[ Advocates say corporate strategy known as ‘Texas two-step’
is being used as ‘menu choice’ to avoid paying compensation]
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‘THEY MADE A HUGE PROFIT KNOWING THEY’D KILL PEOPLE’: US FIRMS
USE TACTICS TO AVOID PAYING ASBESTOS VICTIMS  
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Michael Sainato
October 4, 2023
The Guardian
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_ Advocates say corporate strategy known as ‘Texas two-step’ is
being used as ‘menu choice’ to avoid paying compensation _

Cement pipe workers in Wisconsin.,

 

Before his retirement in 2009, Peter Bergrud was, for decades, a
construction worker, laying cement, water and sewage pipes in trenches
around Seattle. Bergrud often did the handling, cutting and laying of
the cement pipe himself because he was so skilled.

In early 2018, he started having problems breathing, and became
quickly out of breath. In February that year, he was diagnosed with
two forms of mesothelioma, and told these types of cancer were only
caused by asbestos exposure. Doctors told him and his family he would
not survive surgery or chemotherapy.

“The pain in my dad’s face … just the look that he wasn’t
going to be here any more, or that there was less and less hope every
time we went to the doctor. I will never get those faces out of my
head. It was heartbreaking.” said Amy DeMaio, Bergrud’s daughter.

She added: “Watching your grown dad cry because there’s nothing he
can do is devastating. Watching this strong guy who could basically do
anything he wanted to do, to have that and have him not be able to
walk a mile down the street, he started to look sick very quickly.”

But Bergrud and his family have not just been a victim of asbestos. In
their quest for justice they have also been victimized by a corporate
tactic known as the “Texas two-step”, where large firms seek to
get out of paying compensation to people like them.

Mesothelioma is an incurable
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of cancer first linked
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asbestos exposure in a 1960 study. Asbestos fibers when inhaled in the
lungs sets off inflammatory responses and damages cells and tissue.

In 1991, an appeals court overturned 
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final rule enacted by the Environmental Protection Agency in 1989 to
ban most asbestos-containing products. Asbestos use has decreased
dramatically, although the US has not implemented a full ban. The
EPA proposed
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ban of its use in April last year that has yet to be finalized.

Asbestos kills an estimated 12,000 to 15,000 Americans every year.
There are about 2,500
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deaths annually.

Left with no medical options, Bergrud decided to initiate a lawsuit
over his asbestos exposure. His family have taken the suit up as he
died six weeks after his diagnosis in 2018.

Bergrud’s attorneys tracked the sourcing of his asbestos exposure to
cement pipes primarily manufactured and sold by CertainTeed
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a company owned by multi-billion-dollar construction conglomerate
Saint-Gobain. That firm used 
[[link removed]]asbestos
in manufacturing cement pipes up until 1992, despite widespread
knowns
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the harmful effects of asbestos exposure and federal
regulations enacted
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the early 1970s listing it as a hazardous air pollutant and human
carcinogen.

In the US, conservative estimates place the number of exposed utility
construction workers at around 60,000 to the asbestos cement pipes.

But facing thousands of litigation claims, Saint-Gobain has engaged in
the “Texas two-step
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tactic that other large corporations including Johnson & Johnson,
Georgia-Pacific and Trane Technologies have also used. It involves
offsetting liabilities into a corporate entity and filing for
bankruptcy through the new firm, resulting in lawsuits to be
suspended.

In Saint-Gobain’s case, a subsidiary, DBMP LLC, was formed and filed
for bankruptcy 91 days 
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its creation, with over 32,000 asbestos claims
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litigation at the time of filing.

The legal maneuver has been criticized as an abuse of the bankruptcy
system used by highly profitable corporations to escape
accountability. All four companies have utilized 
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same law firm: Jones Day.

Amiel Gross, a former attorney for Saint-Gobain turned
whistleblower, testified
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the company misrepresented its intent in forming the new subsidiary,
and records revealed
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company planned its two-step bankruptcy for months under the code name
“Project Horizon”.

Saint Gobain reported
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revenue and profits in 2022, with over $55bn in revenue, over $5.7bn
in profit, and over $1bn returned to shareholders through dividends
and stock buybacks.

Meredith Good, an attorney representing Bergrud’s family with MRHFM,
the largest law firm in the US devoted to mesothelioma cases, said the
legal case against Saint-Gobain faced several delays due to the Covid
pandemic and the company’s bankruptcy maneuver.

“They made a huge profit selling this pipe that they knew would kill
people,” said Good. “They knew the amount of dust that was getting
released. They knew the asbestos that was released and the guys who
were doing the work had no idea. It is possible to make cement pipe
without asbestos, obviously, because asbestos, as far as we know,
isn’t being used now. But asbestos was cheap.”

Clay Thompson, another attorney representing Bergrud’s family at the
same firm, said the case against the Saint-Gobain subsidiary has been
pending in court in North Carolina for three years. They intend to
make the argument that the company doesn’t belong in bankruptcy
court.

“Billionaires are using bankruptcy as a menu choice,” said
Thompson. “You’ve got an entity like DBMP that wants to be in
bankruptcy. It doesn’t have anything to reorganize. It doesn’t
have any operations and so CertainTeed is happy for DBMP to sit and
rot in bankruptcy for as long as possible. Meanwhile CertainTeed
can’t be sued.”

A spokesperson for Saint-Gobain North America said in an email: “We
are confident in DBMP’s legal position and our ability to reach a
final, full and fair resolution with asbestos claimants. We continue
to support DBMP’s intention to equitably and permanently resolve
current and future asbestos claims.”

That cuts little ice with DeMaio. She just misses her dad.

“He was taken way too early. We had so much more time that we were
supposed to have together. They have to be held accountable for their
actions,” she said.

_Michael Sainato is labor reporter for Guardian US. Twitter @msainat1
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* asbestos
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* illness
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* corporate profits
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* workers compensation injuries
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