Published November 2003

Asbestos lawsuits are hurting the ‘little guy,’ too

By Don Brunell
Guest Editorial

When most people think of asbestos lawsuits, they think BIG — big corporations, big verdicts and big settlements from mining companies, shipyards and industry giants who used asbestos decades ago before the dangers were known. But in reality, the national plague of asbestos lawsuits is now harming thousands of small companies that had nothing to do with asbestos.

Aggressive trial lawyers have turned asbestos lawsuits into a moneymaking industry — more than 6,000 companies have been sued. It has gone well beyond compensating people who are sick and need help. According to a study by the RAND Institute for Civil Justice, the vast majority of asbestos claims clogging our courts today were filed by people who aren’t even sick. Those cases are delaying justice for real victims and draining money that should go to legitimate claimants.

Faced with billions of dollars in potential claims, many companies have gone bankrupt, putting as many as 100,000 employees out of work.

But that is only the tip of the iceberg. The companies that were forced into bankruptcy each had hundreds of creditors of their own — most of them small businesses who are now left with nothing.

For example, the U.S. Gypsum Co. never manufactured asbestos, but they did use it as a minor component in some of their building products. Even though asbestos was legal at the time, and U.S. Gypsum stopped selling the asbestos-tainted products 20 years ago, more than 250,000 asbestos claims have been filed against the company since 1994. After spending almost half a billion dollars in litigation costs, and with its insurance coverage almost depleted, the company filed for bankruptcy protection in 2001.

That filing left hundreds of U.S. Gypsum creditors in the lurch, including Northwest Embroidery in Tacoma. Needless to say, Northwest Embroidery has never had anything to do with asbestos, but they have become “collateral damage” in the asbestos wars. The company’s owner, Jim Mickelson, has been waiting two years for $14,000 he’s owed by U.S. Gypsum, and he doesn’t expect to get paid anytime soon.

Mickelson is not alone. According to bankruptcy documents, hundreds of small companies have filed claims with the bankruptcy referee for money owed to them by U.S. Gypsum.

Now, multiply those several hundred creditors by 6,000, the number of companies facing asbestos lawsuits, and you get some idea of the economic devastation that could result unless the plague of asbestos lawsuits is stopped.

But rather than fix the problem, Congress is mired in partisan wrangling. The trial lawyers, one of the nation’s most powerful political forces, have succeeded in preventing asbestos litigation reform from even coming up for a vote.

In the meantime, real victims of asbestos-related diseases are dying before their cases can get to court, 100,000 people have lost their jobs because their employers were bankrupted by lawsuits, and tens of thousands of small creditors are left with nothing.

The trial lawyers may be aiming at the “big guys,” but the “little guys” are the ones getting hurt.

Don Brunell is president of the Association of Washington Business (www.awb.org), Washington state’s chamber of commerce.

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