By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Kraus says his criticism isn't personal. Baron is the best lawyer he's ever met, he says. "He's a real street fighter when he's in a battle. I saw that. And he will make it personal. I hope this doesn't get personal, because I have great respect for him. But he's already tried to isolate those among us who have taken this stand from the larger body of lawyers around the country. I'm sure it has started to affect our referrals, but we can take that. We all compete for cases anyway."
Kraus says it is wrong to think corporate America has simply taken an unfair beating at the hands of some sharp lawyers, as Fortune suggested recently in an article labeling asbestos lawsuits a "$200 billion miscarriage of justice."
That gargantuan number is the latest estimate of total corporate asbestos liability projected by the actuarial firm Tillinghast-Towers Perin if the current trends remain. Stephen Carroll, senior economist at the Rand Institute for Civil Justice, says a quarter of that total has been paid out so far by the companies and their insurers in 600,000 settled claims. The circle of defendants, which now stretches out to everyone from toaster-makers and wineries to Sears, Roebuck, numbers about 5,000 in virtually every part of the U.S. economy.
Kraus says it is a mistake to oversimplify the multistage battle that has become the longest-running product liability fight in history. Corporate defendants will tell the public they are all for compensating the sick, he says, "But they fight like hell to pay as little as they can.
"I have pieces of paper come across my desk every day that are shameless. They will do anything to continue [or delay] a cancer case, because everyone knows the claim is less valuable after the plaintiff is dead. Some of these companies want to pay a mesothelioma claimant with substantial exposure [to their products] $25,000. That isn't what I call compensation. That's what they think it's worth if you're a blue-collar guy who has died catastrophically 20 years before the end of your natural life."
Iola says he gets many of his asbestos cases from lawyers who were clever enough to establish elaborate Web sites on asbestos. Ronald Bailey came to him that way. When he was diagnosed, his daughter typed the word "mesothelioma" into a search engine, hoping to learn more about the disease. Out came a lawyer-sponsored Web site giving an encyclopedia of information, plus the lawyer's phone number. The advertising-savvy lawyer in turn brokered the case to a trial lawyer, Iola, who did all the traditional legal work.
That same entrepreneurial zeal is behind the tens of thousands of claims from workers who are unimpaired but who claim to have mild asbestosis, small irregular scarring between the air sacs of the lungs caused by inhaling tiny shards of the asbestos mineral.
"You could see as early as a decade ago this unnatural proliferation of nonmalignant cases being filed around the country," says Iola, who began working on asbestos cases in 1982. "I say unnatural because malignant disease from asbestos is predictable. We can scientifically predict through epidemiological studies how many people will come down with mesothelioma in a given year. It's coded on death certificates, and the number has been constant--around 2,800 deaths each year for the past 25 years. Same with asbestos-related lung cancers. There's about 4,500 cases filed a year.
"What has proliferated have been these nonimpaired cases. Medical science would say there should be a decreasing trend, because controls in the workplace began in 1969 and became effective under federal law in 1972. We have decreased dramatically the amount of exposure, and asbestosis is a dose-response disease. So we should have fewer and fewer cases. But we have more and more because lawyers are very, very creative.
"That's why we have 10 times more nonmalignant cases being filed today than in 1990. A nonmalignant asbestos disease is whatever a willing physician says it is, so a lawyer and physician can go out and create however many cases they want."
Lawyers for a list of corporations that are being hit with new claims in an ever-widening search for solvent defendants--including General Electric, Exxon Mobil and Union Pacific Railroad--have been probing the medical side of that phenomenon.
Their target has been the medical screening companies that lawyers hire to find clients. As Paul Scrudato, a defense lawyer in New York, wrote in a brief earlier this month, "Hundreds, sometimes thousand of asbestos plaintiffs do not just happen to file lawsuits or bankruptcy claims on the same day, in the same place, represented by the same lawyers."
Most of the new filings are generated through free, lawyer-sponsored mass-screenings, often advertised with promises such as "A Picture Of Your Lungs Could Be Worth Millions," he says.