WSJ on Asbestos. Pressure is really building to do SOMETHING. !000+ companies already under assault. Does anyone know of other OS companies besides MDR and HAL with asbestos liabilities?
John
REVIEW & OUTLOOK
Bush and Asbestos
Through no great failing of his own, Vice President Dick Cheney may not have been the best investment
for his former employer, Halliburton. As CEO, he led the company to a much-applauded merger with
Dresser Industries, but now Halliburton finds itself engulfed in a red tide of asbestos litigation. And his
new job could be interfering with the Bush Administration's willingness to help.
Halliburton has been hit by four asbestos verdicts totaling $152 million in recent months. It faces 250,000
other claims and counting, most originating from the Dresser side. In this the company is like much of
American business, for which asbestos suits have become the new plague.
Alert people up to and including the U.S. Supreme Court have been arguing for
years that asbestos litigation has swollen to such ungainly proportions that the
court system can no longer sensibly handle it. Congress needs to act, creating a
nonjuridical process that would speed compensation to the truly injured and
preserve the option of those who were exposed to asbestos to collect someday if
they develop a related illness.
It would help if the Bush Administration, which owes nothing to the plaintiffs'
bar, would lend a hand. And sure enough, our sources say that tort reform was
in early drafts of Mr. Bush's State of the Union address. But it got pulled --
some say for reasons of time, but others say because some White House
myrmidon remembered that Mr. Cheney had worked for Halliburton, and
Halliburton had been in the news for asbestos.
We can understand the political sensitivity, but it's a sad precedent if an
administration can't address an urgent problem because one of its members
actually knows something about the issue. The idea that private-sector experience is by definition
delegitimizing is of great service only to career politicians who are able to make a virtue of their lack of
contamination by reality. We hear a tort reform task force is still percolating inside the Bush
Administration, and we hope its work sees the light of day.
Enron is the panic du jour, but more jobs and pensions are under threat from asbestos than from 10
Enrons. A study by the Rand Institute of Justice last summer estimated that the 500,000 claims filed so
far represent less than half the eventual total, and even this probably underestimates the trial bar's
ingenuity in scaring up "victims" to claim they were exposed.
The problem has become more urgent since the study was published, with nine more companies driven
into bankruptcy and liability spreading to firms that had nothing to do with making asbestos stuff or
concealing its danger. On Friday, Honeywell, an asbestos virgin, found itself among 48 defendants
walloped for a $53 million verdict on behalf of a former brake mechanic and Coast Guard engine-room
worker.
Also on Friday, the Big Three U.S. carmakers lost a bid to transfer some 20,000 brake-related asbestos
suits from state courts to a single federal claim. The car companies are in the line of fire only because
one of their suppliers, Federal-Mogul, filed for bankruptcy in October after asbestos claims piled up
against smaller companies it acquired in the 1990s.
Resolving all of these claims under the present system could end up costing $275 billion. More than 1,000
companies have collected lawsuits, and every day some new, unsuspecting defendant gets hauled into
court. Once or twice Congress has pretended to grapple with the problem, but the trial lawyers yanked
the contributions chain and Senate Democrats scuttled the effort.
The vast majority of asbestos claimants, by the way, aren't sick and won't become sick. But lawyers are
happy to stir up their fears anyway, because masses of these "exposure" claims are what bring
companies to the table with settlement cash -- or to Chapter 11. So the lawyers rope the claims together
to defy any realistic attempt to evaluate them or find out if the exposure really happened and which
company's products were responsible. The auto claims, for example, are mostly from gas station workers
who claim chronic exposure to asbestos dust from, of all things, brake linings.
The primary beneficiaries are lawyers and their armies of medical and expert hangers-on, who consume
50 cents of every dollar paid out. Meanwhile, people truly ill, for instance those with the horrible
asbestos-related lung cancer mesothelioma, often die without compensation thanks to the backlog of
cases.
The first President Bush had the savings-and-loan mess, which previous administrations had booted but
the White House knew it had to address before the economy could recover in the 1990s. George W.
Bush would be doing himself, the economy, suffering victims -- everybody but the asbestos lawyers -- a
similar service by taking a lead on resolving the asbestos disaster before it puts thousands more
Americans out of work. |
