Somerville, MA – Republican Scott Brown has a problem. He can't talk about his support for Mitt Romney. He can't talk about his national Republican allies and his wish for a Republican senate. He can't talk about his record. And it's clear that his campaign is in trouble. Rather than focusing on the issues important to Massachusetts, he's attacking Elizabeth Warren.
What is he running from?
Mitt Romney: Last night, Brown didn't utter the word "Romney" once. Even though he's endorsed Romney, supports him as Commander-in-Chief and told CNN, "there is no one I trust more on the economy than Mitt Romney.''
His Republican Friends: Another thing Brown didn't want to talk about last night? His national Republican allies. But he's on the record raising money off of the idea that Republicans need to take control of the Senate. He's argued that:
- "Majority control of the Senate hinges on the outcome" [Boston Globe, 7/18/12]
- "I know there are several other GOP campaigns to support, but this race is THE battleground for the United States Senate – the only sure hedge to a potential second term for President Obama." [Politico, 4/24/12]
Even his own website touts the importance of Republican takeover of the Senate: "This is the #1 Senate race in the country…and Majority Control of the United States Senate is at stake."
His Record: Brown does not like to talk about his votes. And he simply can't stand when Elizabeth Warren does. That's because far too often, he's been standing with billionaires and big oil, voting to let taxes go up on middle class families because there weren't enough breaks for the top 2%, even while he was voting for billions in subsidies to big oil. [Roll Call Vote 184, 7/25/12; Vote 63, 3/29/12; Vote 72, 5/17/11]
But he doesn't want to talk about any of that. So he's going after Elizabeth Warren, yet again, using distorted attacks that have already been debunked.
Here are the facts on the Travelers Case – Bottom line: Elizabeth Warren fought for victims' compensation.
"Warren helped preserve an element of bankruptcy law that ensured that victims of large-scale corporate malfeasance would have a better chance of getting compensated, even when the responsible companies go bankrupt."
- Boston Globe, 5/1/2012
"Elizabeth Warren's pro-consumer bona-fides are second to none, and trying to twist her involvement in a Supreme Court appeal of a critical bankruptcy procedural matter into evidence that she is anti-consumer is just ridiculous."
– Adam Levitin, Georgetown Law Professor
As one of the nation's leading experts on bankruptcy law, Elizabeth Warren was asked to assist on one of the major bankruptcy cases of the last two decades. In the Travelers Insurance case, Elizabeth Warren worked to ensure that current and future victims of asbestos and other mass injuries could get compensated.
- Starting in the 1980s, there was an explosion in asbestos lawsuits, and companies like Johns-Manville found themselves in bankruptcy. The bankruptcy court was worried there were so many lawsuits that the money to compensate victims might run out, both from the asbestos producing companies and from their insurance coverage, and some victims would not be compensated. This is a particularly acute problem with asbestos victims, many of whom do not see any symptoms until years in the future. If the responsible companies go bankrupt and insurance is exhausted, then it is possible there would be no compensation for future victims.
- As a solution, in 1986 the parties to the Johns-Manville bankruptcy, with the approval of the bankruptcy court, created a "trust." Under the trust, insurance companies provide funding to compensate victims, and in return get immunity from lawsuits. Any person who can demonstrate health damages from asbestos gets compensated directly from these funds, without a lawsuit. The benefit of this approach is that it helps ensure compensation will be there for future victims and not just the first to sue. In addition, it can help prevent victims and insurance companies from spending years bogged down in lawsuits.
- In 2004, in response to a new set of lawsuits, Travelers Insurance, victims' representatives, and others, with the assistance of mediator Mario Cuomo, the former Governor of New York, and with approval of the bankruptcy court, came to an agreement that Travelers would pay almost $500 million more into the trust to make perfectly clear that all claims had to go through the trust. In response, some challenged the bankruptcy court's power to create a trust, calling the trust unconstitutional and beyond the court's statutory powers.
- In 2009, the Supreme Court heard the Travelers case, and decided 7-2 that it was too late to challenge the bankruptcy court's creation of the trust to address victims' claims and provide insurers with immunity from further lawsuits. If the Supreme Court had ruled the other way, it may have become impossible to establish trusts as a way to ensure that the maximum numbers of victims are compensated in situations of mass catastrophe or injury.
Elizabeth Warren's role in the Travelers Insurance v. Bailey's case
- Elizabeth is one of the nation's leading experts in bankruptcy, particularly bankruptcy issues affecting families, consumers, and individuals facing catastrophic losses beyond their control. Starting in the 1980s she has been discussing the asbestos and other mass injury bankruptcy cases and trusts in academic presentations, in the bankruptcy textbook she co-authored, and in her work advising the National Bankruptcy Review Commission.
- When the Travelers case came up, Elizabeth was asked to bring her expertise to the case to protect the use of a trust and to ensure that the maximum number of victims would get compensated. Elizabeth had written and worked on these issues and was committed to ensuring that victims – even future victims – get compensated. In addition to working on the legal briefs presented before the Supreme Court, she also sat second chair in the Supreme Court when the case was argued.
The importance of bankruptcy trusts
- The benefit of a trust is that it ensures that future victims can get compensated, not just the first to sue. In addition, it can help prevent victims and insurance companies from spending years bogged down in lawsuits.
- In the case of asbestos victims, arbitration through the trust has shortened the amount of time it takes for victims to be compensated. According to at least one study, the mean survival time after a diagnosis of mesothelioma is 8.8 months. [Malignant Mesothelioma: A Clinical Study of 238 Cases, 4/14/11] If a mesothelioma case goes to trial, payment can take two years or more. In contrast, cases that avoid trial and involve an asbestos victims' trust fund can be resolved in less than a year. [NOLO.com, Accessed 7/26/12]
What would have happened if the Supreme Court case undermined the future use of trusts
- This would have had far reaching implications not just in the case of asbestos victims' trusts but for all trusts. If defendants did not believe they would be protected from future lawsuits, they would have no incentive to establish or contribute to victims' trusts. In such cases, victims would be compensated on a first to sue basis until the defendants went bankrupt. Any victims that came forward after that time would simply be out of luck.
- This view was articulated by the representatives of future victims in the Travelers case who filed an amicus brief stating, "The ability of such claimants to achieve timely, fair, and meaningful compensation for the asbestos-related injuries they will suffer over the next decades depends largely on the viability of asbestos compensation trusts of the type at issue in this appeal. " [Brief Amici Curiae Of Future Claimants Representatives, Travelers v. Bailey, Filed 2009]
- In July 2011, Adam Levitin, a Georgetown law professor, wrote on the Travelers case on the blog "Credit Slips," "Supporting the finality of bankruptcy court rulings is hardly an anti-asbestos victim stance. If insurers like Travelers don't think that the deal they strike as part of a bankruptcy case will be honored, they won't cut deals. And the result will be that asbestos victims will face years of litigation and maybe no better outcome." [Credit Slips Blog, 7/5/11]