Document 7JEj0Bm1y3Z0G9rYoygmwyLo

772 OCCUPATIONAL SAFETY 4 HEALTH REPORTER Sections on occupational disease legislation and dia Although the report drew examples from Agent Orange tion of liability between the federal governraent-^yIts litigation in Vietnam and a case concerning a helicopter contractors were included under a general meastfif oppos- accident in which two Virginia National Guard pilots died, ing the enactment of a federal product liability statute. the issue of the government's liability for hazardous expo Sections on workers' compensation and uniform standards sures occurring during work under government contract is for punitive damages were rejected. Because each section of one that also has been actively argued in ubestoa cases. It the resolution was found to be separable from the others, the was not clear, however, whether the committee's general ABA committee asked that ..each one be considered treatment of the issue could be applied to the problem of separately. .#?' /shipyard asbestos exposures during World War n and the The test of the occupational disease recommendation y Korean Conflict, when the UB, government specified the use urged that the ABA body; support "federal legislation whiplr of asbestos for warship insulation. addresses the issues pfHability and damages with respepf to claims for damages''against manufacturers by throe' who contract ap- occapationai disease (such as asbestofa) when: (a) therp'is arong latency period between expedure to the manifestation of the disease; (b^the number of Workers' Compenealiefl Defeated by awrfro vote was a section of tbe resolution that would hav$refcommended federal legislation to allow a tort defendant'found liable In a product liability action to i and the liability for sachyfamsges in fact i solvency of a significant number of manufac turers engaged in interstate commend; and (c) the number of such claims have become clearly'excessive burdens open deduct jhcrinjared party's workers' compensation benefits from .tgn-'judgment, regardless of employer negligence. The resolution also called for the elimination of any right of Subrogation the employer wqtQtf'liave against the mantifac- the state and federal judicial systems." ,/turer, nd would have prorated the manufacturer from Problem `Unique, Catastrophic' /^'' seeking indemnity or cqriSmution against the employer. Debate centered interests of manufacturers of In a report prepared supplement to the recommendftr' products used inJwrworkpiace, with supporters arguing tiocs, the special computte* said it believes that "thn&tr- that the currenjarorkers' compensation system places a rent social problem/presaoted by occupational iateht'dis- dispropoftionggeourden on manufacturers even in cases of eases, such as jsbestosis, is unique and haaf'heen a gross empljnrtegligeoce, and opponents saying that legis catastrophic npdnomenon on a national scale/fo asbestos lation wcMpbreate a windfall for manufacturers, barm the workers and/o the asbestos industry." /' preteotferkers' compensation system, aod'potentiaUy in Citing tn "unique national scope aad/rnagnitude" of crease insurance rates. Opponents aisojnjfrned against fed competition problems and the effects'they have on the eral intervention in state workers' compensation systems. financial stability of specific industries, the committee By a vote of 185 to 113, the ABJmdy renewed its general made an exception to its generab^feluctance" to recom mend federal intervention In the fbrt liability and common petition on the issue of varsfiptort liability laws and accepted the special committevrecommendation to adopt law systems of the states. Federal attention to the problem would be "neither premature* nor precipitous," the panel a resolution opposing "enactment of broad federal legisla tion that would codify the tort laws of the SO states as they said, "and would not remit in harmful violation of the inherent values" of state^ystems. Speaking of the federal government role as a general relate to product liability." ^_ matter of "attentfojr to the problem, tbe committee en dorsed uo 3pecifkrlegislative proposal. It said;' it believes, however, that any approach "should carefully balance the interests of bfiu injured parties and manufacturers." It basedrits recommendation* on the. large number of MANVULE BANKRUPTCY ACTION MAY BNDANQER CO-DEFENOANTS, FUTURE VICTIMS, PANEL TOLD The bankruptcy action filed by ManviUe Corporation last claimsjaCe perception by a aignificantnumber of manufac- summer as a means of contending with thousands of health turersAnat their solvency is threatened," tbe interests ofj liability claims based on worker exposure to asbestos has claimants in receiving prompt indidaquatt compensate raised legal problems concerning the interests of future and the burden that pending claiqts appear to be placing state and federal courts. As introductory passage recent court decisions t claimants and of ManviUe co-detendanti whose cases have not been fTOiifl, witnesses told a Feb. 10 hearing of the House Education and Labor Subcommittee on Labor lowing workers to make c gainst tbeir own employ^ Standards. in certain cases of itlocal conduct, federal I Tbe subcommittee session was called by Rep. George ruptcy filings by companies (see reh Miller (D-Callf) to continue the panel's scrutiny of Manvillo's article in this issue), reports that the number of <' decision to seek protection from lawsuits by filing a petition being filed is po' ithiy. under Chapter 11 of tbe federal bankruptcy code (Current levemment Liability Report Sept IS, 1982, p. 328). Millar, who chairs the sub committee, said he will reintroduce a bill "within a couple Also approtejTby voice vote waa a seqUoo suppoij enactment qplederal legislation allocathwproduct Half of weeks" to establish an occupational disease compensation system to address the asbestos problem. risks betwflen the federal governmentjmd its contrag Lawrence P. King, professor of law at Naw York Univer and providing, in certain instances, imKmnity against I sity, warned that the bankruptcy move, while it may end up risks." The committee's report notedpat, in cases of | uct-related injury, "tbe product fgkture or character causing tbe injury may in a parMpar instance be atl able to a government spedfionon" reached through a trade-off between safety and utility, as in cases involving satisfying the claims of disease victims with suits pending, may not be applicable to the claims of those who have yet to file actions against the company. ManviUe has proposed putting future claimants into a single class with current plaintiffs for the purposes of paying out assets to meet national dafense. claims (Current Report, Feb. 10, p. 758). 1-17-83 Copyright 01983 by Tha Suraou at Notional Attain, 90S-0237/tt/OOJO DUP 0501657 13028, j)U 001391 MMiiiia ,-i sliafc iii'-i aMaallLiLi^i .....J mmimik - as life -i.-i.a-........................................... >:. - , i 'Ia tlr Current report 773 King suggested that serious legal problems would be raised by including future claimants in the general class of asbestos creditors and added that if future claimants cannot be put in the class of creditors, insolvency could result after pending claims were satisfied and Manvllle emerges from the bankruptcy's protection against litigation. `Skeptical* of Representation The law professor said he was "extremely skeptical" that the claims of future plaintiffs can be discharged in the current bankruptcy proceeding. He observed that the reor ganization plan required under Chapter U must be accepted by a two-thirds majority of creditors and then commented, "I can't see how unknown plaintiffs can vote on the plan or how people can say they are representing them." Issues raised by this problem, including the constitutional question of due process or lack of notice, would have to be resolved by the U.S. Supreme Court, King maintained, a process that in normal course could take three years, assum ing the court agrees to hear them. In addition, he said, three years run from a contest of a reorganization plan. The result, he stated in response to questioning by Miller, is that "the time is considerable before claimants can collect" In a situation in which claimants "don't even know they're claimants when the plan is voted on, negotiated, and con firmed by the [bankruptcy] court" ManviUe's liability could continue, King said. "The major purpose of the bankruptcy would be lost," he concluded. Co-Oefendant (mum A coalition of asbestos defendants that have not filed for bankruptcy protection from lawsuits told the subcommittee that Chapter 11 filings by Manville and two other companies "have made an unbearable situation even worse." The'coali tion. called the Committee for Equitable Compensation, consists of 12 companies that have asbestos actions pending against them. It was formed when six firms joined former members of the Asbestos Compensation Coalition, which disbanded after three of Its members filed for protection under Chapter 11, according to an attorney for the group. "When one co-defendant drops out of a case, the others must pick up the slack," John L. Baldwin, president of Pittsburgh Corning Corporation and head of the group, said. "Not only must they bear the entire cost of defense, but in many states, they may be required to pay the entire amount of any judgment rendered under the law of joint and several liability." In Manville cases where judges have not stayed the co defendant litigation, Baldwin said, pending proceedings have been allowed to go forward against the other companies, and filing of new suits against them also has not abated. None of the other companies, to his knowledge, is contem plating a Chapter 11 filing, he stated. Their financial situa tion has worsened, however, as a result of the Manville filing, he reported, citing a Moody's bond survey predicting that the "full weight" of the liability litigation costs "will be shared by the remaining companies." Baldwin also warned of harm to future claimants, "who I may be left without compensation if the assets available for I compensation are depleted by the present horrendously] costly and inefficient situation." He proposed a five-point] legislative plan for an exclusive, no-fault administrative] remedy to remove the compensation problem from litiga tion. The plan included contributions to a compensation fund | by all responsible parties, a category that included compan ies in Chapter 11. the other defendants, their insurers, and] the federal government. `Empty Chair' Defense George W. Kilbourae, a plaintiffs' lawyer from Pleasant Hill, Calif., accused Manville of "ducking behind the velvet curtain of the Bankruptcy Act," malting it difficult for claimants to obtain compensation as they continue "to grow old and die." Negotiations with co-defendants have been fruitless since the Manville filing, he said. In addition, Kilbourae reported, recent cases tried before juries have resulted in absolution of the co-defendants be cause the court panels have been "unwilling" to allocate ManviUe's responsibility to them, finding that they have not made a "substantial contribution" to the harm. This development recalls the "empty chair" defense Manville lawyers used to ImpUcate the tobacco industry for lung cancer cases, the California attorney said. In a recent suit against the tobacco industry and Manville, the court indicat ed that ManviUe, because of the bankruptcy filing, would be severed from the proceedings. Plaintiffs' attorneys "are now faced with the prospect of the tobacco industry asking, `Where is ManviUe?' as they point to the empty chair," Kilbourae said. Also testifying at the hearing were representatives of the Asbestos Victims of America headed by the group's founder, Jim Vermeulen; and James E. SuUivan, chairman of the board of PACOR Corporation, a smaU Philadelphia insulat ing firm. COURT ENDS LABOR DEPARTMENT NEOLiQENT |N PROSECUTION ORE0TKIN 11(e) CLAM The U.S. Depmt&at of Labor's negUgence in represent ing an eraplQMgjirmterests in an antidiscrimina$iq{jtlon warrants jjgpWry from the government of Uf<*mount the emploasnMmld have received from the cqmjiShy which was a the suit, according to the ILSrBistrict Court for trict of Oregon. ^This decision, issued Jan. S htJjvtUiaro W. Chadsey v. United States of America 0m No. 81-469FR), foUowed a previous court ruling whte&t$d dismissed the Section tl(c) discrimination claim JStoT by the Labor Department on behalf of Chadsey. This case arosorakr WUUam Chadsey was fired from his job as a chippegi^erator with Lumeo, Inc. The termination foUowed ijws of complaints or threats of complaints ipioyee to Lumeo management orgovern- ies concerning working conditions Since the date he waa hired in 197kpHcsey had _ to Oregon State's Safety IMvtsion.tijilKtiie chipper machine he operated lacked an extension t#keep chips from flying out, and complained to compapjTsupervisors about the absence of a railing on the^.wjJWrty around the top to the equipment's hopper. As a result of his copp&l&it to the state of Oregon, company officials added^e extension to the chipper. How ever, they failed togtiMaul a guardrail on the top of the machine. FoUowtfNBincident in which Chadsey nearly feiit into thR chiMBynooper, the employee notified ccsn^iipf- officUdHRptrintesded to contact the Labor DepSrtfhent concerningthe lack of a railing. ImmediatelyjsafeCquent to this communication, Chadsey wu termujatfe^from his em ployment with Lumeo. He then requegfijfc'fliat the govern ment file a complaint against the eg By charging that he waa subjeettd to unlawful dis Bon for threatening to report unsafe working condiff 2-17-13 Oecuoetlcnal Sef^ & Health Reporter DUP 0501658 DB 1302631 DU 001392