Document YVOX9rjd11506MyqrbqXaqVN

FILE NAME: Avondale (AVD) DATE: 1978 Nov 2 DOC#: AVD008 DOCUMENT DESCRIPTION: Meeting Minutes - Shipbuilders Council of America - Committee of Asbestos PLAINTIFF'S b EXHIBIT Jz S B C A 5090 | SHIPBUILDERS COUNCIL OF AMERICA " T n T ""'r.. ........ .... t % Ad Hoc Committee on Asbestos Minutes A meeting of the Ad Hoc Committee on Asbestos was o n N o v e m b e r 2, 1 9 7 8 a t t h e o f f i c e s o f the S h i p b u i l d e r s Council of America in Washington, DC. Pr esent were; held D a v i d R. L a v a l e t t e , C h a i r m a n Joseph Bogni, M.D. G e o r g e L. Bowen French Caldwell J o h n A. Chantrey, Jr. Vernon E . Duke Stephen Gould Russell Guy C h a r l e s K. K l e i n Daniel Whichard F r a n k R. K e s t e r m a n General Dynamics Corp. General Dynamics Corp., Quincy Shipbuilding Bethlehem Steel Corp. Litton/lngal1s Shipbuilding Ogden/Avondale Shipyards, Inc. Alabama Drydock & Shipbuilding Company National Steel S Shipbuilding Co. Bethlehem Steel Corp. Newport News Shipbuilding Litton/Ingalls Shipbuilding Shipbuilders Council of America ASBESTOS STUDY Mr. Lavalette provided the Committee with a summary r e p o r t on t h e C o u n c i l 's s u r v e y o f e m p l o y m e n t a n d a s b e s t o s r e l a t e d d i s e a s e c l a i m s s i n c e 194 1 . It- w a s t h e c o n s e n s u s of the committee that the number of workers compensation claims and third party litigation actions is increasing exponential ly as can be seen from the results of the SCA asbestos ques tionnaire attached. The potential liability for workers compensation alone is in the $billions. For example, it has been estimated that for claims where the last exposure occurred before the 1972 amendments to the Longshoremen's and Harbor Workers' Act, the claim value will probably be under $100,000 per claim. However, where exposure last occurred after the 1972 amendments, the value of a claim will probably be in the range of $250,000-$ 750,000 including escalation and litigation costs. Even the most conservative assumptions made about claim experience in the future will produce a figure which could be potentially ruinous for the industry. CONSULTANTS REPORT Versar, Inc. has been retained by Avondale Shipyards, inc. to provide an o v e r v i e w of the asbestos problem. Dr. Michael Markets, President of Versar, Inc. provided the Committee with background information comprised of two v o l u m e s (1) l e g i s l a t i o n p r o p o s e d in the 9 5 t h C o n g r e s s r e l a t S - i n g a s b e s t o s - r e l a t e d d i s e a s e s a n d (2) d o c u m e n t s r e l a t i v e to 2 "black lung" legislation and the parallel to "white lung" legislation for shipyards. Dr. Markels noted in his presentation that various government agencies are research ing their own historical involvement with asbestos regu l a t i o n . T h e s e a g e n c i e s i n c l u d e the- U.S. N a v y , D e p a r t m e n t of Labor, General Accounting Office and the Maritime Administration. LITIGATION PATTERN The. N a v y had on file $2.1 b i l l i o n in p e n d i n g a s b e s t o s c l a i m s as of O c t o b e r 1, 1978. It a p p e a r s t h a t t h e c l a i m a n t s in private and naval shipyards file workers compensation claims against their employers and also fill lawsuits agains t asbestos suppliers, The suppliers are in turn seeking indemnification from the shipyards and the Government. Two recent settlements ar e mentioned below: In May 1978, a former employee of AMOCO Refinery was given an jury award of $750,000. This case was settled out of court for $275,000 under threat of appeal. On O c t o b e r 4, 1978, G w a l t n e y , f o r m e r e m p l o y e e of N o r f o l k Naval Shipyards settled out of court with Johns Manville the day before trial for $157,000. Johns Manville is suing the Navy for full recovery under the indemnification theory. Johns Manville claimed the shipyard-was negligent in the use of the product and in failing to warn employees of hazards. The shipyard defense is that workers compen s a t i o n payments are the exclusive remedy of their employees. RECOMMENDATIONS TO THE BOARD OF DIRECTORS After considerable discussion, the Committee agreed that they would recommend to the Board of Directors, on December 13, 1978 that indemnification legislation be pursued. The indemnification sought could be in the form of "white lung" legislation or a National Toxic Substances Indemnification bill. The Committee recommended that, the Council pursue Toxic Substances indemnification legislation because of the increasing danger of more occupational diseases being discovered and growing to,epidemic proportions. In addition to asbestos, shipyards must be prepared to deal with welding fumes, silicosis, lead, hydrocarbons and carcinogens yet undiscovered. The mechanics of such a legislative remedy have not been thought out. The proposed legislation would have to have sufficient safeguards on presumption of responsibility, m a l - a d m i n i s t r a t i o n , and offsets to workers compensation and social security programs. The source of funds would be the U.S. Treasury and most likely a general tax on industry. 3 The p r i n c i p a l a r g u m e n t for such l e g i s l a t i o n is that the shipbuilding/ship repair industry could not have known of the dangers of asbestos until the 1960's or later. In f a c t , t h e U . S . G o v e r n m e n t r e q u i r e d a s b e s t o s to b e u s e d , ** provided specifications and maintained responsibility for public health standards. Therefore, the G o v e r n m e n t is the ultimate "responsible party", even more responsible than asbestos manufacturers. The Committee believes that the case for Government responsibility should be documented for possible use in litigation, and to convince the Govern ment that it should support some type of indemnification of shipyards. It was also noted that government indemnifi cation may be the only recourse for former employees of the many shipyards that have gone out of business. After prope preparation, it was recommended that meetings be held with the Department of Defense, Department of Labor and the Mari time Administration to gain their support for this approach ADJOURNMENT There being no further business, the meeting was adjou rned at 3 PM. Vice President and Secretary SUMMARY RESULTS ALLEGED ASBESTOS RELATED DISEASE QUESTIONNAIRE % E M P L O Y M E N T (1) Years Tot. Avg. No. Employees on Payroll (as of Dec. 31) Tot. Avg. Employed Annually (Including t u r n o v e r ) (2) Estimated Total Different E m p l o y e e s (3) 1941 - 1945 1946 - 1950 1951 - 1960 1961 - 1970 1971 - 1975 440,200 80,000 81,000 104,000 146,000 704,300 128,000 129,600 166,400 - 233,600 1,760,800 320,000 567,000 728,000 584,000 GRAND TOTAL 4,563,800 WORKERS ' COMPENSATION CLAIMS Period of Filin ? 1960 - 1965 1966 - 1970 1971 - 1975 1976 - 1978 No. Claims Filed for Alleged Asbestos Related Diseases 5 10 159 294 THIRD PARTY AND Period of Fili ng L I A B I L I T Y A C T I O N S (4) No. of Actions 1960 - 1965 0 1966 - 1970 3 1971 - 1975 5 1976 - 1978 125 (1) I n s u f f i c i e n t d a t a w a s r e p o r t e d r e g a r d i n g a p p r o x i mate average age of workforce. (2) T u r n o v e r r a t e s a s s u m e d to be 6 0 % / y r . o r c o l u m n 1 X 160% (3) C o l u m n 1 p a y r o l l a t s t a r t o f e a c h p e r i o d p l u s 60%/yr. x yrs. in period (4) T h i s i n c l u d e s a c t i o n s b r o u g h t b y o r o n b e h a l f of members of employees family and other actions such as enjoinment by asbestos producers and/or v:. s u p p l i e r s r e g a r d l e s s o f m e r i t o r r e s u l t . ASBESTOS SURVEY - REPORTING COMPANIES ALABAMA AVONDALE r BATH BETHLEHEM (ALL) GENERAL DYNAMICS (ELECTRIC BOAT) GENERAL DYNAMICS (QUINCY) JACKSONVILLE LITTON-INGALLS NASSCO NEWPORT NEWS NORFOLK ROHR SEATRAIN SUN TODD (ALL)