Document gbL4p46XQDp7LXdDEMGwL3g7N

PRODUCT LIABILITY INSURANCE ; -1 PLAINTIFF'S i EXHIBIT HEARINGS * BSroriE TH5 SUBCOMMTTEE EOB C0KSU3IEBS **. or-iss . ' 1' ! 7' COMMITTEE' OR COMMENCE, ' SCIENCE; AND TRANSPORTATION; ERTEEI) STATES SENATE \ *' STKETY-rlFTH CONGRESS' . nssT session ... ...r ` ..;' os .7' . ; :* ** S. 403 TO REGULATE THE FLO^V OF INTERSTATE COiDlESCS BT ESTABLISHING PROGRALIS, STANDARDS, AND FROCEDtfUES FOB, DETERiONING RESPONSIBILITIES AND LIABILITIES ARISING OUT OF PRODUCT BELATED INJURIES, AND FOR - OTHER PUP-POSES .. 27, 2S, AND 29, , Serial No. 93-25 , Printed for the use of the Cocaaittee on Commerce, Science, end TruasportaCioa t AlACrtMtrt4 * 01 A t * (7rtdwcl liiWily iMni*MC pitmiwm*--117& nd 1974 27 C#p* co**l 0 * t * . . . 1970 pitmiiu* 1974 . - ? ' v/... ttntni IwtlH ttumbtf < employ*** C9tn?*Tr;. , > ` - t - * *i V .* * - m Tt TV . ,, ' 14 1* 1 1* It 3 TV ' TV * .. . .................. *. - VT T9 Tt >4 ' V* ; * ' Tt ' i Apprvxi'sifC. --' ' * ' *. 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' ll 1.100 a qos 10 * *- a '-* ` _ * '7 T . * .V * ' Attacsixctt ynna Two GBIA Pxouccr Lraarmr Susvrr Products involved !n Product Liability lawsuits la Georgia: Aircraft, baas.. bricJi burlap bajs. buses, cartons, cement. ehctnicnlH. chicken houses, cosmetics, crushed marble, cultivators. food, class containers. iron casting*. lawn mowers, meat cutting tools, metering equipment, motorcycle*. paint, imper roll plastic containers, pressure vessels, suack foods, soft driuks. solvent, steel bar. steel tantg*, teiephone enclosures, textile machinery, textiles, wire. ' . .. / . '. ' ` j -: *' *" ' ' ** Hot TTssnsii Poaa, * . ZsvTxcjrifsxT.it CowscLTaire, . Washington, D.C. April 2S, 1377. . Chairman. Consumer Subcommittee. Senate Committee tm Commerre. Science. and Transportation. Jiusscil Senate Qgtcr Building, Washington, D.C. Dexx SsTAToe Poxa: I submit the enclosed comment for the record of your . hearings ou S. *<(13 this week. (National Product Liability Insurance Act). Since theae bearings are "exploratory*. I liare not attempted to criticise the Bill la derail but rather offer material that should be of central value. I do wish to note that most parts of Title VI. Part A appear to place consaasta at a disadvantage. "When and if your Subcommittee sets to more advanced stages of drafting this legislation, I hope you will actively solicit input from consumer organisations. -- - . .- . . . Sincerely yours, , _ / _ . .. . *' ; ' . ** * `^nrrT CASTtXSiaa. '** -- Csiiaxssr I have served as an expert witness on- product liability cases Involving asbestos and would like to offer some remarks for the record of your hearings. Host of my efients are environmental croup*, and recent actions of the Natural Besourers Defense Council are also iwrticularlv relevant to the subject of liability from the sale of osbcstos-coutitinius consumer produets. The modern asl>estos Industry is over 100 years old. and commercial proHuc* tion of asbestos insulation products was recorded as of 1S7-L The asbestos /. 419 jsaolotlon products developed In the 19tli century were sUtt In use as recently (8 lOGo.* Aslnwtos insulation* products did not bear ha-sard warnings before jOW, the year a study was published establishing that cancer end nabestosis were major causes of death among workers who applied asbestos insulation to pipes and boilers, etc, '' ' Today there are thousands oi product liability cases against the manu facturers o asbestos insulation being pressed by dying Insulation workers and their families. A reading of published literature strongly suggests that the . ' manufacturers recognized the deadly nature oi their products .long ago, but decided that sales n*as a more immediate and overriding concern^ tiiau the public health baaard those sales would represent. .. * PUny the Younger (01-113 AJ}.). a Roman historian, referred to asbestos!* In his description of diseases of.the slaves.* He referred to the use of respirt* tors to protect against inhalation of the dust* Apparently, the Romans realized that slaves wearing asbestos were first becoming disubled to the point that they could not exert themselves at work, and then they died as their breathing . difficulties became severe. . *. - The first modem reports of asbestosis appeared In Europe ia the first > decade of this century. In 191S, a U.S. Snrtaa of Labor Statistics mocograph . . died mortality figures from Prudential Insurance Company, and noted:* * X . . the hygienic aspects of the industry hare not been reported upo& It ` say be said, in conclusion, that ia the practice of American and Canadian life Insurance companies asbestos workers are generally declined on account of the assumed health-injurious conditions of the industry." ' - ~ The Department of Labor bohe&n contained numerous pleas for research on the health hazards of the growing asbestos industry.* Case reports oi asbestos deaths among factory workers appeared in British . medical journals in the 192Q*s, leading to a government survey of the industry conditions and workers' health. But some of the factory workers figured out on their own that their jobs were hazardous and quit, according to a 1929 British'' report of four fatal asbestosis <ases (average age: 41).* The following year the government report was issued, ia which it was reported that about one worker ia three employed for 5 years or more had asbestosis. Regulations were shortly Issued which resulted in vast Improvement of conditions in British asbestos . factories.* .. ' In 1939. "officials reprr*ntins the asbestos industry in the Tailed Slates" approached the Jfefiropolitan life Insurance Company to condnct a study of workers employed in asbestos plants.7 Onlr 16 per cent of the workers had so sign of asbestosis on x-ray, and. of these, many complained of other symptoms (cough, shortness of breath). By the time this study was published in 1935, there was a growing body of evidence published in England and the U.S. showing that asbestosis is a progressive disease in many cases--that is, the disease becomes more extensive eves after cessation of exposure to asbestos.** The first esse reports of asbestos amaug insulation workers appeared in 1933-34. and these were the first findings of asbestosis among workers em ployed using asbestos products (as opposed to mining, milling, and menu* - lecturing). These reports appeared In L\S. and British medical journals, also.*** ' .v - *Sitko& L 7,, CSnrg; J. sad Ti C. Haasaad. "The Oererreae* f Asbestosis Aaoeg Insnlatlsa Worker* la the patted States.'* Asa. TC.T. Acad. Set. 133: 129-122 (1363). Pear, N. G. -T*twr to the Editor.** Aatr. lied. A.*w. 173.- 320 (3361). Snaeer. A, `"Tie DJtmsn of Occupations,** (-4th SA) LitUe. Brown k Co. Boston, 1889. * Hoffman. T. L. "Sfortallty tnta Respiratory Disease* la Dosty Trades (Inorganic Dusts).- H.S. Bnreao of t^ionr Statistics BuUetla 231. Washlnetoa. June. 3913. (19* 3H9a1d. dow, a. C. "Clinical Aspects ot Pulmonary Asaestosta.** Sett. lied. J. 3: 230-3S3 * Merewether. EL 3. A. sad Price. C. ff. "Report on Sffeet* of As&este* Dost oa the Lane* sad Duse Suppression la (he Asbestos Industry.** H. 31. Stationery Office. London (3930). T Loose. A. J-. McCoaaWL W. J. sad 7. W. r*heC ~V&trts of (he Tah*Jaf}ojj ot Asdr*fi* Dane on tfte-Lnns* ot Aebearm Worker*.** (Vital. Health Ren. 301 1--33 (3933). Soarta. J. V, "IVtlmnnarr AebratntMs.* KaiilnloCT iTt 134&-1337 (39311. * iteeewethef*. EL It. A. "X Zlt*n*mran*iam tm XiTiiftcrrte IS: 109--128 (1033). ISJmaa. P. "tVilraonaer AUw-toiU*r its Clinical. RadlalMClcal, nod Psthaieelcai TVuture*. ead Associated RUS of Tuberculous Intention." J. XaduaC. Hrc. 23: 2C3-1S3 (2933). u Wood. W. 3. sad S. R- "Pulmonary Aobesteoia, A Eerie* ot Otae Hundred Csoes,** LaaeetS: 1333-1334 (1934). a? <** T. ' ^ -;i^VrVV: .4 . w4 la 1235, the first reports of lung cancer with nsbcstosis appeared In the US. , and England.*** At this tfme, June cancer was far less coaunou ibaa It ho* ' since become. Other case reports followed, and hr 1020 state Insurance carrier* . la Germany recoguizrd and compensated slight asbestosia with fatal Tuns ` cancer as death caused by occupational disease.** In 1943, the German govern ment formally recognised lung cancer with ss>icstosU a* a cuinpensable occu pational disease* -? . Sfeanwhile. insulation workers were among those d.rtae with lung caucer sad there was a report of 2 cares in New York in 1942." Oue of these men * had stopped working with asbestos 10 years before his death hut nonetheless developed very disabling aslwstnsis in this time (. . during the last few year* of life he was almost completely exhausted after climbing only one fight at stairs. He had frequent touts nf concilia? . . **). prior to developing cancer. . By 1947, the Chief Inspector of factories in England reported that of 235 ` cases of asbestosis known among deceased workers. 31 (13 percent) had had cancer of the lungs or pleura present as well at autopsy. This was contrasted . with a 1.0 percent rate of lung cancer is autopsies in the general population.*^ Numerous descriptions in the literature show that the disability of the ' asbestos industry's factory workers must have been as obvious to factory. . owners as the same symptoms were to the Roman slave drivers many centuries before. TThen the- Public Health Service announced Its intention to survey the . asbestos textile mills of North Carolina, the mill owners responded by firing . 150 out of less than 600 workers, thus gutting the data base the government would need to dereiop its regulations.1* ; ... -- : .....\ * The Public Health Service recommended a "tentative'* standard for worker . exposure based on the severely limited findings of Its study published la 1038,. ' and this stood unchanged for over 30 years. * .. ' The cozy relationships that the American asbestos industry has set up wfth * universities and government officials trere described by New Yorker writer , Fan! Brodear as the "medical-industrial complex.'* in his book Erpendaila ` American*.* Hare than half of Rachel Scott's chapter. "Science, the Drab and Sint of Industrialism" was spent discussing the publication of "red herrings'* in the. scientific literature to "buy time" for the asbestos industry.* Two other scathing accounts on the asbestos industry is the 17.5. nud Canada have been published by the Health Policy Advisory Center of New York, in its Bulletin.3* . .... As far back as 1938. the General Manager for the Association of Casual^ and Surety Executives in New York wrote that increasing workman's compen sation insurance rates were as high as 2E55* of the payroll and in New York some companies couldn't even find a carrier who would insure them.3 "As a consequeacy of some of these very high rates and the inability of - some Industries to get any kind of insurance at a price that permits continu ance of operations, many establishments are laying of workmen and either closing down or sending their hazardous work out of state . . Unfortunately, state workman's compensation laws Imre become a patchwork' of injustice when It comes to fatal occupational diseases with long latency .periods, such ss cancer and asbestosis Very low limits an both weekly com-- wLyseh. IS. It. and Smith. IT. A. ''Pulmonary Asbestosi* HI: Carcinoma of the Long la-4>bF*tSIJieo5<*." Amer. J, Caserr 24 : 30--04 (29331. a<31aya. 3. A. "Tm* Case? <it Sqaamoos Corctaoaa at the Lang Occurring la Asbestosis." Tnbevei* 1?: 3-10 (19331. . -' M Bander. S. W,, **A.e*twe." Dent Med. Woeh. S3: 407-40S (Mereb 17. 19391. 3 Saner. "Arbeit und Gesnndbwt Die cntscbaiiljraasrpfllciiUcia SemfstmakiieJtea CJeore Thlerne Publication, Smtrsarz. (Z93.1U u HoIIWl H. 3. and Aagrisf. .1-- **3rtiehleetle Cnrelsos* la Association with Pulmonncr Asbestosis." Amer. J. Path. IS : 123-1.11 < 19421. M*rrwrv S. It A. "Anntiai Itepnrt at thr Chief Inspector of Taetoriea for the Tear 1947." H. M. Stationery Ofe* London. Jaanitre. 1949. " Drreosoa. W. C et at- "A Srtdr at Ala the Ashestno TeriHe Industry,*' Public Health Bulletin No. 240. OS. pubUr Health Sernre. WasHlaetnn (193S1. * Brodeur. P- "Eanendable Americans," Vlfcloe New l'orit, 1974. * SetWC. "Mnsei* and Blond.*9 S. P. Dittron It C New. Torts. no. 174-203. (19741. ** "Sdttiwlal: Tour Job or Tn*r Life." lleaith/l'AC Ituilcua No. 20. Health rollw Advisory Crater. New Veefc OCnrrt 2973). . 3 KotHchnrk. T>. end Phttllp*. 1A "Asbestos Research: Wlnnloe the Battle bnC Losing the War." Uenith/rAC Huiletia No. SI. Health Policy Adrlisiry Crater, New Tor*. (Noremder-IVeeajoer. 1974). ! ' 33oac^ T. R-- "Oceupsuoasl Dlaenao Compensation," tadust. Med. 2: 179--183 (JSSfl). 1 i y 421 pensation nnd total medical compensation, as well as statutes of limitations for time allowed for Sling claims after terminating employment leave workers > little or no compensation compared ru the harm the? suffer. There is no pro* ' vision for exemplary compensation. Jt is remarkable how little most workers esa get trom their direct employe** as compensation for occupational cancers* Tie only workers who have a right to sun Cor full compensation--repayment of total ecouomic loss (of earnings from premature death or <I;sa3>illtj% and for medical costs), and exemplary compensation for the los or disability of a . jjxju.se, parent, and provider--are those worker?* who han*, araw ihrnusb the better state product liability laws. Of course, -some state product liability law* . suffer from the same types of limitations just mentioned in describing work* ' man's compensation iawu. And In most states, a worker must reimburse money received as workman's compensation to the insurance carrier out of a product liability award. . * - * . The asbestos ladiwtry is is quite a psaic to stem the rising tide of product liability suits It faces, not only from insulators but dry wall workers, door tile >.. Installers, brake mechanics, and others..It ha* been conservatively estimated that 400,000 people now living la the U.S. will develop cancer from being, occupationally exposed to asbestos now and in the past.** Beginning in 1360, neighborhood and domestic exposure to asbestos have been linked to cases o .. rare cancers (pleural and peritoneal mesothelioma) that lure been called ' "signal tumors" for asbestos exposure.* * The as-yet uncounted toll of death and disease is enormous, and it has directly resulted from calculated decisions to promote asbestos sales with the knowledge that workers' and consumers' Utcs would be endangered thereby. . ' .* In my own experience of urging government agencies to provide increased public and worker protection from asbestos, the Industry has bitterly opposed any regulation of its activities. A recent example is a petitiou to the Consumer Product Safety- Commission which I helped draft for the Marumi Resources Defense Council.9 The petition asked the agency, to ban the use of asbestos m widely sold dry-wail taping and spackiing compounds; In spite of the fact that the use of such products entails long term indoor contamination and short term exposures to asbestos levels in excess of those now allowed ` la asbestos plants; and deavit* the fact that these products can be made without asbestos and the use of asbestos la these produets coustitntes only 1 per cent of the sales of asbestos in the TJ.S.--the asbestos industry trade association (Asbestos Information Association of Morth America) asked the government to deny the petition.* Johns-klanville Corporation, the industry leader, also urged that the petition be turned down. This is only one recent example of the ashesros Industry's refusal to accept a decline is sales to protect the health of its customers. The product liability laws are a last stopping place for justice when It comes to environmental cancer. Their principal value is that they return some of the proceeds from the rale of murderous produce to the victims. The cost of such payments and of liability insurance is some incentive for Srtas to sell wfe products, anti has at least prompted the use of euphemistic hazard labeling . I realise that the litigious nature of our society has created problems in the area of product liability laws, npd changes in the laws may be necessary. But I hope that as yon proceed your Committee and staff will also remember that whatever its excesses, product liability law in some parts of the cannery is * SellkoC. X. X. "Cancer Rlxfc of Asbestos Bxooraw." Abstract of Paiwr Presented it the Election "Orlcion at Human Cancer.'* Cold Sorts? Hardee, Xew Xorfc. September SS7S. . 7. G* Sieves, C. A. and Mnrehoad. I*- 'TMlftise PJeoral Mcsetbettom* and Asbeete* Sxnoaare is tfie Keren Western Cape Province." Brit. J. ladnst. Med. 17; 2SA-2T1 flPfiO). Ne*ehoe. SC. X* and Thompson. JL. *Sem<feitnm* of pleura end Perttooenm F(ioallcoawi.ing Srpexure to JMxttOM la the London Area." 3 m. J. Incus*. Med. tZi .CG1-2SS 9 Ketvnl Rtinnme Defense Cauneif end CAnsMimera. QaIso, Petition' to tbe Consumer Produce Safety Commission to Orvlarr Drrn-nil Psteiilne Compounds Containing Asbeston to he Banned ilAxnrdnun SuUeinnc-- Muir IS, 19791. . " Aettesio* InlermaltM AiinxUtimi. !!e-Ort<fw* in Gotisnmt* Pwinet Safety Conmis* alas eo Petition bf Ketnral Ucxmrm Defence Council. Ine, Anri Consumer Union of U-3.A Inc. Car the rramuientioa of Ttule IVeeiarie? Certain i'stcdiac Compounds to be Banned Batardoua Substance* (Aug; 3</ 7970}. . 3V X 422 deficient In terms of consumer protection, not excessive. Specifically. I urge your Committee to protect the rishts of victims of the asbestos industry now existing under product liability- lows, and to take appropriate further action so that all Americans will' Iiare a right to demand full compensation for product liability cancer. a .-.V-.. - > ; '' . Ixscxancs Company or Noirrn America. - Life Jxscxanct: Company or Noam America, *. . .. . . PACIFIC EMPLOYES# GaOCT, * ; "* Philadelphia, Mag 27, 2077, Hon. TTcyront H. Fono, .x * Chairman, Container Subcommittee, CammUtec on Commerce, Science, end _ Transportation, U.S. Senate.^Washington, D.C.' * -.* Dean Senator Ford : The Insurance Company of North America (INA) and to affiliated companies constitute one of the nation's lamest multi-line is snrance services organizations with world-wide operations in property and casualty insurance, life aud group insurance, reinsurance, and related services for risk and financial management. INA wishes to comment on certain aspects at S. 403, the subject of recent bearings before your Subcommittee. During the recent hearings ou S, 403. Senator rearson announced that the liraring record would remain open for three weeks. INA requests that this letter be made a part of that printed rccori .' - Among its proposals. S. 403. the National Product Liability Insurance Act,. would authorize the proposed National Product Liability Insurance Adminis- ` tratioa to federally charter captive insurance companies [S 3091. 'While not expressly stated, evidently a federally chartered captive would be eligible to obtain reinsurance of its product liability coverage provided, by S. 403 once It is authorized to do business in & State [2 301(a). (b) (4). (3)]. as it most he In order to transact any business under the Act [l 309(d)]. llerely providing a mechanism to charter captives at the federal level doe# not provide any advantage over presently available alternative mechanisms, particularly when that mechanism would rcstilr in totally dual regulation. For example, captive Insurers may now be Incorporated under Colorado law a-v well as under a number of foreign laws, notably that of Bcrmxtda. Permitting captives to be organized will nor solve insurance availability problems in areas such as product liability insurance coverage for two reasons. First, the Internal Revenue Service 1ms been reluctant to permit corporations to deduct premiums paid to "true" captives (wholly-owned subsidies or af filiates), reasoning that such payments do not constitute deductible premium expenses, but rather arc merely transfers to create a reserve for seif-insurance, and therefore aon-deducrible payments. Second, in the ae of -'one-rail'* in surance coverages, such as product liability, where substantial funds arc set * aside and accumulated over long periods of time to cover anticipated losses, many Halted State# insureds prefer to use off-shore captives, such ns Bermuda- based Insurers, whose accumulations are not subject to federal income taxes, in order to increase the amounts to pay such awards, lowering the premium cost to them and the ultimate cost of their goods ami services to consumers. la light of this, we believe that Congressional lunoirire on the utility of captives should focus no the tax Issues sec forth chore, and Hint S, 403*s pro posal to charter captive insurers at the federal level be withdrawn - Respectfully submitted. * .. Johx J. McGonacle, Jr,, ' . Couaaei. .. . * " . Txucac Boar ano Rqtnrstcvr Association. Inc. - ./ Washington. D.C. May 2S. 2277. Sou. TTcxoot H. Foss. Chairman. Consumer Subcuutmittec, CM. Senate, Diri'scn Senate Oflre Building, .. Washington, D.C . i ' Pr- Senator Foaor Reference ymir letter of April 33. 397?. In response to Track Body ami Equipment Association's rwpieat to testify U-furr your Cett- Miner Suiwrommittee and its exploratory Iwnrinsa mi product. tiuliillty, i While we were disappointed at not being ubie to testify at the hearings. t i i f I