Senate Majority Leader William Frist, R-Tenn., signaled that the bill has a difficult road to resurrection when he turned to consideration of the much-delayed Patriot Act legislation immediately after action on the asbestos measure was halted by the failure to garner the 60 votes needed to overcome a budgetary point of order.

Congress is in recess until next Tuesday for the President's Day holiday, and Sen. Specter said there is still hope that the bill, which failed by a narrow, 58-41 margin, could overcome procedural objections.

Most believe, however, that the bill's time has passed and that the best hope for meaningful reform is legislation modeled after the Texas medical criteria law, according to representatives of a number of stakeholders in the debate.

Florida, Georgia and Ohio are other states with laws mandating that victims present evidence that their cancer or respiratory disease was caused by asbestos in order to win damages.

“We're pleased with the Senate's action as it opens an opportunity now to craft an alternative bipartisan medical criteria solution to the nation's asbestos litigation problem,” said Chris Winans, a representative for AIG, a vocal opponent of S. 852.

In addition, the Coalition for Asbestos Reform (CAR), whose members include a number of insurers opposed to S. 852, also voiced support for medical criteria legislation. “Several factors suggest that the time is right for a medical criteria solution,” said the group's chair, Tom O'Brien, who noted that the vote “highlighted the deep concerns senators have over the trust fund's financial stability.”

Mr. O'Brien called for reconsideration of a redraft of legislation introduced by Sen. John Cornyn, R-Texas, that failed to pass the Senate by a wide margin on Feb. 8, which featured a medical criteria thrust.

“Positive comments from both sides of the aisle, and the openness of Sens. Harry Reid, D-N.V., and Richard Durbin, D-Ill., to working with Sen. Cornyn and others on a medical criteria approach, suggest that this may be the best option for meaningful reform,” Mr. O'Brien said.

In comments after the vote Tuesday endorsing the medical criteria model, Sen. Durbin, a deputy Democratic leader, said that “the starting point is obvious for reform.” He added that changing the legal system would “make it fairer and quicker for victims to get fair compensation.”

Medical criteria legislation has already been introduced in the House by Rep. Chris Cannon, R-Utah, and already has 60 cosponsors, Mr. O'Brien noted.

“The Senate made the correct decision in upholding a budget point of order against S.852–legislation that would have created a new federal bureaucracy and a $140 billion asbestos trust fund,” Mr. O'Brien said.

“From the beginning of this debate, CAR has expressed significant concerns over the fund, including its lack of transparency, how many companies will contribute, how many claims will be filed, and the likelihood that the trust fund will fail. These concerns spoke directly to the budgetary point of order,” he added.

Mr. O'Brien pointed out that opposition to the trust fund concept has been broad-based, including asbestos victims groups, insurance companies, conservative organizations, labor, plaintiffs' lawyers as well as small to medium-sized defendants that make up CAR.

Insurer members of CAR opposing the bill include AIG, The Hartford, Chubb, Allstate, American Re, Liberty Mutual, Nationwide and Zurich Financial. However, the bill has supporters in the industry, such as St. Paul/Travelers, MetLife and ACE.

A trial lawyer source, who asked not to be named, indicated that the Texas medical criteria law could be a model for legislation the trial bar would accept. However, the source pointed to the closeness of the vote on the budget point of order, with supporters, including Sen. Specter, saying that if Sen. Daniel Inoye, D-Hawaii, had been able to vote, the procedural hurdle would have been overcome.

The decision to end floor action on the bill was crafted by an unlikely coalition of conservative Republicans and liberal Democrats. The decision was a victory for a majority of insurers who for various reasons opposed the legislation as drafted by Sens. Specter, chairman of the Senate Judiciary Committee, and Patrick Leahy, D-Vt., its ranking minority member.

Under the 58-41 vote by which the Senate failed to garner the 60 votes to overcome a budget point of order, the bill is now sent back to Sen. Specter's committee.