Asbestos Litigation Trust Transparency Priorities

The bill enacts the 'Asbestos Bankruptcy Trust Claims Transparency Act'. Federal bankruptcy law provides companies with asbestos-related liabilities the opportunity to reorganize and emerge from bankruptcy with protection from lawsuits. Asbestos trusts established as part of the bankruptcy process assume the debtor company's asbestos-related liabilities. The trusts then pay present and future asbestos-related claims, thus relieving the reorganized company of all present and future asbestos-related liabilities. Plaintiffs may also file asbestos-related personal injury actions against companies that are still solvent and subject to suit in the civil system. The bill addresses this dual compensation system to give defendants access to information regarding all of a plaintiff's trust-related exposures and give fact finders information they need to properly assign fault.

The bill requires that a plaintiff must:

• File and disclose all asbestos trust claims before proceeding to trial in any asbestos action;
• Provide all parties with all trust claim materials connected to the plaintiff's exposure to asbestos; and
• If the plaintiff's asbestos trust claim is based on exposure to asbestos through another individual, produce all trust claims materials submitted by that individual to any asbestos trusts.

The bill allows a defendant to file a motion requesting a stay of the proceedings if the defendant has information that could support the filing of additional trust claims by the plaintiff. If the court determines that there is sufficient basis, the court shall stay the asbestos action until the plaintiff files the asbestos trust claim and produces all related trust claims materials. The bill addresses discovery and access to materials relating to trust claims materials or trust governance documents by defendants. Prior to trial in an asbestos action, the court shall enter into the record a document that identifies every asbestos trust claim made by the plaintiff or on the plaintiff's behalf. If a plaintiff proceeds to trial in an asbestos action before an asbestos trust claim is resolved, there is a rebuttable presumption that the plaintiff is entitled to and will receive compensation specified in the trust governance document applicable to the claim. The court may impose sanctions, including vacating a judgment rendered in an asbestos action, against a plaintiff for failure to comply with the disclosure requirements of this bill.

If the plaintiff or a person on the plaintiff's behalf files an asbestos trust claim after the plaintiff obtains a judgment in an asbestos action, and that asbestos trust was in existence at the time the plaintiff obtained the judgment, the trial court, on motion by a defendant or a judgment debtor, has jurisdiction to reopen the judgement in the asbestos action and adjust the judgment or order other appropriate relief.

The bill also establishes procedures for the prioritization of asbestos-related claims. An asbestos action involving a nonmalignant condition shall not be brought or maintained in the absence of prima facie evidence that the exposed person has an asbestos-related physical impairment based on objective criteria developed by the medical community. When filing an asbestos-related claim, the plaintiff must submit signed medical reports from qualified physicians who have a doctor-patient relationship with the plaintiff. If the plaintiff has not established that he or she is sick as a result of the asbestos exposure, the court shall dismiss the action. The bill prevents the filing of class action lawsuits for asbestos-related exposures. The bill sets forth the elements of proof for asbestos-related actions and the evidence needed to establish evidence of physical impairment.

Until a court enters an order establishing that the exposed person has established prima facie evidence of impairment, an asbestos action is not subject to discovery, except for discovery relating to establishing or challenging the prima facie evidence or by order of the trial court, upon motion of one of the parties and for good cause. A defendant in an asbestos action is not liable for exposures from a product or component part made or sold by a third party, even if the third party is insolvent or otherwise not amenable to suit.

The bill provides that an exposed person's cause of action shall not accrue and the statute of limitations does not begin running for a person who has been exposed to asbestos prior to the earlier of the date:

• The exposed person receives a medical diagnosis of asbestos-related impairment; or
• The exposed person discovers facts that would have led a reasonable person to obtain a medical diagnosis with respect to the asbestos-related impairment; or
• Of the death of the exposed person having an asbestos-related impairment.

The bill states that an asbestos action arising out of a nonmalignant condition is a distinct cause of action from an action for an asbestos-related cancer. Damages shall not be awarded in an asbestos action based upon the plaintiff's fear of or increased risk for future disease.

(Note: This summary applies to this bill as introduced.)