Proposed New York Bill Seeks Fairness in Asbestos Litigation by Requiring Claimant to File All Asbestos Trust Claims Within 45 Days of Commencement of Civil Action

A recent proposed New York Bill seeks fairness in asbestos civil litigation. SB2511, sponsored by Senator Jon J. Bonacic and co-sponsored by Senator John A. DeFrancisco, aims to bring transparency to asbestos litigation by requiring plaintiffs to file asbestos trust claim forms within 45 days of filing a civil asbestos action. After the recent decision in In re Garlock Sealing Techs, LLC, 504 B.R. 71 (W.D.N.C. Bankr. 2014), it became apparent that asbestos litigation “has been infected with the manipulation of exposure evidence” by certain plaintiff firms.

A summary of the bill established that, beginning in the 1980s, several of the larger target defendants sought bankruptcy protection. From the ashes emerged several bankruptcy trusts whereby plaintiffs could simply submit “documentation establishing the claimant’s disease level and degree of exposure to asbestos from products manufactured by the bankrupt company.” The trusts, separate and distinct from the civil court system, pay billions of dollars each year based on these submissions. The bill would put an end to a process where plaintiffs could seek recovery in a civil action and then file for additional trust claims whereby defendants did not have access to the alleged trust exposures. In those instances, defendants were robbed of their ability to put forth evidence of the claimant’s complete exposure allegations. Therefore, defendants could not accurately assess liability proportionally. This is particularly the case where plaintiffs file the trust claims after the civil action concludes.

Highlights of the bill include:

1) Claimants would be required to notify defendants in the civil action of each asbestos trust claim 30 days after the commencement of discovery.

2) Claimants must provide notice to all defendants of the trust claims and produce all related trust claim materials prior to the start of trial.

3) Permits the defendants to file a motion to stay where the defendants believe the plaintiff could make such claim against a particular trust.

4) Allows the court to stay a civil action if it determines that a claimant is “likely to receive compensation for the asbestos trusts identified in the motion.”

5) Permits the filing for sanctions against the plaintiff if it is found that the claimant made additional claims after judgment that were not disclosed.

The bill is currently in committee. Asbestos Case Tracker will provide updates as they become available.

Read the full bill here.

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