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Monday, February 24, 2020

Three weeks after Silver conviction, NY lawmakers balking at asbestos reform

By Daniel Fisher | Jun 2, 2018

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NEW YORK (Legal Newsline) – Reform bills that would require asbestos plaintiffs to disclose all potential claims in court appear stalled in the New York legislature, three weeks after former Assembly Speaker Sheldon Silver was convicted for a second time on charges stemming directly from the state’s scandal-prone asbestos court system.

A new asbestos-transparency bill was introduced May 29 in the State Assembly, streamlining a previous one that has languished in the Judiciary Committee since February of last year amid fierce trial lawyer opposition. A similar bill in the Senate passed out of that body’s Judiciary Committee in March but has been sitting in the Finance Committee awaiting separate review.

Supporters of the bills say they would level the playing field between plaintiffs and defendants by forcing plaintiffs to identify all the sources of exposure to the deadly substance before taking lawsuits to trial. Under the current system, plaintiff lawyers target solvent companies with lawsuits first, then file claims with the numerous trusts set up by companies already driven into bankruptcy by asbestos litigation. 

Defendants – and the insurance companies that actually pay most of the bills in this system – say withholding bankruptcy trust claims until after trial deprives them of potentially exculpatory evidence about whose products made the plaintiff sick.

New York’s specialized asbestos court known as NYCAL has been criticized as especially favorable for plaintiffs, with docket procedures that allow plaintiffs to bundle cases together and sue for punitive damages, which defendants say are hard to justify in lawsuits against companies that in most cases ceased operating years ago and were gobbled up in larger transactions by companies like Pfizer and Honeywell. NYCAL has also consistently been tagged a “Judicial Hellhole” by the American Tort Reform Association.

It’s also the court system that spawned the illegal behavior of Silver, who collected millions of dollars in fees from the state’s leading asbestos law firm, Weitz & Luxenberg, in exchange for providing the names of patients diagnosed with mesothelioma, a deadly asbestos-linked cancer. 

Once the state’s most powerful politician, Silver was convicted of steering hundreds of thousands of dollars in taxpayer funds to the doctor who provided him the names. As Assembly Speaker, Silver named Weitz & Luxenberg name partner Arthur Luxenberg to the Judicial Screening Committee for the First Department, which includes NYCAL.

Both of the New York bills face a tough road to passage despite the fact they were sponsored by lawyers and have strong support from the state’s insurers, business community and veterans’ groups.

Many other states have passed asbestos transparency measures. For instance, with support from a group of Democrats, North Carolina is ready to become the 15th.

“In New York, the Assembly especially is very much beholden to trial lawyers,” said Lev Ginsburg, director of government affairs for the Business Council, the state’s biggest business association. “The logic of the policy is so pronounced, but the politics of the state of New York make this an incredibly difficult task.”

The latest assembly bill, AB 6032, was sponsored by David Buchwald, a Mt. Kisco Democrat and Harvard Law School graduate. It has language similar to a bill that passed the Michigan legislature earlier this year with bipartisan support and focuses on requiring full transparency in asbestos proceedings.

The bill, like its Senate companion, requires plaintiff lawyers to conduct an investigation and file all trust claims that can be made within 45 days of initiating the lawsuit. Within 30 days of the start of discovery, the plaintiff must provide a provide sworn statement listing every trust claim, the amount of money received, the date the claim was made or is expected to be made. Trial can’t begin until all the potential claims have been filed.

The bill allows plaintiffs to delay filing claims if attorneys’ fees would exceed the expected recovery from the trust, but the plaintiff must still file exposure histories that could merit recovery from those trusts. It removes a clause from last year’s bill that would have allowed defendants to request a list of trust claims made for five years after they settle with a plaintiff. It also simplifies a procedure under which defendants can request a stay of active cases if they determine the plaintiff has valid trust claims that haven’t been filed. The court has 10 days to determine the validity of those stay requests.

“This new language passed in Michigan with the support of the trial lawyers there,” said Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York. “It was carefully drafted to address concerns about using transparency as a delaying tactic.”

In a March hearing before the Senate Judiciary Committee, Committee Chairman John Bonacic, a Republican and lawyer, said of the bankruptcy trusts: “There’s a pot of money there. There's no litigation. You put in a claim and you’re going to get paid money.”

“All this bill does is provide transparency in litigation and fairness,” he said. “When you start a civil lawsuit, name ‘em.”

The bill passed in committee on a 10-7 vote but Bonacic referred it to the Finance Committee because of the strong opposition by the trial bar. No action has occurred yet in that committee and it hasn’t been scheduled for a hearing.

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Organizations in this Story

Weitz and LuxenbergNew York State AssemblyAmerican Tort Reform AssociationHarvard Law SchoolLawsuit Reform Alliance of New York