Warren’s Role in Asbestos Case
Posted on October 15, 2012Massachusetts Sen. Scott Brown and challenger Elizabeth Warren are accusing each other of “not telling the truth.” Brown says Warren worked to “restrict payments” to asbestos victims, while Warren says she worked to “get more money” for them. We find Warren is correct; Brown’s ad is a distortion.
It may seem counter-intuitive that Warren’s work on behalf of an insurance company that covered an asbestos manufacturer could be work on the same side as the victims of the case. But Warren was brought in as a bankruptcy expert on a case before the Supreme Court to secure a $500 million trust to pay asbestos victims. As part of a settlement that Warren worked to preserve, the insurance company sought immunity from lawsuits in exchange for releasing the $500 million trust. Attorneys for most of the asbestos victims supported Warren’s efforts.
Here are the two narratives portrayed by the competing campaigns.
Brown’s VersionIn recent TV and radio ads, the Brown campaign begins with a narrator saying, “Elizabeth Warren’s not telling the truth about her career.” It then cuts to a clip of Warren saying, “I’ve been out there working for people who have been injured by big corporations.”
The narrator then says, “But the [Boston] Globe says Elizabeth Warren was a key lawyer in an asbestos case working for a big corporation. Warren helped Travelers Insurance restrict payments to victims of asbestos poisoning. The results were disastrous for the victims. The insurance company saved millions. And Elizabeth Warren got paid 40 times what they paid victims. Elizabeth Warren’s just not who she says she is.”
Brown echoed those comments during a debate on Sept. 20, saying, “You chose to side with one of the biggest corporations in the United States: Travelers Insurance. When you worked to prohibit people who got asbestos poisoning, and I hope all the asbestos union workers are watching right now. She denied, she helped Travelers deny those benefits for asbestos poisoning, made over $250,000 in an effort to protect big corporations. There is only one person in this debate, right now, Jon, who is protecting corporations. She has a history of it.”
“It’s just not true,” Warren said at the debate. ”The facts speak for themselves.”
Warren’s VersionAlthough she didn’t elaborate during the debate, Warren’s camp later fired back with two ads featuring family members of victims of mesothelioma who describe Warren as a champion of their cause.
“I’ve been a widow since 1990 when my husband, Sam, died of mesothelioma,” says Ginny Jackson. “He was exposed to asbestos when he worked at the Quincy shipyard. It’s a terrible, terrible way to die. Elizabeth Warren went all the way to the Supreme Court to try to get more money for asbestos victims and families. Now Scott Brown is attacking Elizabeth Warren about her work. Scott Brown is not telling the truth. He’s trying to use our suffering to help himself. He outta be ashamed.”
Warren’s version of the case has been publicly backed by several attorneys representing the asbestos victims, as well as leaders of an asbestos workers’ union.
“He’s flat out misrepresenting the facts,” Francis C. Boudrow, business manager for the International Association of Heat and Frost Insulators and Asbestos Workers Union, Local No. 6 told the Boston Globe. “It’s offensive to all these people who’ve lost lives” to asbestos-related illness, he said.
Warren’s WorkAt the heart of this issue is an ongoing asbestos case involving the nation’s largest asbestos manufacturer, Johns-Manville Corp. The company ended up in bankruptcy, leaving some victims, who did not develop symptoms until more than a decade after others, seeking compensation from an ever-shrinking victims fund. By the time Warren entered the case in 2008, more than $3.2 billion had been paid out to over 600,000 claimants.
Warren was brought into the case by Travelers Insurance, one of the insurers of Johns-Manville. Specifically, Warren worked on the case Travelers v. Baily to preserve a $500 million trust from which current and future victims would be paid — part of a settlement agreement previously reached between lawyers for Travelers and the victims.
According to Warren’s financial disclosure forms, Warren was hired by Travelers in April 2008 and did work for the company through September 2010. By that time, Travelers and the asbestos victims were working together on a common goal: to preserve the $500 million trust both sides had agreed to. Another insurance company, Chubb, was contesting the settlement agreement, and Warren ended up making her one and only appearance before the Supreme Court arguing on behalf of Travelers to uphold the trust. As part of the deal, Travelers would be permanently immune from future asbestos-related lawsuits concerning Johns-Manville. Warren’s argument prevailed. According to the Globe, Warren was paid $212,000 over three years by Travelers.
So it’s true, as the Brown ad says, that a Boston Globe headline on May 1 described Warren as playing a “key role in an asbestos court case.” But the subhead of the story — “Worked for insurer on fund for victims” — belies the ad’s claim about her opposing the interest of the victims.
Specifically, the ad leaves out this pivotal paragraph from the same Globe story:
Boston Globe, May 1: Travelers won most of what it wanted from the Supreme Court, and in doing so Warren helped preserve an element of bankruptcy law that ensured that victims of large-scale corporate malfeasance would have a better chance of getting compensated, even when the responsible companies go bankrupt.Unfortunately for the asbestos victims, the Supreme Court’s decision wasn’t the final word on this case. After Warren left the case, it took a “disastrous” turn for the victims when a lower court issued a ruling on Feb. 29, 2012, that, as the Globe reported, took Travelers “off the hook for paying out the $500 million settlement.”
The Globe noted that according to one judge who tried to preserve the settlement, Travelers received “something for nothing” — immunity from future lawsuits without having to pay out the $500 million trust.
Warren has said she believes the lower court erred. The ruling is still under appeal.
Bruce Carter, an Ohio attorney whose firm has worked on behalf of over 19,000 claimants in the case, told us Brown has simply mischaracterized Warren’s role. The idea that Warren was working against the interests of the victims, he said, is ”not true.”
“During the period she worked with Travelers, the claimants (the victims) and Travelers were working together to do what was necessary to get these funds approved and established,” Carter said. “We were all working together for the benefit of the victims. We were working together toward a common goal.”
The trust established through a settlement with Travelers avoided further legal wrangling that “could have taken many, many more years, if ever, to succeed,” Carter said. In other words, he said, the trust provided a mechanism for victims to actually get paid.
In an interview with the Globe in May, Warren said, “The issue I was focused on like a laser was the constitutionality of preserving the trust, because the trust is a critical tool for making sure that people who’ve been hurt have a fair shot at compensation. Without it, millions of people who’ve already been injured will get nothing, and millions more in the future will get nothing.”
How close was the relationship between Travelers and victims? Before the Supreme Court, the attorneys representing the victims gave Travelers’ attorneys their time so they could provide a more complete argument in favor of the settlement agreement, Carter said.
“That tells you, we worked together toward a common goal,” Carter said. “We gave them our time to argue to the panel.” It was only after Warren left the case, he said, that Travelers “tried to back out of the deal and try to get something for nothing.” Another lawyer representing victims in the case, Edwin L. Wallace with the law firm Thornton & Naumes in Boston, echoed Carter’s assessment.
“She was working for the victims,” Wallace said. “In order to pay the victims, we needed a settlement trust,” said Wallace, who has contributed to Warren’s campaign. “She represented Travelers for that argument.”
Warren’s work for Travelers was over by the time a lower court ruled that Travelers would not have to pay the $500 million trust. So no one — including Ginny Jackson, the woman featured in the Warren ad — has been paid yet.
Carter and Wallace both said that — contrary to what the Brown campaign is now saying — neither they nor Warren could have foreseen the lower court ruling that let Travelers off the hook for the $500 million trust.
And Wallace is confident that ruling will be overturned. “They will get paid,” Wallace predicted.
– Robert Farley