Saturday, April 28, 2012

Silent Killer Elizabeth Warren worked to end asbestos consumer safety suits


BY: Patrick Howley
Washington Free Beacon:

Democratic Massachusetts Senate candidate Elizabeth Warren publicly supports a consumer protection platform, but records show she received more than $100,000 to help suppress personal injury lawsuits against an insurance company accused of misleading the public about the dangers of asbestos.

In 2008, according to her financial disclosure records, Warren received $73,625 from Simpson, Thacher, & Bartlett LLP, the New York law firm representing the Hartford, Conn.-based Travelers Insurance. The following year, she received $94,772 in “non-employee comp” from Travelers, and in 2010 she was paid $43,938 in non-employee comp by the insurance company. Travelers also paid her husband $1,000 in 2009, according to Warren’s financial disclosure records.

Warren worked for Travelers on asbestos-related litigation. Her financial disclosure reveals that she served as a consultant to Travelers on Travelers Indemnity Co. v. Bailey, a 2009 Supreme Court case. In the case, Travelers petitioned for immunity against personal injury suits related to its onetime client, the bankrupt asbestos manufacturer Johns Manville Corp. Johns Manville filed for bankruptcy in 1982; Berkshire Hathaway acquired the company in 2001. Travelers served as the company’s primary liability insurer until 1976.

Warren wrote in a Supreme Court brief on behalf of Travelers that the asbestos victims’ lawsuits were part of a “global strategy developed by the asbestos plaintiffs’ bar.” Warren also criticized the victims’ “enterprising” lawyers. According to Warren:

After a full, contested evidentiary hearing, the bankruptcy court concluded that all of the pending direct action suits against Petitioners violated the 1986 confirmation order, finding as a matter of fact that these new claims were part of a global strategy developed by the asbestos plaintiffs’ bar to put Petitioners ‘in Manville’s chair’ and thereby collect on claims that had already been channeled to the Manville trust. …

And by effectively rewriting a long-final confirmation order (at precisely the time when its enforcement was necessary), the court of appeals gave enterprising plaintiffs’ lawyers an “end run” around a final federal court judgment.

Warren referred in her brief to the court’s responsibility to end “the asbestos litigation crisis.”

Warren campaign spokeswoman Alethea Harney told the Free Beacon, “Elizabeth served as a consultant for Travelers because she wanted to ensure that all victims got a fair shake and had an equal chance for compensation. That’s why she supported all insurance proceeds being put in a trust rather than fighting lawsuit-by-lawsuit until the money ran out.”

The Supreme Court ruled in favor of Travelers, citing the establishment, by a federal bankruptcy court judge in 1986, of a trust fund for asbestos victims to settle all personal injury claims against the bankrupt Johns Manville. Travelers agreed in 1986 to make hundreds of millions of dollars in payments to the Manville Personal Injury Settlement Trust in return for immunity from future personal-injury suits from the account.

In his dissenting opinion Justice Stevens, with whom Justice Ginsburg joined, wrote that while the 1986 agreement should protect Travelers from suits related to its insuring of Johns Manville, it should not protect Travelers from facing civil charges for its own misconduct.

Lawsuits filed in 2001 accused Travelers of breaking consumer protection laws by allegedly hiding the dangers of asbestos and failing to warn the public.

Travelers reportedly knew about the dangers of asbestos for decades. As early as 1932, Travelers considered asbestos exposure enough of a hazard that it instructed its agents not to sell life insurance to asbestos workers over the age of 56. A former Travelers employee said that he was informed of the health risks of asbestos when he joined the insurance company in 1952. In 1971, a former Johns Manville insulation worker dying of mesothelioma won the first product liability suit against Johns Manville, and his claim was upheld on appeal in 1973. In 1975, Travelers formed a new asbestos subcommittee of its “catastrophe committee.” According to the asbestos committee, “punitive damage potentials are extremely large because of the apparent failure to adequately warn workers and the public of the hazards known to makers and large distributors of asbestos.”

By the time of the 2001 lawsuits, the Manville Trust had cut payments to asbestos victims dying of cancer down to $10,000 or less—down from hundreds of thousands of dollars per claimant in the 1980s.

In 2004, Travelers settled with several plaintiffs for $445 million, in exchange for an order from the bankruptcy court clarifying its 1986 decision that no new asbestos cases could be brought against Travelers. However, in 2008 the 2nd Circuit Court of Appeals reversed that ruling and held that the bankruptcy court had no authority in 1986 to block all future lawsuits against Travelers.

Not until the 2009 Supreme Court case, which Warren helped win, did Travelers finally gain binding immunity against all new lawsuits related to its alleged conduct.

In effect, Warren helped end the “asbestos litigation crisis.”

But the late Democratic senator Edward Kennedy disputed such a crisis existed, and took exception to the very term that Warren used in her brief.

“The real crisis which confronts us is not an ‘asbestos litigation crisis,’ it is an asbestos-induced disease crisis. Asbestos is the most lethal substance ever widely used in the workplace,” Kennedy said in a 2006 statement. “All too often, the tragedy these seriously ill workers and their families are enduring becomes lost in a complex debate about the economic impact of asbestos litigation. We should not allow that to happen. The litigation did not create these costs. Exposure to asbestos created them.”

Warren, the architect of the controversial Consumer Financial Protection Bureau, has spoken out in favor of consumer protection.

“We have to come back to the notion that government really has a function in America. It has the function of creating kind of these basic safety—think about how the world—how well markets have worked,” Warren said in a 2009 Charlie Rose appearance. “My favorite example is toasters. You know there were two ways you could have gone in the toaster market. If you had no safety standards, there would be a way to make profits. Take out the insulation. Because the insulation costs money, right? Use the cheaper wiring. And if one in every five toasters bursts into flames, too bad. Customers can’t tell the difference. You’ll make nice profits.”

No comments: