Institute, the first claims were filed in 1966 and lawsuits against asbestos manufacturers and suppliers shot up in the early 1970s, even as use of the product was phased out.
The RAND report said claimants have received about 42 cents of every dollar spent on asbestos litigation, according to the study, while 31 cents has gone to defense costs and 27 cents to plaintiffs’ attorneys. At least 8,400 entities were named as defendants in asbestos claims through 2002. At least 73 companies named in a substantial number of asbestos claims filed for bankruptcy through mid-2004.
Even companies on the periphery of the industry have been hit hard.
Crown Cork & Seal Co., a Philadelphia bottle cap and can maker with holdings in Oregon, acquired a company with an insulation division in 1963 before spinning it off three months later.
The company said in June 2002, its $7 million investment in Mundet Cork Co. has resulted in an expense of more than $350 million in asbestos-related payments. That was after a Pennsylvania court dismissed 376 pending asbestos cases against the company.
"Crown is simply in the bottle cap and can business," William Gallagher, General Counsel for Crown, told Productiondaily.com in 2002. "Yet, through the technical application of corporate merger successor liability law, thousands of asbestos claims have been filed against Crown because of Crown’s brief connection nearly 40 years ago with Mundet Cork Co., a manufacturer of cork-lined bottle caps that had also owned a small insulation division."
posted by Chris Placitella | 10:36 AM
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