The “Asbestos Wars”

John P. PalumboTucker Ellis LLP

Did you know?

• 1929: First asbestos-related case filed

• 1970s: Flood of asbestos-related cases filed

• 1991: MDL-875 was created

• 10,000 people die every year from asbestos-

related diseases

• 1.3 million U.S. workers are still exposed to

asbestos

• EPA has no general ban on the use of asbestos

– Regulated by the Clean Air Act

– Some applications forbidden by the

Toxic Substances Control Act

Three Phases of Asbestos Litigation

I. 1970s – 1990s: Suits against asbestos

manufacturers

II. 2000: twenty-five of the largest asbestos

manufacturers went bankrupt

III. 2000 – 2052: Cases against identified

industries that used asbestos

parts/components

Factors Driving

Asbestos Litigation Today

1. Lax pleading standards

2. Questionable “expert” witness opinions by

plaintiffs

3. Opportunity for “Double Dipping”

Lax Pleading Standards

• Numerous defendants

– Average of 40 defendants

– Let discovery sort it out

• Careless naming of defendants

– No attention to corporate pedigrees

– Defendants – not plaintiffs – have to sort it out

Lax Pleading Standards

• Lack of information in the initial pleadings

– No product identification

– No significant facts regarding exposure

– Generic allegations against “Defendants”

• Master asbestos complaints

• Result: left to sort it out in discovery

Lax Pleading Standards

• Iqbal/Twombly

– Allegations in Complaint must do more than raise mere possibility but rather proffer “enough facts to state a claim for relief that is plausible on its face”

• Iqbal/Twombly challenges

– Mixed success

– Cases dismissed without prejudice

– Cases placed in holding docket

Plaintiffs’ “Experts”

• Daubert and Frye are not applied

– Ipse dixit

• No investigation of the specific facts of the

case

• No cost to plaintiffs in expressing “canned”

opinions

Plaintiffs’ “Experts”

“One Fiber” Theory

– It only takes one fiber above background to make

a person sick.

– Plaintiff is sick.

– Plaintiff worked around defendant’s product.

– Defendant’s product contained asbestos.

– Therefore, defendant’s product made plaintiff sick.

Plaintiffs’ “Experts”

Plaintiffs’ experts make no effort to determine:

– Frequency of exposure

– Regularity of exposure

– Proximity to asbestos-containing product

– Amount asbestos fibers released

Plaintiffs’ “Experts”

Recent opinions challenging this approach

• Number of defendants

– Before bankruptcy wave: 25 defendants

– After bankruptcy wave: 40-100 defendants

• Recovery from bankruptcy trusts between

2000 and 2011: $14 billion

Bankruptcy Wave

Double Dipping

• Allows recovery from:

– Bankruptcy trusts

– Tort-based litigation against solvent companies

• Order sometimes matters

– Lawsuit resolved first

– Then, submit bankruptcy claims

States React

Ohio, West Virginia, New York City, Pennsylvania,

and Texas

– Disclose all trust claims prior to trial

Ohio

• ORC § 2307.951-2307.954

– Plaintiffs must disclose claims prior to trial

– Defendants want to show alternative exposure

from bankrupt entities’ products

– Court can re-open case and re-allocate judgment

based on recoveries from bankruptcy trusts

FACT Act of 2013

• Furthering Asbestos Claim Transparency

(FACT) Act of 2013, H.R. 982

• Modeled after FACT Act of 2012

• March 2013: Introduced and assigned to

congressional committee

FACT Act of 2013

• Bankruptcy Trusts Would Be Required to:

– File quarterly reports describing demand and basis

for payment

– Provide information to parties to asbestos

litigation relating to demands and payments, upon

request

FACT Act of 2013

• Not go as far as Ohio legislation

• Primary Advantages

– Forum shopping less appealing

– Stop plaintiffs from hiding existing trust claims

Questions

Thank You