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Manufacturer wants states to cap legal liability in asbestos cases

A Philadelphia company is lobbying the Minnesota Legislature to pass a bill that would minimize its liability in asbestos-related lawsuits.


Crown Holdings Inc., an $8 billion company that manufacturers cans, says it has spent $700 million on asbestos claims for which it is not liable. The company, also known as Crown Cork and Seal, has never manufactured asbestos-containing products, but in 1963, it merged with another firm that made insulation containing asbestos.


Although Crown sold the arm of the company that manufactured the insulation, the law in Minnesota and other states means that Crown assumed the legal liabilities of the merged company. William Gallagher, Crown's general counsel, told the Minneapolis Star Tribune this week that such laws are unfair, and that Crown’s effort to change them in Minnesota and 14 other states is necessary to protect the company.


"Blanket successor liability as posed to us is very unfair," he said.


The Minnesota bill that Crown wants state lawmakers to pass is the Innocent Successor Asbestos-Related Liability Fairness Act, which would establish limits on liabilities that result from corporate mergers or consolidations.


The bill reflects model legislation drawn up by the American Legislative Exchange Council (ALEC), a business-friendly organization. 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.” According to ALEC, reforms based on the model have passed in Ohio, Georgia, Texas, Florida, Kansas, South Carolina and Tennessee.


According to the Associated Press, Crown is also lobbying the Idaho Legislature as “part of its years-long, state-by-state trudge to shield itself” from future claims. Mark Behrens, a Washington, D.C. lawyer who advises both Crown and the American Legislative Exchange Council, told the AP that the company — and its current and former employees — deserve the protection afforded by the legislation.


"If Crown goes bankrupt because of the litigation,” he said, “the current employees will lose their jobs, their health care benefits and their pensions.”


The World Health organization estimates that more than 107, 000 people worldwide die each year for asbestos-related disease, largely due to exposure on the job. Advocates for victims of asbestos-related disease say Crown’s efforts, if successful, would harm victims and set a dangerous precedent.


Barbara Jorden, a lobbyist for the Idaho Trial Lawyers Association, told the AP that Crown should “honor” its responsibilities.


"It's not as if the claims or injury has not occurred. It has,” she 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 who have suffered these grave illnesses."


Sen. Mike Parry, lead sponsor of the Minnesota bill, told the Star Tribune that Crown has faced about 150 asbestos cases in Minnesota in the past 15 years. He said the legislation he proposes is “common sense” and would prevent the financial ruin of a company that has never been in the asbestos business.


But Sue Vento, whose husband, former U.S. Rep. Bruce Vento of Minnesota, died in 2000 from mesothelioma, said she is afraid the bill could eventually be amended to remove all corporate responsibility for asbestos exposure.


"It's a bad idea because it doesn't consider the interests of people who end up with these illnesses, nor does it consider the interest of their families," Vento told the Star Tribune.