Yes folks, it’s another one in my regular series of ‘bash Elizabeth Warren’ posts.
But this one is dead serious.
So, how did Warren earn that $44,000 consulting paycheck from Travelers Insurance?
By helping Travelers Insurance limit its liability exposure from asbestos lawsuits.
As a legal expert on the subject of bankruptcy, she was hired as a consultant to work on a 2008 Supreme Court appeal involving a 1986 court order that was in turn related to the bankruptcy of the Johns-Manville corporation, which was an insured of Travelers.
The 1982 bankruptcy of Johns-Manville was a landmark asbestos tort case, as it helped define the precedent of a defendant company setting up an “asbestos trust fund” to pay victims of asbestosis and mesothelioma, followed by Chapter 11 bankruptcy reorganization to ensure that the company stayed in business and was able to continue making contributions to the trust fund.
The 1986 court order that was at the heart of the Supreme Court appeal on which Warren worked blocked attempts by victims to sue Travelers Insurance after the establishment of Johns-Manville’s asbestos trust fund. Travelers Insurance had already paid out over $100,000,000 to claimants before the trust fund had been established. The order prevented “any person from commencing any actions based upon, arising out of, or related to insurance policies that Travelers issued to Manville.” The legality of this court order came under question via Federal appellate court (and ended up in front of the SCOTUS) after several Johns-Manville plaintiffs attempted to avoid the lengthy trust fund claims process by filing ‘direct action‘ lawsuits against Travelers Insurance in the early 2000’s.
In Warren’s defense, trust fund settlements and the bankruptcy process were crucial in preserving the financial assets of asbestos defendants. To the extent that the fallibility of our legal process allows, the system ‘worked’ in that it prevented companies from simply liquidating their assets and vanishing without compensating the victims of their negligence. And enforcing bankruptcy agreements is an important part of this system:
Supporting the finality of bankruptcy court rulings is hardly an anti-asbestos victim stance. If insurers like Traveller’s don’t think that the deal they strike as part of a bankruptcy case will be honored, they won’t cut deals. And the result will be that asbestos victims will face years of litigation and maybe no better outcome.
… Warren’s involvement in the appeal is not even evidence that she’s anti-asbestos victims. I vividly remember as a student in Professor Warren’s bankruptcy class the great personal sympathy she has for asbestos victims when discussing the problems of dealing with mass torts in the bankruptcy system. She took great pains to make sure the class understood what a particularly terrible death mesothelioma causes.
But I have to wonder, how politically toxic would something like this be for a Republican? Mass tort lawsuits are complex and the settlement process can take years. Asbestos victims don’t have the luxury of waiting. Since mesothelioma is generally detected only after it has reached stage III or stage IV it is almost 100% fatal, and once it begins to spread out of the pleural cavity the life expectancy of a mesothelioma sufferer is usually less than four months.
Hundreds of thousands of workers were exposed to asbestos in the 1960’s and 1970’s. Since asbestosis can take as long as 25 years to develop, new diagnoses were still turning up consistently in the early 2000’s. Many of those victims could not endure a mass tort lawsuit; neither could they afford to wait at the end of a long line of claimants for a settlement from an asbestos trust fund. Plaintiff’s lawyers argued that direct action lawsuits were the last best hope of these victims for obtaining a fair settlement before they succumbed to their illness.
Democrats love victims and sob stories. A Republican senatorial candidate who had helped design an argument to shut down direct action lawsuits by terminally ill victims of reckless negligence would surely be portrayed in campaign ads and news reporting as a heartless bastard who had sold out to Big Business.
Does Elizabeth Warren deserve to be treated any differently?
______________________
The featured image for this post is asbestos victim Joe Darabant, who worked for Johns-Manville and died in 1990.
