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Asbestos cases, arbitration agreements lead to lively debate in Special Committee on Litigation Reform

JEFFERSON CITY, Mo. – If Tuesday morning’s Special Committee on Litigation Reform is any indicator of how tort reform measures will fare during this legislative session, then one should expect a long and heated debate.

Three bills appeared before the committee on Tuesday: Rep. Bruce DeGroot’s HB 1531, which regards interpleaders, as well his bill on asbestos-related damages, as well as Rep. Kevin Corlew’s HB 1512, which addresses arbitration agreements.

The committee wasted little time to pass DeGroot’s HB 1531, which passed with a vote of 6-3, with Reps. Mitten, Ellebracht, and Roberts voting nay.

House’s Special Committee on Litigation Reform hears DeGroot’s interpleading bill

But the true story of the hearing was in what followed the vote.

HB 1512

First up in the committee was Corlew’s bill, which seeks to make changes to the Uniform Arbitration Act.

Presenting his bill before the committee, Corlew told his colleagues that the bill was similar to legislation that had been heard in previous years, including SB 45 in the previous session and HB 1718 in 2016.

He said the purpose of the bill was to strengthen the arbitration agreement process by providing that in the matter between an employer and an “at-will employee”, the arbitrator is authorized to make all decisions as to the arbitrability, which includes: “deciding whether the parties have agreed to arbitrate, whether the arbitration agreement is enforceable, and whether specific claims are arbitrable.”

The bill establishes criteria for “when the arbitrator must determine if the arbitration agreement is valid.”

By allowing for more agreement to be arbitrated, Corlew said it would free up the dockets in court to handle other litigation. He said the language still allowed the parties to contract, and the court decides whether to stay any action before the court and order the parties to proceed to arbitration. Corlew finished his introduction by stating that the bill was a good policy, saying it was “fair, cost-effective and efficient.”

“HB 1512 honors contracts between employees and employers,” he summed up.

“But what does your bill do?” Rep. Gina Mitten asked Corlew. “It seems to me that it says issues of arbitrability, they are now decided by the arbitrator.”

“That’s essentially it,” Corlew responded. “We’ve also added some safety clauses to ensure fairness.”

Mitten pressed Corlew on the issue of an arbitrator’s pay, stating that in a courtroom, a judge has no financial interest and will get paid no matter what. But she questioned whether an arbitrator deciding the case was fair, questioning if they would rule the case is invalid, as they would “lose the case” and not get paid to the fullest extent.

Corlew argued that there are ethical codes in place for attorneys, as well as arbitrators.

Mitten also expressed concern about this bill limiting a woman’s ability to file sexual harassment claims, an issue brought forward by opponents of the bill as well. The Missouri Association of Trial Attorneys called the bill “a way to keep bad behavior secret.”

The reason for this is that, unlike court cases, arbitration cases are not typically public record, and sometimes, the outcome is subject to gag orders. Under that pretense, opponents argued that it allows an employer to repeat whatever act initially got them in trouble without fear of a light being shone on their actions.

“Forced arbitration is a sexual harasser’s best friend,” Mitten stated, quoting Gretchen Carlson, the woman who filed a sexual harassment lawsuit against Fox News Chairman and CEO Roger Ailes.

Janet Mark, the associate general counsel at Hallmark, said that arbitration is widely used to decide claims brought by both the employee or the employers.

“This bill has nothing to do with placing a gag order on victims, or squelching complaints or keeping them under wraps,” she stated.

Opponents of the bill said that arbitration takes just about as long, and costs roughly the same in time and resources.

“It takes away the employees ability to argue against the contract,” Mary Anne Seder, an attorney with Sedey, Harper, Westhoff, P.C., said.

A representative from the Missouri AFL-CIO testified before the committee, saying that the current laws provide some transparency and called the bill “bad for Missouri workers.”

“We feel this would further stack the deck in favor of employers, and it’s not the way to go,” Jeanette Motte-Oxford of Empower Missouri testified.

HB 1645

But while the arbitration bill proved to produce some heated debate, it was little when compared to Rep. DeGroot’s HB 1645, which deals with damages related to asbestos.

The bill would change a number of provisions in regard to asbestos tort actions. The provisions would apply to actions filed on August 28, 2018, or after, as well as pending cases where the trial has not commenced.

The provisions included in the bill are as follows:

  1. Requires a claimant to provide all parties in an action a sworn statement indicating that all asbestos trust claims that the claimant can file have been completed and filed. In addition, the claimant shall provide all parties with all trust materials relating to the asbestos exposure and related claims;
  2. Allows any defendant in an asbestos tort action to file a motion for an order to stay the proceedings. The motion must contain information the defendant believes supports any additional asbestos trust claim that the claimant may file;
  3. Requires trust claims materials and trust governance documents to be admissible in evidence. Claims of privilege do not apply to trust claims materials or trust governance documents;
  4. The parties in the asbestos tort action may introduce at trial any trust claims material to prove alternative causation for the exposed person’s claimed injury, death, or loss to person, to prove a basis to allocate responsibility for the claimant’s claimed injury, death, or loss to person, and to prove issues relevant to an adjudication of the asbestos claim, unless the exclusion of the trust claims material is otherwise required by the rules of evidence. Settlements with bankruptcy trusts shall reduce the claim by the stipulated amount of the agreement or amount of consideration paid;
  5. The court may impose sanctions for the claimant’s failure to comply with these disclosure requirements. A defendant may, within one year after the judgment, move to reopen a judgment in an asbestos action if a claimant files certain additional asbestos trust claims.

DeGroot introduced the bill, telling the committee of his experiences earlier in his career, saying he had spent years taking depositions in the matter. He said the goal of HB 1645 was to prevent “double-dipping” among plaintiffs’ lawyers, who often file claims against both asbestos trusts, which cover insolvent companies, and solvent companies in the form of civil suits. He said the matter was simply a matter of fairness.

“I will fight tooth and nail for a person to get what they are deserved,” DeGroot said. “I don’t agree with getting two or three times that.”

DeGroot said that he was concerned for veterans, widows, and other workers getting short-changed because others have received money from both the trusts and lawsuits.

“They’re essentially double-dipping,” he said. “Without this legislation, we’re basically stealing from them.”

Sen. Wayne Wallingford also appeared to testify in favor of DeGroot’s bill, stating that 30 percent of asbestos-related deaths are veterans. He told the committee that 12 other states had enacted similar legislation, and said that under this bill, juries would be better informed.

But Mitten once again rose to question the legislation, taking issue with some of the language, which she said unduly allowed for the delaying of cases.

“What is the cost of a life?” Rep. Gina Mitten asked.

She noted that the language could, in effect, delay the proceedings, when the plaintiffs in these cases, the victims suffering from mesothelioma, may only have a year to live.

“Mesothelioma is a death sentence,” one opponent stated. “Anything that puts this off, or makes it harder to file a claim, we’re against.”

“It’s just not a simple process,” Lauren Williams of SWMW Law said. “You have complex medical and detailed work history and product identification that comes into play. It could be impossible to figure out every occupational exposure that someone might have.

“It’s completely unfair, and there’s no reciprocal for disclosure on the other side, and it’s certainly unfair with the delays.”

Other opponents argued that the bill was simply another effort of so-called “tort reform”, benefiting big business and puts the burden on the plaintiff.

“There were no plaintiffs or victims, or anybody that served on the plaintiff side, that supported this bill in any way. The only people supporting the bill are supporting companies that knowingly poisoned their employees, large corporations who have filed for bankruptcy in various forms,” Irl Scissors, representing the law firm of Simmons Hanly Conroy, said. “Those companies have been found, through court proceedings, to have knowingly poisoned their employees. So, any adjustments to this law, and this bill, in particular, will have an adverse effect and a negative impact on any plaintiffs or victims bringing suit.”

Bart Baumstark, an attorney with the O’Brien Law Firm, has represented families of the victims of mesothelioma for years, a good number of whom have been military veterans and has testified against this type of legislation for some time.

“The chief purpose is two-fold – to allow defendants to take over and dictate a plaintiff’s claim, and delay that claim,” he said. “This bill gives them almost unfettered ability to get motions to stay and delays from judges until they die. The second purpose seeks to make solvent companies judgment proof.”

“These are hardworking people, blue-collar people who work with their hands. If a defendant is at trial, and a jury finds them liable for 10-15 percent, that’s what they’ll pay. It’s a bill that is unnecessary, and hurts people who are in a bad spot already.”

Rep. Corlew argued that the delays were not as substantive as some made them seem, stating that the bill provides some set time limits.

The debate on the two bills lasted a little longer than two hours, but the committee did not go to executive session on either bill.

To view HB 1512, click here.

To view HB 1645, click here.