Manville Asbestos Trust Reducing Transparency on its Asbestos Claims Data
— See also March 11, 2009 update on the entry below ——-
Today’s entry is unusual, and arises because of fact research I undertook in preparation for a presentation as part of panel focused on “global asbestos claiming” at a March 9-11 BVR/Mealeys seminar on Emerging Trends in Asbestos Litigation. Why write about fact research? Because the research unexpectedly yielded facts indicating that the Johns-Manville asbestos trust is cutting back on transparency regarding claims submitted to and/or paid by the trust.
Specifically, the court-created Manville Trust is now reducing transparency by limiting the availability of online and off-line data on the claims submitted to and/or paid by the trust. As is further detailed below, the Manville Trust is cutting the public availability regarding claims submitted from outside North America (“foreign” or “global” claims data'”) and the trust also 2) is no longer allowing outside experts to purchase a license to use digital copies of an up-to-date, comprehensive database of all the data for Manville Trust claims.
In addition to limiting access to data, the Manville Trust also is impairing transparency by modifying its data collection activities. Specifically, as of November 2008, the Trust dropped its long-standing rule requiring claimants to provide their social security numbers. Without submission and tracking of social security numbers, it is harder to distinguish between claimants, and thus harder to detect duplicate and/or fraudulent claiming to the Manville trust, and/or to use the Manville Data as a comparative reference for databases containing other sets of asbestos claims.
Do these changes really matter? Yes.
Why? At the abstract level, the changes matter for those who embrace Justice Brandeis’ advice that “sunshine is the best disinfectant.” See also Graham, Mary, Is Sunshine the Best Disinfectant? The Promise and Problems of Environmental Disclosure (arguing that environmental disclosure requirements actually have improved environment and policy-making).
At the practical level, the transparency cutbacks matter because the Manville Trust data are embedded in much work that outside experts have for years performed in reliance on Manville Trust data. For example, my colleague and expert witness, Steve Sellick, previously licensed and used the Manville Data as part of consulting work involving estimating future claims and/or values. So did Bates White. So did Francine Rabinovitz. So did anyone truly expert in the field. They all used the data for what it could tell them asbestos claiming, including use date for evaluating or setting FASB 5 reserves. But, the Manville Data license was recently terminated for Steve, as were Manville Data licenses held by other experts, thus leaving the experts without access to up-to-date from a data resource that has been relied on for many years.
Of equal importance, outside experts have for many years relied on Manville Trust data in “liability estimation” proceedings in Chapter 11 asbestos bankruptcies. The liability estimates in these cases sometimes involve billions of dollars per case, and already involve tens of billions of dollars in the aggregate. See, e.g., In re Federal-Mogul Global Inc., 330 BR 133, 144, 149 (D. Del. 2005)(Rodriguez, J.)(opinion on “liability estimation” for Turner & Newall entities; court describes estimate presented for the Asbestos Creditors’ Committee and the Futures Representative (Eric Green) by Dr. Mark Peterson, with his estimates of future claims based in part on data regarding claims against the Manville Trust, and a separate estimate for the Asbestos Property Damage Committee by Dr. Robin Cantor, with the future claims portion of the estimate also based in part on data regarding claims against the Manville Trust, and pending claims evaluated in part by imputing data to Turner & Newall claims by “matching data” to the Manville Trust data” ). In Chapter 11 estimates of future asbestos expenses, the claiming history of the Manville Trust’s may, for example, be pointed to as evidence proving that asbestos claiming rates are rising and falling in general or for certain categories of disease. Indeed, the claiming rate for “nonmalignants” have been and continue to be a key issue for estimates. The validity of future estimates also should matter to trustees who must make decisions on how much money to pay out today bearing in mind the amount of expected future claims and payouts. See generally Bates, Charles and Mullen, Charles, Have Your Tort and Eat It Too (PhD economists with asbestos experience describe scope and potential impacts of the $ 30 billion or so of Chapter 11 asbestos trusts).
Accordingly, the Manville Trust data cutbacks may have extensive financial consequences because the absence of the data makes it harder for experts to provide the best possible predictions from the most comprehensive data. The absence of up-to-date also makes it harder for lawyers to cross-examine experts on their predictions. That matters because in general, claiming rates have fallen significantly since the height of asbestos claiming in the early to mid 2000s. The absence of up-to-date data also may hurt current and/or future asbestos claimants who are best paid fairly if reliable estimates can be and are in fact made. In short, billions of dollars may change hands based on estimates that are being impaired by the absence of the Manville Trust data.
The Manville Trust data cutbacks also matter with respect to parallel and/or fraudulent claiming. By 1) terminating the Manville Trust data licenses and 2) allowing claims to be submitted without social security numbers as of November 2008, the Manville Trust is making it harder to weed out duplicate and/or fraudulent claims submitted to the trust. The cutbacks also make it harder for other trusts or defendants to use the Manville Trust data for comparative purposes with respect to their own databases. Making it harder to find claim duplication and/or real fraud is surely the wrong result after all the time and effort that has spent on trying to shut down some of the particular bad actors who triggered and asserted thousands upon thousands of inaccurate asbestos claims in courts and to trusts. For those who have somehow missed that topic, it has been covered in great detail in law review articles by Professor Lester Brickman, and in Congressional testimony by, among others, Prof. Brickman and an asbestos plaintiff’s lawyer who generally represents cancer claimants, Steven Kazan. See, e.g., Brickman, Lester, The Use of Litigation Screenings in Mass Torts: A Formula for Fraud? (August 11, 2008) available at SSRN: http://ssrn.com/abstract=1275406; Testimony of Lester Brickman before the U.S. Senate Committee on the Judiciary, re: Asbestos: Mixed Dust and FELA Issues, February 2, 2005, available at http://judiciary.senate.gov/testimony.cfm?id=1362 &wit_id=3963; Testimony of Steven Kazan before the U.S. Senate Committee on the Judiciary, re: The Asbestos Litigation Crisis Continues – It is Time for Congress to Act, March 5, 2003, available at http://www.kazanlaw .com /verdicts/articles/kazan_senate.cfm.
Further specifics are provided below regarding the Manville Trust data cutbacks, but first some background is provided for readers not burdened with the history of asbestos litigation and Johns-Manville.
Background on Johns-Manville and the Manville Asbestos Trust: The Manville Trust is the long-term “solution” created to pay tens of thousands of asbestos disease claims filed against the many Johns-Manville entities that comprised the largest U.S. seller of asbestos products. The various Manville entities filed for Chapter 11 protection in 1982 due to thousands of then-pending asbestos claims, and due to thousands of future additional claims expected to arise due to the immense breadth and volume of Manville’s asbestos operations. Manville’s operations ranged from mining asbestos fiber to manufacturing and selling literally thousands of asbestos-containing products containing asbestos fibers. The bankruptcy ultimately ended with an injunction that “channeled” all asbestos claims to a new court-ordered “Manville Trust.” Once appeals were over, the trust was created, funded and left to pay then-pending claims and subsequent claims. See generally In Re Johns-Manville Corp, 68 B.R. 618 (S.D. N.Y. 1986). The Manville Trust’s online home is http://www.mantrust.org/.
Fact Research Effort: For the upcoming panel presentation on global asbestos claiming, I went looking for 2008 data regarding “foreign” claims submitted to the Manville Trust by persons who lived and worked outside North America. It seemed that obtaining the data probably would be simple because the Manville Trust foreign claiming data was easy enough to find in the past. Indeed, my files include copies of previously public Manville Trust foreign claims data for 2006 and 2007. Some of the data were presented at prior asbestos seminars, and other data were available through the Trust’s website by using its online links to semi-annual reports submitted to the Court with continuing jurisdiction over the trust. The data indicate that 2007 Manville Trust payments on foreign claims were well over $ 8 million. But, on checking the mantrust.org website for 2008 data, I could not find any 2008 data for the global claims. Moreover, I could not find any website links to or images of a report to the Court for the first six-months of 2008, much less a report for year-end 2008.
Trust Confirms Cutback on Transparency for Data Regarding Foreign Claims: Frustrated because I could not readily find the 2008 global claims data through the trust’s webiste, I tried to obtain the 2008 global claiming data by sending a February 16, 2009 email to the Manville Trust through its web site’s online submission portal . I approached the problem that way because the website explains: “The Trust’s subsidiary and claims resolution facility services provider, the Claims Resolution Management Corporation (the “CRMC”), will respond to your questions about the Trust, its operations and policies at firstname.lastname@example.org or refer to the CRMC homepage at http://www.claimsres.com/.”
With those easy to follow instructions in front of me, off went my email to the Trust asking about global claiming data for 2008.
In response, I received a prompt return email from Mr. Jared Garelick, who uses a signature line that describes him as senior attorney with the trust. The gist of his reply (full text pasted below) was to say that the foreign claiming data are no longer being made public, at least at this time. His email reported that the cutbacks in data availability “come as the Manville Trustees, working together with Trust constituencies, have reevaluated the Trust’s policies regarding the release of claims filing information.”
I sent an email back to ask if the Manville court had approved the cutback on transparency. The response from Mr. Garelick was that the Court had not been asked to approve the cutbacks in transparency. (again, full text of emails is pasted below)
Trust Also Confirms Virtual Elimination of Licensing of Comprehensive Manville Trust Data: I’ve been involved with asbestos litigation long enough to know that economists and other quantitative types have for years been licensing and using comprehensive Manville Trust claims data as a tool for various types of work, including predicting claim trends and analyses regarding data missing from other claims databases, as well as looking for duplicative or fraudulent claiming by some individuals. Accordingly, I thought perhaps the Manville Trust database would include the 2008 global claiming data I was after, and so made calls and sent emails to some people I believed were licensees of the Manville Trust database. The calls and emails, however, soon yielded the answer that the Manville Trust has been issuing letters terminating license agreements. It thus appeared that the comprehensive, up to date Manville Trust database is now largely or perhaps completely out of the public domain. So, in my email to the Trust, I asked whether it is true that the Trust has been terminating licenses and is no longer licensing access to the comprehensive Manville Trust database. In response, Mr. Garelick’s email confirmed that “CRMC [the administrator for the Trust] has cancelled licenses for comprehensive claims filing databases known as the Manville Trust Data. There is a possibility that licensing might be resumed on a very limited case by case basis when the data is urgently needed for experts in certain court proceedings. Again, I am unable to estimate when any change in this policy might occur.” Thus, the Manville Trust once again has cut back on transparency, this time by at least for now having a practice that generally blocks outside experts from accessing previously-available comprehensive data on claims to and payments by the Trust.
Manville Trust No Longer Requires Use of Social Security Numbers by Claimants: While going through the Manville Trust website, I also learned that the trust recently dropped its long-standing rule requiring claimants to submit their social security numbers as part of a claim. Said another way, the Manville Trust has now dropped a rule requiring submission of data that no doubt makes it faster, easier and cheaper to match Manville data to data in other databases, or to find and identify duplicate or fraudulent claims. The rule change is described at the CRMC website (http://www.claimsres.com/), at the right hand side of the home page text block, in a field that includes text stating the following:
“Updated on 11/11/08
“—CRMC will now allow the filing of a claim for a claimant with US exposure without a SSN. However, in that instance you will be required to provide evidence as to how that individual was exposed to JM product within the US. If you are an electronic filer you will receive a notice via the message board indicating that a MV-Exposure Document is required. You must supply specific proof from the claimant detailing how they were exposed.”
Disclaimer and Disclosure: Statements of opinon on this blog and/or presentations at asbestos seminars represent my personal views, and are not views of clients. Clients do not pay for my time to write blog entries and do not see blog entries prior to publishing. Clients also do not pay for my time to write or give presentations on asbestos litigation, and do not see presentations prior to submission to the seminar sponsor. My perspective admittedly is shaped by my twenty-five years of work as a commercial litigator and “asbestos lawyer.” Since 1984, I have represented and do represent entities that are defendants in asbestos litigation, or are financially linked to asbestos litigation through indemnity obligations and/or “shared insurance.” In addition, I have represented and do represent non-insurer entities opposed to certain terms of certain asbestos bankruptcies. Further specifics are available on my bio at my law firm’s website (www.butlerrubin.com), or email me at email@example.com if you need further information. [Disclosure update: Butler Rubin was great, but I left in 2010 (with some regrets) to move on to new experiences. You can reach me at firstname.lastname@example.org.]
Set out below are cut and paste copies of the two emails I sent to the Manville Trust, and the two response emails sent by Mr. Garelick
From: email@example.com [mailto:firstname.lastname@example.org] Sent: Monday, February 16, 2009 12:37 PM To: Inquiry Subject: Questions Regarding the Availability of Data Regarding “Foreign Claims” and Manville Claims Data in General
Dear Sir or Madam:
Pursuant to instructions on the Manville and CRMC websites, I am writing to this address to pose the questions set out below regarding the availability of data from the Manville Trust or its agents ( such as CRMC.) In general, I’d like to find about the availability of information on payments by the Manville Trust for “foreign” claims ( meaning claims for exposures outside the US or Canada), and whether the previously available “Manville Trust Data” will again be made available to experts through licensing or other arrangements. The specific questions are as follows.
1) In the past, Mr. David Austern occasionally provided country-specific Manville claims data at various asbestos-seminars, as illustrated by the attached image of data from a prior presentation. My office has searched across your website, but we could not find country-specific foreign claims data on your website or in the quarterly or annual reports. Is country-specific foreign claims and/or payment data available from you in some format for 2008 (or all years), and what do I need to do to obtain the data?
2) Past annual trustee’s reports on your website, such as the 2007 report, provided some overall but not country-specific data regarding “foreign” claims (the generic data is set out in each report’s Exhibit B regarding claims information. Examples are attached.) We’ve not been able to find such reports for the first or second half of 2008. Are such reports available for 2008, and what do I need to do to obtain them?
3) What is the status of the availability of the claims and payments data commonly known as the “Manville Trust Data”? And, does that data set include country-specific data on foreign claims and payments? I ask because I’ve heard for many years that most asbestos data experts used to have a license agreement to use the Manville Trust Data, and used that data to run comparisons to other databases of asbestos claims information in a process sometimes called “match to Manville.” But today I’ve heard some experts say that Manville/CRMC has terminated license agreements for the Manville Trust Data and that the Manville Trust Data is no longer available for review and comparison by persons outside of the Trust/CRMC. Is is true that the Manville Trust/CRMC terminated data license agreements with such experts, and is it true that the Manville Trust Data is no longer being licensed today to outside users? If true, why were those actions taken? And, if true, was the bankruptcy court asked to approve those actions, when, and are the relevant papers available through you or PACER? When, if ever, do you expect the situation to change?
Thanks very much for your time and attention to these questions. I am giving an unpaid presentation regarding global asbestos claiming on March 11 at a Mealey’s seminar on asbestos trends, and your answers of course would be helpful to have before the presentation.
Kirk Kirk T. Hartley Butler Rubin Saltarelli & Boyd www.butlerrubin.com 3 First National Plaza – Suite 1800 Chicago, IL 60602 312-696-4471 (direct) 312-873-4382 (fax) 312-802-4471 (cell)
_________________________________________________________________ Jared Garelick 02/18/2009 10:45 AM To “email@example.com” cc Subject Re: Questions Regarding the Availability of Data Regarding “Foreign Claims” and Manville Claims Data in General
Dear Mr. Hartley,
The Manville Trust claims filing information you seek is not currently publicly available. As your research indicates, the Trust did make such information available in the past. The change has come as the Manville Trustees, working together with Trust constituencies, have reevaluated the Trust’s policies regarding the release of claims filing information. During the pendency of the reevaluation, which is ongoing, the Trust has declined to make available certain information that it previously did. As you observed, this includes a reduction in the claims filing information the Trust provides in its reports. Whether or to what extent the policy will change is uncertain. You should not count on this type of information becoming publicly available again, at least in the near term.
You are also correct that CRMC has cancelled licenses for comprehensive claims filing databases known as the Manville Trust Data. There is a possibility that licensing might be resumed on a very limited case by case basis when the data is urgently needed for experts in certain court proceedings. Again, I am unable to estimate when any change in this policy might occur. I am sorry we are not able to be of more assistance. Good luck with your presentation. Very truly yours, Jared S. Garelick Senior Attorney __________________________________________________________
From: firstname.lastname@example.org [mailto:email@example.com] Sent: Wednesday, February 18, 2009 12:25 PM To: Jared Garelick Subject: Re: Questions Regarding the Availability of Data Regarding “Foreign Claims” and Manville Claims Data in General
Dear Mr. Garelick:
Thank you for your very timely response to my email inquiry of February 16 to the Manville Trust.
Your response is clear except that it does not explicitly address whether the Manville bankruptcy court was asked to or did approve any of the cutbacks in the availability of information. I infer that approval was not requested or received, but may I impose on you to explicitly address the topic.
Again, thank you for your assistance.
Very Truly Yours, Kirk Kirk T. Hartley Butler Rubin Saltarelli & Boyd www.butlerrubin.com 3 First National Plaza – Suite 1800 Chicago, IL 60602 312-696-4471 (direct) 312-873-4382 (fax) 312-802-4471 (cell)
Jared Garelick 02/18/2009 12:42 PM To “firstname.lastname@example.org” cc Subject RE: Questions Regarding the Availability of Data Regarding “Foreign Claims” and Manville Claims Data in General
Your inference is correct. The Manville Trust’s supervising courts were not asked to approve the reduction in the availability of Trust claims filing information.
Very truly yours,