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Speaker's Resource: 8. The Asbestos Crisis, p 1

 

 

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Key Reference Citations (KRC)

 

Chapter 8:

The Asbestos Crisis

 

 

Introduction

 

Class action lawsuits have become a primary means by which the trial bar has been able to "game" the civil justice system by filing abusive lawsuits in "magic jurisdictions" on behalf of allegedly-harmed plaintiffs, thereby generating millions or billions in fees.

 

 

Fast Facts

  • “Litigation acts as a tax on businesses. How each business reacts to such a tax is dependent on the market factors facing the company. These factors determine whether or not a company can withstand the increased burden of litigation. Some companies can never recover from the additional costs and file for bankruptcy. While bankruptcies are costly to the businesses through filing, accounting, legal, and credit restructuring costs — estimated to be between $367 million and $1.92 billion61 — the most obvious consequence of bankruptcies is the resulting unemployment and lost output from a closure. Indeed, it is a sad truth that workers are hurt by asbestos-related bankruptcies. “ (KRC:  Pacific Research Institute, "JACKPOT JUSTICE...” p.38, citing  Joseph E. Stiglitz, Jonathan M. Orszag, and Peter R. Orszag, The Impact of Asbestos Liabilities on Workers in Bankrupt Firms (Washington, D.C.: Sebago Associates, commissioned by the American Insurance Association, 2002), p. 40)

  • “This reality was clearly shown in 2002 by Nobel laureate economist Joseph E. Stieglitz, who partnered with Jonathan M. Orszag and Peter R. Orszag to conduct an independent analysis of companies that filed for bankruptcy after losing asbestos-liability lawsuits. They found that asbestos-related bankruptcies, 61 so far, produced significant losses to the economy, and that much of the loss fell on the employees of these businesses. The costs included the loss of income from job displacements, the loss in future wages from reduced human capital, and the loss in benefits from reduced pension portfolios. Taken cumulatively, these indirect costs are estimated to range from $111 million to $128 million annually. This is in addition to direct insured losses from asbestos tort claims of $5 billion in 2004.”  (KRC:  Pacific Research Institute, "JACKPOT JUSTICE...” p.38, citing  Joseph E. Stieglitz, Jonathan M. Orszag, and Peter R. Orszag, The Impact of Asbestos Liabilities on Workers in Bankrupt Firms (Washington, D.C.: Sebago Associates, commissioned by the American Insurance Association, 2002), p. 40, and Tillinghast-Towers Perrin, U.S. Tort Costs and Cross Border Perspectives, p. 7)

  • A Miami-Dade court this year entered a $24.2 million compensatory damages award against Honeywell International in what is believed to be the largest verdict with a single defendant in Florida asbestos litigation history. The jury reached its determination after just three hours of deliberations, though Honeywell itself did not manufacture products containing asbestos.  (KRC: JH, Judicial Hellholes,
    page 6)

  • In recent years this Chicagoland county has experienced a substantial surge in asbestos claims, embraced improper class actions, rendered evidentiary decisions that favored plaintiffs, hosted excessive awards and otherwise shown an unwillingness to dismiss claims with little or no connection to the jurisdiction.  (Pat Milhizer, Jury Awards $22.5 Million in Death of Road Worker, Chi. Daily L. Bull., Aug. 28 at 1)

  • Reason for optimism, however, may be found in a recent ruling of the Texas Supreme Court that should stop personal injury lawyers from importing claims from all over the country to friendly Texas courts. On December 5, 2008, the state’s high court ruled in In re General Electric Co. that the plaintiff, who had lived and worked in Maine all of his life, could not sue for his asbestos exposure in Harris County, which handles Texas’s asbestos litigation.  (KRC: JH, Watch List, page 21)

  • Kostal noted the concentration of cases in San Francisco County and Alameda County in California in which verdicts are known to be more favorable to plaintiffs and awards are higher than in other jurisdictions.  (Susan Kostal, “Asbestos They Can? Forging a congressional Trust Fund Is as Complex as, Well, Asbestos Litigation Itself,” American Bar Association Journal, Vol. 91, No. 6 (2005))

 

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