Asbestos Bankruptcy Settlement, Conflicts & Racketeering Clouds Loom

In the latest HuffPo piece by Courts Monitor Publisher, Sara Warner, she writes about Garlock’s asbestos bankruptcy settlement which has multiple implications for the $10 billion per year asbestos-lawsuit industry:  

“In the insular world of civil litigation, watershed events usually arrive on an installment plan, trickling in at the pace of… well, at the pace of civil litigation. Yet, sometimes disruption arrives quickly, like last week’s landmark settlement agreement between a North Carolina gasket maker called Garlock Sealing Technologies and asbestos victims’ attorneys. 

While the ink has yet to dry and the court has not considered, let alone approved, of the deal, the nation’s asbestos litigation community quickly noted that the announced settlement not only addresses the precedent-setting bankruptcy case but seems to include multiple civil racketeering allegations against high-profile plaintiff’s firms.”

Read more on the Huffington Post… 

CM Publisher Posts Veteran’s Asbestos Plight On HuffPo

Courts Monitor Publisher Sara Warner has posted to The Huffington Post about how asbestos cancer policy impacts U.S. veterans. She notes that “… every year, hundreds or even thousands of American veterans who thought they survived military service discover that they were wrong; exposure to asbestos was a mortal wound that took decades to surface, evolving into the much-advertised mesothelioma, a terminal cancer.

She adds that “… both sides also agree that the government under which those vets served excludes itself from the resulting accountability, at least in the U.S. courts. What they do not agree upon is how to fix it, and the resulting debate has left veterans taking sides.”

Read the post here: http://www.huffingtonpost.com/sara-warner/a-sad-truth-for-veterans_b_9417622.html

By the Playbook: Power, Greed & Corruption.

As reported in the NYT 4/4/15, "Sheldon Silver, the former New York State Assembly speaker, arrived at federal court in Manhattan on Tuesday. Credit Seth Wenig/Associated Press."

As reported in the NYT 4/4/15, “Sheldon Silver, the former New York State Assembly speaker, arrived at federal court in Manhattan on Tuesday. Credit Seth Wenig/Associated Press.”

When it comes to the Sheldon Silver corruption trial this week, you certainly can follow Politico’s “Playbook” advice and “pick your news.” The NY Post and Times are illustrating that the GOP/Dem. divide certainly makes for contrasting coverage. But Politico’s NY Playbook is doing a solid job linking to various sources, reporting this week in a curtain-raiser story that Silver “… has maintained his innocence and said he was looking forward to this day. On this mild autumn Tuesday, the man who led the State Assembly for over two decades wrapped himself in the system of Albany. What prosecutors cast as misdeeds — collecting referral fees from a real estate law firm employed by major developers and a firm that represented asbestos patients treated by a medical researcher that Silver gave state funding — were presented as the inevitable conflicts of a part-time Legislature where lawmakers have side jobs.”
 
(This is, of course, a criminal trial. The civil court implications come from allegations that Speaker Silver is charged with a kickback scheme involving referrals for mesothelioma victims, gaining millions of dollars in referral fees while funneling state funding to the clinic making the referrals.)
 
And we’re off…

Big Asbestos-Related Trial Set For Nov. 2

The federal corruption trial of a former New York State Assembly Speaker is set to begin Nov. 2 with authorities saying that the eventual jury might see up to 1,500 exhibits. The case has asbestos litigation ties because the defendant, Sheldon Silver, is accused of funneling state government money to a particular mesothelioma clinic that then sent cancer victims to his law firm.
 
Prosecutors say Silver made millions off the scheme. 
 
The Wall Street Journal reported that, “… during the [pre-trial] conference in Manhattan federal court, prosecutors from the Manhattan U.S. attorney’s office also said they planned to call as a witness Robert Taub, who headed a Columbia University center for mesothelioma research.” 
 
Read an overview of the case here: Sheldon Silver Trial Set to Begin Nov. 2

‘Outlier': Garlock Case Gives Traction to Asbestos Fraud Claims

Originally featured in the Huffington Post. 

Even if all you know (or ever want to know) about the world of asbestos litigation business comes from those unavoidable “if you or a loved one has been diagnosed with mesothelioma” commercials, you still ought to know that big changes are coming to what is called the longest-running personal injury litigation in the United States; some estimates (okay, mine) say it does about $10 billion a year, making it as big as the “industry” of pro football, the NFL.

Multiple defense lawyers have been alleging institutional and operational fraud for years, but lately those charges are gaining some credence. From North Carolina to New York, cases that were initially discredited by victims’ attorneys as mere “outliers” are gaining traction as federal courts allow lawsuits to advance.

For example, politically savvy New Yorkers are likely aware that Manhattan’s Sheldon Silver resigned his longtime post as State Assembly Speaker earlier this year after he was indicted on fraud and extortion charges in a $4 million influence-peddling scheme. However, they may not have made the connection that his fraud charges stemmed from how victims of mesothelioma, the “asbestos cancer,” found legal help. Prosecutors allege Speaker Silver steered taxpayer money to a clinic in exchange for the clinic steering victims to his law firm, in turn receiving millions of dollars in referral payments from a prominent asbestos litigation firm. Such referral fees are common, but the taxpayer implications are not.

Meanwhile, on a key civil litigation front, a North Carolina bankruptcy case initially branded as an “outlier” is gaining credibility. An NPR report noted that “Garlock” offered a look inside the “murky world” of asbestos litigation and a key issues was telling one story in civil cases and another story to any of some 60 to 100 “trust funds,” which were set up when companies declared bankruptcy over asbestos liability.

Judge George Hodges, in the Garlock case, identified significant issues in 15 of 15 cases. In his decision, Judge Hodges said that more research would no doubt have found more problems, although he stopped well short of what the lawyers call “the F bomb,” which to them is “fraud.” But Garlock has brought a civil RICO suit against several asbestos victim’s firms, alleging a pattern of misrepresentation over many years.

At first, the whole Garlock case, and its ancillary issues, were more or less dismissed by the plaintiff’s bar. The talking point was that the judge was new to the litigation and the allegations against the firms would dissolve upon contact with appeals courts. But the opposite has happened so far: Garlock has been upheld through multiple appeals, getting victories even from Democratic-appointed judges – it’s worth noting that asbestos litigation is so political that which party appointed your judge can be a big deal.

Just this month, U.S. District Judge Graham Mullen (a President George H. W. Bush appointee) upheld a lower court ruling that Trust Fund records being sought by Garlock Sealing Technologies should be produced. He also agreed with the complaint that the “requests are broad” but added: “Yet, so is the fraud in which plaintiffs are alleged to have engaged.”

The firm in that case — New York’s Belluck & Fox — made an argument that no doubt illustrates the strategy for those making cases of the Garlock discoveries, stating:

It is now clear that, while the complaint includes allegations about just 11 cases, plaintiffs are seeking to expand discovery to include all the trust claims of virtually every Belluck & Fox client that ever brought a claim against Garlock – whether the case was litigated in the tort system or not.

Belluck & Fox is not alone. Big national firms, like Dallas-based Simon Greenstone and Waters & Kraus and Philadelphia’s Shein Law Center, are also targets and no doubt will face similar discovery efforts.

Those court victories are likely to play a huge role as the U.S. House of Representatives takes up debate on what’s called the “FACT Act,” for “Fairness in in Asbestos Claims Trust,” later this month. That legislation has little chance that President Obama will ever sign it into law, but it does offer a platform and rallying point for those who would change how victims sue over asbestos. The FACT movement may be for “show” in Washington, but six states – Oklahoma, Wisconsin, West Virginia, Texas and Ohio – have passed some form of the legislation.

In what might be a “first use” in Texas, a judge in Harris County has granted a “stay” motion based on that state’s FACT Act legislation. The case involves a Navy veteran with mesothelioma and the judge has agreed that claims against bankruptcy trusts must be considered, even if those concerns are NOT part of the current trial.

Whatever asbestos “scandal” there is may be a slow-motion crisis, but I’ve made the argument that it’s about to exit the litigation world to involve hundreds or even thousands of innocent victims’ families. Some lawyers have turned their clients intoperjury pawns. Others may discover they might owe Uncle Sam some of their hard-won settlement and judgment money. And I truly believe that Democrats, who benefit from the plaintiff bar’s donations, are being slow to realize the gravity of the situation.

The common theme is that focus needs to shift to what it all means to victims.

I’m not the only one who thinks so. The journalist Paul Johnson, best known as a Washington correspondent for Canada’s Global TV and his documentary reporting from Afghanistan, is making asbestos litigation the topic of his next U.S.-based film. He says the project so far has been eye-opening.

“Our story begins with a small car dealership in central California getting sued for what seems to be no good reason,” says Johnson. “We follow that 7-year battle involving all kinds of twists and some serious allegations against a major firm; I will say that it shows that sometimes you might need a lawyer to keep an eye on your lawyer.”

Johnson said the movie, slated for 2016, is “… most unsettling when you find yourself sitting in a New York conference room at one of the more liberal universities on earth, and a professor is assuring you that this [asbestos litigation] scandal will one day be seen as bigger than Teapot Dome or Enron, but it’s what you want as a reporter to find a huge scandal that almost nobody outside the trade press is covering.”

We are anxiously awaiting the release of this film for the topic that “nobody is covering” could very well be the one “everyone is watching” in 2016.

(Sara Warner is publisher of the National Courts Monitor and California Courts Monitor. Disclosure: Although Ms. Warner has not participated in the Paul Johnson film mentioned, some Courts Monitor contract researchers and contributing editors have contributed to the documentary and the National Courts Monitor is in discussions to host the Washington, D.C. premier of the movie.)

CM Publisher Has Her Take On Asbestos-Medicare Issue

Huffington-Post-LogoSara Warner, publisher of both the California and national Courts Monitor civil justice websites, is concerned that asbestos cancer victims are about to become victims of another kind. If money from settlements or other payments was owed to the government, what happens now? She has posted her take at The Huffington Post, and you can access it here.

 

CM Publisher Has HuffPo Piece On GOP Civil Tort Priorities

Courts Monitor Publisher Sara Warner has published a Huffington Post story with her take on recent developments involving the New York Assembly Speaker Sheldon Silver. She notes that “… the new Republican-controlled congress rolled up its sleeves and rolled out its agenda over the last week, and along with immigration and budget issues it turns out “asbestos litigation reform” is an apparent priority. The powerful House Judiciary Committee held a formal hearing in Washington in what amounts to a national campaign targeted at bankruptcy transparency – but fueled largely by both a landmark federal case out of North Carolina and the ongoing New York scandal involving the arrest of state assembly Speaker Sheldon Silver.”
 

BASF Case Focused On Concealing Evidence

The world’s largest chemical maker and a prominent law firm have lost another court appeal in a class action lawsuit accusing them of concealing and destroying evidence in a batch of asbestos litigation. The federal Third Circuit has declined to “rehear” a September decision that, in effect, re-opened the case. Businessweek reports that the company was “… ordered to face claims it fraudulently hid evidence that its talc products contained asbestos as it sought to scuttle thousands of personal-injury lawsuits.” The company in question was actually acquired by BASF and that business unit mined talc that was used in everything from wallboard to children’s balloons. 
Image as reported in The Wall Street Journal 9/4/14 article, "Appeals Court Breathes New Life Into Fraud Case Involving BASF, Cahill Gordon."

Image as reported in The Wall Street Journal 9/4/14 article, “Appeals Court Breathes New Life Into Fraud Case Involving BASF, Cahill Gordon.”

 
Writing in The American Lawyer (a subscription site) Susan Beck reports that “… BASF, its asbestos litigation has morphed from being a negligible nuisance into an expensive, embarrassing problem. The company stresses that it inherited this situation from Engelhard, and has gone to great efforts to find out what happened. For Cahill, the litigation is also remarkable. Legal ethics expert Stephen Gillers of New York University School of Law says it’s not unheard-of for a law firm to be sued for fraud, noting that several were sued in the wake of the savings and loan crisis of the 1980s. ‘What is rare,’ he says, ‘is for a case like this to target such a prominent law firm.'”
 
Beck also notes that thousands of cases might be re-opened based on the evidence. The Wall Street Journal also offers background for free.
 

Asbestos Plaintiff Firms Said To Pocket $2B/Yr.

The National Courts Monitor, our sister website, is reporting on a new estimate that plaintiff’s firms earn a whopping $2 billion per year on asbestos cases. The estimate, by a defense-side attorney, comes in the context of litigation-community debate and raises questions about creation of “Perjury Pawns.”
 

Asbestos Litigation Summit Tackles Issues of Trust

CCM Publisher Sara Warner lights up the Huffington Post again with her latest blog. 

The insular and well-heeled world of American asbestos litigation is gathering atop San Francisco’s Nob Hill this week for what amounts to an annual current-events snapshot, and this year things may get a bit testy in the industry triangle of plaintiff attorneys, defense firms and insurance companies. Read More.