Wednesday, June 25, 2003 | 11:24 a.m.
SUN STAFF AND WIRE REPORTS
Shares of Georgia-Pacific Corp., Owens-Illinois Inc. and USG Corp. surged Tuesday after U.S. senators agreed on medical criteria related to legislation that would cap claims against companies that have made products with asbestos.
Shares of Georgia-Pacific, the world's biggest tissue maker, increased 9.2 percent. Owens-Illinois, the biggest U.S. maker of glass containers, rose 14 percent. W.R. Grace & Co. and USG, both of which are under bankruptcy protection because of mounting asbestos claims, both climbed more than 15 percent.
Democrats and Republicans on the Senate Judiciary Committee reached overnight what Vermont Sen. Patrick Leahy called a "breakthrough agreement" on the law that would create a $108 billion fund to settle claims by people with asbestos-related disease. The senators agreed on criteria that would determine whether someone has an illness that qualifies for compensation.
"That's a big deal. It's really a hard thing to do," USG spokesman Bob Williams said. "We're encouraged and we remain supportive, but we recognize that there's still work to be done."
Companies face thousands of lawsuits from people who were exposed to asbestos while on the job or from products they bought. Exposure to asbestos, widely used in insulation, fireproofing and other building material applications since the early 1900s, can cause scarring of the lungs and cancer.
As evidence of the dangers mounted in the 1970s, industrial workers began suing in greater numbers. Lawsuits have forced more than 60 companies into bankruptcy since 1982, according to data from the Rand Institute.
The agreement on medical criteria would make it easier for workers with severe asbestosis, a lung disease caused by exposure to the material, to qualify for compensation from the fund. An earlier draft proposed by Republicans would have eliminated from compensation 60 percent of workers with non-malignant diseases traced to asbestos.
Shares of Atlanta-based Georgia-Pacific increased $1.60 to $19 at 4:16 p.m. in New York Stock Exchange composite trading. Toledo, Ohio-based Owens-Illinois rose $1.68 to $13.80. Columbia, Maryland-based W.R. Grace, a chemical maker, jumped 51 cents, or 16 percent, to $3.66. Chicago-based USG, the biggest U.S. wallboard maker, climbed $4.57, or 35 percent, to $17.60.
A vital question still faces senators, however: how much money various asbestos-related conditions would bring from the $108 billion fund, which must be resolved before the legislation can get crucial bipartisan support it needs to pass the Senate.
Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, said he hoped to have all agreements done before Thursday, the committee's last scheduled meeting before Congress' one-week Independence Day vacation.
Senators are trying to put the fund together to make payments over 25 years to people with asbestos-related illnesses. In exchange for the fund, businesses' liability for asbestos sicknesses would end permanently.
Under the medical criteria agreed Monday by the committee, the fund will recognize 10 levels of asbestos-related diseases: five levels of nonmalignant disease and five levels of cancer, including colorectal cancer, lung cancer and mesothelioma, another cancer in the chest.
"We have come a long way, and we have worked hard to get to where we are today," Hatch said. "If we don't get this bill done this week, we are telling victims that they must live with the broken system of today."
Hatch said he expects the fund to start paying out within a year of its becoming law.
Asbestos is a fibrous mineral commonly used until the mid-1970s for insulation and fireproofing. Its minuscule fibers can cause cancer and other ailments when inhaled, but the diseases often take decades to develop.
Insurance companies would pay in $45 billion and companies that have been sued would pay an additional $45 billion. The rest of the money would come from smaller companies, existing asbestos trusts and interest on the fund.
Using the criteria schedule agreed Monday, senators have not agreed how much money a victim could get per level of illness. Hatch's original legislation had the top payment at about $750,000 for someone with mesothelioma, the most lethal of the asbestos-caused cancers.
"These amounts may be less than what they would receive in the tort system, but they are swift and they are certain. That is the trade-off," said Leahy, the committee's top Democrat.
The committee also locked in several other changes to the bill, including establishment of a medical exceptions panel for claims that don't fit the fund criteria but have an exceptional case that may merit payment. Another would make people who live with asbestos-exposed workers eligible for the fund.
Still another would drop a requirement that asbestos claims be heard in a new court system called the Court of Asbestos. Instead, claims would be heard in the Federal Court of Claims. Using an existing court will help will speed things up instead of trying to come up with a new court system, Leahy said.
"We'd spend more time trying to set that up and talking about how to staff it," he said.
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