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West Virginia Senate Introduces Bill Regarding Asbestos Bankruptcy Trust Claims

In West Virginia, Senate Bill 411, known as “Asbestos Bankruptcy Trust Claims Transparency Act and Asbestos and Silica Claims Priorities Act” was recently introduced, and is currently in the Senate Judiciary for debate.  The Bill deals with bankruptcy trust claims and other aspects of asbestos litigation in West Virginia.  The portion of the Bill relating to asbestos bankruptcy trust claims is summarized here.

 

 

The Senate Bill observes that over 100 employers have declared bankruptcy at least partially due to asbestos-related activity, and that these bankruptcies have resulted in a search by plaintiffs’ firms for more solvent companies, resulting in over 8,500 companies being named as asbestos defendants, in industries that cover 85% of the United States economy.  Related to the bankruptcies, the Bill notes that asbestos trusts have been created to form a multi-billion dollar bankruptcy trust compensation system outside of the civil tort system.  The Bill further observes that asbestos claimants typically seek compensation from both the asbestos trusts and through the civil court system, and the proposed legislation expresses a need for coordination and transparency between the trust compensation system and civil asbestos claims.

 

 

To address these concerns, the proposed legislation would require plaintiffs’ firms to identify in a sworn affidavit, with an ongoing duty to supplement, subject to penalties of perjury, specific information about each trust claim including the specific amounts claimed, whether there has been a request to suspend or toll the claim, and the claim’s disposition.  Plaintiffs would be required to provide this information for all pending asbestos cases.  For each new asbestos lawsuit filed, the disclosure would be due within 30 days of the filing of the Complaint.  The Bill would remove any barriers to claims of privilege by plaintiff’s counsel, and would make all trust information, including the actual amounts claimed or paid, discoverable.  Under the proposed law, the Court would not schedule an asbestos civil action for trial until at least 180 days after the plaintiff makes the required disclosures, and if plaintiff identifies a potential trust claim in the disclosures, the Court would impose a “stay” until the trust claim was filed and all materials for the claim were provided to the asbestos defendants.

 

 

The Bill would also allow defendants to compel plaintiffs to file a claim with any trust that the plaintiff has identified but to whom the plaintiff has not submitted a claim.  The Bill further provides for a rebuttable presumption by plaintiff at the time of trial that plaintiff is actually entitled to, and will receive, the amounts claimed from bankruptcy trusts not yet paid.  The Court through judicial notice would then establish an attributed value to plaintiff’s trust claims.  If damages are awarded in the civil action, a defendant would be entitled to a set-off or credit of amount of the evaluation by the Court.  For multiple defendants held liable for damages, the Court would distribute the amount of the set-off amongst all defendants in proportion to the liability of each defendant.  Because the Bill is in committee, there may be substantial changes, or the Bill may not pass into law.