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Wall Street Journal Misleads the Public on Asbestos Trusts. . . And Is Just Plain Wrong

6 comments

The Wall Street Journal purports to be a sophisticated, respectable newspaper. One would expect, then, that its editorial board would exercise some independent judgment backed by facts and nuanced analysis. The board's recent editorial about the asbestos bankruptcy trust system shows none of these hallmarks of respectable journalism. Rather, the editorial is nothing more than U.S.. Chamber of Commerce talking points placed in complete sentences. The piece was lazy, superficial, and, most importantly, misleading.

The editorial rests on two main premises, both of which are demonstrably false. The first is that there is already so much money available in the asbestos trusts – $36 billion! – that seeking compensation via lawsuits is just pure greed. To be sure, $36 billion is an enormous amount of money. But remember, we are talking about tens of thousands of people suffering painful deaths – months or years of radiation, chemotherapy and surgery while slowly suffocating, their lungs literally turning to mush – and leaving behind devastated loved ones. And the money in these trusts has to compensate those currently suffering and last long enough to provide some recovery to the thousands more projected to suffer and die in years to come. As a result, each bankruptcy trust treats asbestos victims as any creditor in the bankruptcy system. If you or I declare bankruptcy, the people we owe will only recover a fraction of what they are owed. So too with asbestos victims – they can only recover from the bankruptcy trust a fraction of what they could have recovered from that company in a lawsuit. Far from the windfall that the WSJ editorial implies, asbestos victims are vastly under-compensated by the bankruptcy trusts when one considers the agony that they and their families experience. To be made whole, therefore, the victims must also pursue claims against the companies that have not gone bankrupt. By analogy, if one of the Fortune 500 companies that bankroll the Chamber of Commerce could recover money it is owed from a solvent person or entity, it would not settle for a partial recovery from a bankrupt debtor. This is not greed, it is justice.

The second false premise is that recovering from bankruptcy trusts and then recovering from solvent companies after a lawsuit is "double dipping." This is a plain misstatement of existing tort law. Double dipping is receiving two dollars when you should only receive one. The interplay between bankruptcy recovery and lawsuit recovery is the exact opposite. Every dollar that a victim receives from bankruptcy trusts is a dollar that he cannot receive from a lawsuit. If a jury determines that a victim's damages are, say, half a million dollars, and that person has already received $250,000 from asbestos bankruptcy trusts, the defendant only owes the victim the other $250,000. If the victim has received $400,000 from the trusts, the defendant only owes $100,000. Bankruptcy trusts do not cost solvent companies money. They save solvent companies money. Moreover, consider the alternative: if these bankruptcy trusts did not exist, the victim would go to trial against all of the responsible companies. The companies would not know how much the victim had already recovered because he would have recovered nothing. Why should that change just because the victim recovered part of his damages early? The damages (harms) are still the same.

Just to be clear about the harm to America caused by asbestos, the Centers for Disease Control estimates that by the year 2030 asbestos-containing products may kill 200,000 Americans. A RAND study estimated 432,000 asbestos-related deaths between 1965 – 2029. And, by some estimates, asbestos continues to kill 5,000 – 10,000 per year, which may underestimate the number because pleural mesothelioma, an asbestos "signature" disease (a type of lung cancer), is many times misdiagnosed. Between 1979 – 2001, at least 43,000 Americans died from mesothelioma alone! The early asbestos industry knew by the mid-1930's that the products it was manufacturing were lethal, and many of those manufacturers conspired to keep this important fact from the rest of the country – and their own workers. The American asbestos story is one of the most abhorrent and misunderstood tragedies in our history.

It, therefore, takes some chutzpah for the Chamber of Commerce (funded by a number of the companies that put lethal, asbestos-containing products into the American stream of commerce) to take an asbestos bankruptcy trust system that it championed yesterday, and from which its members have benefited greatly, and use it as a whipping boy today. But then again, hypocrisy in pursuit of profit has become the accepted norm on Wall Street and in numerous corporate board rooms across America, and Americans are becoming used to it. What is disappointing, and perhaps the real "scam" here, is the WSJ editorial board's decision to place its name on these empty and disingenuous Chamber talking points.

6 Comments

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  1. Mark Bello says:
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    Greg: Outstanding post. Hopefully it gains traction throughout the country. It is one thing for a free lance, right wing, blogger to create a position piece on the civil justice system. It is quite another when a formerly respected, long-standing, publication like the Wall Street Journal brown noses for the US Chamber and BEHAVES like a free lance, right wing, blogger. You are quite correct; when you are a blogger, maybe you state your opinion without doing your homework. When you’re the Wall Street Journal, you do research, talk to experts on both sides, get all of the facts, and present them to the public. Even if you choose a position, as the WSJ obviously does here, you have a journalistic responsibility to present ALL of the facts. This is a piece of Chamber propaganda, pure and simple, and is a good example of the pro-Chamber “blog” that the WSJ has become. Your fact-checked, truthful, article is 100 times better written than the piece of garbage that was called an “article” by the Wall Street Journal. People can no longer rely on the publication’s journalistic “reputation”; they must check the facts. The WSJ has lost all credibility after this piece and the lying piece of garbage it recently penned about Blitz USA. Nice work, Greg, well done! Thanks for bringing this outrage to our attention. Regards, Mark

  2. Troy Chandler says:
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    Nice article, Greg.

    If corporations were people they could not dissolve future debt in the bankruptcy system. The average citizen must accept responsibility once they discharge debt in a bankruptcy. Not asbestos companies. The unfairness and abuse in the asbestos bankruptcy system is allowing a corporation to buy immunity from debt it has yet to incur at a fraction of the true cost, leaving taxpayers on the hook to pay the freight when the victim goes uncompensated.

  3. Robert Ryan says:
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    Greg: Your article would carry more weight if you admitted your self-interest as a lawyer who sues on behalf of asbestos claimants. Note, people can make claims against the trusts and still sue, nothing changes. They simply cannot make self-serving assertions in their trust submissions (e.g. lie) and then contradict them in court to enhance their recovery (e.g. lie again) –as was exposed in Kananian.

    While I agree that certain companies (all bankrupt) in the asbestos industry were simply irresponsible, to the point of being potentially criminal in retrospect, the trusts were established with participation by plaintiffs attorneys who purported to represent the individuals harmed, even future claimants.

    The active defendants today are tertiary or quarternary actors, which, if you believe there was a conspiracy by the johns-Manville’s, Raybestos-Manhattan, OWF’s and others in the 1930’s and 1940’s, were ostensibly victims of the conspiracy as well.

    Given that the United States placed asbestos on its list of war-related strategic materials and essentially mandated its use in naval construction, one might think that the government would have accepted its share (or an a minimum a share)of the responsibility, however they have never done so. In addition, while mesothelioma is a tragedy, not all claimants or litigants have mesothelioma, many have other diseases for which there are confounding factors.

    Your comments make good populist reading for the uninformed, but hardly provide a true picture of the immense number incongruencies of asbestos litigation – which has been in the courts in great force since Selikoff in the 1960’s and Borel in the 1970’s.

    The debate continues….

  4. Robert Ryan says:
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    Greg: Your article would carry more weight if you admitted your self-interest as a lawyer who sues on behalf of asbestos claimants. Note, people can make claims against the trusts and still sue, nothing changes. They simply cannot make self-serving assertions in their trust submissions (e.g. lie) and then contradict them in court to enhance their recovery (e.g. lie again) –as was exposed in Kananian.

    While I agree that certain companies (all bankrupt) in the asbestos industry were simply irresponsible, to the point of being potentially criminal in retrospect, the trusts were established with participation by plaintiffs attorneys who purported to represent the individuals harmed, even future claimants.

    The active defendants today are tertiary or quarternary actors, which, if you believe there was a conspiracy by the johns-Manville’s, Raybestos-Manhattan, OWF’s and others in the 1930’s and 1940’s, were ostensibly victims of the conspiracy as well.

    Given that the United States placed asbestos on its list of war-related strategic materials and essentially mandated its use in naval construction, one might think that the government would have accepted its share (or an a minimum a share)of the responsibility, however they have never done so. In addition, while mesothelioma is a tragedy, not all claimants or litigants have mesothelioma, many have other diseases for which there are confounding factors.

    Your comments make good populist reading for the uninformed, but hardly provide a true picture of the immense number incongruencies of asbestos litigation – which has been in the courts in great force since Selikoff in the 1960’s and Borel in the 1970’s.

    The debate continues….

  5. Greg Webb says:
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    Mr. Ryan,

    Thank you for commmenting. You apparently have “a dog in this hunt” as well. Of course I am a lawyer who represents people, people who have been injured or maimed, and families of those who have been killed. I have neither hidden it nor denied it, and I am proud to be such an attorney. This forum, through which I write, seemed to me to make it obvious as to what I do, therefore I did not even consider making such a “disclosure”. It is open and obvious. It is not as if I made such a post on the CNN News Blog and tried to hide my identity. I am fortunate to do what I love for a living. Fortunately, my so-called “self-interest” does not change the facts.

    Regarding my alleged “populist” comments for the “uninformed”, I could go on for a while longer about the conduct of the asbestos industry, including the “tertiary or quartenary actors” – who, by the way, still made and sold asbestos-containing products when they knew, or should have known, the products were dangerous. That simply is a fact. If not so, then juries across the country would not be finding these “tertiary and quarternary actors” liable. Juries that are made up of the same citizens who sit in criminal cases and can impose a life sentence, or even a death penalty. If these juries are good enough to impose such criminal penalties (which they are), then they certainly are qualified to award monetary damages against civil defendants, like asbestos defendants.

    I respectfully submit that the “true picture” is worse than my blog. For a better picture of the asbestos story, for starters, I recommend the book “Outrageous Misconduct: The Asbestos Industry on Trial”, by Paul Brodeur. Frankly, I was a bit stunned to learn the extent to which many companies went to protect their profits.

  6. Robert Ryan says:
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    Dear Greg: Thanks for the response. While at one time I had a “dog in the hunt” I no longer do with the exception of being in-house counsel. I discovered belatedly that the “legal advertiser” is your blog/forum, Mea Culpa, as I thought it to be a more generalized legal paper in VA.

    Nevertheless, I am certain that you and I could share a number of stories over a table somewhere, if we ever crossed paths. As for Brodeur’s book, I read it as it was originally published as a serialization in the New Yorker, own a copy and had all my associates read it before they got too high and mighty about their clients. I also spent many days with Steve Kazan and George kilbourne over the years….

    Best wishes in your practice. Bob