|02/21/2017||referred to judiciary|
|01/03/2018||referred to judiciary|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6032 SPONSOR: Simotas
TITLE OF BILL: An act to amend the civil practice law and rules, in relation to truth and fairness in asbestos litigation   PURPOSE OF THE BILL: The bill will amend the CPLR to promote truth and fairness in the judi- cial system and improve the transparency of asbestos trust claims.   SUMMARY OF SPECIFIC PROVISIONS: Section 1: Creates new Article 99 of the CPLR entitled "Truth in Asbes- tos Trust Claims". § 9901: Defines the terms used in Article 99. § 9902: Promotes truth, fairness and transparency in the judicial system by requiring that any claimant who has filed a. civil action in the New York courts for an asbestos related injury must file all of the claim- ant's asbestos trust claims no later than-0 days after the commencement of the civil action. This section also provides a mechanism for claim- ants to avoid filing claims with certain asbestos trust if the antic- ipated costs and fees associated with such a filing would exceed the expected recovery from the asbestos trust. § 9903: Requires the claimant to notify all defendants in the civil action of the filing of each asbestos trust claim 30 days after the commencement of discovery. The section further requires that the claim- ant must produce to each defendant the asbestos trust claim materials relating to each of the asbestos trust claims filed by the claimant. § 9904: Requires the claimant to timely provide notice to all defendants of asbestos trust claims, and produce to the defendants all related asbestos trust claim materials, prior to the commencement of trial in the civil action. The section further provides judges in civil actions with the discretion to impose sanctions for a claimant's failure to comply with the requirements of § 9903. § 9905: Allows a defendant in the claimant's civil action to file a motion to stay the action by identifying for the court asbestos trusts not disclosed by the claimant against which the defendant has a reason- able, basis to believe that the claimant can make a trust claim. § 9906: Allows for the claimant to respond to a defendant's motion to stay filed pursuant to § 9905. § 9907: Allows for the court to stay the civil action if it determines that the defendant's motion was timely filed and the claimant is likely to receive compensation for the asbestos trusts identified in the motion. The section further provides that a court shall not stay the action if it determines that the claimant's costs and fees are likely to exceed the expected recovery from the identified asbestos trust. S 9908: Provides that asbestos trust claim materials are presumed to be authentic, relevant and discoverable in the civil action. § 9909: Allows for the filing of a motion for sanctions against the claimant if it is determined that the claimant made additional undis- closed asbestos trust claims after a judgment was rendered in the claim- ant's civil action.   JUSTIFICATION: The purpose of this bill is to promote fairness in the civil justice system by curing a procedural deficiency in the New York courts that currently limits transparency between asbestos civil actions and federal asbestos compensation trusts. The bill would ensure that defendants in asbestos lawsuits in New York courts are no longer subject to. disproportionate liability for claims for which claimants are also enti- tled to compensation from asbestos bankruptcy trusts. Under New York law and public policy, defendants in a civil action should only be responsible for their proportionate shares of a claim- ant's noneconomic damages such as pain and suffering - typically the largest component of damages asserted by asbestos claimants - unless a defendant's share of fault exceeds 50%. The bill furthers this goal, and promotes greater fairness in the judicial system, by prohibiting claim- ants and their lawyers from delaying asbestos trust submissions until after their court cases have been resolved, thereby depriving defendants of materials and evidence during the discovery process that could miti- gate their liability. Claimants instead would be required to promptly submit claims to appropriate bankruptcy trusts in advance of trial, and to make their claims-submission materials available to state court defendants. Courts would be authorized to stay the scheduling of trials in civil actions until a claimant complies with these requirements. Widespread use of asbestos products ended several decades ago. Due to long latency periods from exposure to the onset of an asbestos-related disease, however, asbestos-related personal injury claims continue to be brought in large numbers today in New York's court systems. But in recent years there has been a fundamental shift in the way asbestos claimants are compensated. First, the litigation landscape has changed dramatically, as the largest and historically most culpable defendants have declared bankruptcy and exited the civil justice system. In response to this phenomenon, plain- tiffs' lawyers have cast an ever-widening net in the search for solvent defendants. Over 8,500 companies, many of small and medium size, involv- ing a broad variety of industries, have now been sued in asbestos liti- gation. The relative fault of these defendants, who used to be peripher- al defendants prior to the bankruptcies- if they were sued at all -is marginal as compared to the former, now bankrupt, target defendants. Second, the former target defendants have been replaced by bankruptcy trusts. Beginning in 1982 with asbestos giant Johns-Manville, over 100 former asbestos manufacturers, including most of the largest and histor- ically most culpable companies, have exited the civil justice system through bankruptcy. As part of their bankruptcy proceedings, these companies set up trusts. These trusts, which operate independently of the civil justice system, pay billions of dollars each year to asbestos claimants that concurrently file claims in the civil justice system, and will continue to pay tens of billions of additional dollars for years to come. Since 2008, asbestos bankruptcy trusts have paid over $17 billion to asbestos claimants. As a result, there are now two paths to compensation for asbestos claim- ants, the civil justice system and the trust system, and there is very little transparency between them. A typical asbestos claimant collec- tively can recover hundreds of thousands of dollars from numerous trusts by submitting documentation establishing the claimant's disease level and degree of exposure to asbestos from products manufactured by the bankrupt company. Because these claims and their supporting submissions can be used as evidence in the civil justice system by defendants-to demonstrate that their own levels of fault are minimal or non-existent, plaintiffs' attorneys seek to avoid providing this information to the defendants in civil actions even though state discovery rules mandate the timely production of this evidence. One tactic that has emerged is that plaintiff law firms are delaying their clients' submission of trust claims until after their state court cases against solvent defendants have been concluded. This is made possible by "statute of limitations" provisions instituted and main- tained by the trusts that permit an asbestos claimant a minimum of 3 years from the date of their disease diagnoses to file compensation claims with the trusts. Plaintiff law firms use this 3-year window to first file a civil complaint in New York courts and collect damages from solvent defendants in the civil action, waiting until afterward to file their bankruptcy trust claims with no coordination of liability or payments between the two compensation systems. This practice is intended to, and does, unfairly distort and inflate the liabilities of solvent civil defendants by facilitating the suppression of evidence in asbestos actions currently being litigated in New York courts. This unfairness recently was documented in detailed, evidence-supported findings by a federal bankruptcy judge in connection with the Garlock asbestos bankruptcy. See In re Garlock Sealing Techs, LLC, 504 B.R. 71 (W.D.N.C. Bankr. 2014). That judge found that asbestos litigation nationally has been "infected with the manipulation of exposure evidence" by plaintiff law firms. Citing specific cases, including those within New York's own judicial system, the bankruptcy judge concluded that a pervasive practice exists to suppress exposure evidence in New York courts and courts across the nation. Since 2012, eight other state legislatures have passed similar asbestos bankruptcy trust transparency laws in reaction to this growing problem. In New York, courts already have mandated through standing discovery orders the disclosure of trust submissions that have been made by claim- ants. These requirements, however, do not address the delayed-submission phenomenon to which this bill is addressed. This bill seeks to close the trust-instituted procedural loophole in order to help ensure that the parties and the court have full access to exposure evidence needed to establish the equitable allocation of liability to defendants in the civil justice system. The solution to this problem is straightforward - require asbestos claimants and their attorneys to file asbestos trust claims concurrently with the' . active civil lawsuit and furnish their submissions to the defendants in the civil action in advance of any trial in a New York court. Accordingly, this bill would promote fairness in the civil justice system by requiring asbestos claimants to 1) timely file their trust claims; 2) provide notice to defendants in the civil action of the filing of the trust claims, and; 3) produce to those defendants the trust materials and documentation submitted by the claimants to support their trust claims. Historically, New York State has always been a leader in implementing innovative and successful legislation and court administrative proce- dures to efficiently and equitably adjudicate civil litigation. This situation should be no different, This bill neither denies the avenue to justice for deserving asbestos claimants nor does it let current respon- sible asbestos defendants off the hook. The bill simply promotes fair- ness by requiring that the finders of fact in New York's judicial system have the full complement of evidence to correctly allocate liability among culpable parties from both compensation systems. This bill furthers the goal of creating a legal environment for all New Yorkers, creating new and better standards for transparency, efficiency and justice.   EFFECTIVE DATE: This act shall take effect 30 days after it becomes law and will apply to all civil actions filed thereafter.