July 24, 2003

Notes: Time to Learn About the Asbestos Cluster****

One of the most mammoth of the many failures of our common law-based legal system has been the extraordinary mess created by asbestos litigation. Large numbers of victims who have died, are dying, or will die in agony coughing up quarts of blood who receive little or nothing from the legal process. Huge transactions costs. Enormous amounts of valuable working time dissipated in legal battles where there are no facts in dispute to be found. A refusal by righty-wing courts to impose any rationality or coordination upon the process, out of a fear that doing justice on this issue would set a dangerous precedent. Large-scale semi-corruption in states where judges' funds for their future reelection campaigns are paid out of those portions of victims' settlements that wind up in the hands of lawyers.

It is time for me to learn something about all of this...

Senate Testimony by Steven Kazan. Before the Committee on the Judiciary, U.S. Senate, March 5, 2003

Senate Testimony by Steven Kazan. Before the Committee on the Judiciary, U.S. Senate, September 25, 2002 (see also: Senate Judiciary Committee )

Report by the Rand Institute for Civil Justice.... Both the Rand study and the actuarial study support the Kazan argument that the litigation explosion is the result of lawyer-driven filing of non-malignant disease claims, more commonly known as "unimpaired claims".

Attorney Photo  

STEVEN KAZAN: Founding, senior and managing principal; admitted to New York (1967) and California (1970) Bars; U.S. Courts of Appeals, Third, Fifth and Ninth Circuits; California and U.S. District Courts, Northern and Eastern Districts of California; U.S. Supreme Court; Harvard University (LL.B., 1966); Brandeis University (A.B., 1963.)

I filed my first case on behalf of an asbestos victim in 1974, and since then have represented thousands of injured workers and their family members in court cases. I have also represented their interests through my service on creditors' committees for asbestos disease victims in the reorganizations of asbestos companies that sought to avoid their responsibility under the bankruptcy laws, including Amatex, Carey Canada, Celotex and H.K. Porter, and was class counsel in the Fibreboard Global Settlement. I now serve on the Asbestos Victims Creditor's Committee in the Chapter XI bankruptcy reorganization of Babcox and Wilcox, and also serve as counsel to asbestos victim members of the Creditors' Committees in the Chapter XI reorganization of Armstrong World Industries (AWI), W.R. Grace, NARCO, Federal Mogul, Kaiser Aluminum, Global Technologies (GIT), ACandS, ARTRA, Owens Corning, Plibrico, T&N, U.S. Gypsum and Combustion Engineering. I am a member of the Plaintiffs' Steering Committee for Asbestos Multi-District Litigation (MDL) for cases filed in Federal Courts throughout the United States, and a member of the Trustees' Advisory Committee to the Celotex Asbestos Compensation Trust.

Recently, there has been much attention directed at the mounting asbestos litigation, corporate bankruptcies resulting from their asbestos liabilities, and possible legislative remedies to these problems. I often talk to reporters.... Regarding legislative initiatives, in November 2002, I was appointed by American Bar Association President-Elect Dennis Archer to serve as one of two plaintiffs' representatives to the ABA Commission on Asbestos Legislation. This committee will be presenting its report to the ABA House of Delegates in February 2003.

I was Special Counsel to the Manville and H.K. Porter Trusts in their efforts to collect payment for asbestos victims from the tobacco industry, and currently represent the Raymark Trustee in similar litigation. I lobbied and testified in Congress on behalf of asbestos victims, to explain the injustice they would have suffered in the tobacco industry settlement with the Attorneys General of forty-six states that was proposed in June 1997.

I am also active in continuing legal education. Between 1985 and 1991, I chaired the annual plaintiffs' asbestos seminars in Monterey, California. For over twenty years I have been a lecturer, speaker, moderator, program chairman and participant at various California Trial Lawyers Association, Consumer Attorneys of California, and other Continuing Legal Education seminars and workshops on asbestos, tobacco, toxic torts and mass torts. I have also lectured at medical, insurance, and defense seminars...

Posted by DeLong at July 24, 2003 12:00 PM | TrackBack

Comments

Important matter. My father died of mesothelioma. A kind hard hard working man who was along with the other workers was never offered protective gear by the company. The company Johns Manville simply declared bankruptcy to shed the worker claims.

Posted by: jd on July 24, 2003 12:28 PM

The reason the judges have had little success in working out a sensible resolution to the crisis has little to do with their status as "righty" or "lefty." It's built into the law itself, and the judges have probably reached the best legal conclusion, even though the policy consequences have been dire.

The problem is that no one can figure out a legitimate way under current law to aggregate the claims of current and future victims without denying parties their right to individual adjudication of their claims. A bedrock legal principle is that a lawsuit only has the power to "bind" the parties to the suit, not to globally resolve a broad social problem. Of course, in this country, we do have several methods of aggregating joint claims into a single lawsuit -- the most important and familiar of which is the class action. But you can't just bring a class action that joins everyone, in the hope of producing some global settlement to a big problem. Even large class actions depend on there being a substantial amount of identity of interest between the joined parties. This is what class action lawyers refer to as the "adequacy" requirement. It is built into the federal procedural rule that governs the class action.

The problem with the asbestos suits is that there's just no way to put together a single class of plaintiffs that has the same set of interests. For example, it might be possible to reach a settlement that would pay out limited amounts in claims now while keeping a reserve for the future. But this would hardly be fair to the interests of current victims, who are able to bring large claims right now. Their interest is in seeing a big chunk of change right now, and they will claim that they have been inadequately represented in any class action that denies them the right to get it. And in the sense of "adequacy" used in current class action law, they're right.

Even though tort lawyers sometimes talk this way, our litigation system is not set up to handle truly "polycentric" problems -- that is, problems where you can't identify a single group of plaintiffs and a single group of defendants. Litigation is still very much a two person dance.

Of course, the body with the constitutional task of dealing with big, nasty, polycentric problems is Congress. Unlike the courts, Congress can make law based on pure policy considerations, whereas judges can really do no more than adjudicate rights of parties to a lawsuit.

So, legally, the courts have been on pretty solid ground. In the major Supreme Court opinion on this topic, Ortiz v. Fireboard, the court applied quite conventional principles to strike down the settlement class; the dissent, written by Justice Breyer, put forth a compelling policy argument for a mandatory class settlement but basically conceded that there wasn't a strong legal case for the settlement, arguing instead in circumstances like asbestos litigation that courts should have "full authority to exercise every bit of discretionary power that the law provides." (I'd note that the "liberal" justice Souter wrote the majority opinion in Ortiz).

Thus, the judges' strategy of punting to Congress was not a bad one, and probably compelled by the law. It is a tragedy of our current political climate, however, that it has taken Congress so long to act. Let's hope they do something now.

Posted by: williamsburger on July 24, 2003 05:09 PM

>>The reason the judges have had little success in working out a sensible resolution to the crisis has little to do with their status as "righty" or "lefty." It's built into the law itself, and the judges have probably reached the best legal conclusion, even though the policy consequences have been dire.fiat justitia.

Posted by: Brad DeLong on July 24, 2003 05:16 PM

One screw-up in the above post -- class action lawyers usually call the problem of adequate representation of conflicting interests the "commonality" issue, not the "adequacy" one. Wish I'd used that preview function.

Posted by: williamsburger on July 24, 2003 05:18 PM

I'd point out that the US is not the only country to have both a serious asbestosis problem and a common law system. It is the only one where it has become such an appalling mess.
It is also, I think, the only one where the legal profession is allowed to work under a contingency fee system: certainly that is considered immoral and illegal over here (though *conditional* fees are now allowed).

Posted by: Marcus Flavin on July 25, 2003 02:08 AM

from a point of view from a daughter whos father died from asbestos, i think the only people who should of been collecting any compensation are the victims families and the people who are dying from these diseases, not the ones who are walking around with a pocket full of money and nothing wrong with them. i took my father from one doctor to the next with one test after another, and also watching him coughing up blood, loosing his voice, and not wanting to eat anymore. until one day he just died. yes, the system is an appalling mess when the judicial system let these companies who made millions and billions of dollars file bankruptcy under one name and open up under another to escape their neglectful behavior. where is the justice in America?

Posted by: rebecca bogue on September 4, 2003 09:42 AM

from a point of view from a daughter whos father died from asbestos, i think the only people who should of been collecting any compensation are the victims families and the people who are dying from these diseases, not the ones who are walking around with a pocket full of money and nothing wrong with them. i took my father from one doctor to the next with one test after another, and also watching him coughing up blood, loosing his voice, and not wanting to eat anymore. until one day he just died. yes, the system is an appalling mess when the judicial system let these companies who made millions and billions of dollars file bankruptcy under one name and open up under another to escape their neglectful behavior. where is the justice in America?

Posted by: rebecca bogue on September 4, 2003 09:45 AM

from a point of view from a daughter whos father died from asbestos, i think the only people who should of been collecting any compensation are the victims families and the people who are dying from these diseases, not the ones who are walking around with a pocket full of money and nothing wrong with them. i took my father from one doctor to the next with one test after another, and also watching him coughing up blood, loosing his voice, and not wanting to eat anymore. until one day he just died. yes, the system is an appalling mess when the judicial system let these companies who made millions and billions of dollars file bankruptcy under one name and open up under another to escape their neglectful behavior. where is the justice in America?

Posted by: rebecca bogue on September 4, 2003 09:45 AM
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