This year a Texas jury awarded $35 million to 22 workers at a Texaco oil refinery, even though none of them showed any symptoms of asbestos-related illnesses from using asbestos-containing products. U.S. Gypsum's share of this verdict was $16 million because three workers once witnessed an office at the refinery being remodeled with Gypsum wallboard.
Asbestos-related illnesses could take decades to present themselves. But with verdicts like the one in Texas, perfectly healthy people could get millions of dollars for asbestos claims, and those who are ill now may never see a dime because, one by one, the companies that may have some legitimate liability for making people sick today because they used asbestos decades ago are filing bankruptcy. This anomoly increases the financial pressures on companies that remain and ultimately induces them to take the same path. If these otherwise healthy companies don't seek protection they might be put out of business.
It has been nearly 20 years since the leading asbestos producer, Johns-Manville Corp., filed Chapter 11 because it faced what was then considered a flood of 17,000 lawsuits. Since Manville, the number of pending asbestos cases has exploded. In 1988, a number of asbestos defendants, including USG, organized the Center for Claims Resolution to handle asbestos claims. But the 1990s brought a flood of new cases--more than 400,000 of them.
Today more than 200,000 asbestos claims are pending. More than 50,000 cases have been added in each of the last three years. Nearly half of them name Gypsum as a defendant, although many of the claims have nothing to do with any of its products. Some 90,000 of the suits Gypsum is defending have been brought by people who are not showing any evidence of asbestos-related illnesses.