Asbestos Litigation: Manufacturing’s Silent Killer

If you still had doubts about the need for lawmakers to pass serious legal reform, you should have been convinced by the hurried filing of 85 questionable class action lawsuits in just two neighboring Illinois counties in the single week before President Bush signed a new law tightening class action rules last month.

Madison and St. Clair Counties have both been condemned as “judicial hellholes” by the American Tort Reform Association. With trial bar-friendly judges and well-earned national reputations for lopsided jury awards, they have for years attracted abusive lawsuits that victimized upstanding companies from Illinois and virtually every other state.

But if last month’s enactment of the Class Action Fairness Act is soon followed by passage of both asbestos and medical liability legislation, we might just be able to return some reasonableness to America’s civil justice system.Passage of all three legal reform bills this year will strengthen economic growth while appropriately weakening the malignant and self-serving influence an imperious trial bar has wielded in Congress for too long.

Congratulations are in order for those bravely willing to lead across party lines. During Senate debate on CAFA, Sens. Thomas Carper (D-Del.) and Christopher Dodd (D-Conn.) plainly refuted disingenuous critics when they declared that the bill will not impinge on any aggrieved American’s right to bring a lawsuit.It will, however, move class actions involving parties from multiple states back to federal courts where the founders intended them to be heard.The days of shameless venue-shopping will end.

The scandal that asbestos litigation has become must also end.Thankfully, Senate Judiciary Chairman Arlen Specter (R-Pa.) has pledged to push a bill that removes asbestos claims from a clearly broken tort system and makes prompt compensation of true asbestos victims the priority.

Chairman Specter’s bill will establish a $140 billion no-fault trust fund paid for by defendants and their insurers that will then be drawn upon for fair awards to victims who are demonstrably sick.The overwhelming majority of asbestos cases now clogging our courts are filed on behalf of those who are not sick and may never become sick.This litigation logjam delays and too often denies compensation for those who need it most.

While real asbestos victims suffer unconscionable delays, our economy and communities also suffer.At least 74 U.S. firms have been bankrupted by asbestos litigation so far, and most of them were guilty of nothing more sinister than acquiring another company that made or sold asbestos many years earlier.

Tens of thousands of good-paying American jobs have been lost, retiree pensions have been eroded, and the legal uncertainty and fear inherent in the status quo have hindered business reinvestment and recovery.

Though trial bar spinners and others proclaim the proposed trust fund too small, three decades of history during which $70 billion has thus far covered awards to both bona fide and bogus claimants suggest that $140 billion will be more than enough as new exposure claims naturally dwindle over time and transaction costs (i.e., lawyers’ fees) are substantially reduced.

Trial attorneys and their congressional advocates also would have Americans believe that proposed medical liability legislation would deny injured patients adequate compensation.They criticize reasonable caps on more speculative non-economic and punitive damages included in the consensus reform bill.

But this reform would not limit awards for medical care, rehabilitation and projected loss of a patient’s future income.We can compensate injured individuals fairly while reducing the liability exposure that helps propel skyrocketing health care costs.

Speaking of costs, tort litigation now costs our U.S. economy nearly $250 billion a year–that’s an annual tort tax of roughly $3,400 paid by every family of four.And none of our major industrialized competitors spends nearly as much as we do on litigation.

If American workers and companies are to maintain their innovative edge against increasingly fierce and capable international competition, we must rein in runaway litigation costs.Class action, asbestos and medical liability legislation, along with other comprehensive legal reforms will help us do that.

So will a judiciary that is more inclined to interpret laws and less inclined to rewrite them.This is why the National Association of Manufacturers plans to enter the federal nomination fray in behalf of no-nonsense judges who will discourage ridiculous lawsuits that hamstring good American companies.And it’s why we have formed the American Justice Partnership to fight for legal reforms and solid judicial nominees at the state level.

The 109th Congress has a rare opportunity to restore sanity to a costly civil justice system gone wild.With an obligation to the working men and women they represent, lawmakers of both parties must preserve jobs by lowering litigation costs.The nation’s manufacturers will remind members of Congress of that obligation every chance we get.

John Engler is president and CEO of the Washington, D.C.-based National Association of Manufacturers and a former three-term governor of Michigan.