Document zdQzzyarxk0pxM27XNNkB7G0z

KtmJTSS 0? THE ANNUAL MEETING of Che FRICTION MATERIALS STANDARDS INSTITUTE, INC. Wednesday and Thursday, June 16 and 17, 1982 at Savgrsss, Ponte Vedra Beach, Florida 1 PtAfNTlFPS^ i EXHIBIT \ fmz-'u ACTIVE I'gMBERS PRESENT Abex Corporation Bendix Corporation Braasbestoa Manufacturing Corporation Certified Brakes, Lear Sleglcr Company Delco-MoTaine Division Guardian Corporation Nucuta Corporation P. T. Brake Lining Company* Inc. H. K. Porter Company, Inc. Rsyb6st09~Manhatta&, Inc. Reddaway Manufacturing Company, Inc. Thlokol Corporation Virginia Friction Products S. K. Wellman Corporation Wheeling Brake Block Mfg. Co., Zne. OTHERS PRESENT Abas Corporation Bendix Corporation Cougar Automotive Corp* (Regional) Delco-Moralne Division 8. K. Porter Company ?. T. Brake Lining Company y Reybestos-Manhattan, Inc. Reddavay Manufacturing Company Wheeling Brake Block Aabeatoe Compensation Coalition Legal Coxaael Friction Materlale Standard# Institute REPRESENTATIVES Robert E. Nelson, Vice President Francis E. Messier william Simon, Treasurer Robert J. Anderson Donald L. Emrlck Norman Morse Larry DeFrance Stuart Comlaa , W. Max Sleeth David E. Cunningham John M. Moore John P. Gallagher Thomas Kennedy Gordon A. Carrlgan, Preaidant Lae Burgesa (6/16) Philip H. Grim, Jr. James V. Armstrong Alex Tgborl' Fred Tost George J. Bofarer Steve Doyle Ben Kublln Donald J. Testa F. William Barton Sob Burgess (6/16) Dave Pullen (6/16) Dennis Roes (6/16) Robert P. Gorman* Counsel Edward W. Drlalane, Secretary Mr. Carrlgan, President, eallad the meeting to order at 1:30 PM, June 16, 1982. As the first order of business, Mr. Carrlgan eallad for a roll call C2 .June io-i 7, 1982 Mr* Robert E. Kelson, Abex Corporation Mr. Gordon A. Carrlgan, S. K. Wellman Corporation Mr. ?. Williaa Barton, Reddaway Manufacturing Company Mr. David E. Cunningham, Raybestos-Manhattan, Inc. Mr. Carrlgan, President, called for nominations from the floor. Mr. Coming offered the name of Mr.* Kerman Morse of Guardian Corporation in nomination. Mr. Morse declined the nomination. Upon motion duly made, seconded and unanimously passed, it was: RESOLVED: That nominations for the Board of Directors be closed. The Secretary was directed to cast one ballot for the election of Mr. Robert E. Kelson, Mr. Gordon A. Carrlgan, Mr. ?. William Barton, and Mr. David E. Cunningham to the Board of Directors. The Secretary advised that the ballots had been so cast. The President advised that with the election of these four Directors that the Board had the required seven Members. Mr. Messier advised the Membership that It was the Committee's intention to recommend the following slate of Officers for election at the Board of Directors meeting foilwing the first Membership session: For President For Vice President For Treasurer For Secretary - Mr. Robert E. Kelson Mr. Stuart Comlns Mr. William Simon Mr. Edward V. Drislane HEALTH AKD EMVIROKMEKTAI AFFAIRS COMMITTEE Mr. Armstrong, Chairman of the Health and Environmental Affairs Committee, presented this report. Refer to EXHIBIT 9. f Mr. Armstrong noted actions taken by the Committee and the Institute Offiec slnee earlier meetings. Be noted la particular'that concern was rising relative to litigation la the asbestos area, and proposals for Federal Legislation In the Compensation area. Based on this concern, the Coaalctee 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. At its meeting, this Committee asked that the Board of Directors approve a request to the Federal EFA on approved landfills for friction materials waste, and asked that the Board suggest the mesne for asking such a request. Mr. Armstrong reviewed general OSHA and EPA activities In ercae of concern to friction meterlala 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 ~ * < 47U Mr. Armstrong discussed litigation and it was noted that if an individual was covered under workmens compensation, that party then could become a plaintiff in a third party suit against a supplier of asbestos or asbestos products. The problem with landfills was that their availability was drying up, and sites and waste transporters were less accessible and considerably more expensive. The waste problem is probably more of a chemical problem with phenols** formaldehyde, solvents, and the like. It was noted that representatives of the Asbestos Compensation Coalition were at the meeting, and their presentation might answer questions in the litigation and Insurance areas. Upon motion duly made, seconded and unanimously passed, it was: RESOLVED: To accept the report of Che Bealch and Environmental Affairs Committee S3 written. ASBESTOS COMPENSATION COALITION The President welcomed Mr. Dave Pullen of the Asbestos Compensation Coalition to the Meeting noting that Mr, Pullen had been Invited to address the Membership after earlier contacts with Mr. Armstrong's Health and Environmental Affairs Committee. Mr. Carrigan felt it wee timely that the Coalition had accepted this Invitation to our Meeeing because of the In creased concern on litigation and insurance relative to asbestos exposure cases. Mr* Pullen Introduced Mr. Dennis Ross who Is also with the Asbestos Compensation Coalition. Both Mr. Pullen and Mr. Ross presented the Coalition's up-date on the compensation issue and alternated in this presentation. For background. It was noted that the following were members of the Coalitlcn: Celotex Division of Jim Walter, Asarco, Pittsburg Corning, Unarco, Johns-Manville, Raybestos-Msahattan, Aaatex, and Eagle Pitcher. The earlier legislative initiatives were noted Including the Bart Bill, the Fenwick 9111 and the Miller Bill. The Coalition saw merits end shortcomings Is each of these, end felt that while they did not have e complete package to offer at this time, they needed broader support end would encourage meaningful Input from Institute Members and others. In describing the extent of the litigation, it was stated thet there now are 18,000 lawsuits in the asbestos area, and there are more asbestos related lawsuits In the courts than car accident suite. The allegations are that asbestos products manufacturers knew of the health problem end did not warn the exposed worker. Lately the Issue of "strict liability" has arisen where it would not matter If the manufacturer didn't know of Che health hazards--he could be held liable in any event. The increase in litigation has several roots. There has bean an eroalon in the exclusivity of workmens compensation as the remedy in cases of exposure. The plaintiff bar favors this activity as the fees ere on a contingent basis. Some State Workmens Compensation Programs are plainly Inadequate requiring that claims be filed within two or three years of exposure. Soot State plans are now moving to requirements of two to three years after meifetetion of the disease. Minute* of Annual Meeting -9- June 16-17, 1982 Mr, Pullen suggested the poor distribution of funds to the injured party with distribution of a typical $100,000 award. Such an award could go up to $60,000 In fees, $5,000 in costs, $10,000 to repay Workmens Compensation, and the final $25,000 to the Injured party for lifetime medical costa. Counting the.costs of Che defendant parties, and Including the costs of defending successfully where no award is made, it say cost $200,000 to get $15,000 to the Injured party. This system of awards la wasteful, and it is suggested that some other system should be better* A suggestion that there be fifty uniform laws In this area for the 50 States is both unrealistic and costly. It is suggested additionally that such uniform plans In the 50 States do@"not bring the United States Government in as a participant when the Government-run shipyards of World War II ' have been responsible for a majority_of the cases In litigation today. Mr. Pullen and Mr. Ross suggested that if a State-by-State approach is not the solution, that the solution may be the Federal Government, acting on Four Principles: 1. Settlement be prompt, adequate and equitable 2. Proof of injury would be on clearly defined medical evaluation (avoiding the "black lung" theory where any exposure is sufficient "proof") 3. Costs would not be dumped on the taxpayers--the burden must be on those responsible. 4. Such settlement would provide the exclusive remedy, prohibiting third party litigation. Mr. Pullen noted the three earlier legislative Initiatives on asbestos compensation: S1643 - the Bart Bill, HR5224 - the Fenwick Bill, and HRS735 - the Killer Bill. Both the Bart Bill and the Fenwick Bill are dead. While the Miller Bill is technically alive. It Is probably politically dead. The Coalition has recommended s new legislative approach. Among the advantages would be that it does not federalize'workmens compensation, but rather works within the existing State workmens compensation framework. Zt would safeguard the funding, ae the (implementing resolutions would have a limited life of five or ten years, enff:he entire resolution could be terminated if Che pay-out exceeded the funds available, which would re-* instate tort litigation as the remedy. In other words this would avoid possible unlimited funding which could result from legislation of the "black lung" variety. Copies of a "Stsaaty of the Occupational Disease Coapeasacion Improvement Act end the Implementing Resolution for Asbestos Related Diseases" were distributed. The Coalition bed prepared these Summaries to describe generally the legislative approach recommended. The Act would be a generic approach not limited to asbestos which could fimctlon for a range of occupational diseases. This would relate to the types of diseases, t^e provision of benefits, Interaction between Federal and State Programs, and financing of the fund. The proposed Act would provide thet fcfrl* remedy waa the exclusive remedy for choee injured by the occupational disease. The Act would provide for Implementing Resolutions for the different occupational diseases and thesa resolutions would provide for a limited life of the resolution and that the resolution could be terminated if the pay-out exceeded evailable funds absent enacting additional authorizations. ' Minutes of Annual Meeting -10- June 16-17, 1982 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 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 go out of business. The Coalition at this time requests input from any Interested party and that when a draft of the legislation Is available, the Institute and its Members might help with constructive criticism of the proposed Act* Nov Is the time to discuss the plan, and as nothing Is nov cast In concrete, this is the best time for input. It was stated that the Coalition should have the language ready in the next month or so and would hope to have copies ready for the Institute and other Interested parties at that time. They would hope to have the proposed Act in the legislative hopper by late 1982'. The Coalition's proposals vera opened for questions and discussion. In 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 the fund and it was noted that assessments would be made on a formula based ou each manufacturer's defendant settlements and judgements and on the number of pending lawsuits. Mr. Pullen noted chat it was possible chat his company (Johns-Manvllle) might end up being assessed e higher proportion of the costs of the fund, but that such a program would compensate those funding it with Injured parties giving up tort rights. The efficiency of such a program would be ehat up to 852 of the costs now consumed in tort litigation could be eliminated. He noted that currently about 22 of cases go to verdict, and about 652 have been defendant verdicts. As some ocher than Johns-Manville cases have had 851 defendant verdicts, Johns-Manvllle may end up paying a higher percentage fee than others. It was noted that one defendant had von 16 out of 18 cases, and that the procesa of settlement has Increased litigation. Some defendants may reappraise their litigation strategy and prefer going to verdict rather than settling. It was noted that Dr. Selikoff had predicted 10,000 exeesa lung cancer deaths per year from asbestos exposure along with 2,500 asbestosls cases and 2,000 to 3,000 mesothelioma eases. While most observers believe Dr. Selikoff's projections ere 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 his claim through tha Intended compensation find, wouldn't this opes even more claims than tort litigation. In response. It was noted that some observers feel tha "jackpot" settlement of tort litigation is more attractive to the alleged victims. With this open discussion concluded, Mr. Armstrong, Chairman of the Institute'* Health and Environmental Affairs Committee, suggested thae Mr. Pullen's and Mr. Koss's presentation had gives the Members a broader perspective on the issues, and he asked for more participation of the Members In the work of bis committee. It was stated ebat soma Members may wish to participate ea in dividual Mashers of the Coalition, and that the Institute wished the Coalition to maintain liaison with the Institute through its Health end Environmental Affairs Coaodetee. It was asked chat the Coalition place the Institute on Its mailing list, and that the Institute would fotward data as to Its Members. Mr. Pullen and Mr. Hoas projected that the draft of the proposed new legislation would be avallble Cve 07 weeks, and that a draft would ba sent to