Asbestos 'double-dipping' reform bill nixed by Idaho statehouse committee

By Christopher Knoll | Mar 21, 2017

BOISE, Idaho (Legal Newsline) – An attempt by the Idaho House of Representatives to vet the claims of asbestos victims against the availability of trust funds set up two decades ago has been shot down.

On March 7, the House Judiciary Committee, after four hours of discussion, rejected the newly proposed Chapter 31, Title 6 to the state’s law codes with a recorded voice vote.

The amendment, referred to as the Bankruptcy Trust Claims Transparency Act, would have required any claimant to submit all asbestos claims they are making or intend to ever make to the appropriate court within 45 days after the motion to file. These claims would also have had to include statements or reports from the claimant or counsel revealing if such claims could be eligible for reparations through any of the roughly 60 trusts set up in the last 20 years.

In addition, the law would have required that all parties to the matter have access to the trust research materials “including all trust claims materials from all law firms connected to claimant” which would net not only the names of the petitioning law firm, but any referring law firm or any additional firm that has filed an asbestos trust claim on behalf of the claimant.

Once this was done within the allotted time, the case would be heard no sooner than 180 days from filing of the claim.

Alex LaBeau, president of the Idaho Association of Commerce and Industry (IACI), one of the main sponsors of the bill, told Legal Newsline that the amendment would have been a disclosure bill designed to ensure double dipping of trusts was not occurring. 

Proponents of the proposed amendment, like the American Legislative Exchange Council (ALEC) and the IACI, have stated that without such a law, the trusts would be rapidly depleted through double-dipping, in which a claimant files with multiple trusts.

“The problem that we are running into is not that these claims are illegitimate, but that these claims will have one set of facts that are presented to the bankruptcy trust and [the claimant will] go into a state court with another set of facts,” said LaBeau.

“What we’re saying is you need to go to the bankruptcy trust, that is appropriate, and then you need to take that same information and present that to the state courts.”

The federal Government Accounting Office (GAO) has reported that asbestos claims have resulted in the bankruptcy of more than 100 businesses, in which “eighty-five corporations…filed for bankruptcy because of asbestos liabilities and several insurance companies have either failed or are in financial distress,” according to the National Bureau of Economic Research (NBER) in report filed in March 2017.

NBER soberly notes that “[l]egal claims for injuries from asbestos involve more plaintiffs, more defendants, and higher costs than any other type of personal injury litigation in U.S. history.” As of 2011, $54 billion has already been paid out in asbestos claims, with lawyers capturing a stunning $34 billion, or 63 percent, of the monetary awards. It is estimated that eventual claims will total “$200 billion to $265 billion," leaving attorneys (if the formula remains constant) pocketing $126 to $166 billion in fees.

Linda Reinstein, president/CEO of the Asbestos Disease Awareness Organization (ADAO), praised the elimination of the amendment and told Legal Newsline that “[t]he Idaho State House Judiciary, Rules and Administration Committee recognized this was just another industry ploy to delay and deny asbestos victims justice.”

Reinstein went on to say that Idaho lawmakers should focus more on “preventing asbestos exposure in homes, schools, workplaces, and communities” and less on searching for industry bailouts.

“Each year, an estimated 15,000 Americans die from preventable asbestos-caused diseases,” Reinstein reported. “Asbestos kills. I know, I buried my husband.”

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