Crown loses legislative fight

Published 9:47 pm Wednesday, March 10, 2010

A company with a plant in Suffolk lost a legislative battle on Monday when a Virginia Senate committee voted 13-2 to table indefinitely a bill that would shield it from asbestos-related claims.

The move effectively defeats a bill that would have protected companies like Crown Cork & Seal from asbestos-related claims made against companies they purchased or succeeded before Jan. 1, 1972. Crown manufactures more than 10 billion beverage cans and lids per year at its plants in Suffolk and Winchester, employing about 300 Virginians.

In 1963, Crown purchased the stock of another bottle camp manufacturing company, Mundet Cork Company, for $7 million. Though it primarily made bottle caps, Mundet had a small side business selling cork, fiberglass and asbestos insulation. The asbestos operation was shut down by the time Crown purchased Mundet, and all of the assets of that portion of the business were sold off within three months of the purchase.

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Ten years after the sale, the Occupational Safety and Health Administration issued its first asbestos warnings and regulations. Since that time, Crown has paid more than $600 million in asbestos-related claims — far more than it paid to acquire Mundet — for products it never manufactured.

Bill Gallagher, an attorney for Crown, was aghast at the outcome of the vote in the Senate Committee on Commerce and Labor.

“We’re very disappointed,” Gallagher said. “It was obvious that the majority of this committee had no intention of doing anything.”

At the same time the issue was up for debate in Virginia, the state Senate in South Dakota passed similar legislation, and Nebraska also passed similar legislation this week, Gallagher said.

“In my view, there’s politics going on in Virginia,” Gallagher said. “I’m assuming that’s what we ran into. It’s just frustrating, but obviously it’s their prerogative to pass legislation or not.”

Gallagher said it is too early to tell if the company will push for the legislation to be reintroduced next year, or if any jobs or facilities will be lost as a result.