Idaho approves legal protection for corporation mired in asbestos litigation
The Idaho Senate has passed a bill that will protect a company that has already paid out $700 million in asbestos-related damage claims from future liability.
Crown Holdings Inc., an $8 billion company that manufacturers cans, bottle tops and pull tabs, has lobbied state legislatures around the country to pass similar legislation, which would limit the ability of plaintiffs harmed by asbestos to collect damages in court.
Crown Holdings has never manufactured asbestos-containing products, but in 1966 it merged with another firm, Mundet Cork, that once made insulation containing asbestos. Crown later sold the arm of the company that manufactured the insulation, but the law in Idaho and other states means the company assumed Mundet’s legal liabilities.
With 50,000 pending claims pending that are potentially worth an estimated $250 million or more, Philadelphia-based Crown has gone from one statehouse to another, pushing model legislation drawn up by the American Legislative Exchange Council (ALEC), a business-friendly non-profit.
According to the Associated Press, ALEC has succeeded in winning similar corporate protections in Florida, Georgia, Indiana, Mississippi, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Wisconsin and Wyoming.
The bills — and the involvement of a corporate-backed lobbying group — have met with considerable criticism from plaintiff’s attorneys and advocates for victims of asbestos-related illnesses. Barbara Jorden, a lobbyist for the Idaho Trial Lawyers Association, told the AP in January that Crown should “honor” its responsibilities.
"It's not as if the claims or injury has not occurred. It has,” Jorden said. “It's simply who is responsible for taking care of that. If it's not Crown, then it's going to be the state of Idaho that pays to care for the people have suffered these grave illnesses."
ALEC says its proposed legislation addresses “the injustice” of holding one corporation liable for lawsuits that are attributable to the actions of a “dissolved predecessor.” Mark Behrens, a Washington, D.C. lawyer who advises both Crown and ALEC, told the AP the company deserves the protection afforded by the legislation.
“If Crown goes bankrupt because of the litigation, the current employees will lose their jobs, their health care benefits and their pensions,” he said. “Crown is working hard to try to make sure that doesn’t happen.”
The Idaho Senate passed the measure by a 19-15 margin; the House approved the bill in February, 47-22.
If signed by Republican Gov. C.L. "Butch" Otter, the legislation would limit Crown’s asbestos-related liabilities to the fair market value of Mundet’s gross assets, circa 1966 — effectively ending the prospects of big payouts in the future, according to the AP.
The World Health organization estimates that more than 107, 000 people worldwide die each year for asbestos-related disease, largely due to occupational exposure. In the United States, more than 1 million people are exposed to significant amounts of asbestos, according to the Occupational Safety and Health Administration.