More than a decade of conflict over one of the most far-reaching product-liability cases has not swayed John A. McKinney from a fundamental view: Manville Corp. has been stigmatized unfairly as the villain in the asbestos morass.
"I personally for 10 damned years have been trying to get a system in which [asbestos-disease victims] would get compensated at a higher level than they've averaged through litigation," said McKinney, chairman and chief executive of the Denver-based building materials giant. "And all I get is blamed for asking the government to bail us out and a recitation of our misdeeds."
In Washington this week to testify before Congress, McKinney discussed the litigation that has thrust his company into bankruptcy and delayed the compensation of thousands of workers who have contracted asbestos-related diseases because of their exposure to Manville products.
Throughout the discussion, McKinney, 61, maintained his long-standing public posture that the federal government has not borne its fair share of the costs of asbestos compensation, and he portrayed Manville as the beleaguered victim of an inefficient and costly court system.
McKinney, who joined Manville as a patent lawyer in 1951, was the chief architect behind one of the most novel corporate legal moves in history -- Manville's 1982 filing for bankruptcy protection despite its status as a healthy company. At that point the world's largest producer of asbestos products, Manville said it was threatened by more than 16,000 lawsuits that alleged it had failed to warn workers of the health hazards of the material. Asbestos fibers have been linked to cancer and other debilitating diseases.
After three years of negotiation, the company showed signs of emerging from bankruptcy last month when it announced a tentative plan to set up a $2.5 billion trust fund to compensate current and future asbestos victims. Although numerous details remain to be worked out before a bankruptcy judge approves the plan, it is considered a breakthrough. The fund, which would be financed largely through the sale of Manville stock, represents far more money than the company previously had agreed to set aside.
McKinney said Wednesday that the main sticking point remaining between Manville and the other parties, which include creditors and plaintiffs, is the exact mechanism by which the fund would compensate victims.
"What's being negotiated now are issues that will ensure that you have a claims-handling facility such that you don't reach a point where there are no more funds for future claimants," he said. Future claimants are crucial because asbestos-related diseases can take up to 30 years to manifest themselves.
One possibility, McKinney said, would be for Manville to join the Wellington Group, asbestos producers and insurers that are working out a voluntary claims-paying facility for asbestos victims. Or Manville might join a new trust fund proposed by legislation now pending in Congress. The trust fund would be financed in part by contributions from the government, which has steadfastly denied culpability in the asbestos problem.
Under proposed bills in the House and Senate, workers exposed to asbestos would be prevented from filing lawsuits against the manufacturers, and instead would have to file claims in workers' compensation programs. Such legislation previously has failed in Congress, and has been criticized by plaintiffs' lawyers as an unfair abridgement of victims' rights to court action. One Senate sponsor, William Armstrong (R-Colo.), said yesterday the bill lacks the votes to pass now, but probably will attract more support.
McKinney, repeating his testimony of this week, said the legislation would compensate victims more fairly and efficiently than court action. He contended that the court system has benefited lawyers more than victims.
"I decided a long time ago, after considering the thing, that it was fruitless to try to find out who was at fault, whether there was any blame, in the normal sense, to be assessed -- because to me it didn't make any difference," McKinney said. He said the medical community, unions, and some workers themselves share blame with manufacturers because they failed to take action once the dangers of asbestos were known, or because they did not handle the substance according to proper procedures.
He also said the federal government should accept responsibility for diseases that developed among workers in government shipyards in World War II, which account for roughly half the lawsuits filed to date. That argument, often repeated, has not been accepted by the courts. But a recent court decision in California allows Manville to proceed with lawsuits on these grounds, and could open the way to government payments, McKinney said.
"We have never said that what the government did was reprehensible," McKinney said. "We were fighting a war. But somebody decided, in order not to upset the workers and thereby endanger productivity, to not say anything about it even though they were overexposing people.
"How can you consider that legal system fair," McKinney asked, "when the people who did the actions -- the government -- pay nothing for that, and we end up paying the bill for what they did?"