Document qdwjgmQp0Gx5KrEN703bwGOG

Advertising-Public Relations Seventeen Hundred Market Street.Philadelphia.ftnna. 19103-215 LOcust 83775 Public Relations Division July 8, 1981 TO: A/C Pipe Producers Association Public Affairs Committee FROM: Nancy L. Battle, Lewis & Gilman SUBJECT: New York Times Articles -- For Your Information Attached please find two New York Times articles dated July 3 and July 6, 1981. While the 7/3 article regarding asbestos- litigation and its impact on industry was largely negative, the 7/6 article was more favorable in its assessment of continued use of asbestos, and the future of the industry. Fortunately, the second article ran on Monday after the 4th of July holiday and probably reached a much larger audience than the article of July 3, when many businesses were closed. If you have any questions or require any additional copies, please don't hesitate to call the Association or agency. Sincerely, cc: J. Welch, ACPPA A. Kahn, Esq. N. Rahn, Esq. copies to: Public Affairs Committee H. Olsen T, Dougherty J. Woods J. Baker CAP CO JEN 0012966 . JS- Sfae$eltr|Jork Stmeg . Highly raaga'.fis'l photograph o! chrysotlle, or white asbestos, fibers. , TbeNewYoritTim/;uly6,i*i Continued Asbestos Use Seen suit in200,000 more cancerdeaths over thenext 20years, according to medical- No Substitute experts at Mount Sinai Hospital Envi ronmental Sciences Laboratory. It has also caused thousands of other work Found While . 'f ers to suffer asbestosis, a chronic and disabling respiratory disease that is occasionally fatal. Peril Lessens "Asbestos Is bad but not nearly as bad as the people making it look that way would like you to think," said '`"Roberrnitraifrih'e^ureau ofMines By BARJiABY J. FEDER commodity specialist responsible for the Government's asbestos figures. Such thinking leads Mr. Clifton and The InteriorDepartment expects do others who believe his projections to mestic use of the sometimes deadly another reason why major markets for mineral asbestos to remain steady, asbestos are expected to persist: As- and it expects use elsewhere to grow at bestos is hard to replace. an average rate of 4.5 percent through "We continue to look for the substi the year2000. tute for asbestos," John McKinney, These projections have been made chairman and chief executive officer partly in the belief that the hazards of of the Johns^Manville Corporation, the asbestos are finally well enough- un nation's leading asbestos producer, derstood to prevent further dangerous said in a recent company publication. exposure to asbestos fibers. "But so far we haven't come up with Inhalation of asbestos in past dec one, and neither has anyone else." ades has caused tens of thousands of : It is conceivable that no one will. As- Iv^tfK Najan r*fOOTH7P'd a; a rp. markable substance since the days of 'ancient Greece. It consists of micro scopic stone fibers that can be pro cessed--evenwoven--into other ma terials to lend them strength, flexibil ity and resistance to corrosion, heat and fire. Asbestos also insulates against heat, cold and noise, it does not conduct electricity and, because it does not react to most chemicals, it is exceptionallystable. This versatility ana the bisdovet/rfr huge reserves in Quebec a century ago encouraged American companies to incorporate asbestos in about 3,000 in dustrial and consumer items. These include coating and compounds, pack ing and gaskets, friction products (such as brake linings), asbestos ce ment sheet, roofing products, flooring products and asbestos cement pipe. However, even if there is nothing quite like asbestos, there are numer' ous things that perform somewhat like it in certain applications. Materials as 'diverse as metal powder, glass and Continued on Pnoe T)0 CAPCO JEN 0012967 T<L3> ' <aD to ft xh xOn jS s eJ,,S3 mco eoc.2 * U3 B l'1-g , M2SDO>Ce>?--gi 6 ill is Isif--552 r S2 W-S-. CO lo se Ipll- X<L> IP -i*- j* o*g * 3o* Ow d55 , sie.8- xn' Oc-o o,SSSsSE2g. "s?3 iEg>>s Ss5lSi Is =ss.2 m--<" O<xDn I 5E SS'fih'5 S^ Xo 38- o?2 M =ios >212 |5l-|3 Ss.siI t?-. /- . CAPCO JEN 0012968 . */ . IK ^ <n *'*' :C/ ^uCB^ V "! JUL-IS*^31 ) rsitS CPf-C ' /.-; G*jji|2ite 1962 Tilt Nr. Ycrkllsw NEW YORK; FRIDAY, JULY 3, 1981 5> * Asbestos Injury Suits Mount; With Severe Business Impact 90 eott btyowi S&eeuk am frc Hitbar is air Wmc By BARNABY J. FEDER Damage claims by workers exposed facture, use or sell asbestos products, to asbestos'and by their families now according to Michael Mealey, editor of. constitute the largest, and. potentially theAsbestosLitigationReporter. - rapst costly, block of product liability More than 400 new suits are filed each litigation ever to confront American in* month against the Johns-Manville Cor dustry. poration of Denver, once the biggest as About 25,000 people who believe'they bestos producer, by those claiming in are victims have already filed 12,000 jury from exposure. That Is an increase suits against 260 companies that manu from 150 a month last summer, and as of May Johns-Manville had been named in a total cf7,200suits, many with several plaintiffs. "It is impossible to predict when it will peak," Richard B. Von Wald, Johns-Mansville's corporate counsel, said of thecases faced by the company. Resolution of the cases holds broad implications for the liability of both manufacturing companies and their in surers and for the way that American industry deals with hazardous but eco nomically valuable materials. Asbestos is one of the most widely used mineral products, as an insulator, a coating for cables and wires, and a component of floorand ceillngtOes. The flood of cases may yet intensify. The current litigation represents a small part of the potential load because many of the tens of thousands of victims to date have failed to associate their cancers orlungdisease with exposure to the mineral's microscopic fibers in dec- Coctiiroed oo Pagepi, Column 1 CAPCO JEN 0012969 P> !t CcotimaedFromPagel,beetiOQl tlement dollars go to legal epenses ndes past, according to Dr. Irving J. rather than victims. *. Sellkoff, head of the Mount Sinai Hos- Even so, workers who are victims pltal Environmental Sciences Labors-, are expected to continue to prefer the | tory, the leading independent asbestos '. courts over workmen's compensation disease research center. Dr. William claims, which are frequently small ; Nicholson, who works with Dr. Selik- and difficult to win for occupational . off, projects that 200,000 "excess can- diseases. 1 cerdeaths" will be caused by asbestos Variations on asbestos injury cases cvsrthenexttwodecades. ' include theMowing: ! All of this bolds a special threat to.. ; business, which fears the litigation as ^Asbestos products companies that | sue their insurers to resolve the extent ; a trend that could involve potentially ofthe companies' coverage. - hazardous chemicals, such as formal* ^Asbestos products companies that .- debydeand benzene, and products that sue the Federal Government, charg* ; . emitradiatioQ.Aswithasbesto5.mil*' Ing that they were damaged by its i ' lions of workers and consumers have been exposed to the chemicals and negligent standard setting and en- ; forcemeat procedures in shipyards, : radiation, and they are suspected of tbe sites ofmany of the worst exposure j causing cancers and other slow-to-ap^ problems. " '! peardiseases. y '.there is no way to ascertain the cost 9Tbe addition of the tobacco Indus; ; try to the list of defendants, at the j *, of settlements made to date because Insistence of insurance companies. , rdany have been sealed. However, last Medical -research suggests that the 1 : year's annual reports of publicly. hazards of asbestos exposure sky* ' traded defendant companies disclosed- rocket for workers too are also ' ; hundreds of cases settled at average smokers. costs ranging from a few thousand dol* qSpouses and children of aabestos Iars to, in Johns-Mansville's case,-\ .workers and neighbors of asbestos 523,000. plants who sue asbestos mining com ; Tbe Asbestos Compensation Coall* panies and manufacturers, based on tion, an industry-led group attempting growing medical evidence that those ; to build broad-based support for a fund exposed to asbestos dust brought home ' that would be mandated by Congress- on a worker's clothes or In tbe air with Industrial, insurance turd Federal - around a plant may develop asbestos ' Government contributions, estimated diseases themselves.' '. that the average cost of settlements qShareholders of .asbestos compa and awards this year was $75,000 a nies who sue management alleging J plaintiff., '"The numbers scare the hell out of I me," said William Bailey, the senior k-iaror. exftiduelcxicany -Jcj WwNew YorfcTtmw/JulyJ. 1981 that failure to tell shareholders about the companies' vulnerability to asbes tos litigation before the litigation be- * .. vice president at the Commercial came a major problem violated se- ' Union Insurance Company, who is the .safeproductshavebeen removed'from curitieslaws. > Mad of tbecommitteeofAmerican In*.. the market. - "I think there is a very real fear that I surance Association executives moni- Nevertheless, since millions of we can't absorb it all," said Judge toring the asbestos litigation. Mr. Bai- Americans have already been signifi -Harold A. Ackerman of the United ( ; ley's worst-case projections place the cantlyexposed, some accountants and States District Court in Trenton, who j r amount of money at stake between businessmen are wondering whether J $120 billion and $150 billion, exclusive - Johns-Manville and other industrial of the indirect cc ju that might remit defendants, and the insurance compa has overseen negotiation of a tentative ; group settlement ($3.5 million made < public and the res1 s raled) oI the com '.frombankrupting somebusinesses. nies backing them, have the means to plaints of 6S0 former employees of a j hilcroscopicStooeFibers . .. compensate all of the potential vic Raybestos-Manbattan Inc. plant,. tims. Most defendants have far fewer ' which made automotive products until j. Asbestos has been recognized as a' resources that Johns-Manville, which it closed in 1973, and has hundreds of remarkable substance since the days last year earned $30.6 million on sales others on his docket. "It's cot para Cotancient Greece. It is a mineral con- of $2.27 billion despite weaknesses in noia.''. . ,...................... sistlngof microscopic stone fibers that manyofits majormarkets. can be processed--even woven--into One major issue for which a vital other materials to lend them strength, precedent may be set is an insurance flexibility, and resistance tocorrosion, ' question: When a hazardous substance heat and fire. Asbestos is also a good causes an injury that takes decades to insulator: it does not conduct elec* -appear, can the manufacturer resort tricity and because it does not react to . to insurance held throughout tbe time .-.most chemicals it is exceptionally the victims were exposed or only the (Stable. Asbestos is still used widely in policies held when tbe injury ap- chundreds of construction products, . peared? spiping materials and friction prod* ructs, such as the brake linings of - HeschitioclsInconsistent Need to Punish * .. ' It is not just a matter of money. Some victims want to punish major' manufacturers that they charge hid information about the hazards of as bestos from workers while piling up decades ofprofits. "Business . Just wants whatever seems to be the cheapest way out," ` said James Vermeulen, a 54-year old former Johns-Manville employee who ftrucks. "The insurance battle will deter has asbestosis and operates the 1,400- "* Since the turn of the century, how mine notjust who pays but the amount memberAsbestos Victims of America ever, evidence has been accumulating of coverage and which companies will Inc., a nonprofit organization, out of ,,that inhalation of the fibers can cause survive," said Stanley Levy, a promi* his home in Capltola, Calif. "That this ; dertain forms of cancer and a some- pent plaintiffs' attorney at the New industry is allowed to continue.to oper -"tlmes-disabling respiratory disease, York firm ofKriendler & Kriendler. ate is depriving mydeathofdignity." jasbestosis, many years, even decades, Another major concern of plaintiffs Industry spokesmen object to such ".after initial exposure. The asbestos in- and defendants alike is the absence of charges. They say that, to the extent ^ustiy maintains that the true extent any consistency in the resolution of as that the industry understood the haz ;:6r the mineral's hazards were not un*. bestos cases. Some plaintiffs end up ards, it acted to protectworkers. -'derstood until Dr. Selikoffs publica with huge awards, such as the Cleve Some Juries have apparently disa tion In 19W of a study of asbestos-re- land widow of an insulation worker greed. This year, Johns-Manville and -lated diseases among insulation work who in May was awarded $850,000. the Celotex Coporation, a subsidiaryof ers. Since then, they say, methods to ' Others who have similar diseases get the Jim Walter Corporation that pro (Wh<v. The industry coalition esti- duces buiidinz materials, were as- CT* CD W ort* Ui W CAP CO JEN 0012970 ... mi >. . ..., >* r^e *?I// ' **-'*"H "A ' * V*m *1 long with $1,737,000 in compensatory other'companies anticipate that their ! damages in 11 cases tried together be annual reports will also be qualified. ; fore a-Jury In the Federal District ' And the Asbestos litigation Reporter ' Court In Philadelphia. Johns-Manville ` has reported that numerous small dis-' *' was also hit with $500,000 in punitive tribuur-eontrectors fear bankruptcy : damages on top of a $350,000 award in and are being refused renewal of in- . a case before the Federal District ' surance policies.. . - .< Ccurt in Cleveland. And. the North Executives at many of the most fre American Asbestos Corporation, a for quently named defendants sometimes: mer distributor of asbestos products, contend that their companies are also; was found liable for punitive damages . asbestos victims. Many of them that; totaling $373,000 by a jury in an Indi . have not sold asbestos products in! ana state court. - years are finding more and more man- ' - "To me, the punitive damages are crucial," said Morris Mark, an ana lyst .at Goldman, Sachs who follows John-Manvilie. Typically, such dam ages are not covered by insurance. "It "agement time and financial resources . . drained by the litigation. j ' The Keene Corporation, a smallNew j York conglomerate with $210 million j . in annualsales.that acquired Baldwin-1 Ehret-Hill Inc.; a minor insulationpro- isvery rare that you have a legal quesHon that can actually affect a compa . ny's financial integrity," he said. "In this case, it is still more, theoretical than real, but there is reason for cau tion." , . . ; - . ' . dueer, in 1988 is an example. By 1972, all asbestos was removed from the subsidiary's products. ' = "We had no idea of what we were getting' into and never made any money selling those products." Row- ' i * , Even without punitive damage prob- _ ard Mileaf,'the corporate secretary : Jems, leading asbestos companies'' overseeing Keene's battery'-.of. law- | have been showing the strains of the .^yers.said.: - A;.'- ': exploding litigation. The mr.jcr asbes Nevertheless, ICeene is now tied up'.i tos companies are confident that they as a defendant in about 8,000 suits, up.; . can absorb their eventual liability. But "from some 2,300 at the.beginning'of : independent accountants have quail-':' " JS80. "We get sued every day now," = fied Joiros-ManvUie's earnings state-' . Mr.Mfleaf said, "and it has beta that: tnents foe-1979 and 1980 and that of' ''wayfor a yearand a half." ' *:' ..Raybestns-Manhattan Ina, the second- , The situation Is particularly poign- i most frequently named defendant, for. ant at the smaller distributor contrae. 1980. That unusual step indicates that tor concerns, where some" executives j the accountants believe the compa L who are defending the' companies . nies' potential liability is so unpredict against the flood of litigation are for- ; able that the earnings reports maynot tner asbestos workers who themselves fairly represent their financial condi have asbestos-related diseases. James tion. r . Sullivan, president of Pacorlndustries An attorney overseeing the litigation of Phiiladelphla only last month for another defendant named in thou learned that he was suffering from sands of the cases, who declined to be .'mesothelioma, an Invariably fatal identified, said that a number of the cancer associated wiih asbestos.- CAPCO JEN 0012971