House votes for increased transparency on asbestos claims

The House on Wednesday passed legislation that would require asbestos trusts to release quarterly reports on who is seeking compensation due to asbestos exposure, a change Republicans say would help reduce fraudulent claims.

Members passed the Furthering Asbestos Claim Transparency (FACT) Act, H.R. 982, in a 221-199 vote. Democrats strongly objected to the bill during debate, and the bill garnered just five Democratic votes.

{mosads}Republicans said the bill is needed to reduce documented fraud in the 60 asbestos trusts across the country. In 1994, Congress authorized companies facing asbestos litigation to form these trusts to pay off injury awards, freeing these companies from further liability once they re-emerge from bankruptcy.

But the GOP says news reports and other sources show people are filing duplicate and fraudulent claims. Republicans say reports on who is filing and the nature of their claims would help reduce this fraud and ensure funds for legitimate claims.

“Instances of fraud within the asbestos trust system have been documented in news reports, state court cases and testimony before the Judiciary Committee,” said Committee Chairman Bob Goodlatte (R-Va.).

Democrats argued that there is no firm evidence of rampant fraud in the asbestos trust system.

“There is no evidence of systemic fraud in the asbestos trust system,” said House Minority Leader Nancy Pelosi (D-Calif.). “In short, this bill is unnecessary, it is mean-spirited, and it will never become the law of the land.”

The claim that the bill is “mean-spirited” is based on arguments that the bill would require trusts to make public sensitive information about people claiming compensation due to exposure to asbestos. Some Democrats also said the reports could be used by companies to avoid hiring claimants, for fear that they might get sick or make similar asbestos claims at their new place of employment.

“Risking employment discrimination and identify theft for asbestos poisoning victims just because my colleagues on the other side want to stick it to the trial lawyers seems awfully crass to me,” said Rep. Alcee Hastings (D-Fla.).

Rep. Blake Farenthold (R-Texas), who sponsored the bill, said he was “offended” at the idea that the bill was meant to hurt claimants. “This is for the victims,” he said, adding that fraud reduces the amount of money available for real claims.

Some Democrats argued that the bill is aimed at helping companies that are responsible for asbestos exposure. But Goodlatte argued that the bill in no way helps the companies that have already undergone a bankruptcy and set up the trust to pay asbestos claims.

Rep. Steve Cohen (D-Tenn.) charged during debate that if the bill is for the victims, House Republicans should have allowed asbestos victims to testify. But he said House Republicans failed to allow victims to speak at the Judiciary Committee.

Goodlatte rejected that and said Democrats included the views of asbestos victims in the documentation of the bill in the Judiciary Committee. He said victims had chances to speak to committee members, but Cohen argued that these were private conversations only, and were not in committee.

The legislation drew support from business groups, and opposition from victims rights groups and the Obama administration. The U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) supported the bill as a way to crack down on fraudulent claims.

“Fraud and abuse in the asbestos compensation system drain the funds available to deserving claimants and force solvent companies, as well as their shareholders and employees, to pay unjust claims,” said Lisa Rickard, president of ILR.

The National Association of Manufacturers said it would make the bill a key vote, and said the bill would protect both victims and companies.

“By ensuring that trust fund resources are dedicated to legitimate claims, the FACT Act would promote the system to function as Congress intended,” NAM Senior Vice President for Policy and Government Relations Aric Newhouse wrote today.

The White House agreed with House Democrats that the reporting requirements in the bill would put their privacy at risk, but did not say Obama would veto the bill. Still, opposition from Senate Democrats means the bill is unlikely to reach Obama.

“The bill’s mandatory reporting and disclosure requirements would threaten asbestos victims’ privacy when they seek payment for injuries from an asbestos bankruptcy trust,” the White House said in a Tuesday Statement of Administration Policy.

Susan Vento, the widow of former Rep. Bruce Vento (D-Minn.), has lobbied members of Congress against the bill and also argues that the reporting requirement could deter future claims. Vento died in 2000 from mesothelioma caused by exposure to asbestos.

Earlier in the week, she said the reporting requirement is a “cruel and chilling invasion of privacy,” and said Wednesday night that the vote was disappointing.

“I’m deeply disappointed in the vote, but grateful to the Members of Congress who stood up for asbestos victims and their families in opposing legislation that hurts cancer victims,” she said. “We will continue to oppose this legislation and ensure that it never becomes law.”

Before final passage of the bill, the House rejected three Democratic amendments to the bill, including two aimed at forcing manufacturers to reveal their own information about current asbestos threats. The amendments were from:

— Steve Cohen (D-Tenn.), exempting trusts from the reporting requirements if they have internal anti-fraud procedures. Failed 198-223.

— Jerrold Nadler (D-N.Y.), requiring companies who request information from asbestos trusts make available any information about current asbestos threats that they know about. Failed 194-226.

— Sheila Jackson Lee (D-Texas), removing the reporting requirement altogether and requiring companies seeking information from trusts to disclose the name of asbestos-containing products that they make. Failed 195-226.