39–006 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 113–254 

FURTHERING ASBESTOS CLAIM TRANSPARENCY 

(FACT) ACT OF 2013 

OCTOBER 30, 2013.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 982] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 982) to amend title 11 of the United States Code to require 

the public disclosure by trusts established under section 524(g) of 

such title, of quarterly reports that contain detailed information regarding the receipt and disposition of claims for injuries based on 

exposure to asbestos; and for other purposes, having considered the 

same, reports favorably thereon without amendment and recommends that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 16 

Committee Consideration ........................................................................................ 17 

Committee Votes ...................................................................................................... 17 

Committee Oversight Findings ............................................................................... 27 

New Budget Authority and Tax Expenditures ...................................................... 27 

Congressional Budget Office Cost Estimate .......................................................... 27 

Duplication of Federal Programs ............................................................................ 29 

Disclosure of Directed Rule Makings ..................................................................... 29 

Performance Goals and Objectives ......................................................................... 29 

Advisory on Earmarks ............................................................................................. 29 

Section-by-Section Analysis .................................................................................... 29 

Changes in Existing Law Made by the Bill, as Reported ..................................... 29 

Dissenting Views ..................................................................................................... 30 


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1Furthering Asbestos Claim Transparency (FACT) Act of 2013, H.R. 982, 113th Cong. § 2 

(2013). 2 Id. 

3S. REP. NO. 110–189, at 1 (citing Asbestos, NATIONAL INSTITUTE FOR OCCUPATIONAL SAFETY

AND HEALTH, www.cdc.gov/niosh/topics/asbestos (last visited May 23, 2013)); see also Wylie, A 

Report on the Asbestos Litigation Industry, MANHATTAN INSTITUTE’S CENTER FOR LEGAL POLICY, 2008, at 4, available at http://www.triallawyersinc.com/pdfs/TLI-ASBESTOS.pdf (last visited 

May 31, 2013). 4Wylie, supra note 3, at 4. 5 Asbestos, HERITAGE RESEARCH CENTER, http://www.heritageresearch.com/ourlibrary/histories/ 

asbestos.html (last visited May 23, 2013). 6Wylie, supra note 3, at 4. 7 Asbestos Fibers and Other Elongate Mineral Particles: State of the Science and Roadmap for 

Research, NATIONAL INSTITUTE FOR OCCUPATIONAL SAFETY AND HEALTH, Apr. 2011, at 1, available at http://www.cdc.gov/niosh/docs/2011-159/pdfs/2011-159.pdf (last visited May 23, 2013). 

Purpose and Summary 

H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) 

Act of 2013’’ or the ‘‘FACT Act’’ adds a paragraph to subsection (g) 

of section 524 of title 11 of the United States Code to require a 

trust established pursuant to that subsection to file, each quarter, 

a public report with the bankruptcy court listing the name and exposure history of those who have filed a claim with such trust and 

any payments made to claimants and the basis for such payments.1

The bill specifically prohibits the disclosure of confidential medical 

records and Social Security numbers of claimants. It further requires each such trust to provide, upon written request, information related to payment from, and demands for payment from, such 

trust to any party in an action involving liability for asbestos exposure.2 The purpose of the bill is to prevent fraud by requiring 

greater transparency for asbestos trusts so that future claimants 

who have been truly harmed by asbestos exposure will be able to 

receive compensation for their injuries. 

Background and Need for the Legislation 

A. THE HISTORY OF ASBESTOS AND ASBESTOS-RELATED

HEALTH CONDITIONS

Asbestos is a commercial name given to six minerals—amosite, 

crocidolite, tremolite, actinolite, anthophyllite, and chrysotile—that 

were widely used in the United States in industrial products 

throughout much of the 20th Century.3 Humans have used asbestos for centuries.4 The word ‘‘asbestos’’ comes from the Greek word 

for ‘‘indestructible,’’ and the ancient world used asbestos for everything from fabrics to lamp wicks.5 In the 1860’s, it was first commercially used in the United States as insulation. Because asbestos 

is strong, durable, and has excellent fire-retardant capability, it 

was widely used in industrial and other work and residential settings through the early 1970’s. It was regarded as a miracle fiber, 

versatile enough to weave into textiles, integrate into insulation, 

line the brakes of automobiles, and construct flame-retardant hulls 

for naval and merchant ships. Asbestos consumption in the United 

States peaked in 1973 and then dropped dramatically over the next 

three decades.6

Despite the usefulness of asbestos in industrial and residential 

products, it was uncovered that asbestos fibers cause serious diseases when inhaled.7 Inhalation of asbestos fibers has been linked 

to a number of diseases, including mesothelioma, lung cancer, asVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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8 Id. 

9 Asbestos Health Effects, AGENCY FOR TOXIC SUBSTANCES & DISEASE REGISTRY, http:// 

www.atsdr.cdc.gov/asbestos/asbestos/healthleffects/ (last visited May 28, 2013). 10 Id. 11See generally H.R. 4369, the ‘‘Furthering Asbestos Claim Transparency (FACT) Act of 2012’’: 

Hearing Before the Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. 

on the Judiciary, 112th Cong. (2011) [hereinafter Courts Subcomm. Hearing] (testimony of 

Charles S. Siegel). 12 AGENCY FOR TOXIC SUBSTANCES & DISEASE REGISTRY, supra note 9. 13 Id. 14 Id. 15 Id. 16Stephen J. Carroll et al., Asbestos Litigation, RAND INSTITUTE FOR CIVIL JUSTICE, 2005, at 

xvii. 17Lloyd Dixon et al., Asbestos Bankruptcy Trusts: An Overview of Trust Structure and Activity 

with Detailed Reports on the Largest Trusts, RAND INSTITUTE FOR CIVIL JUSTICE, 2010, at xi. 18 Carroll et al., supra note 16, at xx. 19 Id. 20 Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th Cir. 1973). 21 Id. at 1109. 

bestosis, and pleural abnormalities.8 Mesothelioma is a deadly cancer of the lining of the chest or abdomen.9 Exposure to asbestos is 

the cause for most cases of mesothelioma.10 Lung cancer is the 

other frequently claimed malignant disease that can be caused by 

asbestos, although some other forms of cancer may be related to asbestos exposure.11 Asbestosis, a chronic lung disease resulting from 

inhalation of asbestos fibers, can be debilitating and even fatal.12

Exposure to asbestos has been claimed to cause pleural abnormalities.13 Pleural plaques, pleural thickening, and pleural effusion are 

abnormalities of the pleura, the membrane that lines the inside of 

the chest wall and covers the outside of the lung.14 These abnormalities can affect breathing and may be an early warning sign for 

mesothelioma.15

B. ASBESTOS LITIGATION

Asbestos litigation is the longest-running mass tort litigation in 

the United States.16 Personal injury litigation related to asbestos 

exposure ‘‘has continued for over 40 years in the United States 

with hundreds of thousands of claims filed and billions of dollars 

in compensation paid.’’ 17 Throughout this period asbestos litigation 

has evolved, presenting different challenges to the parties and 

courts involved.18 The focus of the litigation shifted from Federal 

to state courts, and now, increasingly, to bankruptcy courts and the 

resulting bankruptcy asbestos trusts.19

Asbestos litigation arose as a result of individuals’ long-term and 

widespread exposure to asbestos, and as a result of many asbestos 

product manufacturers’ failure to protect workers against exposure 

and failure to warn their workers to take adequate precautions 

against exposure. The U.S. Court of Appeals for the Fifth Circuit 

upheld the first successful asbestos liability suit in 1973.20 A worker sued the manufacturers of asbestos-containing products on a 

theory of product liability (a strict liability tort); the defendants’ affirmative defense that their products contained ample warning 

about the dangers of using the product proved insufficient.21 Prior 

to the Fifth Circuit’s decision, employees exposed to asbestos had 

recourse only to workers’ compensation claims to recover for their 

asbestos-related injuries. 

After the Fifth Circuit’s decision, the volume of asbestos litigation exploded—so much so that, in 1990, the Chief Justice of the 

United States Supreme Court appointed the Ad Hoc Committee on 


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22 Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 597 (1997). 23 Carroll et al., supra note 16, at xxiv. 24 Id. 25The Fairness in Asbestos Compensation Act of 1999: Hearing on H.R. 1283 Before the H. 

Comm. on the Judiciary, 106th Cong. 67 (1999) (statement of Christopher Edley, Jr.) [hereinafter Edley Testimony]. 26 Carroll et al., supra note 16, at xxiv. 27 Editorial, The Asbestos Blob, Cont., WALL ST. J., Apr. 6, 2004, at A16. 28 Carroll et al., supra note 16, at xxiv. 29David C. Landin et al., Lessons Learned from the Front Lines: A Trial Court Checklist for 

Promoting Order and Sound Policy in Asbestos Litigation, 16 J.L. & POL’Y 589, 595–96 (2008) 

(internal citations omitted). 30 Edley Testimony, supra note 25. 31Landin, supra note 29, at 597. 32 Carroll et al., supra note 16, at xxv (noting that the 8,400 figure likely was conservative 

given the reporting methodology). 33Dixon et al., supra note 17, at 2. 34See Amchem Products v. Windsor, 521 U.S. 591 (1997); see Ortiz v. Fibreboard Corp., 527 

U.S. 815 (1999); see e.g., Asbestos Compensation Fairness Act, H.R. 1957, 109th Cong. (2005); 

Fairness in Asbestos Injury Resolution (FAIR) Act, S. 852, 109th Cong. (2005). 

Asbestos Litigation to address what the Court later referred to as 

the ‘‘asbestos-litigation crisis.’’ 22 The volume of claims filed against 

asbestos defendants has not abated over time.23 On the contrary, 

annual claims filed against defendants have risen steadily, with 

sharp increases in recent years.24 During the 1990’s, the number 

of asbestos cases pending nationwide doubled from 100,000 to more 

than 200,000.25 By 2002, approximately 730,000 claims had been 

filed,26 with more than 100,000 claims filed in 2003 alone—‘‘the 

most in a single year.’’ 27

The recent growth in the number of asbestos claims is largely attributable to the significant increase of claimants with nonmalignant injuries, including those with little or no current functional 

impairment.28 By the early 2000’s, ‘‘the overwhelming majority of 

claims—up to 90 percent—were filed on behalf of plaintiffs who 

were ‘completely asymptomatic.’ These claimants may have had 

some marker of exposure, such as changes in the pleural membrane of their lungs, but ‘are not now and never will be afflicted 

by disease.’ ’’ 29 Conversely, when asbestos litigation first arose in 

the 1960’s, most claimants were ‘‘workers suffering from grave and 

crippling maladies.’’ 30

The number of asbestos litigation defendants has grown in commensurate fashion with the burgeoning asbestos claims. In 1983, 

there were approximately 300 asbestos litigation defendants.31 By 

2004, the number of asbestos litigation defendants increased to 

over 8,400, with over 90 percent of American industries subject to 

asbestos lawsuits.32 These defendants included miners and manufacturers of asbestos or asbestos-containing products, purchasers of 

asbestos products, insurers, and businesses that used asbestos or 

asbestos-containing products in the course of their industry.33

Under the backdrop of amassing asbestos claims and an expanding defendant constituency, courts and affected parties have initiated several attempts to achieve a comprehensive resolution to asbestos litigation. Notwithstanding these efforts, no resolution has 

been reached. The Supreme Court rejected two comprehensive class 

action settlements and draft Federal legislative reforms were never 

enacted.34 Accordingly, asbestos claimants and defendants likely 

will continue to operate within the existing state and Federal asbestos framework for the foreseeable future. 


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35 Hanlon & Smetak, Asbestos Changes, 62 N.Y.U. Ann. Surv. Am. L. 525, 526–7 (2007); see also Dixon et al., supra note 17, at xii. 36 Id. (citing Carroll et al., supra note 16, at 121 (data through 2002) and Joseph E. Stiglitz 

et al., The Impact of Asbestos Liabilities on Workers in Bankrupt Firms, SEBAGO ASSOCIATES, 2002, at 27–29, 42). 37 Hanlon & Smetak, supra note 35, at 541. 38 Bankruptcy Reform Act of 1994, § 111, 103d Cong. (1994) (enacted) (codified at 11 U.S.C. 

§ 524). 39 11 U.S.C. § 524(g)(2)(B). 40Dixon et al., supra note 17, at xii. 41 Id. (noting that this figure did not include the assets of at least four recently formed asbestos trusts). 42 Id. 

C. ASBESTOS CLAIMS IN BANKRUPTCY

Asbestos litigation has driven nearly 100 companies into bankruptcy, with more than half of such companies filing since the beginning of the year 2000.35 The cost of these bankruptcies is largely immeasurable but has been estimated to cost the American economy approximately 60,000 jobs and between $1.4 and $3.0 billion.36

One of the most prominent bankruptcies was that of John 

Mansville Corporation, the dominant American producer of asbestos products. The Mansville bankruptcy redefined many aspects of 

the asbestos litigation system, including the inception of a trust 

system to compensate asbestos claimants in exchange for a broad 

injunction against future asbestos liability.37

Following the Mansville model and in response to a rising tide 

of asbestos defendants seeking relief from liability through chapter 

11 bankruptcies, Congress amended the Bankruptcy Code in 1994 

to include a provision, 11 U.S.C. § 524(g), to allow for the resolution 

of asbestos liability claims against a debtor through a trust-based 

system.38 Under that section, a debtor is permitted to create, in its 

chapter 11 plan, a trust that is to be the exclusive source of postconfirmation compensation for the debtor’s asbestos liability. If the 

trust meets certain prescribed requirements, the debtor, after its 

successful reorganization, is granted a channeling injunction that 

prohibits any asbestos plaintiff from suing the reorganized debtor 

for asbestos liability.39 The balance intended by section 524(g) is 

simple—the asbestos claimants receive a trust funded in an 

amount and administered in a manner that is satisfactory to the 

presiding bankruptcy court and a majority of the debtor’s known 

asbestos claimants in exchange for the debtor’s ability to gain certainty regarding its asbestos liability exposure and a shield against 

future claims in order to allow the debtor to continue its business 

operations. 

The institution of an asbestos trust has become a virtual inevitability in recent chapter 11 cases involving asbestos defendants. 

As of June 2012, 54 asbestos trusts had been formed, with an additional nine trusts expected in the near-term and a considerable acceleration of trust formations in the second half of the 2000’s.40

These trusts manage substantial assets reported in excess of $18.2 

billion at the end of 2008.41 The asbestos trusts review and pay 

damages on account of millions of claims a year; between 2007 and 

2008, selected asbestos trusts satisfied over four million claims.42

D. FRAUD IN ASBESTOS LITIGATION THROUGH MASS SCREENINGS

A commentator likened the scale of fraud in asbestos litigation 

to that of the scandals of ‘‘Credit Mobilier, Teapot Dome, the SavVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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43 How Fraud and Abuse in the Asbestos Compensation System Affect Victims, Jobs, the Economy, and the Legal System: Hearing Before the Subcomm. on the Constitution of the H. Comm. 

on the Judiciary, 112th Cong. 8 (2011) [hereinafter Constitution Subcomm. Hearing] (testimony 

of Professor Lester Brickman). 44Owens Corning v. Credit Suisse First Boston, 322 B.R. 719, 723 (D. Del. 2005). 45Lester Brickman, The Use of Litigation Screenings in Mass Torts: A Formula for Fraud?, 61 SMU L. REV. 1221, 1233 (2008). 46Griffin B. Bell, Asbestos & The Sleeping Constitution, 31 PEPP. L. REV. 1, 5 (2003). 47Pamela Sherrid, Looking for Some Million Dollar Lungs, Best of Asbestos, U.S. NEWS &

WORLD REP., Dec. 17, 2001, at 36. 48See Lester Brickman, On the Theory Class’s Theories of Asbestos Litigation: The Disconnect 

Between Scholarship and Reality, 31 PEPP. L. REV. 33, 69 (2003). 49 Andrew Schneider, Asbestos Lawsuits Anger Critics, ST. LOUIS POST-DISPATCH, Feb. 11, 

2003, at A1. 50Lester Brickman, Lawyers’ Ethics and Fiduciary Obligation in the Brave New World of Aggregative Litigation, 26 WM. & MARY ENVTL. L. & POL’Y REV. 243, 273 (2001). 51Mark A. Behrens & Phil Goldberg, The Asbestos Litigation Crisis: The Tide Appears to be 

Turning, 12 CONN. INS. L.J. 477, 480 (2006). 

ings and Loan debacles, WorldCom, Enron and the vast Ponzi 

schemes that have recently unfolded.’’ 43 Fraud in asbestos litigation largely stems from plaintiffs’ lawyers utilizing mass screening 

measures to recruit hundreds of thousands of claimants. 

Asbestos lawyers were found to have hired screening companies 

to recruit potential claimants who, although not currently suffering 

from asbestos-related injuries, exhibited symptoms of exposure. 

‘‘Labor unions, attorneys, and other persons with suspect motives 

caused large numbers of people to undergo X-ray examinations (at 

no cost), thus triggering thousands of claims by persons who had 

never experienced adverse symptoms.’’ 44 These screening companies used mobile X-ray vans to seek out potential clients in the 

parking lots of hotels and restaurants. The sole object of these 

screenings was to generate evidence—X-rays, pulmonary function 

tests, and medical reports—to support claims of asbestos-related injuries.45 As former United States Attorney General Griffin Bell has 

observed, ‘‘[t]here often is no medical purpose for these screenings 

and claimants receive no medical follow-up.’’ 46

These mass screenings were wildly successful and generated 

massive numbers of claims for plaintiffs’ attorneys. The claimant 

recruiting process was described by U.S. News & World Report: 

To unearth new clients for lawyers, screening firms advertise in 

towns with many aging industrial workers or park X-ray vans near 

union halls. To get a free X-ray, workers must often sign forms giving law firms 40 percent of any recovery. One solicitation reads: 

‘‘Find out if YOU have MILLION DOLLAR LUNGS!’’ 47

It is estimated that more than one million workers have undergone attorney-sponsored screenings.48 As one worker explained, 

‘‘it’s better than the lottery. If they find anything, I get a few thousand dollars I didn’t have. If they don’t find anything, I’ve just lost 

an afternoon.’’ 49 According to legal scholars, ‘‘without these claims, 

the ‘asbestos litigation crisis’ would never have arisen.’’ 50

An American Bar Association Commission on Asbestos Litigation 

confirmed that claims filed by the non-sick generally arose from 

for-profit screening companies whose sole purpose was to identify 

large numbers of people with minimal X-ray changes consistent 

with asbestos exposure.51 The Commission, with the help of the 

American Medical Association, consulted prominent occupationalmedicine and pulmonary-disease physicians to craft legal standards 

for asbestos-related impairment. The Commission found: ‘‘[s]ome Xray readers spend only minutes to make these findings, but are 


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52 HON. NATHAN R. JONES, ABA COMM’N ON ASBESTOS LITIGATION, ABA REPORT TO THE

HOUSE OF DELEGATES 8 (2003) available at http://www.cdc.gov/niosh/docket/archive/pdfs/NIOSH015/020103-Exhibit12.pdf. 53 Id. 54 Joseph N. Gitlin et al., Comparison of ‘B’ Readers’ Interpretations of Chest Radiographs for 

Asbestos Related Changes, 11 ACAD. RADIOLOGY 843, 852 (2004). 55David E. Bernstein, Keeping Junk Science Out of Asbestos Litigation, 31 PEPP. L. REV. 11, 

13 (2003) (quoting Lawrence Martin, M.D.). 56Owens Corning, 322 B.R. at 723. 57Lester Brickman & Harvey D. Shapiro, Asbestos Kills—And More than Just People: Jobs, 

Ethics, and Elementary Justice, NAT’L. REV., Jan. 31, 2005. 58Lester Brickman, On the Theory Class’s Theories of Asbestos Litigation: The Disconnect Between Scholarship and Reality, 31 PEPP. L. REV. at 33. 59 In re Silica Prods. Liab. Litig., 398 F.Supp.2d 563 (S.D. Tex. 2005). 

paid hundreds of thousands of dollars—in some cases, millions—in 

the aggregate by the litigation screening companies due to the volume of films read.’’ 52 The Commission also reported that litigation 

screening companies were finding X-ray evidence that was consistent with asbestos exposure at a ‘‘startlingly high’’ rate, often exceeding 50% and sometimes reaching 90%.53

Researchers at Johns Hopkins University compared the X-ray interpretations of professionals who are certified by the National Institute for Occupational Safety and Health to interpret pulmonary 

X-rays, referred to as ‘‘B Readers,’’ employed by plaintiffs’ counsel 

with the subsequent interpretations of six independent B Readers 

who had no knowledge of the X-rays’ origins. The study found that, 

while B Readers hired by plaintiffs claimed asbestos-related lung 

abnormalities in almost 96% of the X-rays, the independent B 

Readers found abnormalities in less than 5% of the same X-rays— 

a difference the researchers said was ‘‘too great to be attributed to 

inter-observer variability.’’ 54

One physician, Dr. Lawrence Martin, has explained the reason 

why plaintiffs’ B Readers seem to see asbestos-related lung abnormalities on chest X-rays in numbers not seen by neutral experts. 

Dr. Martin has said, ‘‘the chest X-rays are not read blindly, but always with knowledge of some asbestos exposure and that the lawyer wants to file litigation on the worker’s behalf.’’ 55 In 2005, Senior U.S. District Court Judge John Fullam said that many B Readers hired by plaintiffs’ lawyers were ‘‘so biased that their readings 

were simply unreliable.’’ 56 As Dr. James Crapo, a leading medical 

expert on asbestos-related diseases, has observed, claimants are 

being compensated ‘‘for illnesses that, according to the clear weight 

of medical evidence, either are not caused by asbestos or do not result in a significant impairment—i.e., are not generally regarded by 

the medical profession as an illness.’’ 57 Professor Lester Brickman, 

an expert on asbestos litigation, concluded that ‘‘[a]sbestos litigation has become a malignant enterprise which mostly consists of a 

massive client-recruitment effort that accounts for as much as 90 

percent of all claims currently being generated, supported by baseless medical evidence which is not generated by good-faith medical 

practice, but rather is primarily a function of the compensation 

paid, and by claimant testimony scripted by lawyers to identify exposure to certain defendants’ products.’’ 58

Screening programs declined in prominence following a landmark 

ruling by U.S. District Court Judge Janis Jack, who issued a 300- 

plus page order detailing methods used to generate fraudulent asbestos and silica claims in 2005.59 In the wake of Judge Jack’s 

opinion, which noted that many asbestos and silica cases are ‘‘drivVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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60 Id. at 635. 61The Silicosis Story: Hearings Before the Subcomm. on Oversight and Investigations of the 

Comm. on Energy and Commerce, 109th Cong. (2006). 62 Adam Liptak, Defendants See a Case of Diagnosing for Dollars, N.Y. TIMES, Oct. 1, 2007, 

available at http://www.nytimes.com/2007/10/01/us/01bar.html (last accessed May 31, 2013) (‘‘A 

grand jury was convened in Manhattan more than 2 years ago to look into potential fraud in 

silicosis cases. . . .’’). 63See, e.g., Ohio Rev. Code Ann. § 2307.91 et. seq. (enacted 2004), Tex. Civ. Prac. & Rem. 

§ 90.001 et. seq. (last amended 2007). 64 Constitution Subcomm. Hearing, supra note 43 (testimony of Professor Lester Brickman). 65See Patrick M. Hanlon & Anne Smetak, Asbestos Changes, 62 N.Y.U. ANN. SURV. AM. LAW

525, 593 (2007); Lester Brickman, On the Applicability of the Silica MDL Proceeding to Asbestos 

Litigation, 12 CONN. INS. L.J. 10 (2006); Lester Brickman, Ethical Issues in Asbestos Litigation, 

33 HOFSTRA L. REV. 833, 833–34 (2005). 66Kenneth M. Goldstein, Panel Discussion at U.S. Chamber Institute for Legal Reform’s 12th 

Annual Legal Reform Summit (Oct. 26, 2011) (associated slides available at http:// 

www.instituteforlegalreform.com/sites/default/files/LawyerslMasslTortlSolicitationlAdvertisinglOct2011.pdf) (last visited May 31, 2013). 67 Id. 68See NEW MEDIA STRATEGIES, THE PLAINTIFFS’ BAR GOES DIGITAL 3 (January 2012) available at http://www.instituteforlegalreform.com/doc/the-plaintiffs-bar-goes-digital-0 (last visited May 

23, 2013). 69 Id. at 7 (‘‘Trial attorneys spend as much as $80 per click on mesothelioma-related search 

terms, far exceeding industry averages for search terms . . . ranked as most expensive by 

Google AdWords’’). 70The David Law Firm—Lung Cancer, http://www.calldavid.com/lung-cancer.html (last visited 

May 31, 2013). 

en neither by health nor justice’’ and are instead ‘‘manufactured for 

money,’’ 60 Congress convened hearings on fraud and abuse in asbestos litigation.61 A Federal grand jury was empanelled in the 

Southern District of New York.62

Many believed the decline in mass screenings and enactment of 

medical criteria statutes in major asbestos venue states marked 

the beginning of a new, fairer asbestos compensation system.63 The 

Committee, however, has received testimony suggesting that 

screening programs may be, or soon will be, used to generate asbestos trust claims.64 The asbestos bar is using new techniques to recruit potential trust claimants. While screenings were often advertised in break rooms, in local papers, and on local broadcast stations,65 the modern asbestos plaintiffs’ bar spends billions of dollars on mass media advertisements designed to recruit potential asbestos tort plaintiffs and trust claimants.66 Experts estimate that asbestos plaintiffs’ firms spent over $950 million on television advertising in 2011.67 Trial lawyers’ advertising campaigns extend 

beyond television, and experts estimate that the asbestos bar 

spends tens of millions each year on sophisticated online advertising campaigns.68 ‘‘Mesothelioma’’ has become the single most expensive keyword on Google’s auction-style AdWords platform.69

There are signs that the suspect practices deployed in traditional 

asbestos state court tort litigation have been utilized against asbestos trusts. At least one firm advises lung cancer victims that billions of dollars have been set aside in ‘‘U.S. Compensation Trust 

Funds . . . to financially assist individuals with lung cancer’’ while 

making no mention of asbestos.70 Further, with the advent of enhanced information technology tools, plaintiffs’ firms have the ability to focus their claimant recruiting efforts on a broader audience. 

The indications of fraud coupled with an environment conducive for 

fraud, as provided in more detail below, is cause for alarm. 

E. THE OPAQUE ASBESTOS TRUST SYSTEM AND RELATED FRAUD

While the prerequisites for establishing a bankruptcy asbestos 

trust typically compel certain disclosures, these disclosures are sigVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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71 11 U.S.C. § 542(g)(2)(B)(ii)(V) (2011). 72 Carroll et al., supra note 16, at 24. 73See generally S. Todd Brown, Section 524(g) Without Compromise: Voting Rights and the 

Asbestos Bankruptcy Paradox, 2008 COLUM. BUS. L. REV. 841 (2008); see also Dixon et al., supra 

note 17, at 43 (listing asbestos firms most frequently represented on TAC’s; Weitz and 

Luxenberg P.C. sits on TAC’s of 11 trusts that control, combined, approximately 74% of all asbestos trust assets); see also Searcey & Barry, As Asbestos Claims Rise, So Do Worries About 

Fraud, WALL ST. J., Mar. 11, 2013. 74 11 U.S.C. § 524(g)(2)(B)(ii)(IV)(bb) (2011). 75 In re Combustion Engineering, Inc., 391 F.3d 190, 234 (3d Cir. 2004) (‘‘[A] debtor must satisfy the prerequisites set forth in § 524(g) in addition to the standard plan confirmation requirements.’’). 76 11 U.S.C. § 1129(b)(1) (2011) (allowing confirmation of a plan over the objection of a class 

of creditors). 77 In re Congoleum Corp., 426 F.3d 675, 679 (3d Cir. 2005). 78Lester Brickman, Ethical Issues in Asbestos Litigation, 33 HOFSTRA L. REV. at 868–69 (discussing asbestos bar’s de facto control of bankruptcy process). 

nificantly lacking. To obtain the principal benefit of the asbestos 

trust—the channeling injunction—a debtor must demonstrate to 

the court, among other things, that at the time of confirmation: 

the trust will operate through mechanisms such as structured, 

periodic, or supplemental payments, pro rata distributions, matrices, or periodic review of estimates of the numbers and value of 

present claims and future demands, or other comparable mechanisms, that provide reasonable assurance that the trust will value, 

and be in a financial position to pay, present claims and future demands that involve similar claims in substantially the same manner.71

In many cases, this requirement has caused the debtor to include 

a provision in its chapter 11 plan requiring it to file periodic disclosures with the court of the financial health of the asbestos liability 

trust.72 Missing from these disclosures, however, is any statutory 

requirement that the trust identify claimants who seek compensation from the trust, the nature of their alleged injury, and the 

amount the trust paid them. 

The trusts’ limited disclosures are a result of the structure of section 524(g), which grants considerable control over asbestos bankruptcies and resulting asbestos trusts to plaintiffs’ attorneys.73 In 

particular, section 524(g) allows a channeling injunction to issue 

only if three-quarters of current asbestos claimants support a proposed chapter 11 plan.74 This requirement is distinct from the 

usual requirements for plan confirmation, which must also be satisfied.75 The requirement to gain the consent of a specified class is 

a departure from traditional bankruptcy procedures, which allow a 

chapter 11 plan to be confirmed over the objection of an impaired 

class so long as the plan is fair, non-discriminatory, and supported 

by another impaired class.76

In other words, the asbestos claimants class has a statutory 

blocking right to a proposed chapter 11 plan, which results in representatives of that class having considerable influence over the 

chapter 11 plan and the formation of any resulting asbestos trust. 

Generally speaking, representation of asbestos claimants is concentrated within a select group of law firms. As courts have noted, 

‘‘[a] unique feature of asbestos . . . litigation is the fact that a 

small group of law firms represents hundreds of thousands of 

plaintiffs.’’ 77 Consequently, single firms or small groups of firms 

may effectively block confirmation of a chapter 11 plan.78 As Professor S. Todd Brown has observed, ‘‘[asbestos firms] hold an unassailable veto power [that] leaves debtors and other parties in interVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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79 Brown, supra note 74, at 121. 80 11 U.S.C. § 1126(c) (2011)(‘‘A class of claims has accepted a plan if such plan has been accepted by creditors . . . that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors. . . .’’). 81See Brown, supra note 74, at 150 (‘‘[A]n attorney can obtain a considerable negotiating position and sizeable fees by simply dumping their asbestos claim ‘‘inventory’’ on a debtor [with] 

little to no prospect of sanctions for filing even grossly fraudulent or, at best, wholly unsubstantiated claims.’’). 82 Id. 83 11 U.S.C. § 524(g)(4)(B)(i) (2011). 84Mark D. Plevin, The Future Claims Representative in Prepackaged Asbestos Bankruptcies: 

Conflicts of Interest, Strange Alliances, and Unfamiliar Duties for Burdened Bankruptcy Courts, 

62 N.Y.U. ANN. SURV. AM. L. 271, 301 (2006) (‘‘In almost every . . . case to date . . . the debtor 

[has been granted] a presumptive right to select . . . an FCR acceptable to the current claimants.’’). 85See Brown, supra note 52, at 158–59 (discussing parties’ incentive to propose weak representative). 86Lester Brickman, Ethical Issues in Asbestos Litigation, 33 HOFSTRA L. REV. at n. 144 (noting that Halliburton’s pre-petition futures representative was nearly $5 million and retained by 

the resulting trust). 87See Richard A. Nagareda, Mass Torts in a World of Settlement 177 (2007). 88Mark D. Plevin, The Future Claims Representative in Prepackaged Asbestos Bankruptcies: 

Conflicts of Interest, Strange Alliances, and Unfamiliar Duties for Burdened Bankruptcy Courts, 

62 N.Y.U. ANN. SURV. AM. L. at 292–93. 89See Dixon et al., supra note 17 (FCR’s for largest trusts set forth in Appendix A). 90 Carroll et al., supra note 16, at 22 (noting that TAC must consent to, among other things, 

modifications to a trust’s distribution plan or audit procedures). 

est with a classic Hobson’s choice—reorganization on the [f]irms’ 

terms or no reorganization at all.’’ 79

Another unique feature of section 524(g) is that it looks only to 

the number of current asbestos claimants who support a proposed 

chapter 11 plan. In contrast, a traditional bankruptcy requires a 

majority in number and two-thirds in amount of a particular class 

in order to confirm a chapter 11 plan.80 Plaintiffs’ firms exploit the 

express preference for claimant quantity over claim quality in section 524(g) by asserting their large numbers of claims in bankruptcy regardless of their likely value or merit, which typically will 

be evaluated following the voting period on a debtor’s chapter 11 

plan.81 Plaintiffs’ firms that historically have filed few tort cases 

against a debtor company sometimes file claims on behalf of their 

entire client list once bankruptcy has been declared.82

Section 524(g) also requires the appointment of a legal representative on behalf of individuals who may file claims with a proposed 

asbestos trust in the future, referred to as a ‘‘future claims representative’’ or an ‘‘FCR.’’ 83 Courts generally appoint an individual 

suggested by the current claimants and the debtor company.84 Congress envisioned the appointment of an FCR as a due process protection for future claimants; however, the debtor company and the 

attorneys representing current claimants stand to benefit from the 

appointment of a weak or pliant representative.85 Moreover, FCR 

work can be extremely lucrative,86 and academic commentators 

have expressed concern that FCR’s are ‘‘punch-pulling’’ 87 in an effort to be seen as ‘‘reliable negotiating partners who [will] not ‘rock 

the boat’ ’’ 88 and increase the likelihood of future FCR appointments. Indeed, many representatives serve several trusts concurrently.89

Although asbestos trusts are nominally managed by court-approved trustees, virtually all trusts’ founding agreements require 

the trustee to seek approval of a post-confirmation FCR and a committee composed of current claimants’ representatives, most often 

characterized as a trust advisory committee or ‘‘TAC,’’ before 

amending the trust’s distribution plan or audit procedures.90 The 


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91Dixon et al., supra note 17, at 14. 92Dixon et al., supra note 17, at 32. 93 Constitution Subcomm. Hearing, supra note 43, at 94–95, 100–101 (written testimony of 

James Stengel). 94 Carroll et al., supra note 16, at 28. 95 Courts Subcomm. Hearing, supra note 11, at 14. 96 Courts Subcomm. Hearing, supra note 11, at 207 (‘‘The Manville Personal Injury trust offer[ed] a data extract of claim level information . . . to anyone willing to pay a $10,000 licensing fee. Prior to 2002 the data could be purchased outright. . . .’’). 97Manville Trust Single Use Data License Agreement, http://www.claimsres.com/documents/ 

MT/DataAgreement.pdf (last visited May 31, 2013). 98 Carroll et al., supra note 16, at 23; Dixon et al., supra note 17, at 45. 99See, e.g., Courts Subcomm. Hearing, supra note 11, at 224–36 (letter signed by six FCRs). 

asbestos bars’ pre-confirmation influence extends to operating 

trusts, as many TAC seats are held by plaintiffs’ attorneys who 

represented large numbers of claimants in bankruptcy proceedings.91

The trust documents governing the operation of the asbestos 

trusts often include restrictions on sharing trust data, facilitating 

a lack of transparency in the trust system. A majority of the trusts’ 

distribution plans affirmatively require claims to be treated as confidential settlement negotiations.92 As a result, tort litigants must 

engage in lengthy and expensive discovery disputes in order to gain 

access to basic information—including exposure information—routinely disclosed by defendant companies before they created trusts 

and exited the tort system.93 In many instances, trusts’ procedures 

require a valid state-court-issued subpoena in order to provide information to state litigants.94 Even in cases where a valid subpoena is served upon an asbestos trust, an asbestos trust may attempt to defeat the subpoena or require an additional subpoena 

from the presiding bankruptcy court judge.95

There was a time when asbestos trusts were willing to share 

claims information more freely. Prior to Judge Jack’s exposure of 

fraud in mass screened silica and asbestos cases, the Manville 

Trust sold its data to actuarial firms, law firms, and defendant 

companies.96 The trust also licensed its data to occupational health 

researchers and provided custom datasets to academics upon request. But in the wake of Judge Jack’s opinion, the Manville Trust 

limited access to its data. Its current data license prohibits use of 

the trust’s data to process or contest trust and tort claims, prevents 

data recipients from revealing information regarding an individual 

claimant, and is otherwise structured to ensure that any analysis 

of the data is strictly empirical, unusable in litigation, and may not 

serve as a basis for other trusts to reject inconsistent or improper 

claims.97

Because the trusts’ current confidentiality provisions and practices make data sharing difficult, individual trusts and the trust 

system as a whole are susceptible to fraud and abuse. The GAO 

and the non-partisan RAND Corporation, in their respective reports on the trusts, both concluded that asbestos bankruptcy trusts 

are unlikely to identify and decline payment of improper claims, including claims that are supported by ‘‘altered work histories’’ or allege inconsistent exposure patterns.98 The trusts, the plaintiffs’ 

bar, and the post-confirmation FCRs nonetheless contend that the 

trust system is free from fraud and that more robust anti-fraud 

measures would be costly and reduce the funds available to fulfill 

the trusts’ core mission—claimant compensation.99


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100 Carroll et al., supra note 16, at 16. 101 Carroll et al., supra note 16, at 23. 102 Courts Subcomm. Hearing, supra note 11, at 25 (testimony of S. Todd Brown). 103See e.g., Nedra Pickler, Ex-naval officer gets prison time for 9–11 fraud, ASSOCIATED PRESS

(Dec. 12, 2011), available at http://www.washingtontimes.com/news/2011/dec/12/ex-naval-officergets-prison-time-911-fraud/; DEPT. OF JUSTICE, DEEPWATER HORIZON (BP) OIL SPILL FRAUD, http://www.justice.gov/criminal/oilspill/(last visited May 31, 2013) (collecting cases involving 

fraud on the Gulf Coast Claims Facility). 104 Courts Subcomm. Hearing, supra note 11, at 25 (testimony of S. Todd Brown). 105Kananian v. Lorillard Tobacco Co., No. CV 442750 (Ohio Ct. Com. Pl. Cuyahoga County 

2007). 106 Id. at 5, 9. 107 Id. at 6. 

Although the eleven trusts interviewed by GAO in the course of 

its investigation reported that their audits have never identified an 

instance of fraud, the trusts paid over $4 billion in 2010 alone and, 

combined, have paid 3.3 million alleged asbestos victims nearly 

$17.5 billion since the Manville Trust was established.100 The GAO 

Report stated that the internal audits of the asbestos trusts were 

designed to ensure compliance with internal trust procedures and 

not generally designed to detect duplicate or inconsistent claims 

among different asbestos trusts and the state courts.101 Further, 

the complete absence of fraud reported by the eleven trusts interviewed in the GAO Report runs contrary to historical experiences 

with compensation and relief programs. Fraud and abuse have 

been uncovered in virtually every compensation and relief program 

undertaken in modern America, whether privately funded or government-sponsored.102 Fraudulent claims against the 9/11 Victim’s 

Compensation Fund and BP’s gulf oil fund, for example, were detected and prosecuted.103 As Professor Brown has observed, asbestos trusts are not ‘‘magically different’’ from other compensation 

trusts; that asbestos trusts’ audits have uncovered no fraud whatsoever suggests that their internal controls are lacking.104

While the trust system operates with near-complete secrecy, the 

quality of medical evidence and the consistency of the allegations 

made by alleged asbestos victims are sometimes tested in the state 

court tort system. Although the trusts’ confidentiality provisions 

and the generally combative nature of asbestos litigation have combined to limit the disclosure of trust information, defendants have 

successfully identified a number of cases of inconsistent and potentially fraudulent claiming. 

In the best known example of fraud uncovered through the state 

court tort system, Kananian v. Lorillard Tobacco, a tort plaintiff 

claimed that he developed mesothelioma solely from smoking asbestos-filtered cigarettes and that he only passed through a naval 

ship yard while being deployed elsewhere by the Navy.105 He simultaneously filed claims against multiple asbestos trusts alleging 

exposure to marine products while working as a ‘‘shipyard laborer.’’ 106 Despite the inconsistency of his tort and trust claims, 

which the court described as a ‘‘fiction,’’ Kananian received substantial payments from asbestos trusts.107

Kananian is not an isolated incident; the Committee received testimony detailing several additional examples of fraud, abuse, and 

inconsistent claiming in other jurisdictions, including Maryland 

cases in which inconsistent exposure information was presented in 

the tort system and trust systems in an attempt to circumvent 


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108 Constitution Subcomm. Hearing, supra note 43, at 94–95, 103–105 (written testimony of 

James Stengel). 109 Courts Subcomm. Hearing, supra note 11, at 9 (testimony of Leigh Ann Schell); e.g., Montgomery v. Foster Wheeler, Case No. 09C–11–215 ASB, Pretrial Hearing Trans. (Del. Super. Ct. 

Nov. 7, 2011). 110 Courts Subcomm. Hearing, supra note 11, at 16 (written statement of Leigh Ann Schell). 111Montgomery, supra note 110, at 7–8. 112Montgomery, supra note 110, at 25. 113Searcey & Barry, supra note 74. 114Searcey & Barry, supra note 74. 

state-law caps on damages.108 Further examples of inconsistent 

claiming have been identified in Delaware, Louisiana, New York, 

Oklahoma, and Virginia.109

Counsel in a Louisiana case, Mary A. Robeson et al v. Amatek, 

Inc. et al, filed sixteen trust claims that denied the plaintiff’s father 

smoked and included detailed asbestos exposure information. When 

the plaintiff was deposed, however, he claimed his father was a 

smoker and that he had no knowledge of the exposures alleged in 

the claims. He also testified that counsel had never spoken to his 

father about his exposures to asbestos.110

In Montgomery v. Foster Wheeler, a Delaware case, the plaintiff’s 

attorney disclosed a number of trust claims shortly before trial 

even though he had repeatedly represented to the defendant and 

the court that his client had no such claims. The court described 

the plaintiff’s disclosure failure as ‘‘really seriously egregiously bad 

behavior’’ and lamented that ‘‘it happens a lot.’’ 111 The court further observed that: 

The core of this case had been fraudulent. . . . [T]his 

whole litigation is based on who was responsible. Nobody 

can say which fibers did what. But the most important 

thing is that a plaintiff disclose what they think caused 

their disease. And if they don’t disclose honestly when 

they’re asking [for] money from another company and they 

don’t even let the defendant know about that, that’s so dishonest. It is just so dishonest.112

In addition to the fraud uncovered through the state court system, the Wall Street Journal conducted an investigation that detailed numerous anomalies between individuals’ state court filings 

and asbestos trust claim filings.113 The Wall Street Journal found 

that individuals had claimed exposure to asbestos through industrial jobs that they held while under the age of twelve, disparate 

medical diagnoses asserted among different asbestos trusts and 

state court cases, and claims asserted by individuals that simply 

did not exist.114

The lack of meaningfully transparent trust disclosures, combined 

with published research, court decisions and investigations suggesting and highlighting fraud within the asbestos trust system 

provided the framework for bankruptcy bar and Congressional inquiry into potential mechanics to reduce and prevent fraudulent activity within the state court and asbestos trust systems. In March 

2011, the Subcommittee on Business Issues of the Advisory Committee on Bankruptcy Rules considered a proposal to add a new 

Federal Rule of Bankruptcy Procedure to require 524(g) trusts to 

disclose the particulars of each demand for payment received by a 


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115Letter from Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform, to Peter 

G. McCabe, Secretary, Committee on Rules of Practice and Procedure, Judicial Conference of 

the United States (Nov. 22, 2010) (on file with Committee). 116Memorandum from Subcommittee on Business Issues to Advisory Committee on Bankruptcy Rules (Mar. 10, 2011) (on file with Committee). 117Memorandum from Subcommittee on Business Issues to Advisory Committee on Bankruptcy Rules (Sept. 19, 2011) (on file with Committee). 118See generally Constitution Subcomm. Hearing, supra note 43. 119See generally Courts Subcomm. Hearing, supra note 11. 120See id. (testimonies of Leigh Ann Schell, Prof. S. Todd Brown, and Marc Scarcella). 121 Id. at 81. 122 Id. (‘‘As somebody who worked at a trust, the largest asbestos trust, the Manville Personal 

Injury Trust, back in 2001 as their quantitative data analyst and statistician, I can tell you that 

I understand Mr. Siegel’s concern, and I think it is a legitimate concern, but I can assure everybody that it is not a problem.’’) 

trust during the preceding quarter.115 The Subcommittee, in a 

memo to the Advisory Committee, examined the merits and demerits of the proposal, but ultimately concluded that if: 

. . . it is determined that the trusts should be providing 

more information than they currently are, the Subcommittee’s preliminary thought was that this may be a matter 

more appropriately addressed by a legislative solution— 

such as an amendment of § 524(g) that imposes additional 

requirements on trusts created under that provision.116

A second memo from the Subcommittee, dated September 19, 

2011, collects comments the Subcommittee solicited from various 

bankruptcy and nonbankruptcy legal groups. The chair of the ABA 

Business Bankruptcy Committee established a task force to review 

the proposal, which ultimately supported the proposal, subject to a 

small number of qualifications. Others who submitted comments, 

including the FCRs, opposed the proposal.117

F. THE FURTHERING ASBESTOS CLAIMS TRANSPARENCY

(FACT) ACT OF 2013

During the 112th Congress, the Subcommittee on the Constitution of the House Judiciary Committee held a hearing entitled 

‘‘How Fraud and Abuse in the Asbestos Compensation System Affects Victims, Jobs, the Economy, and the Legal System.’’ 118 In 

light of the testimony received at that hearing, the study of the Advisory Committee on Bankruptcy Rules, and the experience of debtors who have used the Bankruptcy Code to manage their future asbestos liability and their attorneys, Rep. Quayle (R-AZ), together 

with Reps. Matheson (D-UT) and Ross (R-FL), introduced H.R. 

4369, the Furthering Asbestos Claim Transparency (FACT) Act of 

2012, on April 17, 2012. 

The Subcommittee on Courts, Commercial and Administrative 

Law of the House Judiciary Committee held a hearing on H.R. 

4369 on May 10, 2012.119 Three of the four witnesses testified that 

transparency was sorely needed in the 524(g) asbestos trust compensation system.120 The fourth witness, Mr. Siegel, conceded that 

no provision of the FACT Act would impede a claimant’s filing of 

a claim with or receipt of compensation from a trust.121 Mr. Siegel 

did argue that the FACT Act would impose ‘‘onerous’’ new administrative burdens on the trusts—a hypothesis that was contradicted 

by Mr. Scarcella’s testimony founded in his experience working at 

a claims processing department at one of the largest trusts.122


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123See generally H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) Act of 2013’’: 

Hearing Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 

Comm. on the Judiciary, 113th Cong. (2013) [hereinafter the Reg. Subcomm. Hearing]. 124See id. (testimonies of Hon. Peggy L. Ableman, Prof. S. Todd Brown, and Marc Scarcella). 125 Id.; see also H.R. 982. 126 H.R. 982 § 2. 127 Id. 128 U.S. CONST. art. I, § 8, cl. 4; see Court Subcomm. Hearing, supra note 11, at 85–89 (memorandum regarding Congress’ power to enact legal reform legislation prepared by former Solicitor 

General Paul D. Clement); see also Reg. Subcomm. Hearing, supra note 124 (testimony of Prof. 

S. Todd Brown). 129 H.R. 982 § 2. 

On June 8, 2012, the Committee met in open session and ordered 

the bill H.R. 4369 to be reported favorably to the House with a 

manager’s amendment. The amendment adopted during the Committee’s consideration of H.R. 4369 incorporated comments received 

during its legislative consideration and clarified that section 107 of 

the Bankruptcy Code applies to the new requirements of the asbestos trusts and that asbestos trusts could require payment for costs 

related to third-party discovery requests. H.R. 4369 was not considered by the Full House of Representatives during the 112th Congress. 

Given the necessity for transparency and the significant legislative record, Rep. Farenthold (R-TX), together with Rep. Matheson 

(D-UT), introduced H.R. 982, the Furthering Asbestos Claim Transparency (FACT) Act of 2013, on March 6, 2013, which is identical 

to H.R. 4369 as reported out of the Committee during the 112th 

Congress. The Subcommittee on Regulatory Reform, Commercial 

and Antitrust Law held a hearing on H.R. 982 on March 13, 

2013.123 Three of the four witnesses testified that the current asbestos trust system lacked transparency and was conducive to 

fraudulent activity.124 The fourth witness, Mr. Inselbuch, argued 

that the FACT Act would abrogate state discovery laws and would 

create administrative burdens on the trusts notwithstanding a 

record to the contrary on both accounts.125

The bill amends section 524(g) of the Bankruptcy Code to require 

asbestos trusts to file quarterly reports with the presiding bankruptcy court that detail claimants’ names, demands made by the 

claimants to the asbestos trust, any amounts paid to claimants, 

and the basis for such payments.126 The FACT Act also requires 

asbestos trusts to provide information requested by parties to traditional asbestos tort litigation, subject to payment from the requesting party for costs associated with such a request.127 As the bill 

amends a provision of the Bankruptcy Code, the reporting and information sharing requirements contained therein fall squarely 

within Congress’ bankruptcy power.128

The FACT Act includes several privacy protections. The bill provides that sensitive identifying information, such as complete Social Security numbers and confidential medical records, should not 

be published in the quarterly reports.129 Additionally, the FACT 

Act subjects both the quarterly reporting requirements and the 

written discovery requests to section 107 of the Bankruptcy Code. 

Section 107 of the Bankruptcy Code and related Rule 9037 of the 

Federal Rules of Bankruptcy Procedure grant the presiding bankruptcy judge broad discretion to exclude confidential or sensitive information from the quarterly reports or in response to a written 

discovery request. Specifically, section 107(c) of the Bankruptcy 

Code provides a bankruptcy court with discretion to exclude from 


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130 11 U.S.C. § 107(c) (2011); 18 U.S.C. § 1028(d) (2011); Fed. R. Bankr. P. 9037. 131 H.R. 982 § 2. 

disclosure broad categories of information contained in any document filed in a chapter 11 case that would ‘‘create undue risk of 

identity theft or other unlawful injury. . . .’’ 130 Further, responses 

to written discovery requests are subject to any applicable protective orders.131

The FACT Act does not disturb or supersede any applicable state 

discovery laws or rules. On the contrary, any information received 

pursuant to a written request would remain subject to the discovery laws and rules applicable in the relevant state court proceeding. 

The FACT Act is a measured amendment to the Bankruptcy 

Code provision governing asbestos trusts that will promote greater 

transparency among the asbestos trusts and the state court system. 

This information will reduce the potential for fraud and help to 

unveil any existing fraudulent activity. A reduction in fraud will 

help to ensure that the asbestos trusts achieve their designed 

goal—administering and preserving their funds to provide substantially similar recompense to future claimants that have been truly 

aggrieved by exposure to asbestos. 

Hearings 

The Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on H.R. 982 on March 13, 

2013. Testimony was received from Hon. Peggy L. Ableman, former 

Delaware Superior Court Judge and special counsel at McCarter & 

English, LLP; S. Todd Brown, Professor of Law, SUNY Buffalo Law 

School; Elihu Inselbuch, Member, Caplin & Drysdale, Chartered; 

and Marc Scarcella of Bates White Consulting, with additional material submitted by Bill Cawlfield, Asbestos & Mesothelioma Patient, Denver, CO; Courtney Davis, Daughter of Asbestos & Mesothelioma Victim, Raleigh, NC; Bob Guinn, Asbestos & Mesothelioma Patient, Ririe, ID; Julie Gundlach, Asbestos & Mesothelioma 

Patient, St. Louis, MO; Shelly Kozicki, Widow of Asbestos & Mesothelioma Victim, Detroit, MI; Mary Jane Williams, Asbestos & 

Mesothelioma Patient, Springfield, OH; Loring Williams, Spouse of 

Asbestos & Mesothelioma Patient, Springfield, OH; Forrest Wulf, 

Asbestos & Mesothelioma Patient, Alton, IL; Dan Young, Spouse of 

Asbestos & Mesothelioma Patient, St. Louis, MO; Susan Vento, 

Widow of Bruce Vento, Mesothelioma Victim and Former U.S. 

House Representative, St. Paul, MN; Nan Aron, Alliance for Justice; Joanne Doroshow, Center for Justice & Democracy; Thomas 

Cluderay, Environmental Working Group; Robert Kelley, Protect 

Missouri Workers; Robert Weissman, Public Citizen; Ed 

Mierzwinski, U.S. Public Interest Research Group; Michael J. 

Crames, FCR for the Owens Corning/Fibreboard Asbestos Personal 

Injury Trust; Lawrence Fitzpatrick, FCR for the ACandS Asbestos 

Settlement Trust and the Durabla Manufacturing Company and 

Durabla Canada Ltd. Asbestos Trust; Prof. Eric D. Green, FCR for 

the Babcock & Wilcox Company Asbestos PI Trust, the DII Industries, LLC Asbestos PI Trust, the Federal-Mogul Asbestos Personal 

Injury Trust, and the Fuller-Austin Asbestos Settlement Trust; 

Martin J. Murphy, FCR for the Kaiser Alum. & Chem. Corp. AsVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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bestos Personal Injury Trust; James L. Patton, Jr., FCR for the 

Celotex Asbestos Settlement Trust and the Leslie Controls, Inc. Asbestos Personal Injury Trust; The Honorable Dean M. Trafelet 

(Ret.), FCR for the Armstrong World Industries Asbestos Trust, the 

Plibrico Asbestos Trust, the MLC Asbestos PI Trust, and the 

United States Gypsum Asbestos Personal Injury Settlement Trust; 

Doug Campbell, Campbell & Levine, LLC; Genevieve Casey 

Bosilevac, Mesothelioma Victim; Judy Van Ness, Widow of Dickie 

Van Ness, Mesothelioma Victim; and the Asbestos Disease Awareness Organization. 

Committee Consideration 

On May 21, 2013, the Committee met in open session and ordered the bill H.R. 982 favorably reported, without amendment, by 

a rollcall vote of 17 ayes to 14 noes, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

recorded votes were taken during the Committee’s consideration of 

H.R. 982. 

1. The amendment offered by Mr. Conyers replaces the bill’s substantive provisions with a requirement that asbestos trusts report 

only aggregated information on demands received and payments 

made from the asbestos trusts. This amendment was defeated by 

a rollcall vote of 15–16. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) .......................................................................................

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) .......................................................................................

[Vacant] .....................................................................................................


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ROLLCALL NO. 1—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................ X 

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) .......................................................................................... X 

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 15 16 

2. The amendment offered by Mr. Cohen excepts from quarterly 

reporting trusts that already have an internal audit mechanism in 

place. This amendment was defeated by a rollcall vote of 13–19. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) ............................................................................................. X 

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................


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ROLLCALL NO. 2—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) .......................................................................................... X 

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) ..........................................................................................

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 13 19 

3. The amendment offered by Mr. Nadler limits third party discovery to those parties who disclose information pertaining to the 

public safety or health to a law enforcement agency. This amendment was defeated by a rollcall vote of 14–18. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) ............................................................................................. X 

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................


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ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) .......................................................................................... X 

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 14 18 

4. The amendment offered by Mr. Scott treats certain medical information in the quarterly reports as protected health information 

under the Health Insurance Portability and Accountability Act. 

This amendment was defeated by a rollcall vote of 14–18. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) ............................................................................................. X 

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) .......................................................................................

Mr. Jordan (OH) ......................................................................................... X 

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................ X 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................


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ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) .......................................................................................... X 

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) .......................................................................................

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) ....................................................................................... X 

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 14 18 

5. The amendment offered by Mr. Scott exempts claimants who 

are veterans or servicemembers. This amendment was defeated by 

a rollcall vote of 14–15. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) ............................................................................................. X 

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................


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ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) ..........................................................................................

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) ....................................................................................... X 

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 14 15 

6. The amendments offered en bloc by Mr. Johnson limits the 

terms upon which a trust may disclose information and to exclude 

personally identifiable information from the bill’s public reporting 

and document production requirements. These amendments were 

defeated by a rollcall vote of 13–18. 

ROLLCALL NO. 6 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) ............................................................................................. X 

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) ......................................................................................... X 

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................ X 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 


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ROLLCALL NO. 6—Continued 

Ayes Nays Present 

[Vacant] .....................................................................................................

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) ..........................................................................................

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) ..................................................................................... X 

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 13 18 

7. The amendments offered en bloc by Ms. Jackson Lee require 

the filing of certain certifications concerning claims against a third 

party before it may seek discovery from an asbestos trust and require the filing of certain certifications concerning asbestos-containing products before a third party may seek discovery from an 

asbestos trust. These amendments were defeated by a rollcall vote 

of 95–15. 

ROLLCALL NO. 7 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) ..........................................................................................

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ............................................................................................... X 

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................ X 

Mr. Labrador (ID) .......................................................................................


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ROLLCALL NO. 7—Continued 

Ayes Nays Present 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) ..........................................................................................

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) .......................................................................................

Mr. Pierluisi (PR) .......................................................................................

Ms. Chu (CA) .............................................................................................

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 9 15 

8. The amendment offered by Mr. Garcia prohibits defendants 

who were held liable for asbestos exposure from seeking information through the bill. This amendment was defeated by a rollcall 

vote of 11–18. 

ROLLCALL NO. 8 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) ......................................................................................... X 

Mr. Poe (TX) ............................................................................................... X 

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................ X 


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ROLLCALL NO. 8—Continued 

Ayes Nays Present 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) .......................................................................................

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) .............................................................................................

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 11 18 

9. The amendment offered by Mr. Jeffries replaces the quarterly 

reporting requirements with a requirement that a trust provide 

discovery, upon written request, to a party to an action concerning 

liability for asbestos exposure if the requesting party cannot obtain 

such information under non-bankruptcy law. This amendment was 

defeated by a rollcall vote of 13–18. 

ROLLCALL NO. 9 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) ......................................................................................... X 

Mr. Poe (TX) ............................................................................................... X 

Mr. Chaffetz (UT) .......................................................................................


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ROLLCALL NO. 9—Continued 

Ayes Nays Present 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................ X 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) ....................................................................................... X 

[Vacant] .....................................................................................................

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) .......................................................................................... X 

Mr. Johnson (GA) .......................................................................................

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 13 18 

10. The bill was reported favorably without amendment by a 

rollcall vote of 17–14. 

ROLLCALL NO. 10 

Ayes Nays T2Present 

Mr. Goodlatte (VA), Chairman ................................................................. X 

Mr. Sensenbrenner, Jr. (WI) .....................................................................

Mr. Coble (NC) ........................................................................................ X 

Mr. Smith (TX) .........................................................................................

Mr. Chabot (OH) ...................................................................................... X 

Mr. Bachus (AL) ...................................................................................... X 

Mr. Issa (CA) ...........................................................................................

Mr. Forbes (VA) ....................................................................................... X 

Mr. King (IA) ............................................................................................ X 

Mr. Franks (AZ) ....................................................................................... X 

Mr. Gohmert (TX) ..................................................................................... X 

Mr. Jordan (OH) ....................................................................................... X 

Mr. Poe (TX) ............................................................................................ X 

Mr. Chaffetz (UT) ....................................................................................

Mr. Marino (PA) ....................................................................................... X 


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ROLLCALL NO. 10—Continued 

Ayes Nays T2Present 

Mr. Gowdy (SC) ....................................................................................... X 

Mr. Amodei (NV) ...................................................................................... X 

Mr. Labrador (ID) .................................................................................... X 

Ms. Farenthold (TX) ................................................................................. X 

Mr. Holding (NC) ..................................................................................... X 

Mr. Collins (GA) ....................................................................................... X 

Mr. DeSantis (FL) .................................................................................... X 

[Vacant] ...................................................................................................

Mr. Conyers, Jr. (MI), Ranking Member .................................................. X 

Mr. Nadler (NY) ....................................................................................... X 

Mr. Scott (VA) .......................................................................................... X 

Mr. Watt (NC) .......................................................................................... X 

Ms. Lofgren (CA) .....................................................................................

Ms. Jackson Lee (TX) .............................................................................. X 

Mr. Cohen (TN) ........................................................................................ X 

Mr. Johnson (GA) .....................................................................................

Mr. Pierluisi (PR) ..................................................................................... X 

Ms. Chu (CA) ........................................................................................... X 

Mr. Deutch (FL) ....................................................................................... X 

Mr. Gutierrez (IL) .....................................................................................

Ms. Bass (CA) ......................................................................................... X 

Mr. Richmond (LA) ..................................................................................

Ms. DelBene (WA) .................................................................................... X 

Mr. Garcia (FL) ........................................................................................ X 

Mr. Jeffries (NY) ...................................................................................... X 

Total ...................................................................................... 17 14 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 982, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, June 7, 2013. 

Hon. BOB GOODLATTE, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) Act of 2013.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Martin von Gnechten, 

who can be reached at 226–2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 982—Furthering Asbestos Claim Transparency 

(FACT) Act of 2013. 

As ordered reported by the House Committee on the Judiciary 

on May 21, 2013. 

H.R. 982 would require trusts set up through a Chapter 11 bankruptcy reorganization caused by asbestos liabilities to submit quarterly reports to the bankruptcy court concerning the damage claims 

and payments made by the trust. Based on information provided by 

the Administrative Office of the U.S. Courts (AOUSC), CBO estimates that implementing H.R. 982 would have no significant impact on the Federal budget because the AOUSC would incur only 

minor costs to make that information publicly available. Enacting 

H.R. 982 would not affect direct spending or revenues; therefore, 

pay-as-you-go procedures do not apply. 

H.R. 982 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would impose no 

costs on state, local, or tribal governments. 

H.R. 982 would impose a private-sector mandate as defined in 

UMRA by requiring asbestos trusts to submit quarterly reports. According to studies by the Government Accountability Office (GAO) 

and the RAND Corporation, only a small number of asbestos trusts 

currently exist. Further, the GAO study indicates that the information to be submitted under the bill is already tracked by many of 

the asbestos trusts. Therefore, CBO expects that the incremental 

cost to comply with the reporting requirements in the bill would 

fall below the annual threshold established in UMRA for privatesector mandates ($150 million in 2013, adjusted annually for inflation). 

The CBO staff contacts for this estimate are Martin von 

Gnechten (for Federal costs) and Paige Piper/Bach (for the impact 

on the private sector). The estimate was approved by Theresa 

Gullo, Deputy Assistant Director for Budget Analysis. 


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Duplication of Federal Programs 

No provision of H.R. 982 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 982 specifically directs to be 

completed no specific rule makings within the meaning of 5 U.S.C. 

551. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 982 amends title 

11, United States Code, to require the publication and disclosure 

of certain data by trusts created in a chapter 11 plan pursuant to 

section 524 of that title. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 982 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Section 1. Short Title. Provides that the bill may be referred to 

as the ‘‘Furthering Asbestos Claim Transparency Act of 2013,’’ or 

‘‘FACT Act of 2013.’’ 

Section 2. Amendments. Adds to section 524(g) of the Bankruptcy 

Code a requirement that asbestos liability trusts publish quarterly 

public reports identifying claimants, amounts paid, and basis for 

paying claims on the court’s public docket. Further provides that 

trusts must comply with third-party discovery demands subject to 

third-party’s payment of reasonable discovery costs. 

Section 3. Effective Date; Application of Amendments. Sets the effective date of the Act as date of enactment. Provides that the 

amendments made by the act apply retroactively and prospectively. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

and existing law in which no change is proposed is shown in 

roman): 


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1Furthering Asbestos Claims Transparency Act: Hearing on H.R. 4369 Before the Subcomm. 

on Courts, Commercial and Admin. L. of the H. Comm. on the Judiciary, 112th Cong. 61–62 

(2012) (testimony of Charles S. Siegel, Waters & Kraus LLP). 

TITLE 11, UNITED STATES CODE 

* * * * * * * 

CHAPTER 5—CREDITORS, THE DEBTOR, AND THE 

ESTATE 

* * * * * * * 

SUBCHAPTER II—DEBTOR’S DUTIES AND BENEFITS 

* * * * * * * 

§ 524. Effect of discharge 

(a) * * * 

* * * * * * * 

(g)(1) * * * 

* * * * * * * 

(8) A trust described in paragraph (2) shall, subject to section 

107— 

(A) file with the bankruptcy court, not later than 60 days 

after the end of every quarter, a report that shall be made available on the court’s public docket and with respect to such quarter— 

(i) describes each demand the trust received from, including the name and exposure history of, a claimant and 

the basis for any payment from the trust made to such 

claimant; and 

(ii) does not include any confidential medical record or 

the claimant’s full social security number; and 

(B) upon written request, and subject to payment (demanded at the option of the trust) for any reasonable cost incurred by the trust to comply with such request, provide in a 

timely manner any information related to payment from, and 

demands for payment from, such trust, subject to appropriate 

protective orders, to any party to any action in law or equity if 

the subject of such action concerns liability for asbestos exposure. 

* * * * * * * 

Dissenting Views 

INTRODUCTION

H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) 

Act of 2013,’’ is a thoroughly flawed bill that blatantly strengthens 

protections for the very entities that exposed millions of 

unsuspecting Americans to the toxic effects of asbestos. The bill accomplishes this end by giving asbestos defendants ‘‘new rights and 

advantages to be used against asbestos victims in state court’’ and 

it would ‘‘add new burdens’’ to asbestos bankruptcy trusts that 

would severely cripple ‘‘their ability to operate and pay claims.’’ 1


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2Letter from Susan Vento, widow of Rep. Bruce Vento (D–MN), et al. to Chairman Bob Goodlatte (R–VA) of the H. Comm. on the Judiciary (May 20, 2013) (on file with H. Comm. on the 

Judiciary Democratic staff) [hereinafter Vento Letter]. 3 11 U.S.C. § 524(g)(2)(B)(i)(I) (2013). 

4See, e.g., Vento Letter. 5See, e.g., Supplemental letter from Douglas A. Campbell, counsel for various asbestos settlement trusts, to Chairman Bob Goodlatte (R–VA) of the H. Comm. on the Judiciary et al. (Mar. 

20, 2013) (on behalf of four asbestos settlement trusts) (on file with H. Comm. on the Judiciary 

Democratic staff); letter from Douglas A. Campbell, counsel for various asbestos settlement 

trusts, to Chairman Bob Goodlatte (R–VA) of the H. Comm. on the Judiciary et al. (Mar. 11, 

2013) (on behalf of four asbestos settlement trusts) (on file with H. Comm. on the Judiciary 

Democratic staff). 

Although the proponents of this legislation assert that it is intended to protect asbestos victims, not a single asbestos victim has 

expressed support for H.R. 982. For example, we heard from the 

widow of our former colleague Representative Bruce Vento (D–MN) 

who passed away from mesothelioma. She emphatically stated that 

H.R. 982 ‘‘does not do a single thing’’ to help asbestos victims and 

their families.2

H.R. 982 disrupts a reasonably well-functioning asbestos victim 

compensation process. Entities facing overwhelming mass tort liability for causing asbestos injuries may shed these liabilities and 

financially regain their stability in exchange for funding trusts established under chapter 11 of the Bankruptcy Code to pay the 

claims of their victims, under certain circumstances.3 H.R. 982, 

however, interferes with this longstanding process in two ways. 

The FACT Act would require these trusts to: (1) file a publicly 

available quarterly report with the bankruptcy court that would include personally identifying information about such claimants, including their names, exposure history, and basis for any payment 

made to them; and (2) provide any information related to payment 

from and demands for payment from such trust to any party to any 

action in law or equity concerning liability for asbestos exposure. 

The bill’s sponsors contend that these changes to the asbestos 

claims process are necessary to curb fraud in the system, but there 

is scant evidence that such a problem even exists. In fact, the multiple hearings held by this Committee have failed to identify any 

academic or other objective study demonstrating endemic fraud in 

the asbestos trust claims process. With the knowledge that there 

is no empirical evidence of fraud in the system, we are led to conclude that this measure is nothing more than an end run by asbestos defendants around the discovery process available under nonbankruptcy law. 

The truth is that this legislation is a solution in search of a problem that will benefit the asbestos defendants and will re-victimize 

asbestos victims and their families by invading their privacy and 

slowing the claims payment process. Moreover, this legislation is 

fundamentally inequitable as it mandates disclosure by the trusts, 

but does not require solvent defendant companies to disclose information about the injurious effects of the products they manufactured or hazardous working conditions they imposed on their employees. Finally, the bill will divert critical funds and further decrease compensation to asbestos victims by forcing bankruptcy 

trusts to prepare burdensome reports. 

Not surprisingly, this measure is opposed by various asbestos 

victims,4 asbestos trusts,5 and legal representatives for future asVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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6See, e.g., Letter from Michael J. Crames, future claimants’ representative for Owens Corning/ 

Fibreboard Asbestos Personal Injury Trust et al., to Chairman Bob Goodlatte (R–VA) of the H. 

Comm. on the Judiciary et al. (Mar. 11, 2013) (signed by six future claims representatives) (on 

file with H. Comm. on the Judiciary Democratic staff). 7See, e.g., Letter from William Samuels, Director, Government Affairs Dep’t, AFL–CIO, to 

Members of the House of Representatives (June 25, 2013) (expressing the view that ‘‘the bill 

is simply an effort by asbestos manufacturers who still are subject to asbestos lawsuits to avoid 

liability for diseases caused by their products’’) (on file with H. Comm. on the Judiciary Democratic staff). 8See, e.g., Letter from Nan Aron, Alliance for Justice,, et al., to Chairman Spencer Bachus 

(R–AL) and Ranking Member Steve Cohen (D–TN) of the Subcomm. on Regulatory Reform, 

Commercial and Antitrust Law of the H. Comm. on the Judiciary (Mar. 12, 2013) (on file with 

H. Comm. on the Judiciary Democratic staff). 9 11 U.S.C. § 107(c)(1) (2013). 

10 Asbestos Litigation Crisis in Federal and State Courts: Hearings Before the Subcomm. on 

Intellectual Property and Judicial Admin. of the H. Comm. on the Judiciary, 102d Cong. 1 (1975) 

(opening statement of Chairman William J. Hughes) [hereinafter Asbestos Litigation Hearings]. 

bestos personal injury claimants.6 In addition, various organizations representing workers and consumers have registered their 

strong opposition, including the AFL–CIO,7 Public Citizen, U.S. 

Public Interest Research Group, the Environmental Working 

Group, the Alliance for Justice, and Protect Missouri Workers.8

For these reasons and those described below, we respectfully dissent and urge our colleagues to reject this seriously flawed bill. 

DESCRIPTION AND BACKGROUND

DESCRIPTION

H.R. 982 amends section 524(g) of the Bankruptcy Code in two 

significant respects. First, it requires a trust to file with the bankruptcy court not later than 60 days after the end of every quarter 

a report that must be made available on the court’s public docket. 

The report must describe each demand the trust received from a 

claimant, including the claimant’s name and exposure history as 

well as the basis for any payment from the trust made to such 

claimant. The report may not include any confidential medical 

record or the claimant’s full Social Security number. Second, the 

measure requires the trust, upon written request and subject to 

payment for any reasonable costs incurred in responding to such 

request at the option of the trust, to provide in a timely manner 

any information related to payments and demands for payment 

from the trust, subject to appropriate protective orders, to any 

party to any action in law or equity if the subject of such action 

concerns liability for asbestos exposure. The bill’s reporting and information disclosure requirements are subject to Bankruptcy Code 

section 107, which authorizes the bankruptcy court, for cause, to 

restrict public access to any document filed in a bankruptcy case 

if the court finds that the disclosure of the information contained 

in such document would create an ‘‘undue risk of identity theft or 

other unlawful injury.’’ 9

BACKGROUND

A. The Lethal Effects of Asbestos 

Asbestos is a fibrous material, extracted from the earth, that has 

been used for centuries because of its tensile strength and its heat 

resistence.10 The modern industrial use of asbestos began around 

1860, and the world’s annual use of raw asbestos increased from 

some 500,000 tons to 2.5 million tons between the years 1934 and 


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11 Id. 12 U.S. Government Accountability Office, Report on Asbestos Injury Compensation: The Role 

and Administration of Asbestos Trusts, GAO–11–819, at at 6 (Sept. 2011) [hereinafter GAO Report]. 13 Id. 14 Id. 15The Department of Labor provided this estimate. Asbestos Litigation Hearings at 2. 16 Report of the Judicial Conference of the U.S. Courts Ad Hoc Committee on Asbestos Litigation, at 2 (Mar. 1991). 17Letter of transmittal dated July 21, 1983, Chronic Hazards Advisory Panel on Asbestos, Report to the U.S. Consumer Product Safety Commission (July 1983). 18 U.S. Environmental Protection Agency, EPA Study of Asbestos-Containing Materials in 

Public Buildings: A Report to Congress, at 5 (Feb. 1988). 19See EPA Asbestos Ban and Phasedown Regulations, 40 C.F.R. 763.160 et seq. (1989). 20 Corrosion Proof Fittings v. Environmental Protection Agency, 947 F.2d 1201 (5th Cir. 1991). 21 Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (5th Cir. 1973). 22GAO Report at 8. 

1964.11 Asbestos has been widely used as an insulator and as a fire 

retardant by the construction and ship-building industries. Examples of asbestos-containing products include attic and wall insulation, roofing shingles, ceiling and vinyl floor tiles, paper and cement products, and ‘friction products such as automobile clutch, 

brake and transmission parts.’’ 12

Asbestos fibers, when released into the atmosphere and inhaled 

by humans, may cause various diseases, including asbestosis (a 

clogging and scarring of the lungs that can produce a reduced 

breathing capacity) and mesothelioma (a cancer of the lining of the 

chest and abdomen that is typically fatal).13 Lung cancer and other 

diseases have also been associated with the inhalation of asbestos 

fibers.14

Although a link between asbestos and lung cancer was first reported in 1935, an estimated 21 million Americans were exposed to 

asbestos over the ensuing years,15 some of whom began to manifest 

injuries during the 1960’s.16 During the 1970’s, asbestos became 

the subject of significant regulation and was banned or declared 

hazardous by numerous federal agencies. For example, the Occupational Safety and Health Administration in 1986 stated that it was 

‘‘aware of no instance in which exposure to a toxic substance more 

clearly demonstrated detrimental health effects on humans than 

has asbestos exposure. The diseases caused by asbestos exposure 

are life-threatening or disabling.’’ 17 The Environmental Protection 

Agency (EPA) in 1988 published a study of asbestos in public 

schools and found that its presence was ‘‘extremely hazardous.’’ 18

In 1989, the EPA promulgated a regulation banning the manufacture, processing, importation, and distribution of materials or products containing asbestos.19 The rule, however, was later overturned.20

In 1973, the Fifth Circuit rendered the first appellate opinion upholding a product liability judgment against a manufacturer of asbestos-containing products.21 As the Government Accountability Office (GAO) reported, ‘‘In the course of the first successful personal 

injury lawsuits against asbestos manufacturers, plaintiffs’ attorneys introduced evidence that these manufacturers had known but 

concealed information about the dangers of asbestos exposure or 

that such dangers were reasonably foreseeable.’’ 22 In the nearly 

four decades since, litigation over personal injuries resulting from 

exposure to asbestos has resulted in ‘‘hundreds of thousands of 

claims filed and billions of dollars in compensation paid,’’ according 


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23Lloyd Dixon et al., Rand Institute for Civil Justice, Report: Asbestos Bankruptcy Trusts— 

An Overview of Trust Structure and Activity with Detailed Reports on the Largest Trusts, at 

xi (2010). 24GAO Report at 1. 25Kane v. Johns-Manville Corp., 843 F.2d 636 (2nd Cir. 1988). 26 11 U.S.C. § 524(g)(2)(B)(ii) (2013). 27The provision defines ‘‘demand’’ as a demand for payment, present or future, that— 

(A) was not a claim during the proceedings leading to the confirmation of a plan of reorganization; 

(B) arises out of the same or similar conduct or events that gave rise to the claims addressed by the injunction issued under paragraph (1); and 

(C) pursuant to the plan, is to be paid by a trust described in paragraph (2)(B)(I). 

11 U.S.C. § 524(g)(5) (2013). 28 11 U.S.C. § 524(g)(1)(B) (2013). 29 11 U.S.C. § 524(g)(2)(B)(i) (2013). 30 11 U.S.C. § 524(g)(2)(B) (2013). 31GAO Report at 13. 32 Id. at 3. 33 Id. at 15. 34 Id. 

to the Rand Institute for Civil Justice.23 ‘‘Asbestos litigation,’’ according to the GAO, ‘‘has been the longest-running mass tort litigation in U.S. history.’’ 24

B. Overview of Asbestos Bankruptcy Trusts 

In 1994, Congress amended the Bankruptcy Code to authorize 

the imposition of a channeling injunction in chapter 11 cases involving asbestos claims. Codified as section 524(g), this provision 

allows a debtor, under certain circumstances, to shift its asbestos 

liabilities to a trust fund. Modeled on the injunction issued in the 

Johns-Manville bankruptcy case,25 section 524(g) authorizes a 

court in a chapter 11 case, after making certain findings,26 to issue 

an injunction preventing any entity from ‘‘taking legal action for 

the purpose of directly or indirectly collecting, recovering, or receiving payment’’ for any claim or demand 27 that is to be paid in full 

or in part by a trust established under a confirmed plan of reorganization.28 Funding for the trust is derived by the debtor’s securities and by the obligation of the debtor to make future payments, 

including dividends.29 Upon confirmation, the trust assumes all of 

the debtor’s liabilities for personal injury, wrongful death, or property damages allegedly caused by the presence or exposure to asbestos or asbestos-containing products.30 As the GAO observes, 

‘‘neither the courts nor the U.S. Trustees have any specific statutory or other requirements to oversee a trust’s administration.’’ 31

Once operational, the trust implements ‘‘a nonadversarial administrative process—independent of the court system—to review 

claimants’ occupational and medical histories before awarding compensation.’’ 32 The trusts are privately managed and typically consist of a trustee, a trust advisory committee, and a future claims 

representative.33 The GAO explains: 

Trustees manage the daily operations of the trusts, including managing the trusts’ investments, hiring and supervising support staff and advisors, filing taxes, and submitting annual reports to the bankruptcy court, as required 

by the trusts’ [trust agreement]. The trustees are to manage the trust for the sole benefit of the present and future 

claimant beneficiaries.34


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35 Id. at 3. 36 Id. at 17. 37 Id. at 21. 38 Id. 39 Id. at 16. 40 Id. at 15. 41See, e.g., Unofficial Tr. of Markup of H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) Act of 2013,’’ by the H. Comm. on the Judiciary, at 5 (May 21, 2013) (remarks 

of Chairman Bob Goodlatte, H. Comm. on the Judiciary) [hereinafter Full Committee Markup 

Tr.]. 42See, e.g., Editorial, St. Francis of Asbestos, WALL ST. J., June 14, 2004, at A14 (recommending that the House and Senate ‘‘bankruptcy subcommittees . . . [conduct] a full and public 

investigation of the rigged asbestos mess’’); The Latest Asbestos Scam—The Lawyers Are Now 

Rigging the Bankruptcy Process, WALL ST. J., June 1, 2004, at A16 (observing that the ‘latest 

asbestos scandal is threatening the integrity of the judicial system itself’). 43The Administration of Large Business Bankruptcy Reorganizations: Has Competition for Big 

Cases Corrupted the Bankruptcy System?: Hearing Before the Subcomm. on Commercial and 

Admin. Law of the H. Comm. on the Judiciary, 108th Cong. (2004). 44See, e.g., Dionne Searcey & Rob Barry, As Asbestos Claims Rise, So Do Worries About 

Fraud, WALL ST. J., Mar. 11, 2013, at A1. 45 Id. 

Currently, there are 60 asbestos bankruptcy trusts in operation 

with a combined total of $36.8 billion in assets as of 2011.35

Each trust establishes its own process by which claims are assessed and paid. Claims that meet the requisite criteria are paid 

a percentage of the scheduled value based on the nature of the asserted injury. The payment ratio varies among the trusts based on 

the availability of assets and anticipated present and future 

claims.36 According to the GAO, the range of payment ranges from 

1.1 percent to 100 percent for certain diseases, such as mesothelioma or asbestosis.37 The GAO found that the median payment 

percentage among the various trusts was 25 percent.38 The GAO 

reports that ‘‘[s]ince the establishment of the first trust in 1988 

through 2010, available data indicate that asbestos trusts have 

paid about 3.3 million claims valued at about $17.5 billion.’’ 39 In 

addition to seeking compensation from an asbestos bankruptcy 

trust, asbestos claimants may also seek compensation from liable 

companies that are not in bankruptcy through the tort system.40

CONCERNS WITH H.R. 982

I. H.R. 982 IS NOT NECESSARY GIVEN THE ABSENCE OF ANY

EMPIRICAL EVIDENCE OF SYSTEMIC FRAUD

In order to justify the onerous new requirements the bill would 

impose on the asbestos trusts and the victims they serve, proponents of H.R. 982 allege that ‘‘there is growing evidence of fraud 

and abuse in the asbestos trust compensation system.’’ 41 In truth, 

however, there have been only isolated reports of fraudulent claims 

over the years and many of those instances were attributed to 

human error. For example, reports surfaced in 2004 regarding a series of incidences of abusive claim practices 42 and the Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

(Subcommittee) conducted an oversight hearing into that issue as 

well as others presented with respect to the treatment of mass 

torts in bankruptcy cases.43 In addition, the Wall Street Journal recently published an article purporting to document ‘‘numerous apparent anomalies’’ regarding various asbestos claims.44 A close 

reading of this article, however, reveals that these instances were 

isolated or could be explained.45 As noted in her response to this 

article, Joan Claybrook, president of Public Citizen from 1982 to 


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46 Joan Claybrook, Fraud Made the Asbestos Illness Situation Much Worse, Letter to the Editor, WALL ST. J., May 19, 2013, at A16. 47Telephone interview with William Jenkins, Director, Homeland Security and Justice Issues, 

et al., U.S. Government Accountability Office (May 7, 2012); GAO REPORT at 23. 48GAO Report at 18. 49 Id. 50 Id. at 23. 51 Id. 52 Id. 

2009 and head of the National Highway Traffic Safety Administration from 1977 to 1981, noted: 

There is no evidence to support assertions of significant 

fraud in claims by asbestos victims. Human error in data 

entry is not fraud. Out of millions of claims filed at the 

company asbestos trusts, the Journal’s extensive investigation identified an error and anomaly rate of only 0.35%, 

much of that due to mistakes by the trusts, not the victims.46

Likewise, the GAO is not aware of any subsequent reports of endemic fraud since 2004 with respect to asbestos claims and it did 

not uncover any evidence of overt fraud during its examination of 

asbestos trusts last year.47 Instead, the GAO has detailed an already robust set of procedures that a claimant must follow to establish entitlement to compensation. The claimant completes a claim 

form supported with documented evidence of exposure to asbestos 

products. Such evidence may consist of the claimant’s work history, 

employer records, Social Security records, and deposition testimony 

taken during any litigation.48 The claimant must also submit medical records ‘‘sufficient to support a diagnosis for the specific disease being claimed or, if applicable, a copy of a death certificate.’’ 49

In addition, 98 percent of the 52 trusts that the GAO reviewed required a claims audit program to be conducted. Based on interviews held with representatives from 11 trusts, GAO found that all 

the trusts ‘‘incorporate quality assurance measures into their intake, evaluation, and payment processes.’’ 50 GAO also found that 

‘‘each trust is committed to ensuring that no fraudulent claims are 

paid by the trust, which aligns with their goals of preserving assets 

for future claimants.’’ 51 It is noteworthy that even with this 

heightened scrutiny, none of the trusts ‘‘indicated that these audits 

had identified cases of fraud.’’ 52

To draw attention to the fact that the current asbestos trust 

claims process generally has adequate fraud detection systems in 

place, Subcommittee Ranking Member Steve Cohen (D–TN) offered 

an amendment that would have excluded trusts that have a claims 

audit program from the bill. This thoughtful amendment, however, 

was defeated by a vote of 13 to 19. 

With the knowledge that there is no empirical evidence of fraud 

in the system, we are led to conclude that this measure is nothing 

more than an attempt to improperly allow asbestos defendants to 

circumvent state and federal discovery procedures. As the Minority 

witness explained during the hearing on H.R. 982, ‘‘Solvent asbestos defendants remaining in the tort system are currently able to 

learn all information relevant to a claim against them, including 

information about a victim’s trust claims, under state discovery 


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53Furthering Asbestos Claim Transparency (FACT) Act of 2013: Hearing on H.R. 982 Before 

the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the 

Judiciary, 113 Cong. (2013) (prepared statement of Elihu Inselbuch). 

rules.’’ 53 All information that would be relevant to claims against 

asbestos defendants—including information related to a victim’s 

trust claims—can be obtained using normal discovery tools available under state law, like interrogatories, document requests, and 

depositions. Nonetheless, the bill’s proponents offer no explanation 

as to why the bill’s potentially costly and burdensome information 

request provision is necessary or why federal law should subvert 

state law discovery processes. 

In response to this particular flaw in the bill, Representative 

Hakeem Jeffries (D–NY) offered an amendment that would have 

required the trust to provide information relating to payments 

made by the trust and demands for such payment to any party to 

an action concerning asbestos liability exposure only if such party 

cannot otherwise obtain such information under applicable nonbankruptcy law. The amendment further provided that the information must relate to a trust claimant who is also a party to such 

action against the requesting party. Representative Jeffries’ 

amendment, however, failed by a vote of 13 to 18. 

Representative Joe Garcia (D–FL) also offered an amendment 

that would have prohibited a party that has been found liable in 

court for asbestos-related harm to a plaintiff from seeking information about that plaintiff through the bill’s disclosure process. Essentially, this amendment would have prohibited an asbestos defendant who has already been found liable in court for causing 

harm to a plaintiff from using this bill to seek information that was 

already available to it in discovery. This amendment would have 

added a little more balance to what is a very unbalanced bill. Defendants that have already had their day in court and lost should 

not be allowed to then use this bill as a way to simply harass asbestos plaintiffs they have already harmed. Notwithstanding the 

clearly equitable bona fides of this amendment, it failed by a vote 

of 11 to 18. 

II. H.R. 982 WOULD HARM ASBESTOS VICTIMS IN MULTIPLE WAYS

A. The Bill’s Reporting and Disclosure Requirements Constitute an 

Assault on Asbestos Victims’ Privacy Interests 

H.R. 982’s mandatory reporting and disclosure requirements 

would threaten asbestos victims’ privacy when they seek payment 

for injuries from an asbestos bankruptcy trust. Specifically, the bill 

requires such information to be made part of the bankruptcy 

court’s case docket, which is easily accessible through the Internet 

with the payment of a nominal fee. As a result, information concerning claimants’ sensitive personal information—including their 

names and exposure histories—would be irretrievably released into 

the public domain. 

It is readily apparent that these reports would provide a treasure 

trove of data that could be accessed by insurance companies, prospective employers, lenders, and data collectors who could then use 

such information for purposes having absolutely nothing to do with 

compensation for asbestos exposure and that could be used to the 

detriment of asbestos victims. In effect, this bill would allow 


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54 Vento Letter. 55GAO Report at 1, 24. 56 Id. at 17. 57 Id. at 4, note 7. 58 Id. at 24–25. 59 Id. at 26. 60 Id. at 30. 61 Id. 62 Id. at 29. 63 Id. 64Memorandum from Legal Representatives for Future Asbestos Personal Injury Claimants 

with Respect to Certain Asbestos Settlement Trusts to Prof. Troy McKenzie, Advisory Comm. 

on Bankruptcy Rules of the Judicial Conference of the United States, 2 (Aug. 10, 2011) (on file 

with the H. Comm. on the Judiciary Democratic staff). 

unsuspecting asbestos victims to be further victimized, all in the 

name of helping those who harmed these victims in the first place. 

As the widow of our former colleague, Representative Bruce Vento 

(D–MN), who died of mesothelioma in 2000, warned, ‘‘The information on this public registry could be used to deny employment, 

credit, and health, life, and disability insurance. We are also concerned that victims would be more vulnerable to identity thieves, 

con men, and other types of predators.’’ 54

It is notable that trusts already generally provide annual financial reports to the bankruptcy court, but the information disclosed 

typically consists of the total number of claims paid and the aggregate value of these claims, thus protecting claimants’ privacy.55

Some reports are publically available, while others are filed under 

seal with the bankruptcy court ‘‘for reasons deemed appropriate by 

the court.’’ 56 Such reasons include protecting the interests of the 

reorganized company and its competitiveness.57 In fact, of the 47 

trust annual reports that the GAO reviewed, only one reported the 

amount paid to each individual and listed these individuals’ 

names.58 Nevertheless, 65 percent of the trusts reviewed by GAO 

(33 out of 52 trusts) specifically provide that ‘‘claimant information 

submitted to the trust for purposes of obtaining compensation is 

confidential and should be treated as a settlement negotiation.’’ 59

Proponents of more disclosure argue that it may reduce the ‘‘asbestos-related litigation burden on the remaining solvent defendants by demonstrating that the trusts have increased claimants’ 

overall compensation beyond the amount justified in relation to the 

harm caused.’’ 60 They also assert that the current system’s lack of 

transparency ‘‘could enable plaintiffs to file contradictory claims to 

different trusts while also pursuing recovery through the tort system.’’ 61

These arguments lack any merit. As the GAO observed, ‘‘parties 

in the tort system are not required to disclose settlement negotiation or agreement information outside of the subpoena process’’ and 

that ‘‘trusts are analogous to any other settling party and related 

negotiations and payments are privileged.’’ 62 Equally important, 

the GAO noted that ‘‘all of the potentially relevant information in 

the trusts’ possession is available to the defense through pretrial 

discovery.’’ 63 Trust representatives are also very concerned about 

the ‘‘privacy rights of hundreds of thousands of individuals who did 

nothing except successfully seek compensation from a trust.’’ 64

In attempt to protect asbestos victims from this unwarranted invasion of privacy, Ranking Member John Conyers, Jr. (D–MI) offered an amendment specifying that the quarterly reports required 

to be filed under the bill contain only aggregate information. In 


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65Pub. L. No. 104–191, 110 Stat. 1936 (1996). 66 U.S. Dep’t of Health & Human Services, Health Information Privacy—The Privacy Rule, 

available at http://www.hhs.gov/ocr/privacy/hipaa/administrative/privacyrule/index.html (last visited May 23, 2013). 

support of his amendment, Representative Conyers argued that the 

bill would, in effect, subject unsuspecting asbestos victims to possible future abuse. The amendment also struck the bill’s burdensome discovery requirement. This amendment would have ensured 

victims’ privacy by not making individualized claimant information 

public. It also would have ensured that trusts could focus their resources on their primary mission of assuring fair compensation for 

asbestos victims, rather than participating in the discovery process 

for outside lawsuits. Notwithstanding these benefits, this amendment failed by a party-line vote of 15 to 16. 

Representative Bobby Scott (D–VA) offered an amendment that 

would have required the trust to: (1) not identify the names of asbestos victims in the quarterly report; and (2) treat any information contained in the report pursuant to the privacy protections set 

forth in the Health Insurance Portability and Accountability Act 

(HIPAA).65 This amendment would have simply ensured that 

trusts comply with the HIPAA Privacy Rule. This Rule, according 

to the U.S. Department of Health and Human Services, was promulgated to establish: 

national standards to protect individuals’ medical records 

and other personal health information and applies to 

health plans, health care clearinghouses, and those health 

care providers that conduct certain health care transactions electronically. The Rule requires appropriate safeguards to protect the privacy of personal health information, and sets limits and conditions on the uses and disclosures that may be made of such information without patient authorization. The Rule also gives patients rights 

over their health information, including rights to examine 

and obtain a copy of their health records, and to request 

corrections.66

Although asbestos victims who seek compensation for their injuries 

should be accorded at least the same privacy protections that are 

given to every other patient, this amendment failed by a vote of 13 

to 19. 

In another attempt to address the bill’s privacy flaws, Representative Hank Johnson (D–GA) offered two further amendments that 

were considered en bloc. One amendment would have required the 

quarterly reports required by the bill to be protected from public 

disclosure. Access to such reports, pursuant to the amendment, 

would have been restricted to a party that is a defendant in an action concerning asbestos exposure, with the access limited to the 

information in the report that was relevant to the plaintiff in such 

action, and only when such information is relevant to such action. 

In sum, this amendment would have ensured that the privacy interests of asbestos victims are respected by restricting access to the 

information contained in the reports to only those parties that have 

a ‘‘need to know.’’ 

Representative Johnson’s other amendment would have ensured 

that personally identifiable information about an asbestos victim 


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67Press Release, Federal Trade Commission, FTC Releases Top 10 Complaint Categories for 

2012—Identity Theft Tops List for 13th Consecutive Year in Report of National Consumer Complaints (Feb. 26, 2013), available at http://ftc.gov/opa/2013/02/sentineltop.shtm (last visited May 

23, 2013). 68See text accompanying note 54. 69 Unofficial Tr. of Hearing on H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) 

Act of 2013,’’ by the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the 

H. Comm. on the Judiciary, 113th Cong. 2 (Mar. 13, 2013) (statement of Chairman Spencer 

Bachus, Subcomm. on Regulatory Reform, Commercial and Antitrust Law). 70See, e.g., Vento Letter. 71See, e.g., Unofficial Tr. of Hearing on H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) Act of 2013,’’ by the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th Cong. 2 (Mar. 13, 2013). 72See, e.g., Furthering Asbestos Claims Transparency Act: Hearing on H.R. 4369 Before the 

Subcomm. on Courts, Commercial and Admin. L. of the H. Comm. on the Judiciary, 112th Cong. 

(2012); How Fraud and Abuse in the Asbestos Compensation System Affect Victims, Jobs, the 

Economy, and the Legal System: Hearing Before the Subcomm. on the Constitution of the H. 

Comm. on the Judiciary, 112th Cong. (2011). 73 Unofficial Tr. of Markup of H.R. 982, the ‘‘Furthering Asbestos Claim Transparency (FACT) 

Act of 2013,’’ by the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the 

H. Comm. on the Judiciary, 113th Cong. 21, 23 (Mar. 20, 2013) [hereinafter Subcommittee 

Markup Tr.]. 

claimant is protected from disclosure. It included within the 

amendment’s definition of ‘‘personally identifiable information’’ any 

information pertaining to the claimant’s health and finances. The 

unfettered release of personally identifiable information facilitates 

identity theft. According to the Federal Trade Commission (FTC), 

identity theft is one of the top complaints received by the agency. 

In fact, 18 percent of complaints that the FTC received in 2012 

were related to identity theft.67 As previously noted, identity theft 

is a serious concern of asbestos victims.68 These amendments, however, failed by a vote of 13 to 18. 

B. Asbestos Victims Vigorously Oppose this Legislation 

The proponents of this legislation assert that it is intended to assist asbestos victims. For example, the Subcommitte Chairman described the purpose of the bill as follows: 

We are here for one purpose and one purpose only, and 

that is to protect those victims of asbestos exposure. That 

is our only motivation. We are not here to protect companies, we are not here to protect the defense bar, plaintiffs’ 

bar. We are here for the victims, and we are here to protect their rights and to ensure that justice is served. We 

are not here to protect those who are not victims.69

Nevertheless, we are unaware of a single asbestos victim who 

supports H.R. 982. In fact, we received letters from asbestos victims in vigorous opposition to this bill.70 It is notable, for instance, 

that the Majority failed to call an asbestos victim to testify at any 

of the hearings on this legislation in either this Congress 71 or in 

the last Congress when a similar measure was considered.72

To his credit, the Subcommittee Chairman suspended the markup of the bill by the Subcommittee on March 20, 2013 to give certain asbestos victims ‘‘the right to have their testimony recorded’’ 

and to allow ‘‘members to ask them questions.’’ 73 The process ultimately offered to the victims, consisting of an informal information 

session that would have been closed to the public and neither transcribed nor recorded, was rejected by the victims because they 


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74Letter from Susan Vento et al., to Chairman Spencer Bachus (R–AL) of the Subcomm. on 

Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary (Apr. 5, 

2013) (on file with H. Comm. on the Judiciary Democratic staff). 75 Id. 76Military.com, Asbestos and the Military, History, Exposure & Assistance, available at http:// 

www.military.com/benefits/veteran-benefits/asbestos-and-the-military-history-exposure-assistance.html (last visited May 23, 2013). 77 Id. 78 It should be noted that shipbuilders and dockworkers over the years have been extensively 

exposed to asbestos. For example, it has been reported that ‘‘[s]hipbuilding in World War II is 

a significant aetiology of the malignancies caused by asbestos.’’ John Hedly-Whyte & Deborah 

R. Milamed, Asbestos and Ship-Building: Fatal Consequences, 77(3) ULSTER MEDICAL J. 191 

(Sept. 2008), available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2604477/. 

Continued 

rightly deemed this process to be woefully deficient.74 As these victims observed: 

Instead of a public hearing as originally promised, we 

were invited to participate in an informal and private ‘‘information session’’ that would be closed off to the public 

and everyone else, except subcommittee members and 

their staff. We were told that this would be a closed door 

‘‘conversation’’ that would not be recorded or become part 

of the official record of the legislation. This was insulting, 

and disturbingly ironic for a bill with the word ‘‘transparency’’ in its title. 

We may not be Washington insiders, but we know the difference between being official witnesses and being treated as 

invisible people who need to be hidden behind closed doors and 

then forgotten. We rejected this offer because we felt it was not 

a serious effort to ensure that our views and those of other asbestos victims—who would be most affected by this one-sided 

legislation—were heard and considered before the bill moves 

forward.75

C. H.R. 982 Will Be Particularly Harmful to Veterans 

Although millions of unsuspecting Americans have been exposed 

to asbestos, there are certain populations who had greater levels of 

exposure as the result of their work. For example, members of the 

Armed Forces of the United States have been disproportionately affected by asbestos. Even though veterans make up only eight percent of the population, they comprise 30 percent of all mesothelioma deaths.76 Military.com, the largest military and veteran 

membership organization in the United States, explains: 

Virtually every ship commissioned by the United States 

Navy between 1930 and about 1970 contained several tons 

of asbestos insulation in the engine room, along the miles 

of pipe aboard ship and in the walls and doors that required fireproofing. The sailors that manned these ships 

and the men who repaired them in Navy shipyards were 

prime candidates for asbestos exposure, a fact borne out by 

the disease statistics.77

In response to the special concerns presented by servicemembers 

and asbestos exposure, Representative Scott offered an amendment 

that would have exempted claimants who have or who are currently serving in the Armed Forces of the United States from the 

bill’s disclosure requirements.78 The amendment, however, failed 

by a vote of 14 to 15. 


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According to the White Lung Association: 

During World War II a new Liberty Ship hit the water in Baltimore every 37 hours 

and a few hundred miles South, in Hampton Roads Virginia, three ships hit the water 

each day. Trucks and ships delivered thousands of pounds of asbestos and asbestos 

products to the shipyards. . . . Workers in all trades breathed the asbestos used by 

insulators, boiler mechanics, carpenters, machinists, painters and joiners. 

James Fite, U.S. Shipyards: A History of Massive Asbestos Exposure and Disease, World Asbestos Report (2004), available at http://worldasbestosreport.org/conferences/gac/gac2004/wsl 

Hl2le.php. 79Full Committee Markup Tr. at 137. 80 Id. at 31. 81The Americans with Disabilities Act of 1990, Pub. L. No. 101–336, 104 Stat. 327 (1990), 

was subsequently amended by the ADA Amendments Act of 2008, Pub. L. No. 110–325, 122 

Stat. 3553 (2008) (codified at 42 U.S.C. §§ 12101 et seq. (2013)). 

D. H.R. 982 Heightens the Risk of More Discrimination Against 

Victims 

H.R. 982 will make asbestos victims more vulnerable to employment discrimination by making their disease status a matter of 

public record. Both Ranking Member Conyers and Representative 

Johnson raised serious concerns that current and potential employers could use the information required to be disclosed about asbestos victim claimants to engage in employment discrimination. In 

response, Representative Farenthold argued that the ‘‘American 

[sic] Disabilities Act would protect folks with the jobs.’’ 79 He continued: 

They talk about employers using this information. There is 

[sic] volumes of existing law. The Americans with Disabilities Act, for instance, would prohibit discrimination based 

on the information disclosed in here.80

While we would hope that Representative Farenthold’s analysis 

is correct, it is not clear that this would prove to be the case under 

the Americans with Disabilities Act (ADA).81 To begin with, these 

victims would face potential problems with proof. How, for example, would an applicant or employee ever be able to prove that an 

employer had accessed and relied on the information in the database? 

Even if this problem of proof could be overcome, the applicant or 

employee would then have to prove that he or she was an individual with a ‘‘disability,’’ as defined in the ADA, to obtain its protection from discrimination. The information in the database concerns exposure to asbestos, while the ADA protects individuals who 

have, had, or are regarded as having physical or mental impairments. It is not clear how, or whether, mere exposure to asbestos 

would qualify as an impairment or being regarded as having an impairment, thereby creating the risk that individuals could face discrimination based on their prospective or current employer’s knowledge of their exposure to asbestos outside the ADA’s protection. 

While we believe that a court could, and should, find that reliance on exposure to asbestos in making an adverse employment decision is unlawful under the ADA, we have very real concerns that 

this would not be the case based on our experience under this law. 

For example, following the enactment of the ADA in 1990, employers and the courts seized on the Act’s definition of disability as a 

means of denying protection to individuals with disabilities that 

Congress unquestionably intended to protect, such as workers with 

diabetes, multiple sclerosis, HIV, and similar limiting impairments. 


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82 ADA Amendments Act of 2008, Pub. L. No. 110–325, 122 Stat. 3553 (2008). 83Pub. L. No. 110–233, 122 Stat. 881 (2008). 

To remedy this misinterpretation of the law, Congress, in 2008, 

had to amend the ADA to ensure sufficient coverage.82

In addition, our experience with a closely analogous problem— 

discrimination by employers and others based on genetic information, i.e., a marker for a disease or impairment that has not yet developed—provides additional cause to question whether the ADA 

would be interpreted to prohibit discrimination based on information about exposure to asbestos. With regard to genetic information, Congress was sufficiently concerned that the ADA might not 

reach discrimination on this basis and therefore passed the Genetic 

Information Nondiscrimination Act of 2008.83 Congress understood 

that, while it was possible that the courts might interpret the ADA 

to prohibit discrimination based on genetic information, there also 

was a significant risk that they could fail to do so. 

Thus, while we again would hope that the ADA would protect individuals from discrimination based on information revealing exposure to asbestos, protection under current law is too uncertain to 

risk. 

III. H.R. 982 IS FUNDAMENTALLY INEQUITABLE BECAUSE IT REQUIRES

DISCLOSURE BY THE TRUSTS, BUT DOES NOT REQUIRE SOLVENT DEFENDANT COMPANIES TO DISCLOSE THEIR CONFIDENTIAL SETTLEMENT AGREEMENTS

H.R. 982 is fundamentally inequitable because it imposes additional burdens on asbestos bankruptcy trusts while easing the process by which solvent defendant companies can obtain discovery. 

This is particularly galling given the history of asbestos manufacturers in affirmatively concealing the dangers of their products 

from the public. 

Many defendant companies insist on confidentiality agreements 

before entering into settlement agreements specifically in order to 

prevent evidence of their wrongdoing from becoming public. More 

importantly, because of the secrecy of these settlements, other people who have been injured have no way of gaining important information about their exposure, their illnesses, or the settled liability 

of the companies that made them sick. Information about the concealment of wrongdoing never becomes public, and the people who 

have suffered have no way of knowing about that wrongdoing or its 

extent. Governmental agencies that are charged with protecting 

public health—whether in the workplace or in the home—are deprived of the information they need to enforce the laws Congress 

has passed. 

To highlight the problem of H.R. 982’s inequitable disclosure obligations, Representative Jerrold Nadler (D–NY) offered an amendment requiring a party that requests information from a bankruptcy asbestos trust to meet certain criteria. Under the amendment, such a party would have been required to agree to disclose 

information relevant to such action that pertains to the protection 

of public health or safety to any other person or to any federal or 

state agency with authority to enforce laws regulating an activity 

relating to such information upon request of such party or agency. 

The goal of this amendment was to ensure that the transparency 


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84GAO Report at 27. 85Legal Representatives Memorandum at 2. 

that H.R. 982’s proponents demand from the victims of the asbestos 

industry would also apply to the corporations that inflicted so much 

damage and so much suffering over the years. The amendment 

would have addressed the longstanding efforts by these corporations to conceal the facts from the public, from their victims, and 

from government agencies charged with enforcing our health and 

safety laws. Notwithstanding the equitable value of this amendment, it failed by a vote of 14 to 18. 

Similarly, Representative Sheila Jackson Lee (D–TX) offered two 

amendments en bloc that would have provided balance to the bill’s 

disclosure requirements. One of these amendments would have required a trust to provide certain information to a defendant providing such defendant first disclosed the median settlement 

amount that it paid for claims settled or paid within 5 years of the 

date of the request, by disease category, for the state in which the 

plaintiff’s action was filed. Her other amendment would have similarly allowed the trust to supply information in response to a request from a defendant providing the defendant first made available to the plaintiff and the trust certain information regarding the 

defendant’s asbestos-containing products and work sites under the 

defendant’s control, unless such information is a trade secret. 

These amendments, however, failed by a vote of 9 to 15. 

IV. H.R. 982 WILL DIVERT CRITICAL FUNDS AND FURTHER DECREASE

COMPENSATION TO ASBESTOS VICTIMS BY FORCING BANKRUPTCY

TRUSTS TO PREPARE BURDENSOME REPORTS

H.R. 982 would effectively shift the cost of discovery away from 

solvent asbestos defendants to the bankruptcy trusts, ultimately diminishing the available pool of money to compensate the victims of 

bankrupt asbestos defendants. By imposing reporting and information demand requirements on trusts, H.R. 982 could significantly 

increase the administrative costs of trusts in meeting these requirements and force them to divert their limited resources from 

paying the claims of asbestos victims to satisfying the information 

requests of those who caused injuries to millions of Americans. The 

GAO, for example, noted that one trust reported that it incurred 

$1 million in attorneys’ fees to respond to a request to disclose 

every document on every claimant.84 Several legal representatives 

for future asbestos personal injury claimants fear that ‘‘unnecessary and unreasonable reporting and discovery obligations would 

divert resources from the trusts’ limited funds, which were specifically created to pay the claims of individuals stricken with asbestos-related diseases, for the benefit of third party defendants in 

non-bankruptcy, asbestos-tort litigation.’’ 85

The bill includes only a modest compensation provision with respect to its information demand requirements, which allows a trust 

to seek payment for ‘‘any reasonable cost’’ that it incurred in responding to such demands. The ‘‘reasonableness’’ of reimbursement 

requests, of course, can be subject to dispute and litigation. Ultimately, the trusts will incur costs to implement the bill’s requirements, leaving less money to compensate asbestos victims. This is 

particularly problematic in light of the fact that defendants can alVerDate Mar 15 2010 21:21 Oct 31, 2013 Jkt 039006 PO 00000 Frm 00044 Fmt 6659 Sfmt 6601 E:\HR\OC\HR254.XXX HR254

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86GAO Report at 16. 

ready obtain the information they want using existing discovery 

tools. 

H.R. 982’s retroactive application only adds to this unnecessary 

burden. The vast bulk of asbestos trusts that would be affected by 

this legislation have long been in existence, one of which dates 

back to 1988. According to the GAO, these trusts have already paid 

3.3 million claims valued at about $17.5 billion.86 Yet, after the 

passage of more than 20 years since the first trust was established, 

the proponents of H.R. 982 now insist that these trusts issue reports and provide documentation. 

CONCLUSION

The only beneficiaries of H.R. 982 will be the very entities that 

knowingly produced a toxic substance that killed or seriously injured unsuspecting American consumers and workers. The legislation does nothing to protect victims or to improve the claims process and is based on the false assertion that there is endemic fraud 

in the asbestos trust system that must be addressed. In truth, this 

legislation is simply an end run by defendants around the discovery process that threatens to prevent or delay adequate compensation for asbestos victims. 

Further, H.R. 982’s reporting and disclosure requirements are an 

assault against asbestos victims’ privacy interests and are fundamentally inequitable because solvent defendant companies are 

not similarly required to disclose their confidential settlement 

agreements. Finally, these burdensome new reporting requirements 

will divert critical funds and further decrease compensation to asbestos victims. 

Accordingly, we urge our colleagues to stand on the side of justice for asbestos victims and to oppose H.R. 982. 

JOHN CONYERS, JR. 

JERROLD NADLER. 

ROBERT C. ‘‘BOBBY’’ SCOTT. 

MELVIN L. WATT. 

ZOE LOFGREN. 

SHEILA JACKSON LEE. 

STEVE COHEN. 

HENRY C. ‘‘HANK’’ JOHNSON, JR. 

PEDRO R. PIERLUISI. 

JUDY CHU. 

TED DEUTCH. 

LUIS V. GUTIERREZ. 

KAREN BASS. 

CEDRIC RICHMOND. 

SUZAN DELBENE

JOE GARCIA. 

HAKEEM JEFFRIES. 

Æ 


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