The House Judiciary Committee Once Again Passes the Furthering Asbestos Claim Transparency Act

5/30/2013

On May 21, 2013, the House Judiciary Committee passed the Furthering Asbestos Claim Transparency Act of 2013 (the “FACT” Act).  This proposed amendment to the Bankruptcy Code is identical to the one passed by the Judiciary Committee in 2012, which was reported by the Committee to the full House, but ultimately did not receive a vote.  If the 2013 bill were to become law, it would represent a fundamental change in the way that asbestos bankruptcy trusts disclose information both to the public and to litigants in asbestos personal injury actions.

Claims submitted to asbestos bankruptcy trusts typically contain signed affidavits that describe the claimant’s work history, including details about employers, jobsites, dates, and the asbestos products to which the claimant alleges exposure.  At a minimum, this information is relevant to the issue of causation in the claimant’s case against other companies.  The FACT Act, a bipartisan bill, is intended to prevent the “double dipping” that occurs when asbestos claimants allege exposure to one set of products in their bankruptcy trust filings and to a different set of products in their complaints filed in court.  Furthermore, any information regarding payments to the claimant is relevant to both causation and setoffs.

The FACT Act would specifically require the trusts to do two important things:  first, it would require the trusts to file a publicly available quarterly report with the bankruptcy court containing the name and exposure history of each claimant making a demand to the trust and the basis for any payment made to the claimant.  Second, the FACT Act would require the trusts to provide “any information” related to demands and payments to any party in a case concerning exposure to asbestos.

If this bill were to become law, companies defending themselves in asbestos litigation would benefit from the mandated disclosure of claims submitted to various asbestos bankruptcy trusts in a more timely and effective fashion.  By automatically requiring public disclosure of such claims, defendants would no longer have to wait until the eve of trial to find out whether a plaintiff alleges exposure to asbestos products manufactured by bankrupt entities.  Because the FACT Act would require the trusts to respond to written requests for claims information, the playing field would be leveled, and defendants would no longer be at the mercy of plaintiff counsel and local courts to obtain this crucial information.

Advocacy groups opposing the bill have consistently raised concerns about privacy.  However, the bill prohibits the asbestos bankruptcy trusts from disclosing a claimant’s full social security number or any “confidential medical record” in the publicly available quarterly report.  In addition, the bill specifically contemplates that production of individual files to litigants could be subject to “appropriate protective orders.”

We will continue to monitor the progress of this important bill in the hope that it meets with a better fate than the 2012 version.  We will update our website with any subsequent developments.  Please contact David Governo at dgoverno@governo.com or Chuck Sheehan at csheehan@governo.com or call (617) 737-9045 if you have questions or would like additional information.


<back