GlobalTort : Commentary from lawyers and experts on mass torts, law, insurance and science

A new article by Russel Prugh from Marten Law caught my eye because it explained that the federal circuit courts are now embracing a rule that permissive ointervention rules and CERCLA protect the contribution claim rights of allegedly responsible co-defendants. These ruliings stand in contrast to some asbestos bankrutpcy rulings that fail to protect the rights of co-defendants. The article focuses on a recent opinion, United States v. Aerojet General Corp., No. 08-55996, --- F.3d ---, 2010 WL 2179169 (9th Cir. June 02, 2010). 

Why does this subject matter ? Because in some but not all mass torts, there are many potentially responsible parties that caused an indivisible harm. Think BP oil rig. Think asbestos litigation. Upon scrutiny of any real depth, it seems pretty obvious that there is no valid logic to respecting contribution claim rights in some mass tort settings, but not in bankruptcy court. Simply put, there cannot be a sound public policy that says that people who screw up a business through bad judgments should be protected from paying for physical injuries and property damage they caused through their bad judgments. Indeed, one can pretty easily argue that tort claimants and co-defendant are both involuntary creditors who should recevie more protection than do voluntary creditors. 

The entire article and opinion should be read. But, for now, here are two key excerpts (text of footnotes omitted)  to whet the appetite. Note especially the second quoted paragraph, and consider an analogy to the fairness of chapter 11 "pre-packs" in which the asbestos persoanl injury creditors and the debtor already have cut a deal. The key quotes are:

The Ninth Circuit panel rejected the reasoning of the Aerojet district court and a 2004 Ninth Circuit district court ruling, once thought to be in line with the majority view, holding that the contribution right was insufficient to permit intervention under CERCLA.[27] These decisions focused on two broad themes: (1) the contribution right under CERCLA was a “contingent” or “speculative” interest that would not support intervention;[28] and (2) intervention for non-settling parties was inappropriate under CERCLA Section 113(i) because CERCLA’s legislative history and underlying policies supported denying intervention.[29]

***

The Ninth Circuit also briefly addressed whether CERCLA’s notice and comment procedure for consent decrees provides non-settling PRPs with a means to adequately protect their interests.[36] The court rejected this proposition, noting that once the settling parties and the government have agreed, their interests “are essentially aligned and are adverse to those of non-settling PRPs who oppose entry of the decree.”[37] Indeed, the court explained it would be “unrealistic” to believe that the government would “abandon or substantially modify” the proposed consent decree in response to the non-settling PRPs comments “at this late stage of the process.”[38]

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It's great to see and feel a message starting to get through, as illustrated by legal media coverage of last week's Perrin asbestos bankruptcy conference.  For some time now, I've been trying to communicate the message that the asbestos chapter 11 cases are important because they are setting precedents that will be applied to other mass tort situations, and that the issues ultimately are global in scope. To work further towards that end, I was delighted to accept Lynnsey Perrin's invitation to co-chair last week's conference with John Cooney. John is an excellent and thoughtful plaintiff's personal injury lawyer here in Chicago, and we've known each other since the mid-1980s.

To try to spread the message,  this prior post included my conference handbook cover letter message to attendees. To reiterate a key point from the letter:  

These chapter 11 cases, however, matter for more than just asbestos claiming. Indeed, the highly unusual world of asbestos is only part of the larger scene in which chapter 11 is becoming or is being considered as the way to resolve mass tort claims and other product liability claims. The current hot issue is whether the BP oil rig fiasco will be resolved using chapter 11. In addition, chapter 11 procedures and trusts or funds are in place or contemplated for breast implant claims, silica claims, claims arising from sexual abuse by Catholic priests, and Chinese drywall claims. Consider also the Chrysler and GM chapter 11 cases, and their impacts on non-asbestos tort claimants. Note also the Tronox reorganization arising out of massive environmental risks. Note further the Third Circuit’s recent sua sponte grant of rehearing en banc in the GIT/Narco case that has previously caused 19 state Attorneys General to file an amicus brief regarding disposition of insurance-related rights and the scope of chapter 11 injunctions.

 The message is getting out, as indicated by the current online issue of the Madison-St. Clair Record. The newest online issues includes an article by a legal reporter, Aricka Flowers, who attended the conference.  The article's slant indicates the message is getting out that asbestos chapter 11 cases are indeed precedents for more global mass tort issues, with an example being the sudden and powerful oil rig fiasco that will probably cost BP more than the $ 20 billion fund created to date.  The article also includes some great quotes from some of the judges who kindly took the time to attend and offer their insightful comments. To further spread the message, the full text of the article also is set out below:

 Asbestos bankruptcy conference highlights Chapter 11

CHICAGO - An asbestos litigation expert said rules being developed in asbestos Chapter 11 cases are serving as precedent for resolution of other mass torts.

Asbestos defense attorney Kirk Hartley of Childress Duffy Goldblatt, Ltd. in Chicago co-chaired an asbestos bankruptcy conference earlier this week that featured discussions on how bankruptcies are affecting asbestos and tort litigation as a whole.

"The conference served as an opportunity for co-defendants in asbestos litigation to start learning about and paying attention to the Chapter 11 cases," Hartley said.

"Some are starting to realize that the more sophisticated entities are using Chapter 11 strategically to exit the tort system regardless of whether they are actually insolvent. The impacts are profound for both plaintiffs and co-defendants."

Plaintiff's attorney John Cooney of Cooney & Conway in Chicago co-chaired the conference with Hartley.

In light of recent Chapter 11 filings of asbestos targets Bondex International and Garlock Sealing Technologies, the conference covered the timely issue of how corporations are using Chapter 11 to seek refuge from lawsuits.

One particular session, "The Continued Impact of the General Motors and Chrysler Bankruptcies: Upcoming Issues on Estimation, Liability and the Effect on Co-Defendants," discussed the Chapter 11 filings of the major automobile manufacturers and how they impact pending and future lawsuits, sparking heated debate on the issue of transparency in bankruptcy trusts.

The session's moderator, Richard Ames of California-based Carroll, Burdick & McDonough, stated that the trusts make it much more difficult - and sometimes prohibit - attorneys from getting access to documents related to claims that have already been paid.

But Joseph Rice, co-founder of the personal injury firm Motley Rice in Mt. Pleasant, S.C., shot back saying that defense attorneys would have to go through the regular discovery process if a company hadn't filed bankruptcy. He said defense attorneys could actually get access to information on old bankruptcy trust claims by going through the typical discovery process instead of expecting plaintiff's attorneys "to do all the work for them."

Rice challenged asbestos defense attorneys by saying that he has been trying to get defendants to create a national database of job sites that were involved in cases surrounding successful bankruptcy trust claims. He went on to say that if any of the defense attorneys agreed to do so, plaintiffs would be willing to pass on information regarding claims, which got a laugh, but no takers.

One of the most anticipated sessions of the conference was a judicial panel comprised of bankruptcy and state court judges from across the nation, including Madison County Circuit Judge Daniel Stack. Stack presides over one of the busiest asbestos dockets in the country.

Other speakers were Judge Judith Fitzgerald, U.S. Bankruptcy Court for the Western District of Pennsylvania; Judge James Murray Lynn, Philadelphia Court of Common Pleas; Judge William D. Maddux, Circuit Court of Cook County and Judge. Randall J. Newsome, U.S. Bankruptcy Court for the Northern District of California.

Newsome lamented the state of asbestos litigation, blaming what he sees as no change over the last 30 years on the fact that there is no interaction between bankruptcy and state court judges.

"It's really no surprise that I don't see a difference between now and 1979 because there is no system in place," Newsome said.

"No one has ever put a legislative system in place that would encourage or require us to have any interaction whatsoever in this particular area. I think it's a real sad state of affairs that as I listen to the program today it's all the same thing; nothing's changed. It is like Groundhog Day."

Hartley said the judicial panel offered a unique opportunity to look at asbestos litigation from the vantage point of key players that decide the fate of many cases.

"The conference was important as serving as the first occasion in which bankruptcy judges and state court asbestos judges have actually talked to each other about their respective legal rules and practices," he said.

During the discussion, Fitzgerald said there is a serious misconception about the way the bankruptcy process operates.

"We have a tendency to be frequently looked at by people and entities as an appellate court," she said.

"Of course, we are not that and there are several guidelines that prohibit the bankruptcy courts from acting as an appellate court. But, I do think there are many cases in which we are being looked at as a new opportunity or open window and that really isn't what the bankruptcy process is about for claimants."

The judges also discussed the amount of time it takes for a mesothelioma case to go to trial in their jurisdiction.

Stack said the cases went to trial faster than any other lawsuit type in Illinois. He went on to say that a suit can be expedited in Illinois if plaintiff's attorneys prove that their client is suffering from mesothelioma.

If the mesothelioma victim is deceased, the plaintiff's attorney can file an affidavit of hardship for the family and get the trial expedited.

"I don't think you can ordinarily get that in a medical malpractice or other type of case unless you show some sort of a circumstance," Stack said.

There was also debate about Congress' inability to pass legislation, like the Fairness in Asbestos Injury Resolution Act that would put additional controls on the bankruptcy trust system.

Newsome said there is a systematic problem if otherwise healthy companies have to file for bankruptcy solely due to asbestos litigation.

Conversely, he said it is also a bad situation if plaintiffs are not being compensated in a timely manner because of the inherent delays in the bankruptcy process. Because of this, he said there is a strong need for legislators to make policy changes and create a systematic solution to the problem.

During the conference, Hartley responded by saying that policymakers might be in a better position to make a move on legislation if there was more transparency with regard to the bankruptcy trusts.
 

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For various reasons, I decided to try an American Express platinum card this year,. One reason was that the ads promised concrierge service, and so I thought the hefty fee would result in actually good customer service.  Silly me. To date, it's been all hassle and no service.

Today's example ?  I want to go back to good old fashioned mailed statements so  that I can avoid the download and print ordeal created by passwords. So, I called to ask for that change to be made. After 8 minutes, the answer was:  N no, we will not do that for you. Instead you have to go on line and make that change yourself." ( per supervisor Mindy (# 57362 - Ft. Lauderdale). And, that answer cane after their systems kept failing to pass along information (e.g card number) that the system demanded before I could reach a human being (and even then only after proceeding further into  the bowels of myriad levels of voice mail prompts.)  

In short,  paying the price for an AMEX platinum card does not produce actual customer service. 

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AmLaw includes today an article by Andrew Longstreth regarding the settlement strategies used by Merck for Vioxx, and by Glaxo  for Avandia and for Paxil. The article contrast the Vioxx strategy to the Glaxo strategy and offers some reasoning as as to why Glaxo apparently has chosen  to settle hundreds of cases after just one trial (a plaintiff''s verdict). The case that went to trial involved claims the drug allegedly caused heart defects in babies. Paxil also is claimed to  promote suicides in persons taking the drug.

In short, GSK appears to be settling most of the cases after the adverse trial result, a mediation, and extensive negotiations; go  here for more specif cs. In the case that went to trial, plaintiff's counsel argued that GSK failed to act on information indicating the defects.   The same article says that GSK countered with an argument based on statistically significant proof of a defect.

A few thoughts come to mind. One is that plaintiff's lawyers with potentially hundreds of cases to try seldom give up and go away after winning the first trial, unless the plaintiff's are paid well. Another is that science has by now pretty plainly established that changes in the chemistry of a mother also cause changes for the chemistry in a fetus, and that the changes can be profound,  With today's science,  effects of that sort can be perceived and proved without epidemiology based on statistics..

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I'm enjoying today a role as co-chair of  this Perrin conference on asbestos chapter 11 cases.The timing of the conference is fortuitous in view of recent chapter 11 filings, and the prominent discussions regarding the BP fund.  In the following cover letter for conference materials,  I've asked conference participants to look outside the asbestos context to the wider world of  all mass torts, corporate reorganizations, actual insolvency, and the reality that chapter 11 proceedings are now used by corporations for strategic purposes instead of being forced into chapter 11 by actual insolvency. The letter pulls together some of the points previously aired on this blog. The letter states:

Conference Participants:

My purely personal view is that current law and practice pays far too little heed to science and the rapid changes that I believe will over time bring tort claiming on a scale that will widely exceed the asbestos claiming. Science is especially important when it comes to considering the potential rights and claims of current and future persons cancer victims. These concerns are especially strong now that science indicates that some subsets of exposed persons pass on genomic changes that will or may disrupt endocrine systems or produce future cancers. The best known examples may be the plights of the so-called DES daughters and the Vietnamese families that have seen generations of cancer after Agent Orange exposures. For more on the general topic of science, genomes and future litigation, see the recent articles of a brilliant lawyer who also holds a PhD in genetics, Gary Marchant, of the Sandra Day O’Connor School of Law at Arizona State University. One of the recent articles is included.

This conference brings us together to talk about chapter 11 cases that arise from asbestos claiming. These chapter 11 cases, however, matter for more than just asbestos claiming. Indeed, the highly unusual world of asbestos is only part of the larger scene in which chapter 11 is becoming or is being considered as the way to resolve mass tort claims and other product liability claims. The current hot issue is whether the BP oil rig fiasco will be resolved using chapter 11. In addition, chapter 11 procedures and trusts or funds are in place or contemplated for breast implant claims, silica claims, claims arising from sexual abuse by Catholic priests, and Chinese drywall claims. Consider also the Chrysler and GM chapter 11 cases, and their impacts on non-asbestos tort claimants. Note also the Tronox reorganization arising out of massive environmental risks. Note further the Third Circuit’s recent sua sponte grant of rehearing en banc in the GIT/Narco case that has previously caused 19 state Attorneys General to file an amicus brief regarding disposition of insurance-related rights and the scope of chapter 11 injunctions.

Other reorganization-like procedures and events also are relevant. For example, in Australia, one corporation facing massive asbestos claiming is trying to use a "schemes of arrangement" to seek to limit the assets at risk to pay asbestos and claims. Another Australian entity reincorporated around the world as it sought to give effect to a private asbestos trust, and its officers were convicted of securities fraud (the issues are on appeal). Meanwhile, insurers limit their exposures to paying claims by using schemes of arrangement and run-offs that are not unlike reorganizations.

The attached materials address these various topics. Some are court papers. Others are my purely personal comments. My personal comments are offered from the perspective of someone who has lived since 1984 in the world of asbestos claiming while representing manufacturers in underlying claims, coverage cases, corporate arbitrations, and asbestos bankruptcies. Due to cancers that have stricken persons very dear to me, I also look at the issues from the perspective of current and future cancer victims who may someday be claimants against entities that sell or use substances viewed as "toxins." Hopefully you will find the materials useful to considering the precedents being set in asbestos chapter 11 cases.

In short, I suggest that current law and practice fails to respect the rights of co-defendants that end up paying tort claims left behind by entities that are either (1) first movers into chapter 11 because of massive liabilities, or (2) the financially sophisticated and wealthy entities that are later movers into chapter 11 for strategic purposes.  I also argue that current chapter 11 practice fails to meaningfully respect the rights of claimants who live and die outside the United States. Set out below is the full text of the cover letter:

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Chapter 11 filings used to imprint a scarlet letter on a company that was usually actually bankrupt in the classic sense of the word. Not so today. To the contrary, events most everyday illustrate that chapter 11 filings have little to do with actual insolvency, and instead are just part of the larger dance between tort claimants, defendants, shareholders, directors and officers, and their insurers.  The examples illustrate why chapter 11 is out of control, and needs serious improvement. As is, state laws are largely irrelevant except for fraudulent conveyance rules, and so bankruptcy courts are now the vehicle for displacing state laws that financiers find inconvenient and expensive. Chapter 11 cases also are where the MOUs go to obtain class actions and res judicata results they could never obtain in regular federal or state proceedings. Once has to ask - why is this allowed, and is it constitutional in application ?

Examples ? Here are two. This article looks ahead to Sam Zell''s deposition on the more than plausible claim that the Chicago Tribune lbo and related transactions included a fraudulent transfer of assets.  As the article explains, the deposition is part of the dancing between creditors seeking leverage regarding all the debt taken on to finance Mr. Zell's activities. In short, one issue is whether the megalenders can be stripped of their purported rights so that other debt holders and ordinary trade creditors can be paid what they are owed ?  Through the chapter 11 case, the parties likely will end up with a de facto class action, but Rule 23 class action standards will not be explored and its procedural rules will not be applied. Is this really "good"  for anyone other than masters of the universe ?

In cases arising from mass tort claims,  part of the dance is intended to immunize directors and officers from claims relating to corporate activities, such as corporate asset transfers of assets. The latter point is illustrated by this article from the Madison-St/ Clair Record   regarding the Durabla asbestos bankruptcy and efforts to use an adversary proceeding in the chapter 11 to immunize the officers and directors for corporate transfers. Once again, the issues are being teed up to provide national res judicata that would not be created in an ordinary case between two litigants, and the proceedings can easily be viewed as a de facto class action that does not follow the rules for class actions.

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After oral argument about a year ago, the 3rd Circuit has now  sua sponte issued an order for reargument en banc in the important GIT mass tort chapter 11 case. Among other things, the case raises the question whether 1123(a)(5) can preempt anti-assignment provisions in insurance contracts. 19 state Attorneys General have filed an amicus brief in the GIT case to urge the 3rd Circuit to block the efforts of the debtor and the asbestos and silica plaintiff's bar to use bankruptcy court preemption powers to give asbestos and silica claimants exclusive access to GIT's insurance policies.   The case also raises tawdry fact issues regarding generating a silica trust out of just a few claims. Some of the facts are set in past Globaltort posts here and here provide more information.

Important issues ? You bet,. Imagine how the rulings might apply to insurance for the oil rig fiasco.

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4% of Americans are cancer survivors. That’s well over 10 million people. The numbers are the net result of an annual US toll of 1.5 million new cancer diagnoses, and 550,000 deaths.

America’s over 10 million cancer survivors move forward with their lives with increasingly specialized legal needs. I'm proud to say that my law firm's experience in enforcing legal rights insurers is now being applied as part of a group of volunteer lawyers willing to assist survivors pro bono in asserting their legal rights to care. To that end, my firm, Childress Duffy Goldblatt, also  is the presenting sponsor for a Friday June 18, 2010 Cancer Rights Conference at Loyola Law School in Chicago.

The conference agenda and registration packet is here. A similar seminar will be held on Friday October 8, 2010 at the Ronal;d Reagan UCLA Medical Center in Los Angeles; the conference registration form is online here.

The 2010 Cancer Rights Conferences are results of the great work of the Cancer Legal Resource Center (CLRC), a joint program of the Disability Rights Legal Center and Loyola Law School Los Angeles. The CLRC  is a national, nonprofit organization that provides information and resources on cancer-related legal issues to people coping with cancer. The CLRC is the only national effort aimed at specifically asserting the legal rights for persons with all types of cancer. 

There also are growing efforts by groups associated with particular forms of cancer. A growing American Bar Association group is focused on asserting the rights of breast cancer patients. 

Sadly, the needs for legal advocacy are increasing for cancer patients. More advocacy is needed in part because of the improper claims handling practices habits of some national insurers. Advocacy needs also are increasing because rates of cancer are still climbing for some types of cancers, including continuing increases in some cancer rates for children. Data from the National Cancer Institute shows: “Cancer is the leading cause of death by disease among U.S. children between infancy and age 15. Approximately 10,730 new cases of pediatric cancer are expected to be diagnosed in children 0–14 years of age in 2009.”

According to detailed 2010 data from the American Cancer Society, the overall odds of facing a cancer diagnosis during are a lifetime are about 1 in 2 for men, and 1 in 3 for women.  This YouTube presentation from the ACS provides all the depressing data, including that 25% of annual US deaths are from cancer.

The CLRC’s Director is a tireless and wonderful person, Joanna Fawzy Morales. Mrs. Morales is also an Adjunct Professor of Law at Loyola Law School, teaching a seminar in Cancer Rights Law.

The CLRC’s mission and accomplishments are as follows, as taken from its website:

The CLRC has a national, toll-free Telephone Assistance Line (866-THE-CLRC) where callers can receive free and confidential information about relevant laws and resources for their particular situation. Members of the CLRC's Professional Panel of attorneys, insurance agents, and accountants can provide more in-depth information and counsel to CLRC callers.

In July of 2009, the CLRC received its 30,000th call to its Telephone Assistance Line (866-THE-CLRC). Since its founding in 1997, the CLRC remains unique, providing invaluable cancer-related legal information and resources to people nationwide. The success of the Center's work is reflected in the enormous need for the information they provide. Throughout its 12-year history, the CLRC has served over 155,000 people through the Telephone Assistance Line, conferences, seminars, workshops, outreach programs, and other community activities.

CLRC staff members also speak at seminars and outreach events in the cancer community, across the nation, including trainings for health care professionals. If you would like CLRC staff to attend your next event, please complete our Event Request & Material Order Form or call us at (213) 252-8449 or (866) 843-2572.

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Chapter 11 tort claim funds and trusts, backed by injunctions against litigation,  are used for more than just chapter 11 asbestos claims. Thus, at least seven Catholic dioceses are using chapter 11 filings to resolve sexual abuses claims and to marshall insurance assets.   A very focused litigation reporter on the subject is one of many available from  the InterNet Bankruptcy Library located here. The Fairbanks Diocese in Alaska recently received confirmation of its plan that revolves around a trust to resolve the claims. The plan disclosure agreement is on line and provides a general summary of the plan. The website for the diocese includes the remainder of the plan documents.

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Will the oil rig fiasco result in a chapter 11 filing by BP entities or others  ? If so, it could well be a positive for chapter 11 cases related to mass tort claiming. It's been obvious for some time that it's likely that chapter 11 could and probably would be used to resolve claims for at least some of the many entities tangled up in the oil rig situation.  Now, the popular press has caught on, and so recently  there are more articles mentioning that lawyers and financiers are talking about preserving financial value in BP's share price via chapter 11. 

No doubt the lawyers and financiers are talking about chapter 11 for entities other than just BP. Why ? Because, as proved by the chapter 11 cases of Manville, GM, Chrysler, and other events, judges in the Second and Third circuits take broad views of the powers of bankruptcy courts. And, about 15 years ago, professionals in those circuits learned to happily embrace the bankruptcy court's perceived power to quickly blunt some of the sting of massive errors.  The professionals also  learned that complex mass tort claims can generate hundreds of millions of dollars in barely scrutinized chapter 11 fees earned in forum shopped bankruptcy courts via cases that ultimately will generate decades of issues and work.   

What could be good about BP and others using chapter 11 filings to resolve massive  tort claiming ?  Start with intense federal government and public scrutiny of what is done to resolve tort claims arising from  this very large and very public event. Other mass tort chapter 11 cases are barely noticed by most lawyers, much less the federal government or the public. And, chapter 11 cases often but always operate with little if any transparency or useful public information due to absurd rules that bankruptcy courts and lawyers have put in place to seal most but not all hearing transcripts for 90 days. 

An oil rig chapter 11 also could be good because it will force state governments to pay attention to chapter 11's impacts on  persons and businesses in their states.  Until recently, most states have failed to pay meaningful attention to mass tort chapter 11 cases. That's been an ongoing mistake because the chapter 11 mass tort cases involve sickness in state citizens, tens of billions of dollars being funneled to those persons, and chapter 11 games and orders that are used to circumvent and/or ignore state law rules which are supposed  to govern tort claiming.  

Resolving the oil rig fiasco in chapter 11 also could produce good things for chapter 11 mass tort cases because there will hundreds or thousands of lawyers and other  professionals involved, and most will not be repeat players in the chapter 11 system.  It would be refreshing to see a mass tort chapter 11 case with actual diversity of thought, and lawyers really acting as adversaries. In contrast, the recent world of asbestos chapter 11 cases involves a relative handful of lawyers who know the dance by heart and seldom challenge much of anything  for very long.  The few challenges that are raised virtually always settle. And, the issues  quite often settle before appeals are heard due to most of the  repeat players having a well known price, and the knowledgeable players banking on appellate courts rejecting  appeals by invoking the due process defying doctrines of legal and equitable mootness. 

Another good could arise because an oil rig chapter 11 claiming process would force the courts and lawyers to really think about science and the long term. Thoughtful professionals already say  that the impacts of the fiasco will have consequences for decades, and many of the consequences are not now known. These realities hopefully will cause real scrutiny of what the future may bring.  Better yet, it seems obvious that the chapter 11 court will have no choice but to appoint multiple different futures representatives who will not sacrifice their constituencies, and instead will have no choice but to engage real scientists (instead of statisticians) to really think about the future impacts from the massive release of "toxins" in oil. No doubt scientists will speak of myriad deaths of creatures of all kinds. No doubt some will also speak of toxins causing gross malformations of bodies due to  disruption of endocrine systems, and of toxins causing genetic  mutations that will be passed down for generations, with some changes producing future cancers. They probably also will say that the future is not scientifically knowable today, and that a prudent course would be to let better judgments be made in the future after future events unfold. Hopefully such testimony will cause bankrutpcy courts and scholars to see the massive flaws in the current rush to carve the pie all at one time, with large portions still being given  to people who are not really sick and through carving the pie with little regard for future scientific developments.  

An oil rig chapter 11 also could be good because it will force US courts and lawyers to actually honor rights of persons in other nations. BP as an entity obviously brings its own international and parochial views from the UK.  Moreover, Mexico and other nations around the Gulf may be impacted. Unfortunately, in chapter 11 mass tort cases to date, bankruptcy judges approve  "global" notices and injunction terms said to apply to non-US claimants, without providing due process notice to potential claimants.  Instead, notices are usually only in English, and are usually only in newspapers. In this age of Internet, email, databases and translation engines, much more can and should be done to provide actually meaningful notice to persons in other countries. Because BP's oil apparently will be spreading through global seas for decades to come, other nations inevitably will care,  and will pay at least some attention. Hopefully the international claims will actually be considered with real respect for the laws of other nations.

An oil rig chapter 11 claim estimation process also will need to occur, and could be a positive. In mass tort chapter 11 cases to date, the courts and parties have used estimation processes that make a mockery of science, as demonstrated by this detailed declaration from Professor James Heckman, a Nobel prize winning economist.  With a  very public and  global set of oil rig chapter 11 cases, one hopes science actually will be used to the fullest extent possible. Consider, for example, the need to estimate the volume of oil released. Where it will go ?  How many living things the oil already has killed ?  How many will die next year, or in five years ?  How many organisms will ingest oil and will then be consumed by other large creatures, thus spreading the consequences far and wide and into future generations. Will there be a future Silent Spring in parts of the vast unseen ecosystems  beneath the waves ?  Hopefully Congress and/or the bankruptcy courts will make new  law and will actually force the litigants to apply the best possible  science instead of the statistical voodoo too often used in asbestos chapter 11 cases.

In short, bring on chapter 11 filings from some or all of the entities involved with the oil rig. Let's hope they become the vehicle by which the bankruptcy process is actually made to work well. Working well would include embracing science.  Working well also would include recognizing the obvious flaws in the current system of futures representatives. Working well also would mean recognizing that one time liability estimates are not wise because  future liabilities are too often badly underestimated. When estimates are too low, the burden of shouldering the shortfall goes to either injured plaintiffs or co-defendants who remain in the tort system. Accordingly, the  courts or Congress should require some form of  remedy that leaves investors at risk until it's certain others are no longer at risk.

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It's fascinating to watch the dances between and among  science, economics, politics and media as to "toxins."  Consider all the dances going on in the the BP oil rig fiasco.

For another example, note the evolution of the asbestos mining debate in Canada. According to this June 12 article from the Montreal Gazette, the Canadian government is on the brink of moving ahead with funding to assist in maintaining and creating jobs at a chrysotile asbestos mine. The funding would cover an underground expansion of  the decades-old Jeffrey Mine located in the Quebec town named Asbestos. The funding apparently will be provided despite vocal international advocacy from doctors at Mt. Sinai Medical Medical Center and elsewhere. (Mt. Sinai was the professional home for Irving Selikoff, one of the first few asbestos researchers).   Here are key excerpts:

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Two new asbestos chapter 11 cases were filed in the last two weeks. Both filings are interesting for various reasons.  One of the filings was RPM putting into chapter 11 its Bondex business that previously produced joint compound material that contained chrysotile asbestos fibers in relatively small amounts.  This  press release describes the  filing in more detail.

Market impact on RPM's stock price and debt rating ? Small.  Here is Fitch's debt rating for RPM as issued after the chapter 11 filing; it's neutral. Here is a PowerPoint summarizing RPM's presentation and analyst questions; very little said of any real note. The stock ticker is RPM, and shows a price drop of less than 5 %.

The Bondex filing is interesting in that it is not a prepack. During the  2000s, multiple asbestos-related prepacks were ultimately approved.  Hopefully those days are over because the prepacks did great violence to the rights of future claimants. Among other flaws, the prepacks tended to provide way too much money  to people who were not sick. The prepacks also made a mockery of the rights of underlying case co-defendants to assert cross-claims or contribution  claims against the entities in chapter 11. Insurers also were treated badly, but generally deserve little sympathy because they simply make case by case financial decisions that suit the insurers needs and reinsurance situation in  a given case. That's regrettable in some ways because it means the chapter 11 system is deprived of advocates taking long term, principled positions on preserving insurance for those who are really injured or at real risk.   

The Bondex prepack also is noteworthy for information set out in its "Informational Brief."  An "Informational Brief" is the bankruptcy court equivalent of  a white paper advocating a view. 

Set out below are  key excerpts from the brief. The brief and data are largely self-explanatory, but omit one key reality. The key reality is that current. solvent asbestos defendants are paying a huge price for disastrously bad rulings and outcomes in the early chapter 11s of the  major "asbestos companies," such as Johns-Manville, UNARCO, and Raymark. 

In short, the early chapter 11 cases  took far too little money from investors in those corporations, and demanded far too little from their insurers. Why ? In short, because the parties were in a hurry to get to a "final" outcome to generate cash flow for their particular constituency.  That rush to "finality" was a major mistake. The lawyers, judges and legislators failed to fully use science to look far ahead, and also failed to acknowledge all that they did not know. In short, they failed to appreciate  that  relatively lower  levels of exposure would generate asbestos disease. The parties also failed to protect the money against massive raids by the not sick. The result? The Manville trust - the vehicle to supposedly solve all the problems - was broke the minute it opened its doors, and so the trust was soon back in chapter 11.

With that background in mind, consider the following excerpts from Bondex' Informational Brief, and note especiallyy the change in the claiming pattern against Bondex. According to industry records, Bondex was one of over 50 companies with less than 2% of the market for joint compounds. But, today, it is a named defendant in about 60% of annual mesothelioma case filings in the United States. Does anyone really beleive that mesothelioma victims had an uncanny knack for buying Bondex products ?  

The Informational Brief states the following:

"Therefore, as early as 1980, even before the bankruptcy filing by Johns Manville, the world's largest vertically integrated asbestos producer, on August 26, 1982, plaintiffs' counsel in the asbestos litigation clearly knew that the Debtors existed and that they had manufactured and sold joint compound. Yet, during the 19-year period from 1980-1999, the Debtors paid a total of only $1.6 million in asbestos-related indemnity costs, demonstrating that before any major bankruptcy filing in the joint compound market, plaintiffs' counsel viewed the Debtors' joint compound products as a non-factor that played no material role in the causation of asbestos-related disease. 12 Significantly, even this relatively small amount of money ($1.6 million over 19 years, including third party insurance payments) represents to some extent inflated value because most of these claims arose after the Johns Manville bankruptcy filing and during the intervening bankruptcies of other asbestos giants, including Eagle-Picher, UNARCO and Celotex.

Although the Debtors were named in a limited number of asbestos lawsuits prior to 1999, the floodgates opened after the asbestos bankruptcy wave of 2000-2001. As they had in the past, plaintiffs' counsel began searching for of revenue to replace the payments that had up until that time come from then-bankrupt defendants, including USG. In the years following the USG bankruptcy, the Debtors' asbestos costs increased with a rapidity that is statistically and grossly out of proportion with any realistic assessment of Debtors' place in the joint compound market::

From 1980-1999: $1.6 million

Fiscal Year 2001: $10.6 million

Fiscal Year 2002: $43.0 million

Fiscal Year 2003: $52.0 million

Fiscal Year 2004: $63.0 million

Fiscal Year 2005: $67.4 million

Fiscal year 2006: $59.9 million

Fiscal year 2007: $67.0 million

Fiscal year 2008: $82.5 million

Fiscal year 2009: $69.4 million

Fiscal year 2010: $75.0 million

 Additionally, since 2001, mesothelioma claims have increased against the Debtors substantially out of proportion to the incidence of mesothelioma filings in the tort system.This anomalous increase in mesothelioma filings again reflects over-naming or erroneous naming of the Debtors, as opposed to any realistic assessment of liability. The Debtors' mesothelioma filings, as compared with tort system filings of mesothelioma claims in general, demonstrate this striking difference:

 Year              Tort System Meso Filings             Meso Filings vs. Debtors
2001               1600                                                  150
2002               1700                                                  200
2003               1750                                                  650
2004               1850                                                  600
2005               1775                                                  790
2006               1775                                                  1100
2007               1600                                                  975
2008               1650                                                 1025
2009               1800                                                 1125
Note: all numbers approximate.

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How will lawyers and judges ever keep up with science as we trudge along seeking certainty. ?Scientists, on the other hand, like to look ahead and theorize. Thus, the UK's Royal Society and Nature are  celebrating  the Society's  350th anniversary (really, 350 years) by hosting a July 1, 2010, conference to look forward at what science will look like in 50 years. The broad topics are pasted below, and are focused around data, careers, and measurement. (BTW, you can see great science videos here from the Society.)

One wonders what the conference speakers will foresee on the data front given Moore's law  of computing power doubling ever two years ("Moore's law describes a long-term trend in the history of computing hardware, in which the number of transistors that can be placed inexpensively on an integrated circuit has doubled approximately every two years."). Think also about giant projects, such as the data generated from atom smashing at CERN. Or, go here to read about the University of Illinois National Center for Supercomputing Applications that is working with the federal government to build the next world's larget publicy accessible computer system - Bluewaters, a petaflop system. How big is that ? " A petaflop is one quadrillion calculations per second."  Or, go here and read about how the world  of computing power looks to a computer guy who loves reading semi-annual lists of the world's 500 largest computer systems.

Set out below is a short view of the conference; go here for more specifics.

"The Tomorrow’s Giants conference is part of an exciting week of celebrations for the Royal Society’s 350th anniversary, which will include an extended Summer Science Exhibition at Southbank Centre, London. To be held on Thursday 1st July 2010, this one day conference co-hosted by the Royal Society and Nature, will bring together scientists and policymakers to gather scientists’ visions of the next 50 years looking in particular at the following three themes:

Data: The challenge of curating and supporting databases in the future and ethical concerns around the storage and management of certain types of data.

Careers: mechanisms for providing security and support for research careers.

Measuring and Assessment: the use of performance indicators and the challenge of having appropriate checks without inhibiting research.

In the lead up to the conference the Royal Society hosted regional meetings across the country in Edinburgh, Liverpool, Bath, Oxford, Cambridge, Nottingham and London. We invited over 100 scientists to share and exchange views on these issues and this Nature Network forum is an opportunity for you to add to the discussion. We’re taking your views from both the workshops and this forum to make sure that the right questions get asked at the conference next year so here is your opportunity to contribute to the discussion of the issues impacting on the shape of science in the next 10-50 years.

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