SB-0591, As Passed Senate, June 3, 2008

SUBSTITUTE FOR

SENATE BILL NO. 591

A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

(MCL 600.101 to 600.9947) by adding chapter 30.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

CHAPTER 30.

LIMITATION OF SUCCESSOR ASBESTOS-RELATED LIABILITY

Sec. 3001. As used in this chapter:

(a) "Asbestos claim" means a claim for damages, loss,

indemnification, contribution, or other relief arising out of,

based on, or in any way related to asbestos, including any of the

following:

(i) A claim based on the health effects of exposure to

asbestos, including a claim for any of the following:

(A) Personal injury or death.

(B) Mental or emotional injury.

(D) The costs of medical monitoring or surveillance, to the

extent those claims are recognized under state law.

(ii) A claim made by or on behalf of a person exposed to

asbestos, or by or on behalf of a representative, spouse, parent,

child, or other relative of the person.

(iii) A claim for damages or loss caused by the installation,

presence, or removal of asbestos.

(b) "Corporation" means a corporation organized for profit,

whether organized under the laws of this state, another state, or a

foreign nation.

has assumed or incurred, a successor asbestos-related liability.

(d) "Successor asbestos-related liability" means a liability,

whether known or unknown, asserted or unasserted, absolute or

contingent, accrued or unaccrued, liquidated or unliquidated, or

due or to become due, that is related in any way to an asbestos

claim and that was assumed or incurred by a corporation as a result

of or in connection with a merger or consolidation or a plan of

merger or consolidation with or into another corporation or that is

related in any way to an asbestos claim based on the exercise of

control or the ownership of stock of the other corporation before

the merger or consolidation. Successor asbestos-related liability

includes liability that, after a merger or consolidation for which

the fair market value of total gross assets is determined under

section 3004, is paid or otherwise discharged, or is committed to

be paid or otherwise discharged, by or on behalf of the

corporation, by a successor of the corporation, or by or on behalf

of a transferor, in connection with a settlement, judgment, or

other discharge of liability in this state, another state, or a

foreign nation.

(e) "Transferor" means a corporation from which a successor

asbestos-related liability is assumed or incurred.

Sec. 3002. (1) The limitations in section 3003 apply to a

corporation that became a successor before January 1, 1972 or that

is a successor to such a corporation.

(2) The limitations in section 3003 do not apply to any of the

following:

(a) A claim for workers' compensation benefits paid by or on

behalf of an employer to an employee under the worker's disability

compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, or a

comparable workers' compensation law of another jurisdiction.

(b) A claim against a corporation that is not a successor

asbestos-related liability.

USC 151 to 169, or under a collective bargaining agreement.

Sec. 3003. (1) Except as provided in subsection (2), the

cumulative successor asbestos-related liability of a corporation is

limited to the fair market value of the total gross assets of the

transferor determined at the time of the merger or consolidation

and adjusted as provided in section 3005. The corporation does not

have any responsibility for successor asbestos-related liability in

excess of this limitation.

(2) If the transferor assumed or incurred successor asbestos-

related liability in connection with a prior merger or

consolidation with a prior transferor, the limitation of liability

of the corporation under subsection (1) is the fair market value of

the total assets of the prior transferor, determined at the time of

the prior merger or consolidation and adjusted as provided in

section 3005.

Sec. 3004. (1) The fair market value of total gross assets for

purposes of section 3003 may be established by any method

reasonable under the circumstances, including by reference to any

of the following:

(a) The going concern value of the assets.

(b) The purchase price attributable to or paid for the assets

in an arm's-length transaction.

which fair market value can be determined, the value of the assets

recorded on a balance sheet.

(2) In determining the fair market value of total gross assets

under section 3003, total gross assets include both of the

following:

(a) Intangible assets.

(b) The amount of any liability insurance issued to the

transferor that provides coverage for successor asbestos-related

liabilities, determined, if applicable, under subsection (3)(b).

(3) If the total gross assets include an amount for liability

insurance under subsection (2)(b), both of the following apply:

(a) The applicability, assignability, terms, conditions, and

limits of the insurance are not affected by this chapter, and this

chapter does not otherwise affect the rights and obligations of a

transferor, successor, or insurer under an insurance contract or

related agreements, including rights and obligations under

settlements reached before the effective date of the amendatory act

that added this chapter between a transferor or successor and its

insurers resolving liability insurance coverage and the rights of

an insurer to seek payment for applicable deductibles,

retrospective premiums, or self-insured retentions or to seek

contribution from a successor for uninsured or self-insured periods

or periods for which insurance is uncollectible or otherwise

unavailable.

(b) If there is a settlement of a dispute concerning the

insurance coverage between the transferor or successor and its

insurers before the effective date of the amendatory act that added

this chapter, the amount of the settlement is the amount of the

liability insurance to be included in the total gross assets.

Sec. 3005. (1) Subject to subsections (2) to (4), in

determining a limit of liability under section 3003, the fair

market value of total gross assets at the time of a merger or

consolidation shall be increased for each year since the merger or

consolidation by a percentage equal to 1% plus the adjusted prime

rate for the 6-month period ending March 31 of that calendar year

as determined under section 23 of 1941 PA 122, MCL 205.23.

(2) An increase under subsection (1) shall not be compounded.

(3) The adjustment under subsection (1) continues until the

date the adjusted value is first exceeded by the cumulative amounts

of successor asbestos-related liabilities paid or committed to be

paid by or on behalf of the corporation or a predecessor, or by or

on behalf of a transferor, after the time of the merger or

consolidation for which the fair market value of total gross assets

is determined.

(4) The amount of any liability insurance coverage included in

the total gross assets under section 3004(2)(b) shall not be

included in the adjustment under this section.

Sec. 3006. A court shall, to the fullest extent permissible,

liberally apply the limitation in liability under this chapter in

an action that includes successor asbestos-related liability. A

court shall apply procedural provisions of this chapter

retroactively. However, if the application of a provision of this

chapter would unconstitutionally affect a vested right, the

provision shall only be applied prospectively.

Sec. 3007. This chapter applies to an action that includes an

asbestos claim to which either of the following applies:

(a) The action is filed on or after the effective date of the

amendatory act that added this chapter.

(b) The action is pending but trial of the action has not

commenced as of the effective date of the amendatory act that added

this chapter.

Sec. 3008. As provided in section 5 of 1846 RS 1, MCL 8.5,

this chapter is severable.