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Sub. H. B. No. 631 As Reported by the House Judiciary CommitteeAs Reported by the House Judiciary Committee
127th General Assembly | Regular Session | 2007-2008 |
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Cosponsors:
Representatives Coley, Mecklenborg
A BILL
To enact sections 2307.951, 2307.952, 2307.953, and
2307.954 of the Revised Code to
require claimants
in asbestos tort actions to make
certain
disclosures pertaining to asbestos trust
claims
that have been submitted to
asbestos trust
entities for the purpose of
compensating the
claimant for asbestos exposure.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 2307.951, 2307.952, 2307.953, and
2307.954 of the Revised Code be enacted to read as
follows:
Sec. 2307.951. As used in this section and sections 2307.952
to 2307.954 of the Revised Code:
(A) "Asbestos," "asbestos claim," and "tort action" have the
same meanings as in section 2307.91 of the Revised Code.
(B) "Asbestos tort action" means a tort action based on an
asbestos claim.
(C) Except as otherwise provided in division (E) of section
2307.954 of the Revised Code, "asbestos trust" means and
encompasses all trust
entities, claims agents, or claims
processing facilities that are created
pursuant to the
jurisdiction of a
United States bankruptcy court
and section
524(g) of Chapter 11
of the United States Bankruptcy
Code, 11
U.S.C. 524(g), or other
applicable provision of law, that are
formed for the purpose of
compensating claimants asserting
eligible asbestos claims, and
that are in existence on the date
initially set for trial in the
asbestos tort action.
(D) "Asbestos trust claim" means any claim for compensation
by an exposed person or the exposed person's asserted
representative against any asbestos trust.
(E) "Cancer" means a malignant condition.
(F) "Claimant" means any person asserting an asbestos claim
or asbestos trust claim. "Claimant" includes a plaintiff,
counterclaimant, cross-claimant, or third-party plaintiff.
(G) "Exposed person" means any person whose exposure to
asbestos or to asbestos-containing products is the basis for an
asbestos claim.
(H) "Non-cancer" means a nonmalignant condition.
(I) "Proof of claim" means any form of documentation that a
potential claimant against an asbestos trust submits or provides
to the asbestos trust that attests to or asserts the existence of
any liquidated or unliquidated asbestos claim that the claimant
may have against the asbestos trust or its predecessors under any
theory of law.
(J) "Trust claims material" means documents constituting an
asbestos trust claim,
including, but not limited to, claim forms,
proofs of claim, and
informational material required by an
asbestos trust to be submitted by a claimant in order to have the
claim evaluated by the asbestos trust and relied upon by the
asbestos trust in making its compensation determination.
(K) "Trust governance documents" means and encompasses all
documents that set forth in the plan of reorganization and related
orders, terms, conditions, distribution procedures, payment
schedules and matrixes, evaluation paradigms and adjustment
formulas, and all other policies and procedures that are utilized
to determine a claimant's eligibility for, and the amounts or
levels of, payment to a claimant by an asbestos trust.
Sec. 2307.952. (A)(1)(a) Within thirty days of assignment of
an initial trial date in an
asbestos tort action that is not
otherwise barred or deferred
under applicable law, or within
thirty days of the effective date
of this section with respect to
asbestos tort actions that are
pending on that effective date and
that have been assigned an initial trial date, a claimant shall
provide to all of
the parties in the action a sworn statement by
the claimant,
under penalty of perjury, identifying all existing
asbestos trust
claims made by or on behalf of
the claimant.
The
sworn statement
shall disclose the date on which
each
asbestos
trust claim
against the relevant asbestos trust was made and
whether any
request for a deferral, delay,
suspension,
or
tolling of the
asbestos trust claims process has
been
submitted.
(b) The submission of the sworn statement under
division
(A)(1)(a) of this section shall be in addition
to any disclosure
requirements otherwise imposed by law, civil
rule, court order or
ruling, applicable agreement or stipulation,
local rule, or case
management order.
(2) If the claimant, subsequent to
the submission of the
sworn statement under division
(A)(1)(a) of this section,
files
or submits any additional asbestos trust claims not previously
disclosed, the claimant shall provide to all of the parties in the
asbestos tort
action an
amendment updating the statement and
identifying
the additional asbestos trust claims. The claimant
shall provide any amendment under
division
(A)(2) of this
section within thirty days of filing an asbestos trust
claim
with, or submitting an asbestos trust claim to, any
additional
asbestos trust.
(3) With respect to any asbestos trust claim that a claimant
disclosed under division (A)(2) of this section in an amendment to
the sworn statement, the claimant shall provide to all of the
parties in the asbestos tort action all trust claims material
pertaining to each additional asbestos trust claim identified in
that amendment. The claimant shall provide the trust claims
materials under division (A)(3) of this section within thirty days
of filing or submitting each additional asbestos trust claim.
(B) Failure to provide to all parties in the asbestos tort
action all trust claims material as required by this section in a
timely manner shall constitute grounds for the court to extend the
date set for trial.
(C) Nothing in this section shall prevent a court of
competent jurisdiction from requiring disclosures
in addition to
the disclosures required under this section.
Sec. 2307.953. (A) Any defendant in an asbestos tort action
may file a motion with the court, with notice to the claimant and
to all of the parties in the action, for an order to stay the
proceedings. A defendant's motion to stay the proceedings shall
set
forth credible evidence that demonstrates all of the
following:
(1) The identities of all asbestos trusts not previously
disclosed by the claimant pursuant to section 2307.952 of the
Revised Code against which the claimant has not made any asbestos
trust claims but against which the defendant in good faith
believes the claimant may make a successful asbestos trust claim;
(2) The information that the defendant believes supports the
additional asbestos trust claims described in division (A)(1) of
this section;
(3) A description of the information sufficient to meet the
asbestos trust claim requirements of the asbestos trusts described
in division (A)(1) of this section.
(B) Within fourteen days after the filing of the defendant's
motion for an order to stay the proceedings under division (A) of
this
section, the claimant may do the following:
(1) File the asbestos trust claims with or submit them to the
asbestos trusts identified in the defendant's motion for an order
to stay the proceedings.
The submission to the court and to all
of the parties in the
asbestos tort action of proof demonstrating
that the asbestos
trust claims identified in the defendant's
motion to
stay the proceedings have been filed with or submitted
to the
appropriate asbestos trusts is dispositive of the
defendant's
motion for an order to stay the proceedings.
Alternatively, the
defendant may withdraw the motion brought
under this section.
(2) File with the court a response to the defendant's motion
for an order to stay the proceedings requesting a determination by
the court
that the information supporting the asbestos trust
claims against
the asbestos trusts identified in the defendant's
motion for an order to stay the proceedings should be modified
prior to the filing of an asbestos trust claim with, or the
submission of an asbestos trust claim to, an asbestos trust or
that there is insufficient information to file or submit the
asbestos trust claim identified in the defendant's motion for an
order to stay the proceedings.
(C) If the defendant has not met its burden under division
(A) of this section and if the claimant files a response pursuant
to division
(B)(2) of this section, the court shall determine if
a successful asbestos
trust claim could be submitted in good
faith to each asbestos
trust identified in
the defendant's
motion for an order to stay
the proceedings brought pursuant
to
division (A) of this section.
The claimant has the burden of
proof, by a preponderance of the
evidence, to demonstrate that
the
information set forth by the
defendant pursuant to divisions
(A)(2) and (3) of this section
should be modified prior to the
filing of an asbestos trust claim
with,
or the submission of an
asbestos trust claim to, each
asbestos trust,
that the asbestos
trust claims should not be
filed with or
submitted to the
asbestos trust because a successful asbestos trust claim
cannot be
made
in good faith, or that the reasonably anticipated recovery
from the asbestos trust claim renders the filing of the asbestos
trust claim economically imprudent.
(D) If the court determines that there is a good faith basis
for filing an asbestos trust claim with, or submitting an asbestos
trust claim to, an asbestos trust identified in the defendant's
motion for an order to stay the proceedings brought
pursuant to
division (A) of this section, the court shall stay the
proceedings until the claimant files the asbestos
trust claims
with or submits them to the
asbestos trusts identified in the
defendant's
motion for an order
to stay the proceedings and has
otherwise met the obligations set forth in sections 2307.952 and
2307.953 of the Revised Code.
Sec. 2307.954. (A) A non-cancer asbestos trust claim and a
cancer asbestos trust claim are based on distinct injuries caused
by a person's exposure to asbestos. A non-cancer asbestos trust
claim that is subject to disclosure under section 2307.952 or
2307.953 of the Revised Code or is identified in this section
means the non-cancer asbestos claim that is the subject of the
asbestos tort action in which the defendant seeks discovery
pursuant sections 2307.951 to 2307.954 of the Revised Code. If a
claimant previously filed a non-cancer asbestos trust claim with,
or submitted a non-cancer asbestos trust claim to, an asbestos
trust and subsequently filed an asbestos tort action based on a
cancer asbestos claim, a cancer asbestos trust claim that is
subject to disclosure under sections 2307.952 and 2307.953 of the
Revised Code or is identified in this section means both the
earlier filed non-cancer asbestos trust claim and the cancer
asbestos claim that is the subject of the subsequent asbestos tort
action.
(B) Asbestos trust claims and the information
that
is the
subject of disclosure under sections 2307.952 and
2307.953
of
the Revised Code are presumed to be authentic,
relevant to, and
discoverable in, an asbestos tort action.
Notwithstanding any
agreement or confidentiality provision, trust
claims material are
presumed to not be privileged. The
parties in the asbestos tort
action may
introduce at trial any
trust claims material to prove
alternative
causation for the
exposed person's claimed injury,
death, or loss
to person, to
prove a basis to allocate
responsibility for the
claimant's
claimed injury, death, or loss
to person, and to prove
issues
relevant to an adjudication of
the asbestos claim unless the exclusion of the trust claims
material is otherwise required by the rules of evidence. A claim
rejected by an asbestos trust may be excluded if required by the
rules of evidence.
(C) In addition to the disclosure requirements set forth in
sections 2307.952 and 2307.953 of the Revised Code, the parties to
the asbestos tort action may seek additional disclosure and
discovery of information relevant to the action by any mechanism
provided for by any applicable section of the Revised Code, the
Rules of Civil Procedure, any local rule, or any case management
order. In addition to the disclosure described in this division,
any defendant in the asbestos tort action also may seek discovery
of the claimant's asbestos trust claims directly from the asbestos
trusts involved. Within thirty days of assignment of an initial
trial date in an asbestos tort
action that is not otherwise
barred or deferred under applicable
law, or within thirty days of
the effective date of this section
with respect to asbestos tort
actions that are pending on that
effective date and that have
been assigned an initial trial date, a claimant shall provide to
all of the parties in
the asbestos tort action the consent,
authorization, or
permission that may be required by any asbestos
trust for the
release of information and materials that are
subject to the
disclosure requirements of sections 2307.952 and
2307.953 of the
Revised Code or any additional disclosure under
this division.
(D) The court in an asbestos tort action, upon the filing by
a defendant or judgment debtor of an appropriate motion seeking
sanctions or other relief, may impose any
sanction provided by a
law of this state, including, but not
limited to, vacating a
judgment rendered in an asbestos tort
action, for a claimant's
failure to comply with the disclosure
requirements of sections
2307.952, 2307.953, and 2307.954 of the
Revised
Code.
(E)(1) If a claimant, subsequent to obtaining a judgment in
an
asbestos tort action in this state, files any additional
asbestos
trust claim with, or submits any additional asbestos
trust claim
to, an asbestos trust that was in existence
at the
time the
claimant obtained that judgment, the trial court, upon
the filing
by a defendant or judgment debtor of an appropriate
motion seeking
sanctions or other relief,
shall have jurisdiction
to reopen its
judgment in the asbestos
tort action and do either
of the
following:
(a) Adjust the judgment by the amount of any subsequent
asbestos trust payments obtained by the claimant;
(b) Order any other relief to the parties that the court
considers just and proper.
(2) As used in division (E) of this section, "asbestos
trust" means and encompasses all trust
entities, claims agents,
or claims processing facilities that are created
pursuant to the
jurisdiction of a United States bankruptcy court
and section
524(g) of Chapter 11 of the United States Bankruptcy
Code, 11
U.S.C. 524(g), or other applicable provision of law and that are
formed for the purpose of compensating claimants asserting
eligible asbestos claims.
Section 2. Sections 2307.951 to 2307.954 of the Revised Code,
as enacted by this act, apply to asbestos tort actions filed on or
after the effective date of this act and to pending asbestos tort
actions in which trial has not commenced as of the effective date
of this act.
As used in this section, "asbestos tort action" has the same
meaning as in section 2307.951 of the Revised Code, as enacted by
this act.
Section 3. (A) If any provision that constitutes the whole or
part of a section of the Revised Code enacted by this act or if
any application of any provision that constitutes the whole or
part of a section of the Revised Code enacted by this act is held
invalid, the invalidity does not affect other provisions of the
section or applications of other provisions of the section that
can be given effect without the invalid provision or application.
To this end, the provisions that constitute the whole or part of
the sections of the Revised Code enacted by this act and their
applications are independent and severable.
(B) If any provision that constitutes the whole or part of a
section of the Revised Code enacted by this act or if any
application of any provision that constitutes the whole or part of
a section of the Revised Code enacted by this act is held to be
preempted by federal law, the preemption does not affect other
provisions of the section or applications of other provisions of
the section that can be given effect without the preempted
provision or application. To this end, the provisions that
constitute the whole or part of the sections of the Revised Code
enacted by this act and their applications are independent and
severable.
Section 4. The General Assembly makes the following
statements of findings and intent:
(A) The United States Supreme Court has described asbestos
litigation in this country as a crisis.
(B) Asbestos litigation has forced an estimated eighty-five
employers into bankruptcy. The rate of asbestos-driven
bankruptcies has accelerated in recent years. Between 2000 and
2007, there were more asbestos-related bankruptcy filings than in
either of the prior two decades.
(C) Personal injury lawyers have responded to these
bankruptcies by expanding their search for solvent defendants. The
number of asbestos defendants now includes over eight thousand
five hundred companies, including many small and medium size
companies, in industries that cover eighty-five per cent of the
United States economy.
(D) Asbestos claimants often seek compensation for alleged
asbestos-related conditions from civil defendants that remain
solvent in civil court tort actions and from trusts or claims
facilities formed in asbestos
bankruptcy proceedings.
(E) There is limited coordination and transparency between
these two paths to recovery. Ohio courts have already experienced
the problem of instances of claimants failing to provide
information and materials regarding asbestos trust claims that
they have commenced. This lack of transparency creates a strong
potential
for abuse of the judicial process, as plaintiffs may
allege facts
intended to maximize recoveries from trusts created
through the
bankruptcy system while also alleging different or
conflicting
facts to maximize recoveries from tort system
defendants.
(F) It is in the interest of justice that there be
transparency for claims made in the bankruptcy system and for
claims made in civil asbestos litigation. Transparency will
address the potential for abuse, fraud, and duplicate and
inconsistent payments.
(G) Presentation of abusive, fraudulent, or inconsistent
claims undermines the integrity of Ohio's judicial system.
(H) The current lack of transparency in the tort system may
result in businesses in this state being unfairly penalized and
deprived of their rights.
(I) New asbestos trusts are being formed and are anticipated
to be funded with approximately thirty billion dollars in assets.
As a consequence, it is critical to the interests of justice and
to the economy of the state of Ohio that the distribution of these
assets be made in a manner that incorporates full and consistent
disclosure when recovery is sought through an asbestos tort action
in Ohio
against solvent companies or through a trust claim against
a
bankrupt entity. All relevant asbestos exposure information
should
be made available in a timely manner so that solvent
companies do
not unnecessarily absorb the liabilities of bankrupt
trust entities that are not subject to tort actions. Transparency
will help ensure that all responsible parties are allocated an
equitable share of any liability and will encourage injured
persons to promptly seek an appropriate recovery from all
appropriate sources.
(J) The General Assembly has established apportionment of
liability as a public policy. Pursuant to Ohio apportionment law,
bankrupt entities are currently assigned a proportion of liability
by the trier of fact. As a consequence, this act furthers this
existing
public policy of the State of Ohio by ensuring that
asbestos tort actions are resolved on the basis of all available
evidence and on the full merits. With the advent of an increasing
number of significant asbestos trusts, it is apparent that
asbestos trusts and the claimants asserting claims against them
will be primary sources of information and evidence that will
ensure that Ohio's public policy of apportionment of liability and
of civil trials based upon all available evidence will be
protected and promoted.
(K) It is the intent of the General assembly that this act
apply to claims made against any currently operating asbestos
trusts and to any asbestos trusts created on and after the
effective date of this act.
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