FACT Act update

This November the U.S. House of Represented passed the Furthering Asbestos Claim Transparency (FACT) Act of 2013 on a party-line vote — 216 Republicans and 5 Democrats voted aye; 7 Republicans and 192 Democrats voted no.

The bill must now go to the Senate, where Democrats hold a small majority. The bill might be doomed to fail, based on the lopsided House vote. But if only six Democrats vote with the Republicans, it could pass and become law.

What is FACT? FACT’s supporters say it’s a necessary remedy for ending an epidemic of fraudulent asbestos-related damage claims. They allege that many claimants are “double dipping” and filing duplicate claims with the several separate trusts set up by bankruptcy courts to compensate asbestos victims.

However, FACT’s detractors say the bill is nothing but a bullying tactic to intimidate victims and discourage them from filing legitimate claims.

After the House vote, several newspapers ran editorials — no doubt based on industry press releases — about the alleged rampant fraud the FACT Act would stop. However, Meagan Hatcher-Mays of Media Matters for America pointed out that the editorials were all woefully short of evidence. Responding to a typical piece in the Wall Street Journal, Hatcher-Mays wrote,

“The WSJ spends the rest of its editorial fear-mongering about the potential for fraudulent claims being filed with the asbestos trusts. It cites only a few instances of fraud, and claims that one corporation at the center of asbestos litigation ‘has evidence’ of more -- but it is unable to provide any specifics because the ‘evidence’ has been sealed by a federal judge.”

Further, according to Hatcher-Mays, “There is little to no evidence of rampant fraud, and the error rate in payments from the asbestos trusts is reportedly only .35 percent.”

“Before plunging ahead with this misguided attempt to protect asbestos companies from lawsuits, Congress ought to commission an objective study of whether there is even a problem that needs fixing,” wrote the Editorial Board of the New York Times.

Here is some background on the asbestos trusts:

Through much of the 20th century asbestos widely was used as a fireproofing insulation in ships, building materials, and machine and auto parts, among many other things. However, manufacturers continued to use asbestos long after it was known that exposure to the fibrous mineral causes severe illness, including deadly mesothelioma cancer. The asbestos industry continued to expose workers and consumers to asbestos while aggressively lobbying against government safety regulations. The FDA didn’t ban most uses of asbestos until 1989, and even then courts overturned part of that ban a couple of years later.

By then, asbestos manufacturers were beginning to face lawsuits from sick and dying workers. Many manufacturers went into Chapter 11 bankruptcy to protect their assets. Bankruptcy courts required some of these manufacturers to set up asbestos personal injury trusts to compensate present and future claimants.

Mesothelioma can take 40 years or more to develop after exposure to asbestos, so workers exposed before the ban are still getting sick today. It is estimated that 10,000 U.S. workers die each year from asbestos exposure.

Even so, what is the problem with safeguards against possible fraud? The problem is that the “remedy” would require the 60 or so asbestos trusts to publicly disclose, on websites, all manner of private information about claimants. Anyone in the world with a web browser could learn claimants’ and family members’ names and home addresses, where they work, some personal medical and financial information, and the last four digits of their Social Security numbers. In other words, claimants would be left wide open to identity theft.

Further, the FACT Act would allow the defendant companies to demand any information of any sort from claimants, including information that has nothing to do with their claims. This could be a handy way to delay processing a claim indefinitely.

Note that in the FACT Act “transparency” only goes one way; no disclosure requirements are placed on manufacturers.

If the purpose of the bill were only to prevent duplicate claims, it shouldn’t be that difficult to set up a process through which the trusts could share information without making it public. It’s too obvious that the real purpose of the bill is to intimidate victims from filing claims.

FACT will no doubt appear on the Senate calendar after the holidays. The Asbestos Cancer Victims’ Rights Campaign has an online petition to stop the FACT Act.