A Matter of Trust: Promoting Truth in New York Asbestos Trust Claims with Legislative Solutions

Previously on Asbestos Case Tracker, we took a look at the successful efforts of certain states to combat manipulation and abuse of the asbestos bankruptcy trust system. These states passed legislation that prevents claimants from being doubly compensated for alleged exposures to asbestos-containing products manufactured, used, or supplied by bankrupt and viable companies. The legislation enabled defendants in the tort system to obtain evidence of alternative exposures submitted only to bankruptcy trusts but not during the course of personal injury litigation.

New York’s Solution

New York may now join those states by implementing the legislative solution outlined in Bill A53, which the New York State Assembly memorandum of support describes as a bill that would “amend the Civil Practice Law and Rules to improve the transparency of asbestos trust claims.” The bill’s sponsor, Assemblyman David Buchwald, from Westchester, stated that the purpose of the bill was “to prevent duplicate compensation to litigants, who seek relief through litigation then later file claims with bankruptcy trusts.” Moreover, as the memorandum of support states, “[u]nder New York law, defendants in a civil action should only be responsible for their proportionate shares” of substantial damages.

Following the lead of over a dozen other states, including those assessed in our prior ACT post, New York is similarly justifying Bill A53 by the stark findings of a recent study by the nonprofit civil litigation research organization, New York Civil Justice Institute, “A Matter of Trust?  How Access to Asbestos Trust Claims Information Affects Cases in New York Courts.” Just as previous studies prompting legislation enacted throughout the country have consistently shown, “A Matter of Trust” demonstrates extensive trust-system abuse by New York claimants and regular incidents of New York plaintiffs failing to disclose bankrupt-entity-related causation evidence to defendants in the tort system, and further notes that plaintiffs regularly flout administrative rules already established in the storied New York City Asbestos Litigation (NYCAL) meant to promote disclosure of trust filings. The study, therefore, concludes that “without legislatively enacted guides in place, plaintiff’s counsel in New York will continue to elude the defense and control access to trust information.”

Specifically, Bill A53 would create a new Article 99 of the N.Y. C.P.L.R. entitled “Truth in Asbestos Trust Claims,” which would:

  • Require any claimant who has filed an asbestos-related civil lawsuit to file all of his or her claims with asbestos bankruptcy trusts no later than 45 days after the lawsuit is commenced
  • Require claimants to notify all defendants in the civil action of the filing of every bankruptcy trust claim 30 days after discovery begins, as well as produce to every defendant the materials submitted to the trusts
  • Require the completion of all bankruptcy trust claims prior to the commence of the civil action trial
  • Enable defendants to, no fewer than 90 days prior to trial, request that the court direct the plaintiff/claimant to file a claim with an asbestos bankruptcy trust not previously filed
  • Provide rules for the consideration of evidence originating in claims submitted to the trusts
  • Allow defendants to move for sanctions if the court determines the claimant made changes to or failed to disclose trust submissions after a judgment is rendered in the civil action, as well as allow for adjustment of a judgment in the civil action up to one year following the judgment in order to account for trust payments obtained by the claimant/plaintiff for filings made after the judgment

Such directives and remedies promote fairness in the tort system by enabling viable asbestos defendants to better assess their defenses and be held accountable only for their purported share – if any–of causation, while still compensating plaintiffs and claimants for demonstrated injuries.

The new legislative term in the New York State Assembly begins in January 2020, when Bill A53 will come to a vote.