Tar Heel State on Point to Tackle Asbestos Fraud by Sara Corcoran, Courts Monitor Publisher

U.S. Sen. Thom Tillis is among several senators pushing reform with the “PROTECT Asbestos Victims Act.” Photo credit: Wikipedia.

U.S. Sen. Thom Tillis is among several senators pushing reform with the “PROTECT Asbestos Victims Act.” Photo credit: Wikipedia.

North Carolina, long famous for great college sports and some of the nation’s best barbecue, is fast earning recognition of another sort: Being at the forefront of America’s longest-running personal injury litigation, asbestos lawsuits. The new status is interesting in the civil justice sense not only because of recent landmarks involving talc (I’ve written about that here but over how the state overlaps with national political trends.

For example, there was another “reform” milestone this month as the Tar Heel State became, by my count, at least the 15th state to embrace increased transparency in the virtually unregulated filed of asbestos bankruptcy trusts. The trusts are part of a special process for asbestos companies to protect them from massive liability, and industry watchers say some 100 companies have gone the bankruptcy route.

Of course, asbestos litigation community members will recall that one of the more prominent bankruptcies came in 2004 in North Carolina, and has unearthed questionable practices as related to the management of asbestos trusts. “Garlock” is a gasket manufacturer that received bankruptcy protection in Charlotte, NC. In an unusual move, a retired judge presiding over the case allowed discovery into 15 cases, eventually deciding that ALL 15 had some level of evidence suppression.

For context, it is worth noting that asbestos bankruptcy is an insular environment. Faced with burgeoning asbestos liability in the early 1990s, the U.S. Congress in 1994 created a system that allowed court-approved trusts to assume those payouts. Funded by the companies, the trusts are typically managed by victims’ attorneys and have come under fire for having little or no independent oversight.

The Reuters news service explained that “… a judge who found what he called a ‘startling pattern’ of abuse by plaintiff’s lawyers may have shifted the landscape of asbestos litigation with a ruling in favor of manufacturers” and then quoted from the judges decree stating that lawyers had manipulated evidence to get bigger settlements from Garlock.

Citing his finding, the judge knocked a billion dollars off the amount victims attorneys were seeking for asbestos cancer victims. Garlock even sued some of the firms that had been suing them, claiming racketeering. That case was resolved, but other civil racketeering cases have been filed and more than a dozen state attorneys general have taken notice, The AG group issued a formal letter demanding information from trust records, but did not get that information. That effort resulted in a lawsuit in Utah, and developments are ongoing.

In discussing North Carolina, it is also worth noting that in neighboring South Carolina, another retired judge – a former state supreme court chief justice – presided over one of the nation’s high-profile asbestos/talc trials that ended in a hung jury. More than 10,000 lawsuits nationwide claim that talc was involved in giving them cancer, with some jury awards in the millions of dollars. Defendants note that none of that has been paid out and appeals have overturned some big awards.

Federally, the asbestos trust transparency has been a casualty of Congressional gridlock for years. Yet new traction is being reported for a bill with – you guessed it! – North Carolina connections. U.S. Sen. Thom Tillis is among several senators pushing reform with the “PROTECT Asbestos Victims Act.”

Probably the most significant section of the bill involves allowing the U.S. Trustee Program of the Department of Justice, which has oversight of similar trusts, to investigate fraud against the asbestos trusts – a power not included when Congress created the asbestos-specific system in 1994.

“Asbestos bankruptcy trusts were created to compensate asbestos victims, not trial lawyers,” said Senator Tillis. “The PROTECT Asbestos Victims Act will reform the asbestos bankruptcy trust system by adding in layers of oversight, accountability and transparency, which in turn will help eliminate fraud and ensure that trusts are able to compensate present and future asbestos victims.”

Another sponsor of the bill, Chuck Grassley (R-IA), argued that we “… need commonsense accountability measures to ensure that the trust fund is not syphoned away from the victims it was intended to help. And we need independent oversight to protect against any waste, fraud, and abuse. This bill accomplishes these much needed reforms.”

Grassley refers to a provision of the proposed law that empowers the U.S. Trustee Program of the Department of Justice to investigate fraud against asbestos trusts, which they are excluded from doing under current law. Allegations of potential fraud has brought some to support trust transparency efforts, at least in part because asbestos cancers impact U.S. military veterans more than the non-vet population.

For example, the reforms would no doubt be welcomed news to the American Legion, one the nation’s largest veterans’ groups, which has repeatedly endorsed legislation aimed at discovering attorneys who might be pilfering the trusts.

If that turns out to be the case, keep an eye on the Carolinas, Tar Heels and Palmettos alike.

(Sara Corcoran is the publisher of the California Courts Monitor, National Courts Monitor, and a contributor to CityWatchLA and other news outlets.)

Delaware Report Recommends More Funding for ‘Civil Gideon’

A Sacramento Police officer makes a traffic stop in November 2012. Gov. Jerry Brown signed a bill in June to end the practice of Californians losing their driver’s license because of unpaid traffic fines. Photo Credit: Rich Pedroncelli / AP as reported by Los Angeles Times, 6/29/17.

A Sacramento Police officer makes a traffic stop in November 2012. Gov. Jerry Brown signed a bill in June to end the practice of Californians losing their driver’s license because of unpaid traffic fines. Photo Credit: Rich Pedroncelli / AP as reported by Los Angeles Times, 6/29/17.

Another year brings another report about the need to improve access to civil courts for low-income residents.

A court-mandated legal commission in Delaware capped a two-year investigation this fall and issued its recommendations, agreeing the system is unfair to those in poverty.

In a 102-page report, the Delaware Access to Justice Commission urged equal justice under the law, “calling on the state Legislature, courts and law firms to divert more resources to provide poor people with legal aid, including additional hours of pro bono (without payment) representation,” according to a news report.

“The Delaware Supreme Court ordered the creation of the commission in 2014 to identify where access to justice fell short and to provide recommendations for cost-effective solutions,” reported The News Journal.

“The cost for a lawyer, which can add up to tens of thousands of dollars for civil cases, is prohibitive for most of the 123,000 people who live in poverty in the state,” commission members said. “The phenomenon also is a problem nationally where more than 40 million people live in poverty, according to data from the U.S. Census Bureau.”

Some states are trying to address this problem. This summer, California passed a bill ending driver’s license suspensions for unpaid court debt. Instead, courts can arrange a payment plan, a reduced payment, or community service for those who cannot afford to pay but can no longer suspend driver’s licenses for failure to pay. In Michigan, a package of bills has been introduced by the legislature that would help those with unpaid traffic debt to get their licenses back.

According to The Marshall Project, “Most of the movement on this issue began in the last two years, sparked by a Department of Justice investigation into the predatory practices of the Ferguson, Mo., municipal court. The report, issued in 2015, found that the local police and court system were run with an eye toward maximizing revenue, often on the backs of those who could least afford it.”

Chicago Trib Deep-Dives Into Immigration Court Delays

Dario Castaneda, an immigration attorney who is representing detained immigrant, Francisco Casas, outside of the U.S. Citizenship and Immigration Services field office (West Congress Pkwy.) in Chicago on Tuesday, May 9, 2017. (Jose M. Osorio / Chicago Tribune)

Dario Castaneda, an immigration attorney who is representing detained immigrant, Francisco Casas, outside of the U.S. Citizenship and Immigration Services field office (West Congress Pkwy.) in Chicago on Tuesday, May 9, 2017. (Jose M. Osorio / Chicago Tribune)

The Chicago Tribune is taking a deep dive into the Windy City’s immigration court backlog, including how a DUI sent a man to jail for seven months to await his day in court and other big-picture information. For example, the newspaper reports that “… as recently as 2010, the immigration court in Chicago had fewer than 13,000 pending cases on its docket. By the end of March, that figure had risen to 24,844, according to statistics provided by the federal Executive Office for Immigration Review, which is part of the Department of Justice.

The paper also notes that “… the crunch is partly the result of policy changes under the Obama administration, which made a priority of quickly handling cases that involved children and recent border crossers, particularly in the face of an influx of immigrants coming into the U.S. illegally from Central American countries around 2014. But the Trump administration has contributed to the crunch as well, emphasizing the deportation of detainees who have had contact with the criminal justice system, though even those without records have been caught up in the efforts.”

It’s a solid report and you can find it here: Cases flood Chicago Immigration Court as system reckons with new landscape

AG Sessions, Immigration Advocates Agree On Judges

AP, Politico online report, April 2017

AP, Politico online report, April 2017

Politico is among the media outlets noting that, “… for all their opposition to the Trump administration’s immigration agenda,” immigration advocates are welcoming at least one part of the agenda: hiring more immigration judges. In a well-reported story, Politico’s Danny Vinik added that U.S. Attorney General Sessions “… announced that DOJ will seek to add 75 immigration judges to the courts over the next year and will implement reforms to speed up the hiring process. These changes address a real problem with the immigration system—a nearly 600,000-case backlog at the immigration courts—and the move was a rare occasion in which advocates applauded the administration, though they were concerned how Sessions would implement the changes.”

Later, Vinik even deep-dives enough to background that “…immigration judges are technically employees of the Department of Justice, a structure that inherently creates a conflict of interest,since their job is to rule on immigration cases that are pushed by DOJ prosecutors, whereas most of the judiciary is independent. Advocates and the immigration judges union have long pushed to remove the immigration courts from the DOJ. And during the Bush administration, a DOJ investigation found that several immigration judges received their jobs due to their political connections, a scandal that serves as a warning today.”

During comments at the U.S.-Mexican border, Sessions also announced a “streamlined” hiring process for those DOJ judges.

Read the story here: http://www.politico.com/agenda/story/2017/04/the-one-area-jeff-sessions-and-immigration-advocates-agree-000411

Obama’s ‘Rocket Docket’ Policy Comes Under Scrutiny

The so-called “rocket docket” policy of the Obama administration is coming under fire for lack of judicial training and for allowing non-judges to determine which cases get priority, according to four attorneys’ groups.

The Courthouse News is reporting that “… the groups — including the American Immigration Lawyers Association — claimed the Department of Justice, which oversees EOIR, refused to turn over records on policies and procedures for expedited immigration dockets, or “rocket dockets,” in violation of the Freedom of Information Act.

The CN also noted that the groups “… say the lack of clear policies and guidelines made it harder for unaccompanied minors, one-parent families and their attorneys to navigate the system and avoid deportation.

See the story here: https://www.courthousenews.com/foia-reveals-spotty-procedures-immigration-courts/

Health Care Funds Enough To Warrant Trust-Fund Lawsuit?

Photo credit: Legal News Line online report, 3/29/17

Photo credit: Legal News Line online report, 3/29/17

The U.S. Chamber of Commerce-backed Newsline website has published a deep-dive (well, “deeper” anyway) into the mushrooming state attorney generals investigation into asbestos trust funds, including speculation that U.S. Justice Department attention would be a “whole new ballgame.” The story broker recently when Forbes’ Daniel Fisher wrote about the probe.

(Sara Warner, publisher of this website, echoed some of his reporting in a Huffington Post piece.)

The Newsline report quotes Mark A. Behrens, who co-chairs Shook, Hardy & Bacon’s Washington, DC-based public policy group: “If these cases get the attention of the Department of Justice, then it’s a whole new ball game.” That report background that “… In one case, Utah’s Attorney General recently sued four of the largest asbestos bankruptcy trusts to make them comply with civil investigative demands from 13 states on whether they are failing to reimburse states for Medicare and Medicaid. Federal law requires those who oversee settlements to pay outstanding bills for Medicare coverage” and added that “… the federal government and the states may have similar interests with regard to reimbursement of health care costs, business interests believe. It is estimated that some 30 percent of asbestos cases involve veterans. Many of these individuals would receive treatment at VA hospitals at the government’s expense. Given the age of many asbestos plaintiffs, many also would receive Medicare benefits, a federal health care coverage program.”

The Newsline piece is here:

http://legalnewsline.com/stories/511099428-business-lawyers-expect-spillover-from-actions-against-asbestos-trusts-plaintiffs-lawyers

Sen. Patrick Leahy: Many children facing deportation are forced to proceed before a judge without a lawyer

Immigrant children and their mothers arrive in Guatemala after being deported from the United States in 2014. The migrants had come to the U.S. to flee a humanitarian crisis in their homeland. Photo Credit CNN Report, 5/9/2016

Immigrant children and their mothers arrive in Guatemala after being deported from the United States in 2014. The migrants had come to the U.S. to flee a humanitarian crisis in their homeland. Photo Credit CNN Report, 5/9/2016

A powerful U.S.senator, who serves as the ranking Democrat on the Senate’s justice committee and on the body’s subcommittee on immigration, has authored a national CNN piece opinion piece blasting the nation’s current approach to the “border kids,” our term for often unaccompanied children seeking asylum in the U.S. Asserting that a fair day in court is “… a bedrock principle of our justice system,” Sen, Patrick Leahy of Vermont said that having legal representation is “… especially important for children who cannot advocate for themselves.”

The Democrat didn’t call out the Obama Administration, but does ask “… so how could we possibly expect children to navigate court proceedings on their own?” He answers by noting “… and yet, each year, the United States government does just that. In immigration court, in case after case, a trained federal prosecutor represents the interests of the government while too many children facing deportation are forced to proceed before a judge without a lawyer.” He also says that “.. it is the longstanding policy of the Department of Homeland Security and the Department of Justice to pursue immigration cases against children, even very young children, without lawyers. And it is a longstanding executive policy they are actively defending in federal court, right now.”

You can read his comments, which do not include plans from his various committees, here:

http://www.cnn.com/2016/05/09/opinions/children-need-lawyers-leahy/

CBS Details Route To ‘Debtor Prison’ In U.S.

Starting with the story of a Georgia teenager who spent five days in jail for an illegal left-hand turn, the CBS News “Market Watch” program is outlining how the civil-case to jail-case route actually happens. It turns out that the 19-year-old driver could not pay $838 quickly enough. Eventually, a lawsuit over the case was reportedly settled for $70,000, but CBS says the practice remains common nationally.

Of course, the poster child for the practice, and what it can trigger, is Ferguson, MO, where the city’s finance director famously offered advice to the police chief in a March 2010 letter, warning that “unless ticket writing ramps up significantly before the end of the year,” the city faced a budget shortfall, said Norquist. He added that a state lawmaker had told him police officers would get little notices along with their paychecks, warning: “If we don’t get more tickets, there won’t be pay increases.”

Read about the new American debtor’s prison here: How you could go to debtors’ prison in the U.S.

Why Ferguson Opposed The ‘Ferguson Reforms’

With civil unrest in Ferguson, MO, once again making headlines, it’s probably worth noting that much of all this had to do with municipal court reform. In particular, it had to do with traffic tickets given to poor African-Americans and pretty much funding the city with that system. The Justice Department report called for sweeping changes, the state called for sweeping changes and newspapers reported on the famous “Ferguson Reforms.”
 
But once the national spotlight moved on, Ferguson and towns like it did not embrace the reforms, which by and large did not actually become law. One reason is that new laws would have placed limits on how much of a local city’s budget came from traffic enforcement, which some leaders think could lead to some towns going away. Conservatives, it turns out, have been on a “consolidation” kick of late… you can see POLITICO break down the issues here:
 

TV News Report Includes Director’s Rare Comments Demanding Change

 
A California NBC TV affiliate has scored a rare interview with the director of the nation’s immigration system, and he’s not holding back in blaming lawmakers for what amounts to a broken system. Bay Area NBC says that “… in his first ever TV interview on camera, the Director of the Executive Office for Immigration Review (EOIR) tells NBC Bay Area that only a complete overhaul by Congress will truly fix the issues plaguing the current system.”
 
“There’s no question that the system, the immigration court system, is under incredible stress right now,” Director Juan Osuna told the NBC Bay Area Investigative Unit, which conducted the interview in Washington, D.C. The multi-part report says that “… according to EOIR’s latest figures, US Immigration Courts received 306,045 cases in 2014 alone. Many of those cases were never heard, adding to a backlog which now totals 445,607 according to Syracuse University’s Transactional Records Access Clearinghouse, or TRAC.”
 
The comments are rare, both because of what NBC called “tradition” and also because the immigration system, including the judicial branch, are not “courts” at all but really are a function of the Department of Justice. 
 
See the milestone story here.