President Participates in Asbestos Litigation Conversation
Macomb Center for the Performing Arts
Macomb Community College
Clinton Township, Michigan

Bush Pic

12:15 P.M. EST

THE PRESIDENT: Thank you. (Applause.) Thanks for coming today. Please be seated. We've got a lot of work to do here. (Laughter.) Thank you for such a warm greeting, and I want to thank some of our fellow citizens for joining me here on the stage. We're about to have an interesting conversation on a vital issue that confronts our country, and that has to do with asbestos litigation. And I want to thank you all for joining us.

 I think you're going to find their stories to be very interesting and very compelling as to why this country needs to act and to solve a problem. One of the reasons people run for office, or at least the main reason they run for office should be to see problems and solve problems, so that the country is better off because of our actions. (Applause.)

I want to thank Al Lorenzo and the good folks here at Macomb Community College for allowing us to use your beautiful facility. I believe that the community college system is a vital part of making sure that America remains a competitive place to do business. After all, one of the ways to ensure that our business sector is strong and viable is to have a work force that is skilled -- that is trained for the skills of the 21st century. And there is no better place than the community college system of America to provide those skills for jobs which actually exist. So thanks for having us here. I'm honored to be here....

At home, we've got some good economic news today. There's a net job increase -- or new job increase of 157,000 jobs for December. I said 159,000 in the Oval Office; I stand corrected, it was 157,000 new jobs for December, which is good news. More and more people are finding work. And the fundamental question confronting the administration and the Congress is, what do we do to continue to expand the economic growth here in the country. And I've got some ideas on what to do, and I look forward to working with the Congress to see that those ideas come to fruition.

One is we've got to be wise about how we spend your money. It's essential in the budgets that I propose and the budget that Congress passes that it is very clear that we understand that in order to make sure there's confidence in our economy that we cut the deficit in half over five years. And I look forward to working with the spenders in Congress to do just that.

I know -- I think -- I'm confident we need to keep taxes low. One of the reasons why our small business sector is so vibrant and strong today is because taxes on small businesses have been lowered. We intend to keep them low in this administration. I know we've got to do a better job of getting Congress to pass a energy plan. We must become less dependent on foreign sources of energy if we expect this economy to continue to grow....

A way to make sure America is the best place to do business in the world, a way to make sure jobs continue to exist here is to tackle the tough issues of legal reform. And I -- (applause.) We have too many junk lawsuits in our system, pure and simple. And frivolous and junk lawsuits cost our economy about $240 billion a year. That's a problem. We are one of the most -- I think maybe the most litigious society in the industrialized world, which is a competitive disadvantage that we have in a global economy. And therefore, in order to make sure jobs stay here and jobs are increased here, we must be more competitive. And in order to be so, it seems like to me it makes sense to reform our legal systems.

The -- I'm calling on Congress to address three issues as to when it -- as to legal reform. One is to make sure that there is available and affordable health care by reforming medical liability law. There's too many lawsuits around this country that are driving too many good doctors out of practice, that are driving up the cost of medicine. The cost of practicing defensive medicine in order to stay out of the courthouse or to defend -- to provide the defense necessary in case of a frivolous lawsuit is costing you $28 billion a year at the federal level. And it's a problem. And I look forward to working with Congress to solve this medical liability issue. (Applause.)

We need to reform the class-action lawsuit problem. We've got -- these lawsuits are being filed; they have an impact on our economy. They -- many times, the lawyers get the money and the people don't. They are -- these suits that have got interstate claimants really ought to be in the federal court. The system right now allows people to shop for a court of law that is convenient to their case, or place where they can find a sympathetic jury. And I think in order to make sure the system works better, Congress needs to reform the class-action lawsuit provisions of law and enable claimants to be able to argue their case in a federal case -- federal court of law, as opposed to a sympathetic local court of law.

And finally, we're here to talk about asbestos lawsuits. We got a problem. The Supreme Court recognized it as a problem. They said it is a huge mass of -- huge mass of asbestos cases defies customary judicial administration and calls for national legislation. That's a better -- it's better that they define it than me. After all, these are all lawyers and judges; I'm not. But when they say -- the Supreme Court says we have a national problem, I think Congress needs to listen. And why is it a national problem?

Well, first of all, we spend about $80 billion on asbestos litigation, and that could end up being $200 billion over time. Secondly, these asbestos suits have bankrupted a lot of companies, and that affects the workers here in Michigan and around the country. Thirdly, those with no major medal {sic} impairment now make up the vast majority of claims, while those who are truly sick are denied their day in court. We'll hear a little bit about that -- we'll hear more about that a little bit later.

It's a -- most of the asbestos producers are now bankrupt so that lawyers target companies once considered too small to sue, or once considered to be not really directly involved with the manufacturing of asbestos. Because there's nobody else to sue, they try to drag in people that aren't directly involved with the manufacturing of asbestos. We'll hear about what that means here, as well.

This is a national problem, as the Supreme Court said, that requires a national solution. And we're here today to talk about the national problem. I look forward to working with Congress to create a national solution. There are some principles which I think ought to govern Congress' actions. First, funds should be concentrated on those who are sick, not lawyers or claimants who are not ill. In other words, people have been affected by asbestos, there's no doubt about it. You'll hear a story here today about a loved one whose family suffered as a result of that. But most of the money isn't going to those people who have been truly sick. It's going to people who think they might be sick. And that hurts the system.

Secondly, we need to speed up the process for delivering justice to deserving victims. So as Congress considers what ought to be done, they need to keep in mind those who have been truly harmed by asbestos.

Third, we need to provide certainty in the system, which will help save jobs and protect businesses that had nothing to do with creating the asbestos problem. And that's important. And so, as Congress moves -- and I'm confident we can get something done. We'll, of course, need your help. I intend to help by keeping this issue on the front burner. And we've got some citizens up here who want to help today, too. And we're going to start by hearing from Lester Brickman. Lester, tell them what you do.

MR. BRICKMAN: I'm a law professor at the Benjamin N. Cardozo School of Law at Yeshiva University, and I write extensively on the issue of asbestos litigation.

THE PRESIDENT: So what he just said is he's going to give you an expert -- I gave you a layman's opinion about all this. (Laughter.) He's going to give you an expert opinion about all this.

Tell us what the problem is. Tell us -- just give us a little history and educate people.

* * * * *

MR. BRICKMAN: Mr. President, asbestos litigation -- actually, asbestos exposure has been a national tragedy, and more than 100,000 workers have died as a consequence of asbestos exposure. But lawyers have taken this tragedy and turned it into an enormous moneymaking machine, in which, as you say, baseless claims predominate.

In the year 2003, 105,000 new claimants came into the asbestos litigation system. Each claimant will sue 40, 50, 60, 70 different companies, so we're talking about a total of 50 million, 60 million, 70 million new claims generated just in the year 2003. Of this 105,000, approximately 10,000 are seriously ill, some dying, some dead, because of asbestos exposure. These are the malignancies. But more than 90,000 of these claimants have no illness related to asbestos exposure, as recognized by medical science. These are truly meritless claims. Nonetheless, they're supported by medical testimony from a handful of medical experts routinely selected by plaintiff lawyers who are not acting in good faith, in terms of supplying diagnosis, but are, in fact, responding to enormous financial incentives, which is to say, millions of dollars in fees that they generate for reading the X rays in the right way.

These meritless claims are also supported by the activities of screening companies hired by the plaintiff lawyers, who administer pulmonary function tests, which fail to adhere to medical standards, and produce false evidence of lung impairment. And finally, these meritless claims are supported by false witness testimony. Witnesses in asbestos litigation, including claimants, are prepared to testify by their lawyers. It's a remarkable fact that every time a company goes bankrupt, the witness testimony about what their exposure was, what products they were exposed to, immediately shifts to inculpate new defendants, new deep pockets.

I have written about this extensively, and I've called it subornation of perjury. You would think that subornation of perjury would be found to be unethical. Nonetheless, rules of legal ethics simply don't apply to asbestos litigation. The courts simply do not apply any rules of legal ethics to asbestos litigation. The consequence is that we've had, out of approximately 850,000 claimants since asbestos litigation began, perhaps 600,000 of these are largely baseless claims. Nonetheless, they have generated tens of billions of dollars in payments, and billions of dollars in fee income for lawyers, which is why they're brought. And this is a national tragedy.

THE PRESIDENT: I think my state, of Texas, was pretty famous for being a place where people would file these suits. As a matter of fact, if I'm not mistaken, we might have 4,000, 5,000, 6,000 lawsuits dumped on a local court at a time from around the country.

MR. BRICKMAN: That is correct. Lawsuits from around the country used to filed in Texas, even though the plaintiffs never had set foot in Texas, even though the alleged injury had nothing to do with Texas, took place miles away, or hundreds of thousands of miles away. But the Texas courts, in those days, before tort reform --

THE PRESIDENT: I was hoping you would bring that up. (Laughter.) Kind of leading the witness here. (Laughter and applause.) No, no. But it's happening in another state.

MR. BRICKMAN: The law reform that you championed in Texas actually has spread to other states.

THE PRESIDENT: Yes.

MR. BRICKMAN: And that's a good thing.

THE PRESIDENT: The reason I was going to bring it up, is that when you have that many suits filed, it makes it hard for somebody who has got a legitimate claim to have their day in court. That's what we want; we want a court system that's fair. We want the scales of justice to be balanced, and the scales of justice are not balanced.

MR. BRICKMAN: One of the effects of this massive specious claiming, is that people -- the true victims of asbestos exposure, the malignancies, have had their compensation delayed, and in many cases, they have had inadequate compensation because so much money has gone to pay these baseless claims generated by lawyer self-interest. Seventy companies have gone into bankruptcy; 8,500 different companies have already been sued. Hundreds of companies more will go into bankruptcy unless Congress acts to take asbestos litigation out of the courts, and create some kind of administrative process, funded by industry, to pay these claims.

THE PRESIDENT: And people need to understand, when they go into bankruptcy, that's a legal term, but people are losing jobs, which is a real human tragedy. That's what these lawsuits are causing.

We've got some small business owners with us today. I think you'll find their stories sad and compelling. Bruce McFee, that would be you.

MR. McFEE: Well, thank you, Mr. President.

THE PRESIDENT: Thanks for coming.

MR. McFEE: It's an honor to be here.

THE PRESIDENT: First, tell us about your company.

MR. McFEE: First of all, we have a plant in Michigan, and it manufactures air compressors. And we have a second plant in New Hampshire, named Sullivan-Palatek, Inc., also a manufacturer of air compressors.

THE PRESIDENT: Okay, good. And you're the President of the company?

MR. McFEE: I'm the President, yes.

THE PRESIDENT: Mr. President. (Laughter.) And so, why are you here?

MR. McFEE: Well, that's a good question. (Laughter.) I believe the reason I am here is because we have been named in asbestos lawsuits, due to a mistaken identity. We're being sued for things that we never made, we're being sued for things we never did.

THE PRESIDENT: Yes, give the people a little history of your company. Because this is a typical story, as a result of these frivolous lawsuits.

* * * * *

THE PRESIDENT: Right. So what is the rational for suing you?

MR. McFEE: Well, what we found out, the first set of lawsuits was sort of interesting, because one of them, a fellow -- the dates that he had been exposed to asbestos was 1947-1953. Most of the other people had a similar thing. Well, from 1953 to the year we were founded, 1988, there's a 35 year gap. We couldn't possibly have made anything that -- because we weren't in business.

Second thing, we were an air compressor company, and we were named for a Sullivan tugger and some of that information came out. After doing some research into the industry, all we were able to locate was that there had been a company in New Hampshire that was named Sullivan Machine Company, and it closed in 1946. But we think they may have made the tuggers. And I have no idea whether they had asbestos or not. All I can do is know what I'm told.

THE PRESIDENT: How many employees have you got?

MR. McFEE: We've got a little over a hundred.

THE PRESIDENT: This is classic small business in America -- 100 employees, would like to be expanding, I presume, would like to be increasing the work force. And yet, money is going out the door to pay for 53 junk lawsuits.

* * * * *

THE PRESIDENT: This is a case of why frivolous lawsuits hurt our economy. This is money that they are spending that could be better spent on employee health benefits, expanding the business.

MR. McFEE: I'd like to mention one other thing. There's some large companies in this industry that over the last 10 or 15 years have moved their operations to China or to Taiwan or to other lesser developed countries to do their manufacturing. We're one employer that has been fully committed to keeping the jobs in the U.S.A. and this problem we've got now is just totally distracting, let alone if it forces us out of business.

THE PRESIDENT: Right. Well, thanks for sharing with us.

MR. McFEE: Thank you, Mr. President.

THE PRESIDENT: Mr. President. (Laughter and applause.)

Frank Sullivan -- welcome, Frank. Thanks for coming. Where do you live? What's the name of your company? Are you the President?

MR. SULLIVAN: Yes, sir, I am the President. (Laughter.)

THE PRESIDENT: Mr. President. (Laughter.)

MR. SULLIVAN: I first want to thank you for your leadership on this issue. It is slowly destroying out country's manufacturing base.

* * * * *

THE PRESIDENT: Congress needs to act. I mean, I can't make it any more plainly than to listen to these two stories here. (Applause.) I appreciate you sharing that with us. I guess what happened is the big manufacturers no longer exist, and so these lawyers keep searching and searching and searching until they find medium-sized businesses and small businesses. It's not right. It just isn't. We want a legal system that works in America. I want people to say, the system is fair. And, folks, the system isn't fair right now. It's not fair to those who are getting sued, and it's not fair for those who justly deserve compensation.

And I want you to hear the story from Mary Lou Keener. Mary Lou has served our government. She is a public servant, but she's here to talk about her dad.

* * * * *

THE PRESIDENT: There you go. Good job. Well, there you have it. The system isn't fair. It's not fair to those who have been harmed; it's not fair to those who are trying to employ people; it's just not fair.

And so I've come to the great state of Michigan to help -- I asked these citizens to help highlight a problem. And we have a duty to solve problems, and this is a problem. And I hope you let your senators know and your congresspeople know that we've got a problem, and that you as citizens expect people of good will to come together, to forget vested interests, to focus on a solution for the good of the people of this country.

I want to thank you all for coming to give us a chance to discuss this vital issue. I told Mary Lou -- I told you, too -- that I intend to make this an issue. Starting today, we've made it an issue for the year 2005, and I look forward to working with the Congress to get something done.

God bless you all, and thanks for coming. (Applause.)

END 12:57 P.M. EST