Wis. Gov. Walker signs asbestos trust transparency bill

By Heather Isringhausen Gvillo | Mar 31, 2014

MADISON, Wis. (Legal Newsline) - Wisconsin Gov. Scott Walker passed Assembly Bill 19 on Thursday, which requires plaintiffs to disclose claims they have filed or anticipate filing against asbestos trusts to prevent double-dipping and ensure solvency of the asbestos trust.

Assembly Bill 19 was among 29 other bills privately signed on Thursday, slightly more than one year after its introduction in February 2013. Wisconsin joins Ohio and Oklahoma as the only three states with legislation on trust transparency.

Laurel Patrick, Press Secretary for Walker, said in a statement that the new legislation provides transparency and will help ensure future availability of funds.

"Governor Walker signed this law to ensure transparency in the lawsuit process and stop trial lawyers from double-dipping," Patrick stated in an email. "Preventing double-dipping will help make sure there will be resources available for the truly injured down the road."

The bill barely passed the Senate 17-16 and passed the assembly 55-38.

The Wisconsin Civil Justice Council, WCJC, thanked Walker for providing fairness and transparency in asbestos litigation

"We thank Gov. Walker for signing this landmark legislation into law," stated Bill Smith, WCJC President and NFIB State Director. "Wisconsin joins Ohio and Oklahoma in adding transparency in asbestos lawsuits and protecting large and small businesses from unscrupulous plaintiff attorneys who double-dip against asbestos trust funds and Wisconsin businesses."

"The new law ensures that all of the evidence of the plaintiff's exposure to asbestos-containing materials is presented to the jury for its evaluation," added Andy Cook, Legislative Director for WJCJ. "The law seeks to prevent plaintiff attorneys, through gamesmanship, from obtaining double recoveries from two different sources by refusing to disclose in the lawsuit the evidence relied upon to recover from the bankruptcy trusts. In short, this law is about transparency and fairness."

However, a group of Democrats in the Wisconsin Senate had formed a campaign called Veterans For Veto in an effort to prevent the bill from being signed into law.

Lobbyist Jason Johns of Wisconsin Legislative Strategies has represented the American Legion, Veterans of Foreign Wars and the Military Order of the Purple Heart in opposition against the bill. Together, these three veterans groups represent roughly 100,000 Wisconsin veterans.

"Although many of our members recognize the great things the State Legislature and Governor have done for veterans this legislative session, unfortunately, all of the good will now be overshadowed by the deaf ear to our pleas to stop this devastating legislation to our veterans and their families who have been exposed to asbestos," Johns said.

Veterans groups are concerned that the bill could result in veterans collecting less money as trust funds are depleted.

Opponents also fear that transparency requirements could postpone trials, risking the possibility that some mesothelioma victims could die in that time frame and would therefore hurt the chances of the claimants to collect full damages.

"AB 19 was written to impede and delay the legal process in which a victim of asbestos poisoning and mesothelioma can seek justice," Johns said. "It also assures that all settlement offers and verdict amounts will now be drastically reduced. Given this horrible fact, many victims will not see the filing of a lawsuit against a known defendant to be economically feasible as the time and expense involved versus the potential of receiving just compensation will not be worth the burden on the dying victim and their families."

Despite the backlash, Smith reassures opponents that the bill does not delay justice.

"Legislation has been misrepresented as delaying justice or denying justice," Smith said. "It really doesn't affect the process itself beyond that disclosure requirement."

Expressing respect and appreciation for the veteran community, Smith said the purpose of requiring transparency in personal injury trusts is to protect veterans and prohibit attorneys from profiting from the system.

"They were never created to compensate attorneys," Smith said. "They were created to compensate those who get this horrible disease."

Johns said that although AB 19 has already been signed, opposing veterans groups will consider the constitutionality of the law.

"However, we will be taking a look at the constitutionality of the assignment of rights language that will result in a double reduction of fault percentage assigned to defendants (or 'taking,' if you will)," Johns said, "in addition to the unlimited motions provided to defendants to force the plaintiff to file against a federal asbestos personal injury trust."

The bill prohibits plaintiffs from claiming privilege to trust claims materials and trust governance documents.

"The plaintiff may not claim privilege or confidentiality to bar discovery under this paragraph and shall provide consent or other expression of permission that may be required by the personal injury trust to release information and materials sought by the defendant," the bill states.

According to the bill, plaintiffs who file tort actions must disclose whether they have filed or anticipate filing claims against a personal injury trust within 30 days of the action.

The plaintiff must provide all documents, records, trial testimonies, affidavits, depositions, work history medical and health records, discovery materials and all other information relevant to trust claims.

If a claimant indicates possible future claims, the court is required to stay the immediate proceedings until the plaintiff produces final executed proof of claim.

The bill also allows defendants to identify any personal injury trusts not named by the plaintiff, but against whom they believe the plaintiff has a legitimate claim.

By providing transparency with trust information, the bill allows parties to "prove alternate causation of, or to allocate liability for, the plaintiff's injury."

Lastly, the defendant is entitled to a setoff in the amount of any money the plaintiff received from a personal injury trust for a substantially similar injury.

"If the immediate action proceeds to trial before the plaintiff's claim against a personal injury trust is resolved, the bill requires the court to establish an attributed value to the plaintiff's claim against the personal injury trust and to afford the defendant a setoff in that amount," an analysis by the Legislative Reference Bureau states.

The bill does not apply to compensatory benefits pursuant to Workers' Compensation or veterans benefits.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com

More News

The Record Network