Document oDZwDNr9j4k5y1qDp4z019JL8

?ije 4 *\> V-'A - BARROX'S Heat on Asbestos Legislative, Legal Challenges to Producers Mount By SHIRLEY HOBBS SCHE1BLA Washington-a controversy Uaarco Industries Inc.; Uoion Asbestos that's been raging for over a de & Rubber Co.; and Uniroyal Inc. cade and grows hotter by the minute To date, however, the sums obtained payments under the workers' compensa tion program, revision of the product li ability laws (proposed by the Adminis He points out that as means the company's sole operation, and that most asbestos cases are covered centers on an old (the Greeks had a in judgments and out-of-court settle tration) and a program similar to. but by insurance. word for it) and versatile mineral--as ments have been comparatively modest. larger than, (hat in place for black lung. That is the headache* of Travelers bestos. Sparking the controversy is the Johns-Manville. the free world's largest Federal regulators are moving, too. Corpwhich was J-M's only primary in simple fact that asbestos can pose a seri producer of asbestos, has been named a HEW Secretary Califano has launched surance carrier from 1946 to 1976. Se ous health hazard. That simple fact, in defendant in many suits. According to a campaign to warn the nation of the nior Vice President Tom Harnett, who \* turn, has triggered widespread litigation its attorneys, court awards and settle dangers of asbestos, and the various has responsibility for the claims depart- ~ which threatens a number of major cor ments through 1977 total $5.3 million, .HEW agencies are running studies. The meat, gave a special report oq asbestos porations, most notably Johns-Manville of which Johns-Manviilc's share is SJ.4 Occupational Safety & Health Adminis to Travelers* board of directors early Corp., with biliioos of dollars of liabili .million. That Comes to an average pay- tration has been trying to issue a new as- . last month. M. H. Beach, chairman and ty. CEO of Travelers, says: `'We believe *e ' ' About 800.000 tons of asbestos are have put up sufficient reserves for our . - used every year in 3.000 products for which no acceptable substitutes exist. For a change, the Environmental Protection prospective losses. It gets to the problem of what are likely to be the maximum '} , These include brake linings and clutch facings for autos, railroad cars, planes Agency is winning industry plaudits for losses on a case. Then there is the problem of prorating the expense, because .) !f and industrial machinery and insulatioo for boilers, steam and hot water pipes its work in setting .air and water standards. during the period of exposure there often is insurance with more than one ; and nuclear reactors. Trouble is that the company." particles in asbestos dust are very sharp Estimating the harm done to ashes- ,.\ and so fine that when inhaled they aren't caught by nasal hairs or the mu cous membrane. And once they reach ment of $12.500 per case for the compa' ny. In 1978, the average settlement rose 'bestos standard since 1975. Meanwhile, ' Dr. SelikofT charges that it's not ade -' tos workers during the 1950s aod 1960s. according to Harnett, is difficult. While the asbestos industry continued to ex- r: \ the lungs, they are not exhaled. There to SI5,407. But that doesn't represent quately enforcing what's on the books. pand, safety measures adopted during they remain as an irritant, sometimes the entire amount received by plaintiffs, The Food Drug Administration has those years mean less hketihood of s<- J\ . taking as long as 40 years to produce 'since a suit usually names several defen regulated the use of asbestos filters for vere dosages. "On the ether band, we such ill effects as asbestosis (difficulty dants. drug injections since 1973. It's currently can't predict the numb;: of heavy smok- .v in breathing) and cancer. [ Industry Cover-Up? -investigating the possible hazard of eat: ers, and that affects the damage," he ex- * . it's unknown how many people are tpg asbestos Co determine whether it plained. According to r-'EW. the loci- \ ` carrying these tiny time bombs within Biggest judgment so far was for should restrict asbestos-containing fil , deace oflung cancer is *-2 times greater > .- them. Joseph '-Califano, Secretary of * $750,000, last June, and that was settled ters in food and beverage processing. for asbestos workers wr.o smoke than -'Health, Education and Welfare, estj- `for $275,000 when an appeal was threat- ------ .u -- q .. _:n;--------------K ., .* . _ enrd. Tt involved th- death from me- been exposed u> asbestos. But nobody 'sothelioma'Xcancer ot ineLimng oi the' knows how many have ingested danger body cavities) of an insulation worker ous amounts. Industry hotly disp0**'? ' at an Amoco refinery at Yorktown, Va. Califano's assertion that past exposure Some attorneys who spcCiali2fi in asbes* For a change, the Environmental twww is winning industry plaudits for the competence'Ofits work"* a investigating and setting air and wa ter rtmdards. Now it`s getting cranked Up to exercise new authority under the for those who don't. ` * ' sure asbestos product liariliiy in the fu- . ture, but kept J-M as as old client until 1976. Today, according to several indm- j try spokesmen, no insurance company. ; -- | has been so great that it will account for tos cases for piaimi/Ts think the award 17ft of aU deaths from cancer.for many was influenced by new charges that the Toxic Substances Control Act. -.will cover asbestos. - Industry and labor are taking steps President McKinney explains . - . ..years to come. Jt contends that his esti industry since 1929 had been covering of their own to avoid asbestos coQlami- _ ' that his cqmpany now is self-insured. ` . mate takes no account of level or length up evidence of asbestos' dangers. But in nation and to (earn more about the di- - But that applies only to those who have J -' of exposure, or, indeed, if it is actual or dustry lawyers contend that there were seises it causes. John McKinney, presi-' .* injuries after 1976, which McKinney ^ * only potential. do substantive findings until 1964. and dent of Johns-ManvLlle, says (hat while thinks is unlikely because of J-M's ex point out that the jury in the case failed the industry has grown, it has adopted treme safely precautions. His optimism First Suit in *67 .to award punitive damages. safer practices. "There's no reason we also is based on an assumption that the Unlike most occupational diseases, however, those from asbestos are readily diagnosed. With diagnostic proof in hand, workers and their heirs are suing industry. (Most of the suits involve third parties because workers' compensation laws give employers immunity from negligence suits.) Now litigation is broadening to in clude workers' families contaminated by handling work clothing, and people who live downwind from asbestos plants. There's even the threat of suits by those who have walked near (he frames of buildings under construction being sprayed wfth asbestos. Dr. Irving^elikoff, director of the can't use asbestos just as we use nitro glycerin," he declares. J-M plans to pro duce more than 700,000 tons of asbestos fiber per year through at least 1990 from pro%en reserves. Adds McKinney; "Unless the courts start to hold us Liable for punitive damages, we will survive." courts won't allow class action suits. To date, none has done so. Too Many Variables ' ! ' . , la e landmark decision in 1974. the U.S. District Court for the Eastern Dis trict of Texas turned down a class action partly on grounds that asbestos diseases and exposures vary so greatly among in The first case was filed in 1967; to Environmental Sciences Laboratory and dividuals that they don't constitute a day 1,300 cases are pending. Robert E. professor of community medicine at the class. "The members of the purported Sweeney, a former member of Congress Mi. Sinai School of Medicine of the Cay class have a vital interest in controlling and a leading attorney who specializes University of New York, reports that their own litigatioo because it involves in such suits, expects the number to half of (he high rises built in this coun serious personal injuries and death in : double in a few years. Including suits try between 1959 and 1972, including some cases." the court ruled In 1977, seeking to be class actions, which no the first seven floors of the World Trade the U.S. District Court for the District court has approved so far, damages Center, were sprayed with asbestos. ofNew Jersey, citing the Texts decision, sought amount to billions of dollars. (Many ordinances required it for fire reached a similar conclusion. The average case involves 10 people and protection.) lodustry also is bracing for Last year, a judicial panel represent seeks SI million in compensatory dam suits by school districts in which build ing sevetal district courts refused to con ages and S2 million in punitive damages ings were sprayed with asbestos. In solidate 103 actions pendiog in 19. It for each person. some cases the asbestos sprayed on ceil ruled that while all the cases involve ex Defendants in pending asbestos suits ings is crumbling and falling on the oc posure to asbestos, there are too many include Armstrong Cork Co.; Cassiar cupants. variables, including the type of exposure Asbestos Corp. Ltd.; Celoiex Corp.; Certain-Teed Products Corp.; Combus The Matter Before Congress (miner, transporter, factory worker, tradesman and person living near a tion Engineering Inc.; Eagle-Ptcher In dustries Inc.; Electric Boat Division of General Dynamics Corp.; Flimkote Co.; GAF Corp.; Johns-Manville; J. P. Ste vens Co.; Keene Corp.; Mead Corp.; Metropolitan Life Insurance Co.; Nieolet Industries; Owens-Coming Corp.; PPG Industries; Raybestos-Manhattan Litigation thus is apt to proliferate. But even several lawyers for the plain tiff admit that lawsuits fail to provide adequate recompense for the victims of asbestos disease. Now Congress is tak ing a hand in the matter. The proposals it is weighing, however, are so contro versial and costly that their enactment J-M's McKinney: We will sur- plant), products to which exposed, du ration and intensity of exposure, safety precautions taken by each person and medical; personal, employment and family history' over the long periods of exposure. Several petitions for class actions are still pending. Many involved shipyards, Inc.; Rock Wool Manufacturing Co.; could tak$ years. They include larger vive. since ships use a gre^: deal of asbestos. CAPCO JEN 0000934 rT BARRON'S Page : but the claims are against third parties. An estimated 5.000 former and current workers at the Todd Shipyard and Na va! Shipyard at Long Beach, Calif., are ' suing 15 companies for SI billioo. About 350.000 past and current em ployes of Ingalls Shipbuilding Co., a di vision of Litton Industries, are seeking a total of half a billion dollars from third parties. -c; Past aod present employes of Ala- . bama Shipbuilding & Dry Dock Co. are I. asking half a billion dollars, all told. from many defendants. Shipyard work* - ers and insulators within the state of Georgia are seeking unspecified com pensatory and punitive damages. Past ' and present employes of Owens Corning Fibcrglas at Berlin, N.J., want $2 mil.. lion in compensatory and punitive dam quires more balancing of costs and ben efits." HEW also has established a Study Group on Asbestos, headed by Dr. Da vid Rail, director of HEW's National Institute of Environmental Health Sciences. Dr. Rail outlined for Barron's the work of his group, as follows: To estimate the risk of to h- level exposure. This must be answered by epide miological studies. But there will be problems in doing large-scale studies be cause they require electron microscopes which cost hundreds of thousands of dollars each. HEW is beginning to work with local school districts on this to de termine the danger to children where as bestos materials in schools may be dete riorating. by asbestos and other diagnosable occu- cob K. Javits (R., N.Y.) favor a revisit pational diseases, including those from of workers'compensation. They plan kepone and cotton mill dust. "This will ' --re-introdu--ce, ~w:ithk.s..o..m...e...c..h..a..n..g..e..s.,....tuhe be the main thrust of the Subcommittee. National Workers' Compensation Bi In the bearings we hope to find out how which they proposed last May (it i5 sic widespread the problem is and who is to ilar to a measure they have been pus pay for it. Brown lung [from cotton mill ing unsuccessfully since 1973). A dust] and asbestos would far exceed the though the states run (be compensate black lung program (for coal miners] in program, the Senators would setrrir scope aod expense," says Beard. Ac mum federal standards. A special sc cording to the National Coal Associa , tion would have the Secretary of Labe tion, the black lung program involves with assistance from HEW, develop sd> annual outlays of about 5900 million rial standards for occupational diic^> from the federal government and 5300 Michael L. Goldberg, counsel for t! million from industry. Senate Labor Subcommittee (whJc In 1977, Beard sponsored a bill in Senator Williams also heads), say's t troduced by Rep. Millicent Fenwick expects hearings on the new bill in a fe (R., NJ.) to aid disabled asbestos work - months. ers. It would have set up special uniform The Administration is mulling lezi: lative possibilities, too. Dr. SelikofT re ages for each of five named plaintiffs > veals: "The Labor Department ha * and unspecified damages for the class. .* Contingency Fees GnrMC: - asked us to prepare an analysis of tb - whole question of workers' compezsa . tion ... for all exposed asbestos work Workers of J-M at Manville, N.J., >V iers and to project this for the next 5 'are asking half a billion dollars from years. Imagine, to have projections fo .. J-M for each plaintiff. And Charles *50 years. . . . Our analysis will not b .*< Dowds is seeking unspecified damages for former and current workers at J-M's . . Dennison. Texas, plant and 52.5 million for hiipsclf from J-M. Both of the J-M .. cases charge intentional damage and . ; ready for some cnootbs." On Jan. 12. the Commerce Depart ment published a Draft Uniform Prod uct Liability Law in the Federal Regis .ter and asked for public comment. I thus get around the immunity from ocg- plans to have the final version publishe _ s';, ligence suits for employers conferred by . ^.workers' compensation. : *" While chances for certification as S^neitoaf tarn fim. neabcn of the class caris\it"ladlvtduaQy, and the nunw'* ' bT of lawyers willing to take such cases on concineency basis is grow in*. J-Nf , ^ President McKinney aayi there proba bly are a million workers willing to pay * contingency fees. -'-,'as a model for tort law reform for th : various states. Although not specificiU ' . r aimed at as&estcs, 11 is uxeiy to hj\ I*:some effect, if adopted in its preset .i^VfonxL For the draft uyt - ' product conformed to the "state of :> ;^ art" regarding safety at the time rf . manufacture, the producer she:!..: * bear liability if subsequent develo; meats show it to be unsafe. Presumab. The immense research required for urn wouia apply to itcm> dk< each case, however, may limit the num- spray-on materials. *' her- For instance. Gene Locks, a Phila . . '' delphia lawyer who specializes in asbes- -- Conrid Vogel /A Long Time Coming . \ tos cases, says that obtaining data and - evidence is a major problem. As Marlin | , Thompson, a Texas attorney, explains, records of specifications often are destroyed during the long incubation pe" nod of asbestos disease, which makes it difficult to establish proof. He says he handled the first asbestos worker suit back in 1967. Thompson operates on a contingency fee basis and says he bad " incurred expenses of S100.000 by (he time he took the fifth case. In aoy event, he claims an impressive record. "We lost u.- the first case." he declares, "but haven't .. lost one since." More attention to estimating the cost of asbestos controls. "Since we caa't get rid of all the risks, we should control those which are the most important." O Ta see if there are otherfinefibers which might cause problems similar to those of asbestos. HEW is doing a joint study with Great Britain on the inhala tion of finely ground fiber glass. (Fiber glass is used as a substitute for asbestos, but not all of the former is finely ground. J-M says it already is the second largest producer in the U.S. of fiber glass products arid that it has under workers compensation benefits, to be fi nanced partly by taxes on asbestos and cigarels, and partly by the federal gov ernment. But the bill got nowhere,-and now-. Beard says, he is having second thoughts about such taxes. Nevertheless, Fenwick still may re-introduce it. Ac cording to Sheldon Samuels, head of safety and health for the Industrial Union Department of the AFL-CIO, "the bill doesn't stand a chance." Survey of Schools On Jan. 31, Rep. George Miller (D., As noted, the rash of product liabil ty suits against third parties is said 10 t inspired partly by the difficulty of suit employers under workers' compear tion. The draft says workers may sl employers "if possible, in a worker con pensation proceeding," for barm ih, occurs within 10 years from use of a unsafe product. That apparently woul help some victims of asbestos diseas but not those who take longer than l years to develop it. In any event, reform of product U: bility laws -is so controversial that could be years in coming, tco late t Balancing Costs and Benefits Despite all the lawsuits, no asbestos taken a "5200 million capital expansion program which will, by 19S0, double Calif.) introduced a bill for HEW to fund half the cost of surveys to detect cope with many of the urgent mattei involving asbestos. ' lawyer to whom we've talked believes U.S. fiber glass capacity over the 1976. hazardous asbestos conditions in Meantime, Dr. SelikofT is impresse .that litigation will solve many problems. levels. . . . The National Institute of schools. HEW, in turn, would get the with what labor and industry are doin: Fgd^rti iH-TnTtTiy imm Occupational Safety Sc Health issued a money from contributions from compa He says, for-example, that Pittsburg 'them. The Environmental Protection dpaiment in 1977 reporting that occu nies which manufactured asbestos from Coming and the Flint Glass Wcrke: Agency already has Limited asbestos in pational exposure to fiber glass is not a 1946 through "72. The bill also would Union are developing a long-term ced air and water. Stephen JcUinek. Assis- canter hazard.") provide school districts with long-term, cal surveillance program. And be think tant Administrator for TQTTC^'SliIv stances, explains,that in gearing up to otovejgamst asbestos under'the Toxic , SubYjances Control Act, EPA is concen- on..thc major.uses where (he r- product^is .not _regulated, notably in ,, brake linings and concrete pipe. "There are tens of thousands of ? pipes already .laid." says Jellinek. .1. "We're not considering ripping out ex- /As for the Occupational Safety Sc Health Administration, it currently lim it^ occupational exposure to asbestos to tpo fibers per cubic centimeter of air. Its J975 proposal to lower the limit to half a liber is so controversial that it still is pending. According to James Foster, OSHA spokesman, one of the reasons is the agency's difficulty in assessing the ecooomic impact. no-interest loans at the expense of tax that Exjcon and J-M are setting ex.au payers "for the mitigation of situations pies for the rest ot industry, hxxoz Dc which pose an imminent danger to the sought beaked's advice,~aod J-M ha health of students and school em donated an electron microscope for hi ployes." Miller's aide, John Lawrence,, work. In 1974, J-M also hired as its se reveals: "Our bill would cost maybe ' nior vice president for.health and safei $200 million. To clean up all schools Dr. Paul Kotin, founder of the Nations would cost betweea 5500 million and Institute of Environmental Healc 580Q million. The whole issue of com Sciences aod former scientific direcic pensation may be dealt with in a sepa of the National Cancer Institute. L'po rate piece of legislation. But that won't ' hearing that smoking increases the tike . isting pipes. But we're thinking of con- ` Congress is..weighing equally lough be for a while." . lihood of asbestos diseases, J-M banne -..trolling the use c-* asbestos-forpipes'in issues. Rep. Edward R. Beard (D., In the upper chamber, two promi* smoking at its plants. Now* Johns-Man v thrftnuTerOne'tbing loconsfder is that R.I.), new chairman of the House Labor nenl members. Senators Harrison A. '.viilc faces a union lawsuit seeking t< .,o. asubsftTuie might be a worse problem; Standards Subcommittee, says he hopes Williams (D., NJ.), chairman of the overturn the ban! - ibe Toxic Substances Control Act re- to bold hearings soon on diseases caused ^ t, Human Resources Committee, and Ja- Em ZZL tm 0*M* Wrtflt ,Mi|l * ** I* ;y CAPCO JEN 0000935