December 13, 2002

Time to Rein in Asbestos Lawyers

By Congressman Joe Pitts

On November 8, Armstrong World Industries announced that its sales for the third quarter of this year had increased by $41 million over the same period last year.  On the same day, the New York Stock Exchange removed its stock from trading because it had dipped to about 50 cents a share and Armstrong had filed for bankruptcy.  Why would Lancaster County’s largest employer, far outpacing the economy with better than five percent growth, be bankrupt and tossed off the Big Board?

The answer is one of the most outrageous miscarriages of justice in American business history.  Armstrong, which never produced asbestos, has nevertheless been besieged by lawsuits filed by people who have never been sick.  As Stuart Taylor of National Journal writes: “lawyer-plutocrats continue to obscenely enrich themselves by using massive asbestos lawsuits and a disgracefully dysfunctional litigation system to extort billions of dollars from American consumers every year.  The lawyers blackmail mostly blameless companies, while cheating the real victims of asbestos.”

Asbestos is indeed dangerous and sometimes even deadly.  It causes both lung cancer and mesothelioma, a cancer that is fatal within a year or two of diagnosis.   But for decades, asbestos was nearly everywhere.  It was used for insulation, car brakes, textiles, and countless other uses.  Over 100 million Americans can plausibly claim to have been exposed.  Unscrupulous lawyers will not be satisfied, it seems, until every one of those 100 million people has sued. 

When they sue, of course, the lawyer takes up to forty percent of each award.  More than a few asbestos lawyers are now literally only a few million dollars short of becoming billionaires.

Each year, about 2,000 new mesothelioma cases are diagnosed.  These are the people who truly deserve to be compensated.  But 500,000 asbestos claims have been filed so far, all but clogging the courts.  At least 60 percent, and perhaps 70 percent, of the people who sued had no physical impairment at all.

The real culprits, the manufacturers of asbestos, are long gone: bankrupt and out of business.  Those who remain are companies like Armstrong that were only peripherally connected with asbestos.  These companies include hotels, food manufacturers, pharmaceutical companies, shipyards, telecommunications companies, cement manufacturers, and others.  None of them made asbestos, but they all used it or possessed it and they all have pockets deep enough to pay.

By grouping thousands of claimants together, trial lawyers make it impossible to sort out which claimants have good cases and which ones don’t.  Likewise, it’s completely impossible to tell exactly where, when, and at what levels a claimant was exposed to asbestos during the course of a lifetime.

Consequently, these companies are helpless to defend themselves and judges are helpless to ascertain the merits of any individual case.  Corporations go bankrupt, plaintiffs go home with a few thousand dollars apiece, and the lawyers become obscenely wealthy. 

The greatest injustice, of course, is that those who are truly sick find it hard to be heard as they ought to be.  Perhaps just as bad, healthy claimants who sue for a few thousand dollars today will be unable to sue again later if they truly become sick.

The total cost to the economy has exceeded $50 billion dollars, and is on course to reach $275 billion before long.  Six thousand companies, most of whom had very little at all to do with asbestos, have been dragged into court.  More than 60 companies have filed for bankruptcy and some 60,000 jobs have been lost.

The Wall Street Journal recently put things in perspective by comparing the effect of asbestos litigation to the Enron scandal.  “Enron is the panic du jour,” said the Journal, “but more jobs and pensions are under threat from asbestos than from 10 Enrons.”

Congress has tried repeatedly to fix the situation through legislation, but has been thwarted by the powerful influence trial lawyers have over the Democratic Party.  Asbestos attorney Peter Angelos, for example, is regularly listed among the most generous of all Democratic donors.  Angelos, the owner of the Baltimore Orioles, is also among those asbestos lawyers who has made himself a near-billionaire at the expense of mostly-innocent corporations, their employees, their stockholders, and those who are truly sick.

It is my fervent hope that this coming year, with Republicans running both chambers of Congress, we can plug our ears when the asbestos lawyers come calling and finally, at long last, do the right thing.

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