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A novel means of processing asbestos claims was initiated in 1988, when the Johns-Manville corporation emerged from bankruptcy and established the Manville Personal Injury Settlement Trust, the first “bankruptcy trust” set up to pay out money to asbestos claimants. Unfortunately, plaintiffs’ attorneys controlled the trust’s claimants committee and set up procedures for the trust that were advantageous to themselves, rather than potential claimants. The trust rules minimized requirements of proof of actual injury or causation (exposure to Johns-Manville products). The trust thus paid out a lot of money quickly to the attorneys, all the while exhausting its funds for potential future claimants.

In just its first nine months of operation, the trust paid out some $500 million to 12,600 claimants — and by the end of 1989, 89,000 more claimants were outstanding. Eventually, the trust had to sharply curtail payments to claimants — to 10 percent in 1995, and 5 percent in 2001. Injured claimants were literally getting a nickel on the dollar. “As of June 30, 2006, the trust had received more than 773,000 claims and paid out about $3.4 billion–just $4,400 per claimant.”

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Asbestos manufacturing in the United States was ubiquitous. At one point, asbestos-related industries employed as many as 2.5 million Americans. Asbestos commercial mining began in the U.S. in 1874, and after the Johns-Manville corporation was founded in 1890 with a patent for a process that blended short asbestos fibers with magnesia, asbestos manufacturing exploded: “asbestos consumption went from only 956 metric tons in 1890 to a peak of 803,000 tons in 1973.”

While asbestos ultimately proved deadly, it was originally thought to be a “magic mineral,” as it was dubbed at the 1939 World’s Fair. The word asbestos itself is derived from the Greek for “indestructible,” and the product is an incomparable flame retardant: it insulated generations of schoolchildren from fire and indeed fireproofed our World War II Pacific fleet.

But asbestos has also long been known to be dangerous when inhaled–as far back, perhaps, as the days of Pliny the Elder. In the early 20th century, asbestos was deemed as dangerous as lead and mercury (two products that have themselves spawned much litigation). In 1918, the U.S. Department of Labor declared that there was an “urgent need for more qualified extensive investigation” into the harms of asbestos, and in 1938, the U.S. Public Health Service issued a “good-practice” guideline for Threshold Limit Values of asbestos exposure.

Thus, asbestos was known publicly to be dangerous when virtually everyone suffering from asbestos-related illness was exposed. The extent of the danger, however, was not known definitively until 1964, when a seminal study by Mount Sinai Hospital’s Irving Selikoff established a definitive link between asbestos exposure and lung cancers and asbestosis.

Subsequently, evidence indicated that asbestos manufacturing companies knew more about asbestos’ dangers than they originally let on, and indeed in some cases hid that information from the public. Still, as my colleague Peter Huber pointed out in his review of Paul Brodeur’s Outrageous Misconduct, a much-cited book that harshly criticizes the asbestos industry, the asbestos companies’ early knowledge about asbestosis–asbestos-related lung injury that is rarely fatal, and was generally known–should not be confused with knowledge of the deadly lung cancer mesothelioma, which was exposed by the Selikoff study: “In his account of who knew what when–the core of his cover-up theory–Brodeur systematically obscures the difference between asbestos-related cancer and asbestosis, usually a much less serious disease, and understood and discussed in the Manville boardrooms much earlier.”

In any event, the original asbestos manufacturers like Johns-Manville have long been bankrupt due to litigation exposure. (Johns-Manville, ranked 181 on the Fortune 500 with over $2.2 billion in sales, declared bankrupcty in 1982 due to its looming caseload of 16,500 cases, and projections of up to 200,000 in the future.) The story of how that litigation evolved will be the subject of my next post.

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Overlawyered’s long-time readers have doubtless read a lot about asbestos. And we’ve covered asbestos litigation very extensively over at Point of Law. But there’s a lot of new material in the Manhattan Institute’s just-released Trial Lawyers, Inc.: Asbestos, as well as a lot of background for those new to the subject. Over the next week, I’ll be going through both.

I’d urge anyone interested to read the entire report, available here. Those who want a quicker review of some of the newer material should read my column in the Washington Examiner, which ran yesterday. And there’s a good overview of my thoughts in an on-line interview available here.

I’ll be back shortly to begin my walk-through of the report, looking at the underpinnings of the trial lawyers’ big asbestos machine.

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But note correction Thurs. 12:30 EST: in updates, Beck/Herrmann and Pharmalot say that Portfolio mag, which originally reported this story, got aspects of it wrong: the email was a short one, not a comprehensive document, and reporter Berenson had other sources of information. Pepper Hamilton has been flogged up one side of the legal blogosphere and down the other for the slip, but Beck/Herrmann says that isn’t fair: the misdirected email doesn’t appear to have made much difference. Yet more: Ambrogi, Feb. 11 (initial report maybe not so wrong after all).

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Greg Berlanti, a creator of the series, tells the Times that the show presents both sides. If so, there is little doubt which side is presented as the “right” one. The title character of the TV show is supposed to have been a “bad” lawyer (he represented big businesses, you see) who after being struck by a spiritual crisis crossed over to redeem himself by representing the “little guy” in lawsuits. (Per the Times, “In each episode Eli Stone takes on a different cause; in other episodes sent to television reviewers for preview, he wages court battles against a pesticide maker and a priest.”) The ABC preview site, and trailer running in theaters, end with a logo in which the “o” in the character’s surname is presented as a halo. Nothing heavy-handed about that!

Maybe next season Stone can sue on behalf of a client claiming that overhead power line emissions triggered recovered memories of autoimmune damage from her breast implants.

P.S. Orac at Respectful Insolence, no surprise, is on the warpath: “It’s times like these that I wish the Hollywood writers’ strike had really and truly shut down production of new dramas completely.” Other reactions: Autism Vox, Richard’s Asperger’s Blog, and various others rounded up by Liz Ditz.

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Florida Medicaid records show the number of children – some just months old – who were prescribed the drugs went from 9,364 seven years ago to 18,137 in 2006. No records for privately insured patients are available.

As I mentioned earlier this week, putting the blame on the pharmaceutical industry is an oversimplistic reaction to how psychiatry, psychology,and our culture have transformed childhood into a diagnostic checklist. As mentioned in Ed’s post, the litigation in Florida appears to be the recommendation by agencies receiving Medicaid funds to use these drugs in children with ADHD who also had tics. While none of the atypical antipsychotics, to my knowledge, are FDA approved for this condition, it is common knowledge among mental health professionals that the most effective treatment for tics are dopaminergic antagonists such as atypical antipsychotics. True, the recent National Institute of Health’s CATIE study demonstrated that most of the atypicals were no better than the older ones. But that doesn’t mean that the newer atypicals aren’t effective or an appropriate treatment. Perhaps, our current social construction of adolescence is partly to blame for the boom in mental health diagnosis in our children.

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