WASHINGTON (Legal Newsline) – Roughly one year after the Furthering Asbestos Claims Transparency Act, or FACT Act, was sent to the U.S. Senate, a legal reform group believes the coming GOP-controlled Senate could finally give the bill the momentum it needs to make it to the president’s desk. 

Darren McKinney, director of communications for the American Tort Reform Association, said the fate of the FACT Act rested on the midterm elections, explaining that it was unlikely that the law could pass a Democrat-controlled Senate.

The FACT Act was introduced in the House by Rep. Blake Farenthold, R-Texas, on March 6, 2013 and was passed in a 221-199 vote on Nov. 13, 2014. The bill remained on the party line as only five Democrats voted for the act. It was then sent to the Senate for approval.

Rather than decide on the House bill, Senator Jeff Flake, R-Ariz., introduced a Senate version of the FACT Act in May.

The Senate bill is identical to a companion House bill.  

The bill requests an amendment to title 11 of the United States Code, requiring public disclosure by asbestos bankruptcy settlement trusts according to section 524(g) of the title.

If passed, the bill would require asbestos bankruptcy trusts to release information on those seeking compensation due to asbestos exposure in quarterly reports, including “detailed information regarding the receipt and disposition of claims for injuries on exposure to asbestos, and for other purposes.”

The bill would require the quarterly reports to be made on the court’s public docket, specifically disclosing the names, exposure history and basis for any payment from the trust of those who have filed a claim with each trust.

Now that the Republicans control both the House and the Senate, McKinney said it is inevitable that the bill will make it to President Barack Obama as long as Congressional Republicans do not have “suicidal tendencies.”

He explained that if the FACT Act does not pass through both houses of Congress now, the Republicans will have no one to blame but themselves.

“So they both have incentives to get along a little bit,” he said of Congress' and the president’s potential roles in getting the transparency bill passed.

Furthermore, if Congress does manage to get the bill to the president’s desk, McKinney said it will be up to him to see it through to law.

“If the Republicans play their cards right,” he said, “they could put the president in something of a box and make it very difficult to veto the FACT Act.”

“He could veto the FACT Act, but that will be a very difficult decision for him.”

The GOP gained control of the Senate on Nov. 4 after picking up more than the required six seats to obtain the majority.

Ironically, North Carolina was one of the added red states  – the state where the landmark Garlock Sealing Technologies bankruptcy case is currently being litigated.

In a Jan. 10 ruling, Bankruptcy Judge George Hodges ruled in favor of Garlock, ordering the gasket manufacturer to put $125 million in its bankruptcy trust, which is roughly $1 billion less than what plaintiffs' attorneys requested as Garlock’s liability.

Hodges found that the amount of previous awards and settlements paid by the company in the civil justice system were not reliable because plaintiffs' attorneys had withheld evidence of their clients' exposure to asbestos-containing products manufactured by other companies in order to maximize recovery against Garlock.

Since Hodges’ ruling, Garlock has become a poster child for the fight for transparency within the asbestos bankruptcy trust system.

In fact, Hodges ordered all documents pertaining to the Garlock bankruptcy proceeding to be unsealed and made available to the public after ruling in favor of Legal Newsline on Oct. 16.

McKinney said that as Garlock documents exemplifying the alleged withheld evidence and misrepresented bankruptcy information are made public, lawmakers intending to fight against the FACT Act will have a difficult time rejecting the transparency bill.

“Sooner than later, and certainly by the time Congress gets to work in earnest in 2015, Garlock revelations will surface,” he said.

“The Garlock documents will begin to be unraveled and as more of them are made known to the public, I think it just becomes increasingly difficult for the president to veto a bill that will certainly make it to his desk,” he continued.

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

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