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Asbestos litigation prospects for legislative resolution

CRS Report for Congress

Order Code RL32286

Asbestos Litigation: Prospects for Legislative Resolution

Updated February 8, 2005

Edward B. Rappaport Analyst in Industry Economics and Finance Domestic Social Policy Division

Congressional Research Service •:• The Library of Congress

CRS-4

Civil Procedure 23. Georgine was found wanting because various subgroups of claimants (and potential claimants) were in widely varying circumstances, so that common elements did not predominate among their cases. Also, adequate representation was not broadly enough assured, especially for those who might become aware of their injury only in the future. These defects were not adequately overcome by the agreement's provision allowing potential plaintiffs to opt out. The Ortiz class was established under a different subsection of Rule 23 that did not require meeting such criteria, but the Court said it had not been demonstrated convincingly enough that the settlement qualified for this alternate rule subsection (assets of defendants insufficient to meet liabilities).

What was notable about these cases is that members of the Supreme Court expressed discomfort with having to reject settlements with some merit for not meeting the detailed requirements of federal court procedure (which, of course, has its own merits). As stated by Justice Ginsburg in the Georgine case, "Rule 23, which must be ... applied with the interests of absent class members in close view, cannot carry the large load ... heaped upon it." More pointedly, Justice Souter in Ortiz commented that "this litigation defies customary judicial administration and calls for national legislation."

Thus, each of several hoped-for routes toward resolution - bankruptcy court, class actions, or consolidation of individual cases in one court (which is possible for federal court cases) has run into significant impediments in recent years. At the same time, differences have emerged between claimants who are critically ill and others who may be less sick (or show abnormal x-rays without apparent illness) but who sue immediately, either because of legal deadlines ("statutes of limitations") or because they fear that funds may not be available later. Some prominent attorneys representing those with cancer have shown interest in solutions that would postpone suits by those who are not yet impaired, conserving currently available resources.

Policy Alternatives

Status Quo

Despite warnings that the asbestos problem is reaching "crisis" proportions, it could be argued that the current legal regime has distinct advantages and should be allowed to proceed as it is, or with minor improvements. The current system is providing substantial assistance to large numbers of victims, most of whom do not have to pay lawyers' fees unless and until compensation is received. From a public policy perspective, the fact that defendant companies are the ones financing the benefits may be considered broadly beneficial. That is, companies in all industries are being put on notice that allowing harm to occur to employees and the public can be fatal to their own financial well-being.

'° Greg Hitt, "Asbestos Makers, Litigants: Uneasy Allies," Wall Street Journal (May 28, 2002), p. A4.