Asbestos Trust Funds under Regulatory Threat from Trump’s DOJ, Risking Delayed Payments to Asbestos Victims

by Sokolove Law

For years Republicans and big business interests have been lobbying for stricter controls on asbestos trusts. While claiming they want to prevent fraud, these efforts are a thinly veiled attempt to delay compensation for thousands of victims who were exposed to asbestos on the job. These individuals have endured painful illnesses due to asbestos-related diseases, but now the Trump administration is trying to further gum up the works.

Over the past 2 months, Trump’s Department of Justice (DOJ) has waved the red flag of alleged fraud and made unreasonable demands of asbestos trusts. Yet for all their tough talk, the end result will only achieve the big-business goal of frustrating asbestos victims and family members so they never receive just compensation.

Big Business Bullies and the Truth about Asbestos

Asbestos was used as a building material and in consumer goods through the 1970s. Around that time, numerous scientific studies revealed asbestos was a dangerous carcinogen that caused mesothelioma and other asbestos-related diseases. Companies had long tried to conceal this information, but they were later forced to create trusts to compensate victimized workers.

Asbestos trusts started to emerge in the 1980s, so companies did not have to deal with numerous lawsuits filed by former employees who had been exposed to asbestos on the job. According to the Government Accountability Office (GAO), between 1988 and 2010 there were 60 asbestos trusts created, and they have paid out around $17 Billion for 3.3 million claims.

An additional $30 Billion has been earmarked in court-ordered trust money to support people who have had health problems due to asbestos exposure at their workplace. These funds are meant to assist individuals with medical bills, lost wages, and living expenses, which can easily reach into the hundreds of thousands of dollars.

Trusts and Trump’s Tangle with Truth

The Trump administration argues that people are falsely filing claims for money from asbestos trust funds. More recently, the DOJ has taken actions against asbestos trusts to make it more difficult for them to operate. The first was against an asbestos trust organized by Kaiser Gypsum, a company that used asbestos in cement products, and has been named in 38,000 asbestos cases since 1978. The company stopped operating that year, and for the past 4 decades has been negotiating asbestos-related illness claims.

Kaiser Gypsum went into bankruptcy protection in September of 2016, planning to set up a trust for victim compensation. The DOJ denied its plan, saying it needed to include information on who had filed claims and how much they had been paid. The DOJ argues that the federal government has an interest in these trusts, since victims will need to pay Medicare back for medical expenses.

Additionally, the DOJ has stopped the appointment of a lawyer to an asbestos trust, stating there would be a conflict of interest in his overseeing claims. Significantly, the DOJ has not previously objected to a trust appointing a certain lawyer, and it is not clear how the DOJ expects new trusts to select lawyers. All of this points to more red tape, and unnecessary delays for asbestos victims and their families.

The President Who Cried Fraud

Victims of asbestos and attorneys representing them have said the claims of trust fraud are “a ruse” concocted by big business interests, and there is little evidence of fraud in the system. On the contrary, asbestos trusts have proven to be a lifeline for individuals who need financial support due to their illnesses.

Some lawyers argue that the additional red tape that is being wound around the process by the DOJ will mean less money goes to victims, since it will be spent getting over procedural hurdles. Trusts are an important resource for asbestos victims and their families, since they present a way for individuals to get needed funds for medical bills without having to endure a lengthy lawsuit.

Defense lawyers claim the asbestos trust system was not created with the proper control mechanisms, because people can make a claim against a company with minimal evidence, and they can make claims against multiple companies. Yet attorneys for plaintiffs counter that workers were often exposed to asbestos at more than one job site, so it is difficult to know which company is to blame. Additionally, since repeated exposure increases the chances of developing an illness, more than 1 company may be at fault.

The Human Toll of Asbestos Exposure

Underneath the legal arguments, the stark facts are clear: Asbestos is a killer. According to the Center for Disease Control (CDC), asbestos takes the lives of 15,000 Americans every year. Yet even more recent statistics suggest the actual toll could be as high as 40,000 people.

A study by Jukka Takala, President of the International Commission of Occupational Health, revealed that asbestos causes 34,270 deaths from lung cancer, 3,161 from mesothelioma, 787 from ovarian cancer, 443 from larynx cancer, and 613 from chronic asbestosis every year. Despite these sobering facts, the DOJ claims that people who have asbestos-related illnesses that are not lung cancer should not have been paid from asbestos trusts.

Their error in thinking could not be more apparent, since asbestos-related illnesses are not limited to cancer, yet still cause serious pain and death. The heart of the issue is clear: asbestos is dangerous, it must be banned, and those who have had their lives forever changed by this hazardous carcinogen are due compensation – not constant scrutiny. It’s time to put people before profits and help them put their lives back together.

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