Saturday, May 24, 2014
Georgene Vairo (Loyola LA) has posted to SSRN Lessons Learned by the Reporter: Is Disaggregation the Answer to the Asbestos Mess?. The abstract provides:
Described as an “elephantine mass” that “defies customary judicial administration,” asbestos litigation remains the longest-running mass tort in U.S. history. Ultimately, the efforts made to resolve the ever-expanding asbestos litigation failed. In 1997, in Amchem Products, Inc. v. Windsor, the United States Supreme Court struck down the use of a class action settlement to achieve a global resolution of all asbestos claims — those pending at the time and those of future claimants. In the wake of Amchem, dozens of asbestos defendants sought bankruptcy protection while plaintiffs continued to file claims in state and federal courts. Between 1988 and 2010, a United States Government Accountability Office (GAO) analysis of the approximately 100 bankruptcy trusts’ payment data showed that the asbestos trusts had paid about $17.5 billion to 3.3 million claimants.
Since then, much has happened but basic problems remain. The patchwork system of plaintiffs claiming in federal and state courts, as well as the separate administrative claiming before bankruptcy trusts, raises complicated issues about how injured persons can be properly compensated while assuring that defendants are not assessed damages that are not warranted, and how to protect the trusts from fraud and preserve trust funds for future meritorious claimants.
The American Bar Association Torts and Insurance Section appointed a Task Force to look into issues currently confronting asbestos stakeholders. I was appointed its Reporter. This Article focuses on how the Task Force went about its work and developed a record. It then presents some thoughts on how my service brought together my long-standing academic interest in how mass torts ought to be resolved and the realities of the current asbestos litigation. What I have learned thus far has led me to question my once zealous advocacy of aggregated mass tort claims resolution.
When I served as Chairperson of the Dalkon Shield Claimant’s Trust, I wrote articles that focused on how the Trust resolved hundreds of thousands of claims. It is fair to say that I was a fan of aggregate resolution of mass torts. In my view, the use of multidistrict litigation, class actions, other aggregation tools, and even Chapter 11 reorganization provided fair and efficient vehicles for the resolution of mass torts. Indeed, the Dalkon Shield Board of Trustees expressly adopted motivating principles as they began to put meat on the bones of the CRF. First, and foremost, among these principles, was to “[t]reat all claimants fairly and equally, always focusing on the best interests of claimants collectively instead of on the interests of a particular claimant or group of claimants.” Another principle harkened back to the first: “Prefer settlement and prompt payment of claims over arbitration and litigation.” Rereading these principles in light of the compelling testimony of two of the Task Force witnesses challenged my weltanschauung about mass tort dispute resolution. Judge Robreno’s and Judge Davidson’s testimony about disaggregating cases into their core components, “letting lawyers be lawyers,” and getting cases ready for trial instead of obsessing about global or individual settlements is what led to the successful resolution of the cases before them.
Moreover, Judge Robreno’s testimony suggests that attempts at aggregated resolution of the “elephantine mass” were all failures, except for the MDL itself, which has largely wrapped up its work. Rather, as Judges Robreno and Davidson testified, the disaggregation of asbestos claims allowed asbestos cases to be prepared for trial (or settlement discussions) more expeditiously. Now, dying plaintiffs can get a shot at a prompt trial date rather than having to wait out a global settlement. Perhaps tending to the needs of particular plaintiffs is the best way to protect the interests of the whole in mass tort litigation after all.