Capitol Hill

Few issues in U.S. politics have proved as elusive as asbestos liability reform. In 2004, Senate Majority Leader Bill Frist (R-Tenn.) struggled, and ultimately failed, to bring a bill to the Senate floor that would have established a $136 billion no-fault compensation fund for victims of asbestos exposure. And others have stumbled before him.

This year, the baton has been passed to Senate Judiciary Chairman Arlen Specter (R-Pa.). Specter had hoped his bill would be introduced in January and establish a $140 billion trust fund. That deadline has passed. These struggles illustrate the complexity of the issue Congress has wrestled with during the past three decades.

History

In 1982, there were only 300 asbestos defendants. Currently, more than 8,400 companies—accounting for 85 percent of the nation's gross domestic product—find themselves the target of asbestos lawyers. U.S. companies have paid an estimated $70 billion to $80 billion for nearly 750,000 asbestos personal-injury claims. Furthermore, asbestos litigation has forced 75 major companies into bankruptcy, costing as many as 60,000 people their jobs.

Fueling the growth in claims are media campaigns by plaintiffs' attorneys to recruit asbestos victims to sue companies, yet many recruits have had only passing exposure to asbestos and do not show any signs of illness. The campaigns appear to be working—more than 100,000 claims were filed in 2003 alone. The Wall Street Journal estimates that as many as 90 percent of new claims are filed by healthy individuals who may never become sick. The result is asbestos claims are clogging state and federal courts.

But the asbestos litigation crisis isn't just a problem for business. Legitimate victims of asbestos-related diseases are being undercompensated because many recent cases include plaintiffs who show no symptoms from exposure to asbestos. Those claimants are collecting compensation that should go to real victims. On average, claimants now receive only 43 cents for every dollar paid by companies; the rest goes to transaction costs and attorneys' fees.

Congress' challenge

Given the problem's pressing nature, one would think Congress should be able to agree on a solution. Specter was forced to delay introduction of his bill because of a disagreement over how to handle claimants exposed to asbestos and other harmful substances, namely silica. The fear in the business community is silica could supplant asbestos as the basis for a new wave of litigation. Hoping to resolve the issue, Specter added a provision in his draft bill that would require claimants suing over injuries caused by silica and other airborne particles to prove their illnesses were not caused by asbestos exposure. Senate Democrats already have called the provision a "potential deal breaker."

Even worse for the prospects for reform, Specter's draft has elicited a mixed reaction from the business community. Some businesses say they must support Specter's bill because it's the only option available. Their approach is to get legislation introduced and fix problems later in the legislative process. A second group of businesses says the bill, as currently drafted, is hopelessly flawed. In January, insurance companies, chemical companies and a number of automotive parts manufacturers wrote to Specter detailing their opposition.

Specter has encountered opposition in the media, as well. The Wall Street Journal already has published two opinion pieces this year urging Congress to abandon the trust fund approach and adopt an approach passed in Ohio, which gave the force of law to American Medical Association-sanctioned criteria for what counts as an asbestos impairment. According to the Ohio approach, claimants must meet certain criteria otherwise claims would be dismissed.

And former Republican Majority Leader Dick Armey (R-Texas) added fuel to the growing brushfire when he labeled the trust fund a "venture capital fund" for the trial bar.

Still, Specter does have two things going for him that could prove keys to his success. First, the Senate Republican majority is larger than in 2004. Although the Republicans don't have the filibuster-proof 60 votes, they need only five Democrats to join them across the aisle. Second, tort reform is at the top of President Bush's domestic agenda. Earlier this year, Bush made the case for curbs on asbestos, class-action and medical-malpractice lawsuits. If Bush plans to press tort reform, the bully pulpit might just help Specter deliver the impossible.

R. Craig Silvertooth is NRCA's director of federal affairs.