Document 4Q6ZkVRjeMLbOvQdaX35E4GRx

INTERNAL CORRESPONDENCE UNION CARBIDE CORPORATION OLD RIDGEBURY ROAD, DANBURY, CT 06617 To (Name) T. W. Carmody - HS&EA Division S. s. Cunningham - Washington Location w. c. Thurber - Metals Area R. F. Wolff - Metals Copy to Date April 22, 1983 Originating Dept, HS&EA Area Danbury, CT P2598 Subiect Minutes April 7, 1983 Meeting Attached is a brief summary of our April 7, 1983 discussion. We will continue to monitor the Miller Bill and other developing approaches in the public compensation area. LAC/cr Attachment risorio UCC 001121 . MINUTES April 7, 1983 meeting - Review of financial impact of Discussion Draft of the Miller Bill An ad hoc group met to review the financial impact on the Metals Division of the new proposed Miller Bill. Present were: T. W. Carmody-HS&EA L. A. Crisorio-HSfcEA S. S. Cunningham-Washington W. C. Thurber-Metals R. F. Wolff-Metals The attached economic analysis of the new proposed Miller Bill was reviewed and discussed. Figures for AmChem and Metals Division Asbestos Litigation were supplied by the Law Department. Estimates of the number of asbestos cases outstanding (industry-wide) and cost to settle such cases was developed using "best available" industry information. As the economic analysis demonstrates, if the funding were based solely upon market share of asbestos or products containing asbestos as a significant" ingredient) assuming the Metals Division market share is 1/2 of 1%, the proposed program would cost UCC $93/case using a total cost figure per case of $75,000. If the J. W. Walter asbestos cost study figure of $140,000/case/lifetime were used, our costs would be $175/case. In view of the Metals Division limited potential for asbestos litigation and the current language of the new proposed Miller Bill which allows other "toxic substances* to be covered by its compensation provisions it was agreed that the corporate concerns relative to the other "toxic substance's provision is paramount." This is particularly true as it (Miller Bill) could be used as a vehicle for private (industry) funding of a public health program by declaring large numbers of substances as the causative factor of diseases which also occur naturally. 2794B UCC 001122;. PROPOSED MILLER BILL FUNDING MECHANISM For Toxic Substances - 80% 1. Relative market shares of Toxic Substances or product containing Toxic Substances 2. Relative Toxic Substances content 3. Experience in litigation - 20% to employers who expose workers to Toxic Substances. For Asbestos: 50% - manufacturers, importers and distributors of asbestos or asbestos containing products where asbestos is significant constituent element- factors considered in establishing specific company contribution include: 1. relative market share during respresentative period 2. relative asbestos content 3. litigation experience 4. other factors as deemed appropriate 20% - employers- who expose workers to asbestos in course of employment. 30% - manufacturers of products where asbestos is insignificant constituent element. UCC 001123 DATE 12/31/78 12/31/79 6/30/80 12/31/80 3/31/81 6/30/81 9/30/81 12/31/81 3/31/82 6/30/82 9/30/82 12/31/82 3/18/83 AMCHEM Asbestos Litigation Case Load NUMBER OF CASES 123 104 142 292 A +123 - 19 + 38 +150 314 466 703 1021 + 22 +152 +237 +317 1208 1310 1142 1306 +187 +102 -168 +164 1366 +60 ANNUAL +188 +729 --182/qtr. +285 --151 /qtr. + 60 UCC 001124 DATE 3-31-79 12-31-79 6-30-80 12-31-80 3-31-81 6-30-81 9-30-81 12-31-81 3-31-82 6-30-82 12-31-82 METALS DIVISION Asbestos Litigation Case Load NO. OF PENDING CASES 8 31 4 +23 84 +53 156 +72 225 +69 221 - 4 239 + 18 76 -163 79 + 3 206 +127 169 - 39 ANNUAL 4 +31 +125 - 80 + 91 UCC 001125 ASSUMPTION OF DEFENDANT DISTRIBUTION IN CURRENT LAW SUITS (INDUSTRY WIDE) COMPANY % NUMBER PARTICIPATION PLAINTIFF/DEFENDANT IN LITIGATION________________________ INTERFACE UCC involved in 1400 e.g. 14% of cases. Johns-Mansville 100% Owens Corning 80% J. Walter 70% Fiberboard 60% UARCO 60% UNR 60% UCC 14% +5 Misc. 100% 10,000 8,000 7,000 6,000 6,000 6,000 1,400 10,000 TOTAL......................................................................................................... 54 ,400 54,400 plaintiff/Defendant interface 1400/54,400 3% of Plaintiff/Defendant interface is UCC share. UCC 001126 . UCC LITIGATION COST - 12/31/80 - 292 12/31/81 - 1,021 12/31/82 - 1,306 295.000 - 1,000/case 454.000 - 450/case 629.000 - 480/case Total Litigation cost - $1,475,000 Have settled 310 cases - cost/case = 4,800 Therefore, for 1,366 cases - total cost for disposal is $6.5MM Assume cost/case (litigation) is constant 2 years to settle all cases. Therefore, $3.3MM/year for 1983/84 plus any settlement on claims UCC 001127.'. COST ESTIMATE MILLER BILL FUNDING PROPOSAL 1. Assume, for the entire industry 10,000 suits @ 75,000 in 1983 - cost to dispose of dispose of over 5 yrs (2,000 cases/yr) 2. Miller Bill fund would pull 50% based on significant asbestos content materials - mkt. share fund would pull 30% based on minor asbestos containing materials - mkt.share fund would pull 20% based on employer exposure to employees $ 750,000,000 $ 150,000,000/yr. $ 75,000/case 75,000,000/yr. or 37,500/case $ 45,000,000/yr. or 22,500/case $ 30,000,000/yr. or 15,000/yr 3. Assume insignificant UCC exposure to asbestos, so no UCC contribution to the 20% portion 4. Assume all asbestos business for UCC (Amchem and Metals) fall in "significant" category, so no UCC contribution to the 30% portion 5. For the 50% portion, simplify apportionment process by considering two equally weighed variables: (a) market share (b) "experience in litigation" * UCC share of the annual assessment (or per case assessment) is given by the equation: {(3.5(a) + 0.5(b)^ [^75,000,000] * UCC Assessment or {0.5(a) + 0.5(b)J (37,500) - UCC per case assessment UCC 001128 K COST ESTIMATE MILLER BILL FUNDING PROPOSAL CASE Ii If market share was h of 1%, and we are named in 3% of litigation |j0.5)(.005)+(.5)(.03f/ (75,000,000) = $ 1,312,500 ^0.5)(.005)+(.5)(.03)^ (37,500) * $ 656.25 per case If experience in litigation were measured in terms of actual successful claims or even subtracting the number of claims where we were dismissed as not involved, the second term approaches 0, thus simplifying equations to UCC = (0.5)(a) (37,500) CASE II: For the \ of 1% market share, no contribution from litigation experience parameter 0.5(.005)(75,000,000) * $187,500 or (0.5)(.005)(37,500) * $93.75 per case $.140,000/case/lifetime - Based on Walter study 50% is financed by the significant asbestos containing products market. CASE I 7.5)(a)+.5(b)j 70,000 * $1225/case CASE II 7.5)(a)+.5(b)] $70,000 * $175/case UCC 001129 .