Washington, DC, February 9, 2006--Senate Minority Leader Harry Reid fell short in his bid to block consideration of the Fairness in Asbestos Injury Resolution Act, as the Senate moved forward with the first of what are expected to be several days of debate on the proposed $140 billion trust fund bill.
Reid, D-Nev., had objected to the Feb. 6 motion to proceed by Senate Majority Leader Bill Frist, R-Tenn., but was unable to garner the 40 votes necessary to overcome Frist's move for cloture. Ultimately, Reid joined with the 98-1 majority in agreeing to move forward with debate on the FAIR Act.
Sen. James M. Inhofe, R-Okla., was the only member to vote against the motion, while fellow Oklahoma Republican Tom Coburn didn't vote at all.
The FAIR Act, which was reported out of the Judiciary Committee in May 2005 despite concerns raised even by some of its sponsors, proposes a compensation fund to pay all current and future asbestos claims under a no-fault system. The fund would be administered by a new Office of Asbestos Disease Compensation within the U.S. Department of Labor.
Debate on the measure consumed the entire morning and afternoon portions of the Senate's Feb. 8 session. Specter announced from the Senate floor that debate on possible amendments would begin Feb. 9, with any vote on the measure to come no earlier than Feb. 13.
Sponsored by Sen. Arlen Specter, R-Pa., chairman of Judiciary Committee, and ranking member Sen. Patrick Leahy, D-Vt., the measure has drawn objections from several Democrats, including Reid and Senate Minority Whip Richard Durbin, as well as from a number from a number of conservative Republicans.
However, the measure has support from the chamber's GOP leadership, and Democratic cosponsors include Sens. Dianne Feinstein of California and Max Baucus of Montana. The National Association of Manufacturers, United Auto Workers, Veterans of Foreign Wars and the American Small Business Association also have endorsed the bill.
"Despite some rhetoric to the contrary, the FAIR Act offers valuable safeguards to the small business community," said Jim Musser, ASBA's Washington representative. "Most importantly, it would take asbestos litigation out of the courtroom, enabling sick victims to receive compensation through a privately financed victims' compensation fund."
Most insurance groups oppose the measure in its current form, thus joining a "strange bedfellows" alliance with the AFL-CIO, the Association of Trial Lawyers of America, a number of victims' groups and most existing asbestos bankruptcy trusts. Those trusts have threatened to challenge the law in court as unconstitutional. Sen. John Cornyn, R-Texas, alluded to the possible suits during the Feb. 8 floor debate, arguing that the law "basically is a federal confiscation of existing bankruptcy trust funds to the order of $7.5 billion."
The measure calls for insurers to contribute $46.025 billion to the fund, nearly half of it over the first five years of the fund's existence. Insurers have objected that the proposal fails to provide "finality" to asbestos claims, as it would leave cases currently pending before judges outside of the trust-fund framework. Claims also could return to the tort system should the fund prove insufficient.
A Feb. 8 letter to Frist from a group of 200 opponents of the bill -- including insurers Allstate Corp., American International Group Inc., Chubb Corp., EMC Insurance Cos., Erie Insurance Group, Liberty Mutual Group, Nationwide Mutual Insurance Co., Safeco Corp. and Zurich Financial Services Group -- urged that the Senate defeat the legislation on grounds that it "was drafted by and for a narrow band of very large defendant companies that are seeking to shift their asbestos liability onto others."
