Plaintiffs' attorneys weathered the asbestos political storm

Legal News Line Jan. 7, 2009, 7:41am




The window of opportunity for sweeping federal tort reform that started to close in 2006, has effectively been shut.

Experts say the sweeping change of power taking place in Washington won't change things significantly for asbestos litigation, a phenomena still so prevalent that Chicago law professor Richard Epstein called it "a tort unto itself."

Democrats, most backed by large plaintiff attorney donations, will assuredly stall further attempts to pass reform. But that's not surprising, experts say, given failed opportunities under a Republican Congress, eight years of a Bush White House and a demand for reform by the United States Supreme Court.

"The Democratically controlled Congress is not likely to take up tort reform bills," Washington D.C. attorney Mark Behrens said. "But they weren't going to anyway under the Republican Congress."

Plaintiffs' attorneys have effectively weathered the political storm designed to reign in frivolous lawsuits. With money designated in bankruptcy trust funds growing rapidly as companies emerge from bankruptcy, asbestos claims are again on the rise in courts like Madison County.

In the continued absence of federal legislation, the coming years are likely to bring a series of battles for tort reform at the state level, pushing asbestos cases into courts that are more appealing to plaintiff's attorneys. States enacting meaningful reform, like Texas and Michigan, have dramatically curbed the flood of lawsuits. Illinois and California, though, remain prime spots for new cases and new settlements.

The fall of FAIR

In 1999 the United States Supreme Court called asbestos litigation "an elephantine mass" that "defies customary judicial administration and calls for national legislation," according to court records.

The Senate began an intensive effort to pass such legislation. But several variations from 1999 to 2006 of the Fairness in Asbestos Injury Resolution Act failed to garner support. The closest attempt came in 2006, according to Theodore Frank, resident fellow of the American Enterprise for Public Policy Research.

"It was killed on a procedural vote when the bill missed a three-fifths majority by one vote," Frank said. "Backroom negotiations to get it back on the floor failed."

The FAIR act of 2006 would have established a federally managed trust fund for all asbestos lawsuits of $140 billion, funded mostly by assets from companies emerging from bankruptcy protection. But even the companies the act was designed to assist were leery of the enormous sums of money and the potential for government waste.

As would be expected, plaintiffs' attorneys liked the bill even less.

"The FAIR act was anything but fair," said Thomas Anapol, a plaintiff's attorney from Philadelphia. "Victims of the disease faced an under funded proposal ... and a system that denied them access to the courts."

Cases decline

Despite the failure of FAIR, tort reform experts point to gains made from roughly 2002 to 2006 - the peak years of Republican power - as signs of progress against what they call unfair civil courts.

In several states, tort reform helped curb the rise of asbestos lawsuits based on faulty medical evidence or the potential to get sick, rather than actual injuries.

"The number of new asbestos claims - particularly nonmalignant claims - has fallen in recent years, along with the decline of medical screening operations," authors Dr. Charles Bates and Charles Mullin wrote in an October report on the state of asbestos claims.

Mississippi, Ohio, Texas and Michigan all passed new state laws that limited the ability for those not sick to bring suit. Other laws blocked aggregating cases, an effective way to turn one case of a legitimately sick plaintiff into leverage for several others of a more dubious nature.

"The plaintiffs' lawyers may have a case of somebody with mesothelioma," Behrens said, "which is a case that may be worth like three million in a place like San Francisco or Madison County. But they wouldn't settle for that amount unless they got other cases settled for small amounts."

As states passed laws that required individualized trials, the frivolous cases were weeded out, contributing to the rapid decline of litigation from 2002 to 2006.

"The state Legislatures in some states removed the economic incentive for plaintiffs to file claims that may have little or no value unless they were joined with other more serious cases," Behrens said.

Several recent victories for defense attorneys in asbestos cases continued to thwart plaintiffs' attorneys in these states.

In a Michigan case that drew national attention, medical testimony for more than 7,000 plaintiffs was tossed out of court in late November, putting thousands of Michigan asbestos cases in limbo, according to published reports.

"I think that the other courts and other judges around the county - I hope - will be willing to do the same if similar issues arise," said defense attorney Edwin Gault of Jackson, Miss.

But Anapol, the plaintiff's attorney in the case, downplayed the national implications of the ruling.

"I don't know how this is going to have such a far-reaching effect," he said, saying that the judge ruled against the suspect findings of one doctor, not the practice in general. "It's not frightening me."

But the Mighigan ruling followed a similar one in Ohio where more than 30,000 asbestos lawsuits were dismissed following a ruling by the state court that said a 2004 law imposing strict requirements on plaintiffs could be applied retroactively.

The trends, according to one Chicago-based defense attorney, force plaintiff's attorneys to make an even greater priority of getting cases into specific "friendly" venues.

"Certain states you just can't go there anymore," he said. "I mean every Michigan case ends up in Illinois. Same thing in Wisconsin. No plaintiff's attorney wants to go there."

Battle for venue

It takes little more than a connect-the-dots approach to complete the picture of where asbestos litigation is headed: away from courts with meaningful tort reform, and toward places where cases are already on the rise again, like Illinois and California.

Without meaningful federal legislation and with state courts widely disparate in how they handle asbestos cases, the push for venue becomes the first, and often most critical legal step for future claims.

To have a lawsuit placed in a specific court is not usually difficult. Often, the plaintiffs are not from the state where the case is heard. Many times, neither is the defendant. But once filed in a given court, the forum must be challenged by the defendants to move it in a forum non conveniens hearing. Again, state laws and court precedence that varies widely from state to state shapes the eventual decision.

In Madison County, Judge Daniel Stack began the practice of hearing convenience forums shortly after taking the bench in 2004. He tossed out several that had no ties to the Illinois court and cases in the county dropped dramatically in 2005. But they rose again, as challenges to the forum dropped.

A Chicago defense attorney said changes in the Illinois Supreme Court hampered the ability to effectively challenge the venue of a case.

The Supreme Court ruled in 2006 that so-called "forum shopping" - the practice of plaintiff's attorneys to choose pro-plaintiff courts - would no longer be condoned. The court ruled in Dawdy vs. Union Pacific RR, that cases without a reasonable connection to the court should be dismissed or transferred.

But a 2007 case, Langenhorst v. Norfolk Southern, shot down a case over forum battles, though the attorneys claimed they were trying to reverse Dawdy. Nevertheless, many defense attorneys took it as repealing the gains made the year before.

"Since Langenhorst came down," the attorney said, "we in defense have just not bothered to proceed with forum non conveniens because it is just not worth it. It's just a huge pain."

The practical result, while cases decline in tough climates like Michigan and Ohio, they are sky-rocketing in more friendly venues like Madison County, San Francisco, Delaware and Los Angeles.

The gold rush

Though the overall landscape of asbestos has changed dramatically from the frenzied years at the turn of the century that chased dozens of companies into bankruptcy resulting in billions in settlements, the future looks more similar to the past than at first glance it may seem.

True, the total number of cases has declined, but the right case in the right venue still adds up to big dollars. Madison County has already seen its docket spike in the last two years, more than doubling the number of cases from the two years prior. Most significant plaintiff's firm have also cast an eye, not to mention a cadre of attorneys, west where the naval bases and coastal ports are paired with liberal, pro-plaintiff courts.

"California's new gold rush is asbestos litigation," Behrens said.

Large plaintiffs firms from around the company are setting up shop in California, like Waters & Krause of Texas, and SimmonsCooper of Madison County. Proliferate television, Internet and radio advertisements expand the assets of plaintiff's firms with scores of new clients. According to Behrens, judges have already acknowledged the increasing burden from a vibrant and growing asbestos docket.

But this overloaded docket is not just the result of clients discovered in this nation state, but a long list of people with little or no connection to the state brought in to take advantage of the friendly forum.

"Many of these plaintiffs lack any meaningful connection to California, having lived most of their lives outside of the state and alleging asbestos exposure that ostensibly occurred elsewhere," Behrens wrote in a recent article on the current state of asbestos. "In a 2006 sample of 1,047 asbestos plaintiffs for whom address information was available, over three hundred - or an astonishing 30 percent - had addresses outside California."

Madison County's Judge Stack said his observation is asbestos lawsuits are rising anywhere there is an active docket, but "Los Angeles is a place that's really starting to take off."

California has essentially replaced Texas on the asbestos litigation map. Barring federal reform that won't be seriously considered again for years to come, states that enact reform will force their cases into other venues, thus failing to altar the Supreme Court's "elephantine mass" still badly in need of reform.

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