The Building Tradesman Newspaper

Friday, April 27, 2012

ALEC example: Snyder signs law limiting asbestos exposure for success firms

By Marty Mulcahy, Editor

LANSING – Gov. Rick Snyder so far has not passed up any opportunity to sign Republican legislation aimed at limiting workers’ bargaining rights, benefits, income or legal standing.

It was more of the same on April 17, when Snyder signed into law House Bill 4601, one of the most blatant anti-worker and pro-business laws to date. Progress Michigan called HB 4601 a “cut and paste job” from model legislation produced by the American Legislative Exchange Council (ALEC).

The new law limits the liability of certain successor companies related to the sale or use of asbestos-related products. The law effectively prevents workers who may be affected by those asbestos products from suing successor companies for damages.

Before the passage of this law, a state House analysis of the bill said that a successor corporation (one that acquires or merges with another) can be held liable for any civil actions filed against the business acquired, up to the total value of the successor corporation. However, House Bill 4601, sponsored by Rep. Joe Haverman (R-Holland), limits “the liability of a successor corporation that acquired or merged…with a predecessor corporation that had engaged in asbestos-related activities,” according to the analysis.

The new Michigan law is mostly aimed at helping a single corporation. We’ll let Progress Michigan explain things further:

“That corporation is Pennsylvania-based Crown Cork and Seal, who acquired a small company (Mundet Cork) in 1963 without doing enough research to discover that this company had installed asbestos and was liable to pay out worker's compensation for workers made sick by asbestos exposure – unless they convinced state lawmakers around the country to pick up the tab.”

Indeed the medical “tab” for people who develop asbestos-related diseases from their exposure to products made by Mundet Cork will be picked up by insurance companies if the afflicted have insurance – or taxpayers, if they don’t.

Bill sponsor Haverman said it shows that Michigan is “open for business,” even though Crown, Cork and Seal does not have business holdings in Michigan.

Attorney Tom Smith, working on behalf of the law firm of Michael Serling, a major asbestos litigator in the state, wrote in a letter last fall to the House Judiciary chairman: “Crown Cork & Seal acquired a company they knew or should have known had caused their employees to get sick. They acquired the liabilities of the company along with its assets. The question arises, why is the committee here today considering a special corporate welfare bill for their bad business decisions? Why should this be done at the expense of Michigan victims of asbestos disease?”

The Michigan Association of Justice, an attorney advocacy group, said the bill originates from the American Legislative Exchange Counsel. The association called HB 4601 a “get out of jail free” card for corporations responsible for asbestos injuries and death.

Media Matters, a liberal media watchdog group, reported the following: “Last week, Michigan Gov. Rick Snyder (R) approved a bill that curbs the ability of asbestos-exposure victims to recover losses from some companies that are legally responsible. The bill was pushed by the American Legislative Exchange Council and Crown Holdings, Inc., a Fortune 500 corporation trying to legislate its way out of compensating cancer and mesothelioma victims who were exposed to asbestos by a company it purchased. According to a Media Matters analysis, Michigan’s two largest newspapers, the Detroit Free Press and the Grand Rapids Press, have been utterly silent on the bill from introduction to its passage.”

According to information compiled by Media Matters, Crown Holdings General Counsel William Gallagher testified before the Michigan House Judiciary Committee that 15 states had adopted similar laws to forgive “grossly disproportionate liability” of successor corporations. He said “enactment of the ALEC/CSG [Council of State Governments] model is essential as a matter of fundamental business fairness in Michigan.”

Attorney Smith summed up in his letter to legislators the entire case against this new law in a single sentence: “The phrase ‘due diligence’ when merging or acquiring another company requires looking first at what you are acquiring.”