Lessons Learned by the Reporter: Is Disaggregation the Answer to the Asbestos Mess?

Described as an “elephantine mass” that “defies customary judicial administration,” asbestos litigation remains the longest-running mass tort in U.S. history.  More than twenty years ago, in 1991, decades after the commencement of asbestos litigation, a United States Judicial Conference Report (Judicial Conference Report) described the scope of the problem:

The most objectionable aspects of asbestos litigation can be briefly summarized:  dockets in both federal and state courts continue to grow; long delays are routine; trials are too long; the same issues are litigated over and over; transaction costs exceed the victims’ recovery by nearly two to one; exhaustion of assets threatens and distorts the process; and future claimants may lose altogether.

That year, over 26,000 asbestos cases were consolidated for pretrial purposes under the multidistrict litigation statute (MDL 875).  “Tens of thousands of additional asbestos cases subsequently entered the federal system and were transferred to MDL 875.”  Although some cases settled, ultimately the efforts made during the next decade failed to resolve the ever-growing litigation.  In 1997, in Amchem Products, Inc. v. Windsor, the United States Supreme Court quoted from the 1991 Judicial Conference Report and acknowledged the continuing magnitude of the asbestos litigation, but it declined to solve the asbestos mess.  Rather, it 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.

The elephantine mass continued to morph in the decades following Amchem.  Cases continued to flood MDL 875, which remained focused on the global resolution of cases.  Indeed, very few cases were being tried in the federal courts, because the MDL judge generally was not remanding individual cases for trial.  Only very sick or terminally ill plaintiffs’ cases were remanded.

Fast-forward to January 2013.  I was appointed to serve as the Reporter to the American Bar Association (ABA) Tort Trial and Insurance Practice Section’s Asbestos Task Force (Task Force).  One of the Task Force’s first items of business was to draft an overview of our mission for publication on our Web site.  That statement began by noting that the Judicial Conference Report was over twenty years old and concluded:

Since then, much has happened but those basic problems remain.  Dozens of asbestos defendants have reorganized under Chapter 11 of the bankruptcy code, with Trusts established to compensate injured parties.  However, there is substantial debate as to the adequacy of compensation paid by the Trusts to Trust claimants.  Moreover, latent injuries still appear, and injured parties continue to file new cases against solvent defendants.  Although the nature of the litigation has changed, the result is that asbestos claiming has yet to abate.

The necessarily 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.  Other issues of importance include how to protect trusts from fraud and erroneous payments and how to preserve trust funds for future meritorious claimants.

This Task Force will examine these issues with a view toward achieving fairness for both plaintiffs and defendants.

I looked forward to serving as Reporter both because I had experience in dealing with the resolution of other mass torts and because of a long-standing academic interest in mass torts, class actions, and complex litigation.  Although my writing touched on the asbestos litigation, I had only generally been following current asbestos developments.  The assignment would enable me to catch up and, together with the other members of the Task Force, hopefully help contribute to the fair resolution of the asbestos litigation.

This Article focuses on how the Task Force went about its work and developed a record.  Because the Task Force has not yet met to look at the record it has developed or to analyze all the issues presented, it would be inappropriate to predict how our Report and Recommendations will appear once published.  However, I will present some brief thoughts in the last Part of this Article that bring 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.