Legislation & Litigation

Manufacturer Lobbies State Government to Adjust Asbestos Lawsuit Laws

Written By:
Feb 16, 2012
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Written By: Mark Hall,
February 16, 2012

Crown Holdings Inc., a large Philadelphia-based can manufacturer, is lobbying the Minnesota state government to change the law to prevent future asbestos lawsuits from harming the company.

The $8 billion manufacturer, which has three plants in southern Minnesota, has already paid out hundreds of millions of dollars in liability stemming from asbestos-related claims. The company hopes that a revision of the law will minimize future liability.

Asbestos victims and advocates fiercely oppose the company’s efforts and proclaim that this is the company’s way of avoiding its legal obligations. Crown and its lobbying supporters say that the circumstances behind the merger doesn’t warrant the company’s continued liability of asbestos lawsuits involving workers who have fallen ill because of previous interactions with asbestos.

Fatal diseases like mesothelioma and asbestosis have been linked to asbestos exposure. Mesothelioma claims the lives of thousands of patients each year. Exposure primarily happens through occupational settings like working in Navy ships, which have been known to contain asbestos, in addition to working in the manufacturing and construction industries.

Lobbying to Reduce Liability

Crown has never manufactured asbestos-containing materials. However, in 1963, it merged with a company that made asbestos-containing insulation products that also already had asbestos litigation cases against it.

The current Minnesota law states that the merger gave Crown the assets and legal liabilities of the purchased company, exposing Crown to unforeseen legal hazards. Lobbyists have now been tasked to influence legislators to change this rule.

These lobbying efforts have paid off in 15 states, where favorable legislation has already passed. The American Legislative Exchange Council (ALEC), a pro-business group that constructs legislative proposals, is working with Crown to pass the bill in five more states, including Minnesota.

Some who oppose the company’s lobbying efforts declare that records show asbestos-related worker compensation claims from within the company that Crown merged with, dating back to the 1950s and 1960s.

The company has been involved in approximately 150 asbestos-related cases in Minnesota throughout the last 15 years. Claims and lawyer fees have amounted to nearly $700 million for the company while the higher borrowing costs have reached $1 billion. All of this is the result of a $7 million deal that Crown did almost five decades ago. Proponents of legislative reform are making it clear that they feel the current laws are misguided.

“To me this is common sense. How much do you make a company pay that had no knowledge, that was not in the asbestos business and never intended to be in the asbestos business?” Minnesota State Senator Mike Parry said.

“We’re trying to protect our company from an unfair situation,” said William Gallagher, Crown’s general counsel. “Blanket successor liability as posed to us is very unfair,” he continued.

Victims Deserve Compensation

Asbestos litigation has been a hotly contested topic for many years, with tens of billions paid out in compensation. Experts list that the medium amount received by a claimant of a mesothelioma claim is approximately $41,000, but this figure differs greatly based on details of the individual case.

Patients with asbestos diseases and those seeking compensation from asbestos manufacturers express opposition to Crown’s lobbying effort, attributing the lobbying efforts as a sign of the company’s lack of ownership of responsibility.

“Any individual such as yourself or a corporation, if they make a mistake, they ought to pay for their mistake,” said one asbestos lawyer who has been involved in thousands of asbestos cases.

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