The Asbestos Alliance | History of the Asbestos Issue

What's Been Done

For almost 25 years, industry and other interested parties have worked hard to resolve the asbestos litigation crisis. They have focused on finding a solution that will allow fair and prompt compensation for the genuinely ill, while simultaneously managing each company's liability to ensure that funds are available to pay those who become ill in the future.

In the early 1980s, a number of major defendant companies began to search for alternative solutions to the unworkable and inequitable tort system and in 1983, formed the Committee for Equitable Compensation (CEC). Given the U.S. government's mandated use of asbestos in shipbuilding, the CEC sought legislation for a shared industry and government compensation plan. Faced with legislative inaction, a group of companies opted to create their own claims management system, and in 1985 formed the Asbestos Claims Facility (ACF) to handle claims against them. Three years later, following the phase-out of ACF, the Center for Claims Resolution (CCR) was formed, comprising more than 20 defendant companies committed to fair and efficient resolution of asbestos claims against them.

Meanwhile, the federal courts also attempted to improve management of federal asbestos litigation. In 1991, eight federal judges, experienced in the management of asbestos cases, urged the Judicial Panel on Multidistrict Litigation (MDL Panel) to consolidate in a single district all pending federal asbestos cases. The MDL Panel accepted the recommendation and transferred all cases to the Eastern District of Pennsylvania.

Following the consolidation, plaintiff and defendant attorneys started settlement negotiations and the CCR continued to pursue a workable administrative system for the handling of future claims. These negotiations culminated in a settlement agreed to by the CCR companies and plaintiffs' counsel for a class including tens of thousands of people who were or may become sick from exposure to asbestos. The agreement also gained the backing of the Building and Construction Trades Department of the AFL-CIO. The settlement was designed to provide for an administrative procedure to compensate asbestos victims promptly; to ensure that those exposed, but not yet sick, would be compensated if and when disease developed; and to preserve the assets of defendants to compensate future victims.

Originally filed in January 1993, the settlement met fairness tests, was approved by a U.S. District Court in 1994 and was lauded as a model for tort reform. Although it found the settlement to be "arguably a brilliant partial solution," the Third Circuit Court of Appeals in May 1996 overturned the agreement on procedural grounds, holding that a class could not be certified solely for settlement purposes; and in June 1997, the U.S. Supreme Court affirmed that decision.

Writing for the Court in Amchem Products, Inc. v Windsor, Justice Ruth Bader Ginsburg found that the settlement failed to meet the requirements of Federal Rule of Civil Procedure 23 (the rule governing class actions in federal courts). The Court concluded that the class was simply too large and varied and that the interests of some of the parties were inconsistent. Most importantly, the Court plainly suggested that Congress is the most appropriate body to resolve the asbestos crisis.

Two years later, the Supreme Court issued a similar ruling in Ortiz v Fibreboard. In that case, which concerned a $1.5 billion global settlement and more than 100,000 claimants, the justices ruled that the class was too diverse to be represented in a single action. Reiterating the call for Congressional action in the Amchem case, Chief Justice William Rehnquist said the number of asbestos claims "cries out for a legislative solution."

Where We Are Now