SB 1582 – Relating to Asbestos Trust Claims

On Monday, March 2, SB 1582 by Senator David Simmons (R-Longwood) was heard by the Senate Rules Committee and was reported favorable with 17 yeas and 0 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.

Asbestos is the name given to six naturally occurring fibrous minerals resistant to chemical, thermal, and electricity damage historically used in construction, manufacturing, and fireproofing. When handled, asbestos separates into microscopic particles, exposure to which causes cancer and other diseases, including lung cancer, mesothelioma, and asbestosis, which can take 20 to 40 years to develop following initial exposure.

Workers exposed to asbestos began falling ill and in turn sued the corporations responsible for their exposure. As the suits against these corporations piled up, many filed for reorganization under Chapter 11 of the United States Bankruptcy Code, which in turn stayed all current suits against the respective corporation.

The bankruptcy court faced a unique scenario, where corporations were able to reorganize while shielded from future suits. These suits would instead be filed against a trust fund formed by the company seeking bankruptcy reorganization.

Presently, where liability for an asbestos injury comes from both a trust and a solvent corporation, an injured person may sue the solvent corporation to recover its share of the harm, and a court may offset the judgment by the amount of trust payments the plaintiff received for the same injury. However, where a plaintiff files a trust claim after obtaining a judgment in a civil action alleging the same injury, a court loses its ability to offset the judgment against the solvent defendant. Plaintiffs use this loophole to increase their compensation for a single injury, essentially double-dipping.

The bill requires a claimant filing an asbestos injury lawsuit to notify all parties to the action of any claims made against and funds received from an asbestos trust. The bill states that a defendant in an asbestos claim may obtain through discovery certain materials the claimant has filed with an asbestos trust. The bill bars asbestos claimants from claiming that the materials filed with the trust are privileged. Additionally, the bill allows a trial court to adjust an asbestos claim judgment to reflect payment received by the plaintiff from an asbestos trust, if the plaintiff filed the trust claim after he or she obtained a judgment but before that judgment was satisfied.

SB 1582 will now move to the Senate floor.

AIF supports legislation that curbs “double dipping” of the asbestos trust fund which ensures that all Floridians affected may be adequately compensated.