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https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20150&cosponId=18114
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House of Representatives
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: April 21, 2015 10:02 AM
From: Representative Warren Kampf
To: All House members
Subject: Prior HB 1150 - Fairness in Claims and Transparency Act (FaCT)
 
In the near future, I plan to introduce legislation creating the Fairness in Claims and Transparency (FaCT) Act. This bill addresses a loophole in our current system of assessing responsibility for damages in asbestos-related suits which impose job-crushing burdens on many Pennsylvania businesses.

Asbestos lawsuits date to the 1970s when companies that mined and milled asbestos, or that incorporated significant percentages of the material in products used in the workplace, were the primary targets of lawsuits. Beginning in the 1980s and substantially accelerating in the last decade, many of those companies have used federal bankruptcy to shield them from suit in exchange for funding stand-alone trusts. These trusts, formed by asbestos miners, manufacturers and fabricators, make an estimated $30-60 billion available to qualifying injured parties through a simplified claim process. A company declaring bankruptcy and using the trust process can never be sued in court.

Some claimants who receive money from these trusts have also filed other court cases against businesses down the supply chain. These businesses are not part of the bankruptcy trusts, as they remain solvent, and therefore they can be held liable in court even after the claimant has already received money from the trust. These businesses, often with limited connection to any injury, have in some cases been forced to shoulder massive liability.
These liabilities continue to affect businesses throughout Pennsylvania, from small employers that work with asbestos products to large manufacturers that are successor companies to the original asbestos miners from the 1970s. A report showed that between September and December 2010 alone, forty-five Pennsylvania-based companies were named as defendants in new asbestos lawsuits. The enormous burden of these cases drains resources that could otherwise be used for economic growth.

Two particular problems have arisen. First, clever manipulation of the litigation and bankruptcy trusts can result in "double-dipping" where a claimant recovers twice for the same injury – once through the courts, and a second time through the bankruptcy trusts. Second, because the representations made by claimants in the bankruptcy trust system are not public, it is possible for claimants to make inconsistent statements within the different systems. For example, a claimant may argue a particular set of facts about asbestos exposure to the bankruptcy trust, while simultaneously asserting a different set of facts in the courts against other, non-bankrupt companies.

My bill corrects these two problems. First, the bill would apply the principles of our Fair Share Act to asbestos litigation such that defendants would pay only for their individual fault. Second, the bill would require claimants to disclose all asbestos exposure information and to indicate whether they have submitted a claim based on asbestos exposure to a trust or are eligible to submit a claim to a trust. Disclosure of this information will allow a judge or jury to consider all exposures, claims which have been or could be submitted to a trust and claims which have been paid by a trust.

The bill is simple, and it would make our law fair. Double recovery would be much less likely if not impossible, and that is good for our economy, our employers and our citizens.

I ask you to join me in co-sponsoring this beneficial legislation. Thank you in advance for your consideration.

Previous co-sponsors:
CUTLER, GRELL, EVANKOVICH, MILLARD, ROCK, HESS,
PICKETT, SACCONE, MILLER, KAMPF, GREINER, TURZAI, SAYLOR,
MCGINNIS, EVERETT, EMRICK, MARSICO, MILNE, GROVE, STEVENSON,
TOOHIL, TRUITT, HELM, GODSHALL, PYLE, SWANGER, MALONEY,
KRIEGER AND KAUFFMAN



Introduced as HB1428