Wisconsin Gubernatorial Candidate Supporting Repeal of Wisconsin’s Asbestos Bankruptcy Trust Transparency Act

Wisconsin gubernatorial candidate Mary Burke has announced that, if she translates last week’s primary victory into a general election victory this fall, she will repeal Act 154, Wisconsin’s new asbestos bankruptcy trust transparency law. Burke supports the proposed Assembly bill to repeal Act 154, which was signed by Wisconsin Gov. Scott Walker in March 2014.  More than 100,000 Wisconsin veterans and various lobbyists opposed the enactment of Act 154, and apparently the fight is not yet over.

Act 154, which applies to lawsuits filed on or after March 29, 2014, requires asbestos plaintiffs to disclose all potential and pending asbestos trust claims via sworn statements, and sets guidelines for the substance and effects of the required disclosure.  The plaintiff’s sworn statement must include “the name, address, and contact information for the asbestos trust, the amount claimed by the plaintiff, the date that the plaintiff filed the claim, the disposition of the claim and whether there has been a request to defer, delay, suspend, or toll the claim against the asbestos trust.”

To enhance transparency, the Act allows this information to be used in court:  “Trust claims materials and trust governance documents are admissible in evidence.  No claims of privilege apply to trust claims materials or trust governance documents.”  The Act broadly defines “trust claims materials” as all documents and information relevant or related to a pending or potential claim against an asbestos trust. These materials include claims forms and supplementary materials, proofs of claim, affidavits, depositions and trial testimony, work history, and medical and health records.  The plaintiff is obligated to supplement the information and materials provided within 30 days after filing an additional claim or receiving additional information or documents related to any asbestos trust claim.

In addition, under the Act, the defendants may identify additional asbestos bankruptcy trusts that the defendants reasonably believe the plaintiff should file claims with, even if these trusts are not identified by the plaintiff.  Upon motion of the defendants with supporting documentation, the court may order the plaintiff to file claims against defense-identified asbestos trusts.

Further, the Act provides that trust documents may be used at trial “to support a jury finding that the plaintiff may have been exposed to products for which the trust was established to provide compensation and that such exposure may be a substantial factor in causing the plaintiff’s injury that is at issue in the action.”

The Act also governs trial verdicts and the plaintiff’s ability to collect damages.  For a verdict where the defendant is negligent, the plaintiff may not collect any amount of damages until after the plaintiff assigns to the defendant all rights and claims against asbestos trusts.

Wisconsin’s Act 154 is thus a model for increased transparency between the bankruptcy and civil systems.  That it faces possible repeal threatens that transparency, without providing any fairer compensation to injured workers.

To read more about asbestos bankruptcy trusts, see prior posts on this blog: