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Ohio Bill Would End Secrecy Over Asbestos Claims

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Asbestos. (Photo credit: Wikipedia)

The Ohio Senate today is scheduled to consider a bill that would end the secrecy surrounding trusts set up by bankrupt companies to pay out asbestos claims. The bill, passed by the Ohio House of Representatives earlier this year as House Bill 380, would require plaintiffs filing a new asbestos claim to disclose all the prior claims they've filed against other trusts.

The bill is designed to end the double-, triple-, and quadruple-dipping that is common practice in the asbestos litigation industry. Plaintiff lawyers -- who typically control the asbestos trusts -- submit claims against multiple trusts on behalf of their clients even if those claims push the limits of plausibility. Defense lawyers say they need access to the prior claims to show that plaintiffs had conflicting theories about how they were injured.

I wrote about one egregious case a few years back that people involved in the legislation say was an impetus for this bill. In that case, lawyers filed a flurry of  claims on behalf of mesothelioma victim Harry Kananian; in one lawsuit he was a shipyard worker, in another he was exposed to asbestos falling from rattling pipes over his berth on a World War II troop ship, and in yet another he got the disease from smoking Kent cigarettes with asbestos-tainted filters that were marketed to women in the early 1950s.

At least one fan in the trial bar thinks I got this one wrong, but the judge in the Kananian case was so incensed by the behavior of lawyers at Novato, Calif.-based Brayton Purcell that he removed them from the case for making "blatantly false" filings.

The Ohio House passed the asbestos disclosure bill in January and Senate testimony is scheduled for today. The bill would require asbestos plaintiffs to make a sworn statement, under penalty of perjury, identifying all existing asbestos trust claims they've filed and all "trust claims material pertinent to each identified asbestos trust claim." The goal is to weed out claims that contradict each other, where workers claim exposure to one industrial product made them sick and then claim another one was to blame, or file work histories that would require them to be in two places at the same time.

Opponents of the bill told Legal Newsline earlier this year that the bill was a bad idea. John Van Doorn of the  Ohio Association for Justice, a trial-lawyer group, said the disclosure rule is an attempt to trim payouts by insurance companies and manufacturers.

“Their efforts are the latest in their campaign to deprive victims of adequate compensation for their astronomical medical costs," he told the publication.

Asbestos trusts are a form of rough justice recognizing the inability of companies to pay the tens of billions of dollars of claims arising from the material. Many of those claims appear to be fraudulent or based on poorly documented medical evidence; smoking, for example, can cause many of the symptoms that plaintiffs blame on asbestos exposure and insurers have uncovered examples of doctors who rubber-stamped thousands of X-rays with asbestosis diagnoses.

Companies swamped with asbestos claims form trusts, typically with trial lawyers in key oversight positions, to pay out the limited resources in an orderly fashion. The payments, ranging from hundreds of dollars to a few thousand for most claims and tens of thousands for cancer claims, are a fraction of what plaintiffs might win in a trial against a solvent company. Trial lawyers defend submitting claims to multiple trusts both because workers might be exposed to multiple sources of asbestos over their lives and because each trust's payout is so small.

The U.S. Chamber has pushed similar legislation at the national level. The  Furthering Asbestos Claim Transparency Act was introduced in the House in March but has gone nowhere since. It would amend federal bankruptcy law to require more disclosure of asbestos claims.