Elizabeth Warren held asbestos workers hostage to inter-corporate fight
on October 21, 2012
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At the first debate between Scott Brown and Elizabeth Warren, Brown raised the issue of Warren's Supreme Court legal representation of Travelers Indemnity Co. and related companies in asbestos litigation, for which Warren was paid $212,000.
Brown made the point that while Warren was paid a small fortune, the workers ended up getting very little after Travelers was able to avoid paying the settlement it had promised.
The issue played into Brown's campaign theme that Warren was "not who she says she is" and fed upon issues related to Warren's false claim to be Native American for employment purposes.
Since then the Warren campaign and sympathetic media have moved aggressively to portray Warren's role as working to protect asbestos workers' settlements. That the workers later were deprived of the settlement was portrayed as something unforeseeable, a "twist" with which Warren had no involvement.
I have spent considerable time digging through case files and briefing as to Warren's representation of Travelers, and how it came to pass that Travelers ended up not having to pay the workers. What emerges is a story very much at odds with the positive narrative presented by the Warren campaign and the media.
I detail the story below, but here is the bottom line:
Warren played a role at a critical time in what ended up as one of the great coups in legal history, the enforcement of settlement agreements by which Travelers promised a massive settlement fund for asbestos victims, but which Travelers didn't actually have to pay because a precondition to payment had not been met.
The precondition was that other insurers give up their claims against Travelers, without receiving any payment from Travelers. If the other insurers were not bound by the settlement, then Travelers did not have to pay the asbestos victims.
Thus, the asbestos victim fund was held hostage to whether Travelers could strip other insurers of their claims. By the time the case reached the Supreme Court the possibility, if not probabilty, that Travelers would not succeed in this inter-corporate fight -- and that it would not have to pay the asbestos victims -- was well known.
Warren was not working to help asbestos victims, except ancillary to Travelers fight against other insurers. Travelers ended up losing the fight with other insurers, which gave Travelers a contractual right not to make payment.
This outcome, even if unintended, was foreseeable at the time of Warren's legal representation of Travelers. Warren got paid, Travelers got to keep its settlement money, and the asbestos workers were left out in the cold.
