The authors of this guest essay, Evelyn Fletcher Davis and William T. Wood, III are partners in the Atlanta office of Hawkins Parnell & Young, LLP, where their practices focus on asbestos litigation defense. This three-part guest article examines the evolution of the bankruptcy trust system (Part I), how control over the trust system by plaintiffs’ counsel has resulted in unfair allocations of responsibility, double recoveries and excessive costs (Part II), and offers practical advice to defense counsel to fix the disconnect between the tort and trust systems (Part III).
A. State Legislation
In 2013, Ohio became the first state to enact legislation to allow “the tort system to properly account for all of a plaintiff’s sources of exposure to asbestos and compensation.”. Presently, 16 states—Alabama, Arizona, Iowa, Kansas, Michigan, Mississippi, North Carolina, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wisconsin—have enacted asbestos trust transparency laws.
In addition to trust transparency reform, Iowa enacted first-of-its-kind legislation in 2020 to address over-naming in asbestos lawsuits. The legislation requires asbestos plaintiffs to provide a sworn information form with the initial complaint with supporting documentation disclosing the evidence that provides the basis for each claim against each defendant. In 2021, similar over-naming legislation has been signed into law in West Virginia, North Dakota and Tennessee.
B. Judicial Developments
Inasmuch as the Garlock decision “provide[d] defendants with tangible evidence of the problems caused by the lack of transparency between the asbestos bankruptcy trust and tort systems[,]” it resulted in “modification of CMOs [case management orders], and orders and opinions handed down by judges across the country” seeking to address and combat those problems.
However, progress on the judicial front has not been uniform or consistent. For example, the Pennsylvania Supreme Court’s 2020 decision in Roverano v. John Crane, Inc., might be said to take one step forward and one step back with respect to preventing plaintiffs whose injuries have been compensated in the bankruptcy trust system from pursuing duplicative recoveries from solvent defendants in the tort system.
The Roverano court considered two issues under the Pennsylvania Fair Share Act: (1) whether the Act’s provision for apportioning liability by share of fault applies in an asbestos product liability case; and (2) whether the Act’s provision for apportioning liability to a nonparty who has entered into a release with the plaintiff applies to an asbestos bankruptcy trust. With respect to the latter issue, the court affirmed the intermediate appellate court’s holding that the Fair Share Act permits a jury to consider the liability of a bankruptcy trust that has entered into a release with the plaintiff. But with respect to the former issue, the court reversed the lower court’s determination that liability in a strict liability asbestos case could be apportioned by share of fault, holding that it must instead be apportioned by equal shares.
C. Pushback by the Asbestos Plaintiff Bar
Asbestos litigation reform efforts have been strongly opposed by lawyers who represent asbestos plaintiffs. At the outset, plaintiffs’ lawyers “denied that any problem existed, dismissing the experiences of Garlock and other asbestos defendants as anecdotal and unrepresentative.” But “[a]s the evidence mounted, plaintiffs' attorneys changed their strategy and developed more targeted and nuanced opposition to reform. Primary among the opposition talking points has been that mandating trust disclosures before a civil trial begins delays compensation to needy plaintiffs and gives defendants too much control over the pace and extent of compensation.”
The truth is that there are delays today with regard to plaintiff compensation because plaintiffs’ attorneys routinely delay the filing of trust claims while tort cases are pending. The result is that dying claimants may not obtain substantial trust recoveries while they are still alive. Trust transparency laws speed trust claim payments to claimants and may make asbestos tort litigation more efficient.
VI. The Progress That Remains To Be Made
The simple and common sense measures that 16 states have thus far enacted to curb the abuses of the bankruptcy trust system need to become the law of all 50 states. It is especially incumbent upon the legislatures of states where asbestos litigation is most highly concentrated—including California, New York, New Jersey, Pennsylvania, Illinois, Washington, and Florida, among others—to enact those measures. Legislative initiatives that have been made in those states to date have failed to progress.
It is imperative that such initiatives continue to be made and that their proponents work to educate lawmakers and constituents about the systemic abuses of the bankruptcy trust system and the unjust burdens they impose.
It is also critical at the “boots on the ground” level that asbestos defendants and their counsel enforce the lessons of Garlock in their own practices. As one practitioner elaborates, those efforts should include the following:
- “ask[ing] the right questions in pre-deposition discovery, at depositions, at hearings, at pre-trial conferences, at trial, and even post-trial”;
- “[e]liciting bankruptcy trust discovery and claim submissions” in every case, thereby “forc[ing] plaintiffs to play by the rules and disclose the exposures and recoveries” in every case;
- “ensure they are asking for all available information about a trust claim, which may include past claims, current claims, deferred claims, and even notice of intent to file a future claim”;
- in cases where plaintiffs refuse to provide trust information and/or authorizations for the release of trust records, “counter that refusal in court”; and in jurisdictions where plaintiffs “routinely fail to comply” with case management orders requiring disclosure, address those deficiencies “promptly and regularly”;
- in jurisdictions where courts update or amend their standard case management orders, “seize the opportunity to educate the court on Garlock, bankruptcy discovery, and how revisions to existing provisions will improve trust transparency”;
- use the relevant trust information “in the tort system to depict the entire exposure, medical, causation and liability picture of each plaintiff[,]” including by “challenging a plaintiff's memory, providing alternate exposures, identifying additional worksites, and showing alternative causations[,]” and bringing to light any other issues which “may reduce a defendant's liability or prove that the injury was not in fact caused by the defendant being sued”;
- when possible, using trust information “to educate the court on available recovery from trusts.”
Other examples of practices that asbestos defendants and their attorneys may wish to consider include: obtaining lists of bankruptcy trusts from which plaintiffs may be able to recover based on their work history; presenting plaintiffs at depositions with TDPs demonstrating the ability to recover from the trusts; showing plaintiffs and other product identification witnesses pictures of the products for which the trusts make payment; showing such witnesses transcripts of testimony in other cases that there was exposure to a given trust’s products while working at the same work site or for the same employer as the plaintiff in the same time frame, and asking the witness if the testimony is accurate; and moving to compel the filing of all bankruptcy trust claims prior to the plaintiff’s deposition, explaining to the court that recovery from such trusts is available to the plaintiff, and the reasons that the timely filing of trust claims is necessary to present the full story to the ultimate factfinder.
By consistently applying these best practices, defendants can achieve better results for themselves, collectively work to educate the courts, and possibly even exercise some deterrent effect on the abusive practices by plaintiffs and their counsel.
Further, it remains incumbent upon the courts to apply the rules of tort law in asbestos cases with cognizance of the realities of that unique species of litigation and the specific concerns it invokes.
While the years that have passed since the Garlock decision have cast a spotlight on the abusive practices endemic in asbestos litigation, some progress has been made to move the litigation in the direction of justice. Much more needs to be done. This article highlights the serious problems flowing from the disconnect between the tort and trust systems. It also calls on defense counsel to fully utilize the tools at their disposal to obtain complete asbestos exposure histories from plaintiffs so that juries are not misled to impose disproportionate liability on newer or formerly peripheral defendants for exposure and injuries caused by bankrupt former asbestos producers.