Asbestos Suits Target Makers of Wine, Cars, Soups, Soaps

April 12, 2000

Susan Warren, Wall Street Journal - Allwood Door Co. sells wooden doors. So when the little San Francisco company was sued for making someone sick from asbestos, president Bob Howell was flabbergasted. "I just couldn't believe it," he says.

Believe it. Allwood is one of a vast and growing fraternity of unlikely new targets of asbestos litigation. As the coffers of asbestos makers and heavy asbestos users have been depleted by litigation expenses, plaintiffs' attorneys have cast their nets wider to find companies to blame for clients' asbestos-related illnesses and complaints or exposure that could lead to illness in the future.

Allwood is a defendant in about half a dozen lawsuits filed by construction workers because it sold fire-barrier doors made by another company in the 1960s and 1970s. The wood-sheathed doors contained asbestos in their mineral core, says Mr. Howell, who adds, "I had no knowledge that asbestos was even there."

Allwood's insurance company has had some of the lawsuits thrown out, but others remain pending, Mr. Howell says. The door seller is in stellar corporate company. Auto-repair workers are suing Ford Motor Co. and General Motors Corp., as well as auto-parts stores, alleging they were exposed to asbestos from brakes and clutches. Alcoa Inc. became a defendant because its aluminum linings allegedly cut into asbestos insulation, releasing fibers into the air.

Campbell Soup Co. and Colgate-Palmolive Co. are being sued by workers who handled or worked near equipment that contained asbestos. Other corporate defendants in asbestos suits include such well-known names as E. & J. Gallo Winery, Novartis AG's Gerber Products Co., General Electric Co., DuPont Co., Lockheed Martin Corp., AT&T Corp. and Dow Jones & Co., publisher of The Wall Street Journal.

Hospitals and colleges that had ceiling tiles or insulation with asbestos also are being sued, as well as banks that financed asbestos-contaminated properties. "You have to look under every stone," says James Early, whose New York law firm specializes in asbestos litigation. "The deeper you dig into the industry, the more you find."

Asbestos was a ubiquitous product from World War II through much of the 1970s. The mineral was valued for its fireproofing and insulating qualities and was the standard material used for almost anything associated with heat, ranging from massive industrial equipment like turbines and boilers to mundane household items like hair dryers, oven mitts and phonograph records. Because it was cheap, it also was used as filler in floor tile and ceiling plaster.

Plaintiffs' attorneys contend that even a single fiber of asbestos can lodge in a lung and can cause the deadly cancer called mesothelioma. Other plaintiffs say their lung problems were caused by asbestos exposure that caused debilitating lung scarring know as asbestosis. The bulk of new cases involve plaintiffs who aren't ill but have some scarring that they fear will lead to future problems.

Nearly all asbestos-related claims are eventually settled out of court since trials are so expensive and risky. An object lesson: A jury awarded steel-mill workers more than $100 million from a company that made mill equipment containing asbestos.

While individual settlements are kept secret, companies say they generally have settled cases for an average of $2,000 to $4,000 per claim. But they fear they will face more suits and bigger payment demands. And their ranks seem sure to grow.

"Virtually every company involved in traditional basic industries is a potential defendant in asbestos litigation," says Jay Hughes, senior litigation counsel for chemicals maker W.R. Grace & Co., which made construction products that used asbestos. As of October 1999, Grace had paid out $398 million to resolve 154,000 claims dating back to the early 1980s. More than 100,000 claims are still pending, and more are being filed every week.

Plaintiffs' attorneys say the expanding roster of defendants is the natural evolution of complex litigation. Over the years, a more diverse slate of plaintiffs began showing up ill from asbestos, indicating that smaller degrees of exposure still caused health problems.

In this kind of lawsuit, plaintiffs typically name every company--usually dozens--that might have provided asbestos products to the work site. One group tracking asbestos litigation estimates that more than 2,400 companies have been accused in lawsuits of having made, sold or used asbestos-containing products that made people sick. That's up from about 300 companies in the early 1980s, when asbestos litigation was gathering steam.

Some of these companies and institutions face only a handful of suits, and most say the litigation isn't a significant financial threat right now. But in the past year, companies say average settlement demands have doubled, and in some cases quadrupled. Settlement requests have gone up simply because there are fewer deep pockets, says Fred Baron, whose Dallas firm, Baron & Budd, has handled thousands of asbestos claims.

"Companies want to pay what they paid 15 or 20 years ago, and don't want to take into consideration that there might be fewer companies to pay, which means higher shares of liability," Mr. Baron says.

At least 22 companies facing asbestos litigation have filed for bankruptcy protection, by the count of Coalition for Asbestos Resolution. The coalition, a business group, is promoting the Asbestos Compensation Act of 2000, introduced in Congress by Republican Rep. Henry Hyde of Illinois, chairman of the House Judiciary Committee. The act would control the flood of lawsuits and create an administrative process to resolve more than 200,000 pending asbestos claims.