House Committee Holds Hearing on Legislation Requiring Public Disclosure of Claims Filed With Asbestos Trusts

On March 13, 2013, The Subcommittee on Regulatory Reform, Commercial and Antitrust Law, held a hearing on the prospects of H.R. 982. H.R. 982, The Furthering Asbestos Claim Transparency (FACT) Act of 2013, would amend title 11 of the United States Code to require the public disclosure by trusts established under section 524(g) of such title, of quarterly reports that contain detailed information regarding the receipt and disposition of claims for injuries based on exposure to asbestos. FACT was earlier introduced on March 6 by Rep. Blake Farenthold (R-Texas) and Rep. Jim Matheson (D-Utah).

According to the Committee On The Judiciary's web site, the witness list comprised of Hon. Peggy L. Ableman of McCarter & English, LLP; Professor Todd Brown, SUNY Buffalo Law School; Elihu Inselbuch of Caplin & Drysdale; and Marc Scarcella of Bates White Economic Consulting.

The prepared statement of Judge Ableman (ret.) in particular, has shed light on the need for public disclosure, as well as the effect that non-disclosure has on defendants. In her support of the public disclosure, Judge Abelman referenced the Montgomery v. A.W. Chesterton Co.Del. Super. Civil Action No. 09C-11-217 ASB matter to underscore the problem of the highly prejudicial effect that non-disclosure has upon defendants in a system where they are not made aware of the full scope of a particular plaintiff's claim of exposure.

In that case, Plaintiff emphatically reported to Judge Ableman that no bankruptcy submissions had been made and no monies had been received. It was not until two days before trial, Plaintiff's counsel advised that his client had received two bankruptcy settlements of which he was previously aware. By late afternoon the following day, Counsel for the lone defendant left at trial, Foster Wheeler, learned that a total of twenty bankruptcy claims had been submitted. In essence, the representations to the bankruptcy trusts, painted a much broader picture of exposure to asbestos than either Plaintiff or Plaintiff's attorneys had acknowledged during the entire course of litigation. This failure to disclose precluded the defendant from investigating Mrs. Montgomery's exposure to asbestos – which was severely prejudicial to Foster Wheeler. Moreover, where twenty manufacturers of asbestos and asbestos containing products are removed from the equation, a true allocation of fault cannot occur. The act that Plaintiff denied exposures, and yet submitted claims for exposure and accepted money for those claims, went directly to the issue of credibility. See Testimony of Judge Peggy L. Ablemen

As of December 2012, plaintiffs in Ohio are required to disclose in trust claims made by them or on their behalf in any asbestos lawsuits they file in that state. It remains to be seen if other states will follow suit.