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Lt-olbLATlON PLAINTIFF'S EXHIBIT Untangling The Asbestos Mess "iSSS*8 ^Qn asbestosis third party idf C*-e<S'c% *'" <4. , i, is ~ o O, V; % ^ \ \ *o 4) <9 <1 o v\ V<A (0 o 4) E 3 e \4) 'V X >> r, j C<P^. <y -o O 'V 3 .S', <0 3 ; C ST | 2l $* .4* 4t_) 3 <oaA X 4J iwn. *o,saa*\ *0. <9- %/f> % ^ C>-oJ 2! ,* v 3 */' ^ O \ \ es,,> aot ^ ;,od * *. \^oi)e6{)!i ino-ueq soisaqse Ai (0 oo -to <? Usability asbestos Potential beneficiaries of Con Conflicting liability theories throw new kinks into the tangled thread of compensation legislation gressional asbestos compensation reform could number in the mil lions. Recent estimates by the De partment of Health and Human Services put the number of workers Legislation has been introduced pational diseases, have produced exposed to asbestos in the United since 1977 which would deflect the an almost universal cry for a legis States since the beginning of World massive flood of asbestos victims lative remedy. War II between 8 and II million. away from the courts into a radi But while most of the affected Four million of these workers were cally transformed workers' com interest groups are turning to Con exposed in shipyards during the pensation system. Estimates of gress as the only way out, there is a Second World War. twenty-five thousand claims for good chance that this year's legis Of the 4 million workers who damages against manufacturers of lation will fare little better than have been heavily exposed, ap asbestos and materials containing proposals which have been intro proximately 1.6 are expected to die asbestos, coupled with the failure duced over the last five years. from asbestos-related disease. The of the workers' compensation sys Compromise is difficult because expected number of cancers attri tem to adequately cope with occu each party feels it stands to lose buted to asbestos per year will py Deborah Schechter, free-lance writer, too much unless its version of the average about 67,000. Ten percent Washington, D C legislation is enacted. of shipyard workers' wives had as- 30 OCCUPATIONAL HEALTH AND SAFE! . 921001 RowVerK lUU.i The Crown brings air to the wearer's face through a 'crown' en circling the head, forehead, and temples. An airflow module at the waist houses the motor and a removable, rechargeable battery pack. Racal Airstream, Inc. Circle 30 on card. 600 ppm-hours, sufficient to sampie a worker's environment at 1.5 times the present permissible exposure limit of 50 ppm for a full workshift. 3M. Circle 32 on card. tion. Shipped unfilled, it easilv fills, with one gallon of tap water, Lumex, Inc. Circle 34 on card. High-performance gloves The Worknit HD ' Glove line s expanded to include eight new >dels to provide effective, low,st. high-performance alternatives leather gloves. The line'now offers three styles, e Gauntlet, Knit Wrist and Slipn in the Black Stripe Cloth Back. >ash Back, and Nitrile Back glove .odels. The gloves' flexibility and .>ughness make them suitable for a wide range of jobs. Norton Safety Products. Circle 31 on card. Ethylene oxide monitor This silver dollar-sized unit measures concentrations as low as .2.1 ppm over a workshift period. Ethylene oxide diffuses into the monitor chamber and is absorbed by a chemisorption process. The monitor is then analyzed by the ;SM Specialty Analytical Service in five working days. Worn near the breathing zone. Monitor No. 3550 is designed for personnel working in laboratories and chemical processing environ ments as well as those who sterilize surgical products and equipment. The capacity of the unit is about FEBRUARY, 1982 Diffusion analyzer The Sentry 88 Computerized Diffusion Analyzer includes a Sen try Series Computer with dual ex piratory and inspiratory flow - Medicated liquid soap meter, helium analyzer, carbon monoxide analyzer, versatile CRT. Antibacterial and antifungal and full keyboard. Gould Inc. surfactants, enhanced by p-chloro- Circle 35 on card. m-zylenol and combined with moisturizers, skin protectors and humectants, yield Derma Cidol 2000 ; an aggressive agent for reducing cross infection without the side effects of harsher medi cated lotion soaps. Derma Cidol 2000 Professional Liquid Soap Formula is available in both a 12-ounce pump dispenser size and an economical gallon con-, tainer. Minnetonka. Inc. Circle 33 on card. Comfort cushion Aqua-Ease reduces bodily pressure on any firm seating such as wheelchairs, office chairs or car seats. The comfort pad contains a combination of water, polyureth ane foam and air. which together provide a sense of buoyancy. Bac tericide and fungicide are also in cluded in the pad's contents for CHALLENGING CAREERS IN OCCUPATIONAL MIDICINE Our industrial clients, located throughout the United States and abroad, are seeking physicians at all levels tor positions in occupational medicine -- men and women experi enced in industrial medicine. We have immediate openings lor Cor porate. Regional. Area and Plant Medical Directors. Also many ot our clients are seeking Staff Physicians, entrance-level positions lor M.DV O.O.'s currently in practice. Backgrounds/experience in preventive medicine, aerospace medicine, en vironmental medicine, public health service, epidemiology, internal medicine or family practice highly desirable. Board Certification a definite plus. Excellent compensation packages with substantial fringe benefits. Our clients pay all fees and relocation expenses. Send curriculum vitae, salary history and requirement, and geographic preferences in confi dence to WALTER K. WILKINS built-in protection against bacteria and mold. Priced at less than $50, Aqua- /erlil\ SAMPSON, NEILL 4 WILKINS INC nm m tmtwn linen rw rm ma wmsi'wi Ease is constructed of heavv-gauge vinyl and comes with a washable cloth cover to minimize perspira- 543 Valley Rd.. Upper Montclair. N J 07043 1201) 783-9600 J For more facts circle 10 on card. X , 29 921001 RowVerK 'nil` bestosis, according to a recent study by the American Lung As sociation of Southern California. And an earlier study showed 35 percent of asbestos factory work ers' household members showed as bestos-associated abnormalities. LITIGATION PATTERNS If litiga tion patterns are any indication, at stake are hundreds of millions of dollars in claims. Over 240 compa nies have been sued in one or more ;best06 lawsuits. The Asbestos ompensation Coalition, repreenting nine large manufacturers, stimates that the total damages ought in these suits are approxi<ately $24 Billion. For example, Johns-Manvilie JM), the largest asbestos manuacturer in the country, is a defend ant in more than 9,000 lawsuits. JM's average share of the settle ment or judgment in these suits is $23,000. (Multiple defendants may contribute their share of the liabil ity in each case.) At that rate, JM's claims -- excluding legal costs -- could reach more than $205 mil lion. Raybestos-Manhattan, Inc., a brake lining manufacturer, faces over 8,000 lawsuits. Its average share is $6,100. While the net worth of JM is al most 2 billion, and RaybestosManhattan weighs in around $160 million, both figures are qualified by the corporations' accounting firms because of the incalculable future liabilities each now faces. Despite this, their liability "will have very little impact on our cor porate earnings," says Richard Von Wald, JM's Corporate Coun sel, since "only a very small amount may not be recovered from insurance companies." Although the courts have ruled that asbestos manufacturers should have known and warned their employees of the dangers of asbestos as far back as the 1930s, the insureds and the insurance car riers didn't contract with asbestos in mind. Policies were issued offer ing products liability protection at low rates, with small deductibles months to 2 years before relief is and insufficient reserves. Manufac granted. turers and insurers are relentlessly Nick Calio, an attorney for the Litigating obligations to plaintiffs, Washington Legal Foundation, a definitions of policy terms, and the conservative public interest group, coverage afforded by the policies. believes that not only is the asbes tos problem "too big for the to The IS- to 40-year latency system to handle," but also the public interest is not being served period of asbestos-related disease makes it impossible for workers to file claims because "85 percent of the money paid into asbestos claims goes to parties other than the claimants." In addition to claimants' attor shortly after exposure. neys' fees, this includes an average of $2 to $3 in defense and adminis trative costs for every dollar paid Even more intense is the litiga to plaintiffs. tion among the insurance compa The workers' compensation pro nies themselves. Any given em gram is intended to avoid the court ployer may have been covered by system's expense, the burden of as many as five different insurance proving employer negligence, and companies over a period of 20 to 30 iong delays until judgment. Only 5 years. Insurance companies have percent of those severely disabled battled over which of them is obli from an occupational disease re gated to provide a defense and ceives benefits, however. A worker which, when a manufacturer is who becomes totally disabled for found liable, must compensate the life from an occupational disease victim. Over 20 lawsuits alone have and who is able to prove that the been filed to resolve these issues. disability is linked to the work NEED FOR REFORM Advocates place receives an average of $9,776 of asbestos compensation reform in total compensation benefits, frequently offer the view that as compared to average future earn bestos victims are not adequately ings of $77,000. compensated through litigation. But many workers will be lucky Introducing his asbestos legisla to get even these paltry awards. tion, Senator Gary Hart (D-CO) Many states' workers' compensa argues that "in about one-half of tion statutes contain provisions the asbestos cases that have been which effectively-bar occupational tried, the worker or the worker's disease victims. The 15- to 40-year family received nothing." latency period for asbestos-related Fred Baron, Chairman of the disease makes it impossible for Asbestos Litigation Group which workers to file their claims shortly consists of 100 plaintiff attorneys, after their last day of work, or claims, however, that "using the within a specified time of any last number of cases tried is misleading exposure, as some states require. because only 50 or 60 cases have Other states provide benefits been tried.... 95 percent of the only if there is exposure within the claims brought are settled." state for a long period of time, such Baron believes that lawsuits do as two years in Pennsylvania. Still provide adequate relief for asbestos other states omit or qualify bene victims: "Out of the 200 cases my fits for partial disability or do not firm has handled, the average dis permit claimants to reapply for position has been $145,000." Attor benefits when their disability wors ney's fees, however, typically eat ens, as in California. up 33 to 40 percent of such awards. LEGISLATION This year, Con His rases also take between 18 gresswoman Millicent Fenwick l R- FEBRUARY. 1982 92*10O' RcwVorK NJ) and Senator Gary Hart (DCO) have once again introduced their asbestos compensation bills, with a third on its way from Con gressman George Miller (D-CA). The Hart bill provides a floor of at least 66% percent of recent wages for state workers' compensation awards. The Fenwick bill's annual award, paid out of a fund adminis tered at the federal level, would come to at least $8,200 which, like the Hart bill, is increased depend ing on the number of dependents. Clearly the most controversial provision in both the Fenwick and Hart bills is their prohibition against asbestos victims' suing the manufacturer in so-called "thirdparty" litigation. Under existing workers' compensation schemes, the employee cannot sue his em ployer for further damage, but is allowed to sue a "third party" such as a manufacturer of a defective product which may have caused his injury. Not surprisingly, "the asbestos companies will not accept a bill which does not put a stop to the litigation," said Ester Fore of the Asbestce Compensation Coalition. Irene Warshauer, attorney for Keene Corporation, believes, how ever, that the legislation will not effectively reduce litigation, be cause "most of the potential bene ficiaries will beat the prohibition by filing their suits prior to the bill's enactment date." Keene is a defendant in approximately 11,000 cases. The exclusive remedy provision is vehemently opposed by labor, trial attorneys, and public interest groups. "The AFL-CIO certainly couldn't go for that," AFL-CIO's George Taylor said. Asbestos Liti gation Group Chairman Fred Baron said that "this provision is why these bills are known as bail out legislation for the asbestos in dustry." David Gallogly of the Rhode Island Committee on Occu pational Safety and Health be lieves that "the Hart bill serves only the interest of the asbestos in "the federal government was re dustry and is a dangerous preced moved for strategic reasons, as a ent for confronting the dangers of way to get the bill through." He other toxic chemicals and sub added that "somebody else will stances." realize that the federal government WHO'S RESPONSIBLE? Almost has responsibility when we have e'- 'Mly controversial is the ques hearings in the spring.... Fenwick tion of which "responsible parties" might even offer an amendment to will bear the cost of the program. her own bill." Asked why she did The Hart bill names employers, n't add the government to begin manufacturers, or anyone deter with, he replied that "the problem mined by a workers' compensation is that if the federal government is agency to have contributed to the asked to pay, it's considered a bail disease. The bill also names the out." federal or state government, a Even without legislation, the provision which the AFL-CIO's public bears most of the economic George Taylor maintains "is con and social cost of compensating as trived to move financial responsi bestos victims. The social secunt bility onto the backs of the taxpay system supplies 24 percent of the er." compensation going for job-related Asbestos companies frequently disease, with an additional 10.5 sing a different tune. Keene Corpo percent coming from public wel ration attorney Irene Warshauer fare. A mere 1.3 percent comes states: "Government is in large from the workers' compensation part responsible for this problem. system. A large but as yet undeter mined amount is picked up b> ri- vate insurance. The insurance industry's The Hart bill avoids the thorny flat objection to legislation ofany kind stems from its basic abhorrence issue of how to apportion liability among the parties by setting up a commission to establish apportion ment criteria to be used by state or of federal intervention. federal workers' compensation agencies. Not everyone is happy about such an indefinite arrange In most cases exposure took place ment, however. in government shipyards, or in Irene Warshauer objects to the Keene's case, companies with con plan because "a majority of the tracts with the government. The members of the commission would government either controlled the be governed by the larger compa workers' safety or specifically re nies. Also state workers' compensa quired the use of asbestos." tion boards can be more easily in The Fenwick bill departs from fluenced by the larger companies Hart's proposal in targeting the because they have large plants cigarette industry as a responsible across the nation." Warshauer also party. Asbestos workers who believes that litigation over which smoke have an incidence of lung party is liable will be just as vigor cancer 90 times greater than work ous as it is now. ers who smoke but are not exposed The Fenwick bill addresses the to asbestos. ' apportionment question by requir Perhaps more importantly, the ing asbestos manufacturers and the Fenwick bill, unlike the Hart pro tobacco industry to contribute up posal, eliminates the federal gov to 2 percent of their earnings of 15 ernment as a responsible party. yean ago into a fund. It also avoids Larry Rofenshein, an aide to Con using the workers' compensation gresswoman Fenwick, said that system altogether. 32 lb. ' > OCCUPATIONAL HEALTH AND SAFETY ^2UPJ VerK ion- Court refused to hear an earlier ap peal from two federal appeals courts, both of which adopted the exposure theory. In October, the Appeals Court for the District of Columbia merged the two theories and held "that inhalation exposure, expo sure in residence, and manifesta tion all trigger coverage under the policies." The court also deviated from other decisions in finding that each insurance company would be liable for the entire injury, subject only to provisions in the policy re lating to other insurance. In its decision the D.C. court re jected the approach taken by the appeals court sitting in New-Or leans which apportioned liability on a pro rata basis among insurers who were covering the risk at the time the worker inhaled asbestos fibers. It also rejected the finding by the appeals court sitting in Cin cinnati that the insured was liable for a pro rata share of the defense costs and for judgments concerning the period when it was uninsured. Unhappy about this additional liability, the attorneys for the in surance companies have appealed to the Supreme Court. They hope that because there is finally a "split in the circuits" the Su preme Court will accept the case to resolve the conflict. INNOVATIVE APPROACHES Meanwhile, liability is increasingly being sought through novel theo ries and additional parties. One theory being tested in Cali fornia could result in awarding damages to employees who were exposed to asbestos over a six-week period last year. Lloyd Robinson, attorney for the 37 Pacific Tele phone employees said that "a will ful act by the company, who know ingly exposed its workers to asbes tos but concealed the nature and danger of the substance and failed to take any precautions, qualifies this case to be taken out of the workers' compensation system and into civil court." Robinson is suing for $1 million for each plaintiff for present in juries to the nervous system. The suits were filed when workers dis covered that the substance with which they had been covered for six weeks while renovating an old telephone company office was as bestos. In another case, Keene Corpoi tion is suing Johns-Mansville, wh sold them the asbestos which the used in their shipyards, becau JM allegedly did not wait Keei of the danger. Keene is also sum the federal government for requir ing asbestos in its contracts wuh out enacting safeguards. If Keene's theory prevails, suing the govern ment for its failure to regulate may become quite fashionable in this age of deregulation. OHAS --------------------------------------------------- ---- >. Film/video This Publication for healthy backs and lifting is Available in THE INDUSTRIAL WEIGHTLIFTER II 11 mn color -- how to lift neavy objects MICROFORM BACK CHAT 22mm color -- how to lift -- especially tor women MAKE LIGHT OF LIFTING 17mtn color -- how to lift and move objects BACK AT WORK 9'/imm color - how to maintain a healthy Pack through good physical condition MIND YOUR BACK 18 mm color -- how to avoid back injurv and pam through correct lifting oosture w Request further information from: INTERNATIONAL FILM BUREAU INC. 332 Souin Michigan Avenue. Chicago, lllinon 60604 (312) 427-4545 University Microfilms International Oeot. F.A. 300 North Zeeb Road Ann Arbor. Ml 48106 Dept. F.A. 18 Bedford Row London. WCIR 4EJ "Films for a safer tomorrow. For more facts circle 11 on card. U.S.A. V. England J 34 OCC'IPATIONAL HEALTH AND SAFETY 921001 RowVerK Idlio OPPOSITION Among the bills' most uncompromising opponents is the insurance industry. Its flat ob jection to legislation of any kind stems from its basic abhorrence of federal intervention into the busi ness of insurance. Dennis Conolly, Senior Counsel of the American Insurance Associaion, said that "workers' compensa tion is a state area. Discretion to he Secretary of Labor in the past s resulted in overly broad comlsation." Although no statistics i how either bill would affect the surance industry are available, said that "it is entirely possible at there would be greater tiabil-' v for insurers under the proposed gislation." According to Bill Shore, aide to .enator Hart, the insurance indus try will underwrite claims under their proposal through workers' compensation insurance. The last employer who exposed the afflicted person to asbestos pays the claim, presumably through his workman's compensation insurance, and then must seek reimbursement from the other responsible parties. These parties may then seek recovery from product liability insurers which cover that claim. One lone voice in the insurance world favoring the legislative remedy is Commercial Union (CU). William Bailey, Senior Vice Presi dent of CU, does not believe that the insurance industry will suffer with such legislation. Although more claims will be paid out, "we are now paying huge legal fees and lump sum awards___ With a structured settlement, where pay ment would be given out over a lifetime in monthly checks, the same dollars would cost us less." Bailey cautioned that "someone who finds out he has asbestosis 3 to 5 years from now will find that the insurance limits are exhausted and that the asbestos companies have no capital base left." ALTERNATIVES Finally, an al ternative to the Hart and Fenwick proposals will soon be offered by major criticisms of the only other Congressman Miller, according to federal occupational compensation Michael Goldberg, Counsel to the system, the Black Lung Disability Labor Standards Subcommittee Fund, is that it relied in part on which Miller chairs. presumptions of disability based "Congressman Miller is consid on years of exposure rather than ering a more comprehensive ap- medical diagnosis. In contrast, William Bailey thinks that none of these bills is "The asbestos companies will not accept a bill which does notput a stop timely. "This type of individual ized remedy is too much like the Chrysler bail-out for the American people," he said. Bailey thinks that to the litigation." since the "federal government clearly wants to get out of under writing losses," the solution is to proach which will include all occu overhaul the entire products liabil pational diseases," Goldberg ex ity system, a remedy compatible plained. This should satisfy the with a proposal soon to be intro AFL-CIO, which has been pushing duced by Senator Bob Hasten (R- for legislation which covers all oc WI). cupational diseases for almost a Others, including Fred Baron, decade. see the optimal solution as reform "The main thrust of the AFL- ing the workers' compensation sys CIO is towards a general workers' tem by setting federal standards comp, for all occupationally in which accommodate occupational duced diseases rather than brown disease while leaving the option of lung one year, and black lung the third party suits open. next," George Taylor said. "Miller LIABILITY THEORIES If Rofen- is still undecided whether to make shein's view of a future of compro his system the exclusive remedy, mise does not materialize, asbestos and is not sympathetic to a federal compensation claims will remain government contribution," stated mired in litigation. The Supreme Goldberg. Court is currently being asked for Many interested parties agreed the second time to resolve a rift with sentiments expressed by among insurers over theories of li- Larry Rofenshein that this was not . ability. the time to go for a comprehensive Hartford Accident and Indem approach. "With the climate pro nity is one of about 25 insurers who duced by the administration, we argue the so-called "exposure may see an attitude change in both theory" of liability. Bodily injury the AFL-CIO and the companies," triggers insurance coverage, Hart he said. He may be right. Express ford contends, and that occurs ing his own doubts about the shortly after exposure to and inha chance that comprehensive legisla lation of asbestos, regardless of tion could pass during this admin when the symptoms manifest istration Taylor conceded that the themselves. "Fenwick bill is an improvement Another group of insurers, typi over the Hart bill," and the AFL- fied by the Insurance Company of CIO is "keeping an open mind." North America, argues for the Rofenshein hopes that asbestos "manifestation theory" of liability. could serve as a model for future They say that responsibility rests occupational compensation legisla with carriers that had policies in tion, particularly since the result place when cellular damage ad ing diseases are directly traceable vances to the point of becoming a to asbestos exposure. One of the recognizable disease. The Supreme FEBRUARY. 1982 92t0'01 RowVerK JO in <53