House passes bill to reform asbestos lawsuits

The House on Friday approved legislation to set new limits on class action lawsuits and new requirements for asbestos victims seeking compensation through the court system.

The legislation, known as the Fairness in Class Action Litigation Act, passed 211-188, with one lawmaker voting “present.”

{mosads}It started out by only requiring proof that each proposed member of a class action lawsuit has the same extent of injuries before a federal court can certify it. But lawmakers folded Rep. Blake Farenthold’s (R-Texas) hotly contested Furthering Asbestos Claim Transparency Act into the legislation. The bill requires asbestos victims to report certain information when seeking compensation from an asbestos trust.

Proponents say the Republican-backed bill will protect the finite trusts created under the bankruptcy code from paying out money for fraudulent or inflated claims, by forcing trusts to file quarterly reports on their public bankruptcy dockets that include information on demands for payments and the basis for payments made.

“What’s happening is there are people who are gaming the system,” Farenthold said. “We’re not asking for any more information than is normally disclosed in any sort of litigation.”

Advocates for asbestos victims and public interest groups argue that the legislation would allow scam artists and identity thieves to prey on victims of asbestos exposure who have filed claims with trusts.

“In this age of data breaches and instance after instance of hackers stealing personal information from secure sites, Congress should be doing more instead of less to protect people’s personal information,” advocates, led by the Environmental Working Group (EWG) Action Fund, said in a letter to House members this week. “Alarmingly, the FACT Act helps identity thieves by placing highly sensitive information in public databases.”

Linda Reinstein, the CEO of the Asbestos Disease Awareness Organization, contends that the legislation would create new hurdles for victims who are fighting for their lives.

“Asbestos victims go bankrupt because of the disease they fight,” she said. “Why would we want to delay compensation?”

Before final passage, the House rejected an amendment from Rep. Ted Deutch (D-Fla.) that would exempt claims from gun owners seeking damage compensation for defective firearm manufacturing from the bill’s requirements. The Florida Democrat warned that the law preventing the Consumer Product Safety Commission from unilaterally ordering recalls of defective guns limits consumers’ options in the event something goes wrong.

Current law specifically bars the Consumer Product Safety Commission from making any ruling to restrict firearms manufacturing or sales. Gun rights advocates have long supported the statute to prevent a government-ordered recall of Americans’ guns.

“This bill’s rigorous requirement for certifying a class [action lawsuit] would render gun owners even more powerless,” Deutch said. “Currently, gun owners’ only recourse in these unfortunate events is our court system. And most people don’t have the resources to go up against the massive titans of the gun industry.”

Farenthold countered that providing exceptions for specific industries would be unnecessary. 

“Why should guns be treated different than toasters? If your defective product injures somebody, you’re responsible for it. But if your defective product doesn’t injure somebody, you shouldn’t,” Farenthold said. 

“Guns should be treated exactly the same way as toasters,” Deutch agreed, adding, “I hope the gentleman would consider working with me to ensure the Consumer Product Safety Commission could recall defective guns just like it can recall defective toasters.”

Deutch’s amendment failed on a 163-232 vote. Similar amendments from Rep. Gwen Moore (D-Wis.) to provide exemptions for class action lawsuits regarding the Fair Housing Act and pay equity also failed on votes of 172-229 and 177-224, respectively.