Document Z4vRQRD2v3g34OR8m8X9xYKLY

MINUTES OF THE ANNUAL K of the FRICTION MATERIALS STANDARDS INSTITUTE. INC. Wednesday and Thursday, June 16 and 17, 1982 at Sawgrass, Ponte Vedra Beach, Florida ACTIVE MEMBERS PRESENT Abex Corporation Bendix Corporation Brasshestos Manufacturing Corporation Certified Brakes, Lear Siegler Company Delco-Moraine Division Guardian Corporation Nutura Corporation P. T. Brake lining Company, Inc. H. K. Porter Company, Inc. Rsybestos-Manhattan, Inc. It. .'daway Manufacturing Company, Inc. Thickol Corporation Virginia Friction Products S. K. Wellman Corporation Wheeling Brake Block Mfg. Co., Inc. OTHERS PRESENT Abex Corporation Bendix Corporation Cougar Automotive Corp. {Regional) Delco-Moraine Division H. K. Porter Company P. T. Brake lining Company Raybestos-Manhattan, Inc. Reddaway Manufacturing Company Wheeling Brake Block Asbestos Compensation Coalition Legal Counsel Friction Materials Standards Institute REPRESENTATIVES Robert E. Nelson, Vice President Francis E. Messier William Simon, Treasurer Robert J. Anderson Donald L. Emrlck Norman Morse Larry DeFrance Stuart ConrLns V. Max Sleeth David E. Cunningham John M. Moore John P. Gallagher Thomas Kennedy Gordon A. .Carrigan, President Lee Burgess (6/16) Philip H. Grim, Jr. James W. Armstrong Alex Tebori Fred Yost George J. Bohrer Steve Doyle Ben Kublin Donald J. Testa F. William Barton Rob Burgess (6/16) Dave Pullen (6/16) Dennis Roes (6/16) Robert P. Gorman* Counsel Edward W. Drislane, Secretary Mr. Carrigan, President, called the meeting to order at 1:30 PM, June 16, 1982. As the first order of business, Mr. Carrigan called for a roll call. WV-18208 liXUUbl.0 AJillt-WA C IU.UULCO Hr. Robert E. Nelson, AbexCorporati'on; " .; `Mr. Gordon A. Carrigan, S, K. Wellman Corporation'. ' ~ Mr. F. William Baxton,"Reddaway Manufacturing. Company . . Mr.'David'E. Cunningham^"'Raybestos-:Manhattan,~Inc'..'.' r-. ^ ' . .*...*:!! - j s *J 1 . . * . i-- --*-' '* 'll ` . . "* - 4 t< i- ` , rt* * , J .s' f * *"? " * " *i *. i1. . '. .*? v Mr. Carrigan,'President,'called;For .nominations" from"tbelfloors .Mr-; ..... - ConrLns offered the name of 'MrI-Norman Morse' of .Guardian Corporation .. 1"'" I. in nomination. Mr. Morse "declined the nomination. *- *.r-" ' r.*'* Upon notion duly made, ' seconded' and unahimbusly^'p'assed,1 it' was: RESOLVED: That nominations for. the'Board, of_ Directors be closed'.' * " . `.................. ~ * The Secretary was directed tov-'cast"one ballot For-the election of Mr. Robert E. Nelson, Mr.-Gordon .A. Carrigan,-Mr. F_. William; Barton, .. .. and Mr. 'David E.l Cunningham to the Board of'Directors..' iThe'.Secretary /".I. advised that. -the ballots*, had been so cast.. 1 .The'Presiden't'advised that with'' the'election of. these four Directors." that- the. BoardThad the" * .1 .. -1 required seven.Members." . 711.* _ 7 - 71 ,*7'7.7..* . . 17 .17 '., J. a f Mr. Messier advised the Membership that it was. the Committee's intention to recommend the' follcwingsiatel of`Officers! for election.at .the..'Board 7..' of Directors meeting' following.' the.'first^Membership, session:.j . _7 ~ 7.17. , For President . ` For Vice President 1 For Treasurer. 7.17 . . ~ For Secretary . . - Mr.''Robert E. Nelson ' 'llI" Mr. Stuart Comihs. ` .Mr. William Simon. , Mr. 'Edward W.'Drlslane V ... HEALTH. AND ENVIRONMENTAL AFFAIRS COMMITTEE . - .. .. - .1 * * -**.'.". ...* ,*' . * ` '*.*' . ' 'vl*-. Mr. Armstrong,. Chairman of the Health and Environmental Affairs Committee, . presented this report.. Refer^to EXHIBIT 9. .. .' 7 . ** , . .. ..... Mr. Armstrong noted actions-.taken by. "the Committee and'the Institute Office, since earlier meetings. ..He* noted in particular, that concern was rising relative, to .litigation in the asbestos area, 'and proposals.for Federal. Legislation' in' the " Compensation " area.- ..'Eased on this concern, the Committee met with representatives of the:Asbestos Compensation Coalition relative . . to its activities, and recommended that a representative of this Coalition ...*address the full Membership at this Meeting. He also noted the concern with_ landfill and waste disposal' -requirements! .11 At Its meeting, this Committee asked .that, the Board of .Directors approve, a. :y request to the Federal EPA on approved -landfills..for friction materials _ - waste, and asked that the Board suggest, the means for making such a .. request. Mr. Armstrong'reviewed'general...OSHA and EPA activities in areas . of concern to 'frlction materials manufacturers and noted that the Institute, had written NIOSH for either a final report or a status of the NIOSH contract for "Health Hazards In Brake Lining Repair and Maintenance Workers Occupationally Exposed to Asbestos." ' *' 5 * . i s . .. Mr^ Armstrong discussed.litigation and'it was noted that-'.-if' an- individual.. was covered by workmens compensation, that party then could become a plain tiff in a third party suit against a supplier of asSestos.or asbestos . prod ucts. The problem with' landfills ^as'thht^tKeir^availability, Y^^ijryijpg up, and sites and waste. transf)ortei:s-were-'-less"'accessibleconsiderably.roore ex- '. _ TVlP tJac t*P * rT*AW"T Pnv"* r sTiTI v 'Tunri*' V*r rViom^ r.a 1 T-\*"r\Ki.crn tW t-V^ r\Vi ftlc.* Upon motion duly made, secondedVand* unanimously^.`passed,-it was:*.1*- ...... M f4 > ' . ?.* * / * ~ i l 4m > **,* lw RESOLVED: ' To accept tive.*:repor6^of'-.tfteiHealth..end Environmental^v-c Affairs Committee 'as'^writtenl'5" "**.,, ' ' . * *v .[ . ** -- . i*i * ....................- -** ". .> :r . ASBESTOS COMPENSATION COALITION " - - . --:--:--:--------------m:--:---------------: - = .zsrr :. . J...j - 5 The President welcome'd Mr. to the ship after'earlier contacts .witii"Mr'.^ArTOfetmg^s_He*ai;t^land' Environmental' Affairs Committee. Mr'. 'Cariigan' felt- it"w'as'timeiy''ihat'`the^Cea.lition 'h1ad:'acc^p,ted this Dennis Ross xjho. i-S^ also with^ the' Coalition. '', 3bth_Mr.'Pulleh Jand Mr*.'^Ross presented the Co.^ii tibn's ' update''on*".the jcompehsation" issue.. an'd\alte^eted. .in^_this. pre sentation.' For backgroxind,'it'was noted "that the' foliowing'. were^embers `6f the Coalition: Celotex' D'ivision/'o`fr Jim Walter;,*. Asarco;/Pittsburg. Corning,`"j'Unarco, Johns-Manvilie, Raybestos-Manh'attan," Anatex, and Eagie Pitcher'.' 'The'earlier legislative initiatives were 'noted "including; the Hart Bill',: the. Fenwick Bill and the Miller Bill. Hie Cqaliti'.oit saw m'erits' and shortcomings Ip .egch of these, and felt that while' they'did not'have:-a complete package, to .ofter at this tine, they needed broader 'support- and would encourage, meaningful input from Institute Members and others. It was stated that there are how 18,000 lawsuits in the asbestos* area, and th'ere;.AtC- more -asbestos-related lawsuits in .die.', courts, than -car accident' suits'. _The 'aIlegations"are that 'asbestos ** ' products manufacturers'-knew of the -health' 'problem an'd.di'd npt warn the. exposed worker. Lately, the issue of "strict, liability"-has arisen where .'it -#ouId not natter if the manufacturer didn't know'of the" health* hazards-^he could';b'e held liable, iu any fevehtiy^Siib's'equent'-to the' Meeting,, cfor. instance-on' July *7," 1982 the New Jersey'^Sii^'reme .knpwn ofithe.`healtH'h'azards,5'p6Sed'by;`asl5est.qs.' ) - ;; }_" ` . \z:- The increase in litigation has several .roots. There ^as-tjqen. an..erosion in the. exclusivity of workmens compensation-as the'remedy'ihcases' of'exposure. rmlS'--t --tUi-j _________-i-i.-. r _ J___ ____!___ _"_____ .--r____ :__ i___________ r. i y. Mr. Pullen suggested the poor distribution of funds to the injured party with distribution of a typical $100,000 award.. Sucdi an award could go up to $60,000" in "fees,"'$5,000"ih"costs,.: $10,000 *to 1repay Workmens Compensation, and the final7$25,00bto: the injured'party for 'lifetime medical'costs. ""Counting the" costs of the,'deferidant* par ties ^and^nciuding^'the'-costs.'of"defexidihg's'uc- cess fully' where"no" awardnis .made j: it'may cos t '"$200,000~: t o ~g e t -' $ 3.5 r000 -.to the "injured p arty/ ~ 'This" sy'st eir of awards"'is^wastefuiy and it is;-'suggeiteHvthatS -some other sysdem shndidf'b'e^befcte'rf:'iA suggestion' thati::tfiere1b*e -flfty^'uniform lawsr in7this - area1 for';theL50^States' is "both :`unrealis tic-'and:tcostly7~"'{It"is"-1 suggested'additionaliy",t:hat'1such?:unifbrn pians~in.'the"50"!States 'So hotrbring the United' States Government ih^as'a'participant "wheri'.'the'Governmen't-rra-sfiip.yards of World War'll. have been responsible for "a majority4 of the cases'in-**1 litigation* today. '"Mr'. PullehVand^Mr/ 'RossVsuggested that `if a[State-by-Sta'te approach is not the 'sblutioni`"!tHit the'solution may Ve `the' Federal Government j acting on Four Principles: ' - ; . . .s.rv,,- cr-nr o.r- rzirc.:c j zz:\zz.z:.i 1. Settlement be prompt, adequate and equitable 2. Proof "of 'injury would-be-1 on" clearly" defined -medical evaluation' sAT s (avoiding't'the:`MBladk',i;uhgtt.. thedry')whefe?:ariy expos ute^-lfc suf- rfevssr. ;. ficient 'proofJv-"" ?C3 tnc-'-i; mcrisw biuow rr&irllxvi'j ed;. '-Coits^ould^uot-be^dTmpe'd'on the " taxpayers--the^burden? must:*be t---- * on77 those- xespons'ibTe; -- ~ * * !* *irow r.jrricxies-aas jkiiI ar.v - 4."-Such settlement would provide the' exclusIveV-remedy;prohibit-uor.r ing third party litigation. J*-iu21.nl j.-ibcMs The Government''would" itself-''-bear"50%'-of the'; total costsi -as roughly-5 0%? of ;' exposure occurred1 in:-shipyards at*-wartime' rnl.' -. h~. . !r_s \:.uslr.v: .- : / rr.o7". .-. zz-z- Mr.-PuHen'-hote'd-the three Earlier-legislative initiatives on Jasbestos-tconp- ensation: S1643*-- the Eart-Billy- IIR5224^' - -the: Fenwick: Bill, and HR573S1- r c the Miller'-Bill-.'-- Both-'th'e'Hart Bill and the: Fenwick Bill.-are -deadv:'-iJhileb the Miller Bili is'-technically <p3dve,; it-! is probably politically dead.-.r. 1: The Co'alitibn'has-fre"cominende'ci,a';mew legislative approach--'Among :the ad-r.. r-z vantages would be^'that' -it'ddesrnot -federalize.-workmens corapensation, but nno rather'works:withiti'-the*' exTsting'-Btate-worknens -comp'ensation- framework.-' 'It. would safeguard the funding, as the implementing resolutions would-have :a .In limited life of five or ten years, and the entire resolution could be terminated -if.":th'e -"pay-out"-exceeded-cthe -funds! availab!ej.n-rhAchJ would .rein- 2 2 state' tort litigation -as=-he"'ir42medy..I *-r In'Uither iwoxds^ rthls. would.-javoid; - y-c, possible'unlimited funding which ftould "resultfrom legisiationicofvrtheK1 Hack- lung" variety.' : i--Ai " c-. s -zzn a;:ji r.. Si. i vz:.- up \T'vct. r-.Tw . J Copies-of -a-'-"Summary cf -:the- Occupational' Disease- 'Condensation. Ipprovementno Act and the .Inplementing:3lesolutIon':fbr-Ash.estos- Belated dliseases" ;were distributed." ..The Coalition".'had.prepared these Summaries i-to.-describe/ji: ~i-h: generally the legislative approach recommended.-:'.TheAct';wouldrbe-ar.tier generic approach not limited to asbestos which could function for a range of-occupational!diseases.,.-i!Hiis 'would-M"elate^to-the-types :of diseases^ the . provision .'of" benefits', iinteraction -ietween Federal and State -Programs ,;-:and-; ' financing-of^rhe'-^und. -2 TheqjroposedzAct- would .-provide-that, this remedy was the exclusive remedy dEor. those .-injured-by."the occupational. disease,- The-.-.i Act would provide :ior Implementing-Resolutions .-.for the different occupational diseases and .these-resolutions'-woul'd provide ifor i a ".limited life -of theb;. .; resolution .and " that :the. resolution could be.-.terminated. Af- the vpay-out :exceeded available funds rabsent-.enadting additional authorizations. nciil-:,.-o'- ir-!: ' It was suggested that.if 'the -existing system . .of-tort liability-is not . .' changed that there .'will be bankruptcies within this industry There may even.be bankruptcies by :the. Insurance .carriers , as there-now are'400 ".to .500 J new cases being litigated monthly... It" was noted .that solutions to' this'. problem were.'complex; and that if* there . is no-solution many "asbestos "products' " manufacturers, may's go.-'out..of'business. ^The .Coalition ,at .this time requests, input from-any interested pairty'shd..that-vheh'a .draft^of;.the" legi^latibh^is^ available, .the Institute, and'its .Members might help'with .constructive*. ^ criticism of. the proposed Act.., "Now', is-,.the'.time' to. .discuss the 'planj' . and'as . nothing .is now cast in concrete, this'.is-Tithe best'time for Input. .-\It itfas. . stated that* the Coalition .should have- the-- languagerready' in - the next months or so and would hope to have copies' ready for the .institute and other.' interested parties* at that time. They would hope'to haver'the proposed Act ` . .* in the legislative hopper by late 1982. The Coalition's proposals were opened for .questions anddiscussion* Tn' answer to a question on cooperation with the. Coalition, Mr. -Pullen noted that the Coalition would welcome applications for Membership in. the Coalition from interested parties.. Questions were asked ;on_ financing th'e fund and it was noted that assessments would be made on a formula bashd cu-:each ' " manufacturer's, defendant settlemaits-and, judganents and ..on the number of pending lawsuits. '" *fl Mr.-Pullen noted that it was .possible .thathis company - (Johns-Hahville) might end up being assessed a higher proportion-of the. eosts^of-1 tKe-'fund, but .that such a program would compensate those funding it with injured parties giving up tort rights. The efficiency of such a p.rpgram would be-that up to 85%^- of the costs' now consumed in tort-litigation. _could.he' eliminated* He noted .- that currently about- 2Z of. cases goto^verdictV Jaind--about 65Z.'have been . , defendant -verdicts r.1'As some-other than Johns-Manvilie cases have had 85% defendant verdicts-, Johns-Manvilie may end tip paying a higher percentage fee than others. -It was noted that one defendant, had-won 16 -out of 18 cases,. * and rthat the process of. settlement has.Increased'-^li.tigatibia../.' Some defendants may reappraise their rlitigation strategy and.prefer going to verdict rather than-settling-; \` i `- It was noted-that :D'r. Selikbff had.-predicted-10,000 excess -lung .cancer'deaths per year -from`.asbestos exposure along .with: 2,500 ashestbsis cases and'2,000- to'3,000 mesothelioma cases..*' While -most -observers -believe. Dr..'- iSelikoff's projections are too high, this is an indicator of the scope of possible litigation. One party questioned if an alleged victim of asbestos exposure, could readily make {hie.'claim .through .the, -intended : compensation ftind,-.wouldn't this open even more 'claims' than .tort Jitlgatibn.-v/Ih'rresponse,: At was noted, that some observers 'feel *the' "j ackpot" s ettlement: jz f '-tort: litigation is. more attractive to the -alleged.vi'ctims. vt'.:.--!-: * ` T- .. . /. r.'.-.' With this open discussion contludedi-'-Mf. 'Armstrong,' Chairman of the Institute* Health-and Environmental Affairs Committee,'.-suggested that Mr. * Pullen's -. and Mr. Ross's presentation had/given the Members a broader perspective on.'.the issues', and he asked for -more .participation -of -the-"Members iiri the work of his , committee.* 'It was 'stated'that -soma Menbers may wish to-participate as '.in dividual Members of the -Coalition, and that the -.Institute wished : the Coalition to maintain liaison .'with -the Ins titute through its Health and'Environmental Affairs Committee. 'It was -asked that the/Coalition-.place .'.the 'Institute' on its mailing list, and that the Institute would forward data on to Its Members. Mr Pullen and Mr. Ross projected that the draft of the proposed new legislation would be availble ' two or three weeks, and that a draft would be sent to the Institute at that-2timel, -lin-resporise t oa: question"; it was noted that :there was no sponsor for such proposed legislation at thi9 time. ; ; . The President thanked Mr. Pullen and Mr."Ross' fortheir'efforts on this ` presentation pf position hy the Asbestos .Compensation. Coalition. r.--r i .*35.3 s.-r: - l-src;/rstosa ? i:L< Upon motion *dulv '`made.- Vecohded'^arid"imanj'tnouslv toassedi*rl t^-was^~ T . ' ,. :. - presentation 'at ''th'is' -meeting'/1- * IJ- ;V 5--frrr:';;0'f' . r* v .^vVr;-iv': *.3lw 2yn-bij:r::-.T.qirr-y 1 *r.ir.z3 1 ;. -t PEE-'PORMUIA COMMITTEE ^PAftT-SV "C`- -K r:V?Jrv: -"V- ' ~ * . * - j-. a.... y^ Earlier -in the' meetingi ithe';Meiiers'sdIs,cussed.'a! j>foppse.d :inprease/n the'V | annual fee- with ar,vch'ange Utf?Jth^'/;fee 'formula. .It was moved :that ihis item-'-"- he. tabled' Until' dfter pre'Sen't'ations by 'the -Health . and -Environmental'Affairs Committee and members of the Asbestos Compensation7'Coalition.*" The `President called for additional discussion on this agenda item. ;r:- *_-i: .Li.'.<i.-*or='.':Af-n_*"i-a.' u'.-itsyc-- : Si,~r - . .t!; c. The Board of Directors had voted to. increase the annual fee by a change in the fee formula as followai'^"^ r<'~ '.s'n ; "s >3 o..'I'i'rr: njj- n:.- ra J Active Member: Basic Fee Increase from $1,150 *to'$1,300, _ with no .change in the. category .assessment Regional Member with Active Member rights: Same fee increase ^ ......... \l a-- **. asior''Active Heifc'er^^ : - ' - ~;:t Regional Member (Regular) Increase from $1,450 to $1,600 .;. , 1 'Regional -'Member (Associati'iiti) ``Increase "from ,$2r400 -to "$2,6Q0 r f*1 *V" Licensee::V- 'Increas'e'from $550 to $600 ' * As indicated earlier,- -'tlie "Bbard wished to' "est'ab lish ,;a ""reserve1' -with the *.' additional fee ^payment's tb"!p'lan: fir that time when additional monies..may(;-;:; _ "have .to be spent :on- cbhsultantS c^thiet ^dbsts .to help' -solve vprob lems iij' V- L{ the waste disposal' area, arid other' areas''pf envircmmental concern., Such;'u/4 reserves'could only he h'uilt'to ^n lDp.rtaLbr'^pin.t, .arid if funds were; not'; . v'1;| expended' the reserve fcould he closed ` and 'monies^ 'made 'aval1^3le'.`for. general. purposes---in effect reducing -the":fees'ton^rn was expressed;^ creation, of such a reserve" when', the' Institute''"had b'een -geheraping"-ah' Stepps .of income r.i'. over expenses for the past several: years'.- '* -'-'y *'.......... i( .; Upon motion*duly* made,'`%econfle'd 'aiA 7- passed with'ten 1-Iefibers' , - ^ *________"_________________________Li. - - - , . .. *\ Licensee: Fee: $600. his suggestions for more participation pr; .or to next year's meeting. The President thanked the Chairman for hip work on .this year's Tournament, the presentation of awards, and his suggestions for increased participation in the golfing. Upon motion duly made, seconded and unanimously passed, it was: RESOLVED: To accept the report of the Golf Tournament Committee as read. CREDIT REPORTING SERVICE The Board of Directors considered a suggestion for a credit reporting service at its earlier meeting. After dis cussion at the Board meeting, it was rec ommended that Members Individually list the individuals at their companies who should be contacted for credit Information. This list would Include name, address and telephone number, and those submitting this information would have access to the Institute compiled list. The Board asked that this subject be an agenda item at the Membership Meeting. Mr. Cousins was asked to present background on this concept. He indicated that since Institute Members dealt with the same customers and were aware of the credit capabilities of these parties, that it would be advantageous to those extending credit to have access to this information. The idea of a service such as that provided Members of MEMA or CFS was discussed. The original' suggestion was for the Institute to set up a credit reporting system for its Members similar to the MEMA and CFS plans. Some possible shortcomings of such a plan were noted should the plan send out information on a customer which turned out to be Incorrect. One party asked what was wrong with Dun & Bradstreet and it was indicated that was a good service but when someone is going under, it is usually too late with the Information. Tie Members generally concurred in an exchange of information on who should be contacted In their organizations for credit information. This would be done with a filing of information with the Institute as to who should be contacted for credit information giving name, address and telephone number. The Institute would ask for this information and would then distribute a "master list" to those who provided the information. The Institute Office was instructed to review this with Legal Counsel before proceeding ***** There being no additional business brought to the attention of the Member ship, upon motion duly made, seconded and unanimously passed, it was: RESOLVED: To Adjourn Adjourned at 9:40 AM E. V. Drislane Secretary