Senate Bill No. 558
(By Senators Jenkins, K. Facemyer, Green, Oliverio,
Caruth, Foster, Barnes, Williams, Stollings and Guills)
____________
[Introduced March 12, 2009; referred to the Committee on the
Judiciary; and then to the Committee on Finance.]
____________
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §55-7E-1, §55-7E-2,
§55-7E-3, §55-7E-4 and §55-7E-5, all relating to filing of
claims for asbestos; disclosures regarding existing and
anticipated claims involving asbestos bankruptcy trusts;
defendants' rights in asbestos action to require claimant to
show cause regarding additional bankruptcy trust claims;
certification of cause of action by court; discovery of
materials from bankruptcy trusts; value of trust claims;
sanctions for noncompliance; and rights of setoff.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §55-7E-1, §55-7E-2,
§55-7E-3, §55-7E-4 and §55-7E-5, all to read as follows:
ARTICLE 7E. ASBESTOS CLAIMS TRANSPARENCY ACT.
§55-7E-1. Short title.
This article may be cited as the "Asbestos Claims Transparency
Act."
§55-7E-2. Definitions.
As used in this article terms will have the following
meanings:
(1)"Asbestos" means chrysotile, amosite, crocidolite,
tremolite asbestos, anthophyllite asbestos, actinolite asbestos,
asbestiform winchite, asbestiform richterite, asbestiform amphibole
minerals and any of these minerals that have been chemically
treated or altered, including all minerals defined as asbestos in
29 CFR 1910 at the time an asbestos claim is made.
(2) "Asbestos claim" means any claim for damages, losses,
indemnification, contribution, restitution or other relief of
whatever nature (including punitive damages) arising out of, based
on, or in any way related to the alleged health effects associated
with the inhalation or ingestion of asbestos, to the extent such
claims are recognized under state law including, but not limited
to:
(A) Loss of consortium;
(B) Loss of support;
(C) Personal injury or death;
(D) Mental or emotional injury;
(E) Risk or fear of disease or other injury;
(F) The costs of medical monitoring or surveillance; or
(G) Any claim made by or on behalf of any person exposed to
asbestos, or a representative, spouse, parent, child or other
relative of the exposed person.
The term "asbestos claim" does not include a claim for
compensatory benefits pursuant to a workers' compensation law or a
veterans' benefits program.
(3) "Claimant" means any party asserting an asbestos claim,
including a plaintiff, counterclaimant, cross-claimant or
third-party plaintiff; if a claim is brought through or on behalf
of an estate, the term includes the claimant's decedent; if a claim
is brought through or on behalf of a minor or incompetent, the term
includes the claimant's parent or guardian.
(4) "Exposed person" means a person whose claimed exposure to
asbestos is the basis for an asbestos claim.
(5) "Asbestos action" means any civil proceeding seeking
compensation directly or derivatively as a result, in whole or in
part, of exposure to asbestos.
(6) "Trust claims and claims material" means all documents and
information, including, but not limited to, claim forms and
supplementary material, relevant or related to pending or potential
claims against asbestos trusts.
(7) "Trust governance documents" means documents which
determine eligibility and payment levels for the asbestos trusts and include trust distribution procedures, plans of reorganization
and related orders.
(8) "Asbestos trusts" means all trusts or claims facilities,
created as a result of bankruptcies or other settlements,
including, but not limited to, all trusts created pursuant to 11
U.S.C. §524(g), intended to provide compensation to claimants
alleging claims as a result of asbestos exposure.
§55-7E-3. Substantive provisions.
(a)
Required Disclosures. -- Within thirty days of commencing
an asbestos action not otherwise barred or deferred under state
law, and in no event less than one hundred-eighty days prior to
trial of that action, a claimant shall provide to all parties a
statement of any and all existing or anticipated claims against
asbestos trusts. Such statement shall be in addition to any
existing preliminary disclosure requirements otherwise imposed by
law or applicable agreement, ruling or judicial order.
Furthermore, such statement must include under penalty of perjury
an attestation by the claimant that the statement is based on a
good faith investigation of all potential claims against asbestos
trusts. Counsel must certify that he or she has conducted a good
faith investigation of all potential claims against asbestos
trusts. The statement shall also disclose when the claim was or
will be made and whether there has been any request for deferral,
delay, suspension or tolling of the asbestos trust claims process. In the event information obtained subsequent to the submission of
the statement supports the filing of additional claims against
asbestos trusts, the claimant shall update the statement by
amendment filed and served within thirty days of the receipt of the
additional information. A claimant shall also produce to all
parties within the time period specified in this subsection in such
asbestos action the following additional materials:
(1) As to any claims already asserted against asbestos trusts,
the claimant must produce final executed proofs of claim together
with any supporting materials used to support such claim against
the asbestos trusts. A claimant must also produce all documents or
information relevant or related to such claims asserted against the
asbestos trusts, including, but not limited to, work histories,
affidavits, depositions and trial testimony of the claimant and
others as well as all medical documentation (including, but not
limited to, X rays, test results, doctors' reports and pathology
results).
(2) As to any claims that a claimant has not yet asserted
against the asbestos trusts but has disclosed pursuant to the
requirements of subdivision (1) regarding potential claims, all
materials described in subdivision (1) shall be produced,
including, at the time of its filing, the final executed proof of
claim.
(3) Claimant's asbestos action shall be stayed in its entirety until such time as the claimant certifies that all anticipated
claims against asbestos trusts have been filed and that claimant
has satisfied the requirements of subsection (a) subdivision (2),
above.
(b)
Defendant's order to show cause regarding additional trust
claims; court certification and trust claims order. --
(1) Any defendant may proceed by Order to Show Cause ("OSC")
in the court hearing such asbestos action setting forth the names
of additional asbestos trusts against which the plaintiff has not
made, but which the defendant in good faith believes the claimant
can make a successful claim. The OSC shall set forth the factual
basis for the claim describing the evidence sufficient to meet the
asbestos trust distribution procedure requirements to file valid
claims against such asbestos trust and the amount of money the
trust should pay for the claim. In response, within ten days
thereafter, the claimant shall:
(A) File the claim with the asbestos trust as set forth by the
defendant's notice which will be dispositive as to the OSC as to
that trust; or
(B) Show cause before the court hearing such asbestos action
for a determination that: (i) The proof of claim should be
modified and then submitted; or (ii) that there is insufficient
evidence to permit the claim to be filed in good faith under the
applicable asbestos trust distribution procedures. The court hearing the asbestos action shall decide the issue on the basis of
declarations, deposition excerpts, interrogatory responses and such
other evidence as the court deems appropriate. The claimant shall
have the burden of proving that the claim should be modified and
then submitted or should not be filed because it does not meet the
asbestos trust distribution procedure requirements. If the court
hearing the asbestos action determines that there is a good faith
basis for filing the claim, the claimant shall promptly file the
claim with the asbestos trust as it was submitted by the defendant
or as modified by the court hearing the asbestos action. The
claimant's asbestos action shall be stayed until such time as the
claimant certifies that claimant has complied with the court's
order and has disclosed the materials required to be disclosed by
subsection (a), section four of this article.
(2) Not later than sixty days before the scheduled trial date
of an asbestos action, the court hearing such asbestos action must
certify in writing that the discovery described in subsection (a),
subdivisions (1) and (2) are complete. Furthermore, no trial date
may be assigned nor trial commenced absent certification of the
completion of discovery and a determination that all additional
asbestos trust claims required to be made in response to an OSC
have been submitted to the relevant asbestos trust(s). A schedule
of all asbestos trust claims made shall be reflected in a "trust
claims order" which must be entered no later than thirty days prior to trial. The trust claims order shall be deemed to be a final
order and may be amended only upon a showing of mistake,
inadvertence, surprise, excusable neglect or fraud.
(c)
Treatment of trust claims and claims material. -- Trust
claims and claims material (as well as related discovery materials)
are presumptively relevant to and discoverable in an asbestos
action and shall be presumed by the court to be authentic.
Notwithstanding any other provision of law or agreement, no claims
of privilege shall apply to trust claims and claims materials, and
such trust claims and claims materials may be used by the parties
in the asbestos action to prove, without limitation, alternative
causation for the claimant's asbestos exposure as well as serve as
a basis to allocate responsibility for the claimant's claim.
(d)
Discovery of other materials. -- In addition to the
mandatory disclosure requirements of this chapter, additional
disclosure and discovery of information relevant to the asbestos
action may be sought by any mechanism provided by the applicable
Rules of Civil Procedure. Defendants in an asbestos action may
also seek discovery from the asbestos trusts. The claimant shall
assist in any discovery from the asbestos trusts and provide
whatever consent or expression of permission may be required by the
asbestos trusts for release of such information and materials.
Claims of privilege and/or confidentiality by claimants will not
preclude discovery by defendants under this chapter.
(e)
Asbestos trust claim values. -- In the event a matter
proceeds to trial before the claimant has received a decision from
an asbestos trust or trusts, as to each such claim, there shall be
a rebuttable presumption that the claimant will receive the
compensation specified for his or her claimed disease or injury in
the relevant trust governance documents. The court shall take
judicial notice of these documents and the payment amounts
specified therein. For each such pending claim, the court shall
establish an attributed value that will be used for purposes of
calculation of verdict or settlement set-offs or credits, subject
to the adjustment specified in subsection (h) below.
(f)
Sanctions for noncompliance. -- Failure by a claimant to
comply with the discovery requirements outlined in this chapter
shall be a basis for sanctions against the claimant, including, at
the discretion of the court, upon a finding that the claimant
willfully failed to comply with the requirements of this chapter,
dismissal of the asbestos action with prejudice.
(g)
Set-offs. -- The defendants will be entitled to set-offs
or credits of the full value of the trust claims against any
judgment rendered against them in the asbestos action. In the
event that a codefendant settles or otherwise resolves the asbestos
claims against it prior to verdict, if release(s) are obtained for
the benefit of asbestos trusts, the defendants remaining in the
asbestos action may pursue those claims by assignment according to whatever rights were held by claimants. To the extent that any
applicable law provides broader relief to the defendants than is
set forth herein, nothing in this provision shall prohibit any
defendant from pursuing such broader relief.
(h)
Correction of attributed value of claim. -- In the event
that defendants obtain a credit or reduction in a verdict because
of the attributed value of a claim pending but not yet paid against
an asbestos trust, and the claim giving rise to that attributed
value is rejected, in whole or in part, by the relevant asbestos
trust(s), those defendants shall pay to the claimant, on a several
basis, their respective share of the discount. The defendants
shall make payment within one hundred-eighty days of service of
evidence of rejection or reduction of the claim.
§55-7E-4. Severability.
The provisions of this article are severable. If any portion
of this article is declared unconstitutional or the application of
any part of this article to any person or circumstance is held
invalid, the remaining portions of the article and their
applicability to any person or circumstance shall remain valid and
enforceable.
§55-7E-5. Effective date.
This article applies to all asbestos claims filed on or after
the effective date. This article also applies to any pending
asbestos claims in which trial has not commenced as of the effective date.
NOTE: The purpose of this bill is to establish a procedure
that requires a claimant that files an asbestos case after the
effective date of this bill to provide information to all
defendants about all claims filed or anticipated to be filed by
that claimant against asbestos bankruptcy trusts, a mechanism for
the defendant to challenge those claims, a procedure for sanctions
by the court, and for set-offs for those claims.
This article is new; therefore, strike-throughs and
underscoring have been omitted.