The Year Ahead: Will Trump Tackle Asbestos Litigation Scandals?

We have all seen those commercials for victims of mesothelioma, the lethal cancer linked to asbestos exposure, proclaiming the billions set aside for liability and urging calls to law firms. The litigation has been around for some 40 years, and the running joke is that “the future of asbestos litigation is reform, and always will be!” But is this self-propelled feedback mechanism about to end its loop?

That joke seems to apply to much of 2016. For example, 2015 ended with the headline-grabbing conviction of New York State Assembly Speaker Sheldon Silver, who was found corrupt in schemes that involved getting millions of dollars in payments from an asbestos-focused law firm as he steered mesothelioma victims their way. Their physician then received state funding backed by the Speaker.

More than a year later, Silver is still free pending appeal – a notable case in point for the concept of the wheels of justice grinding so very slowly.

However, the “slow grind” is likely to pivot as the election of Donald J. Trump combines with Republican majorities in the U.S. House and Senate. In fact, the trend for civil asbestos cases in 2017 will likely be “pushing back” as pro-business forces counter attack with legislation and their own lawsuits. Much of that pushback will no doubt focus on the famous (well, for asbestos-litigation observers) Garlock case. In that watershed case, a federal judge examined evidence and testimony in 15 cases and found problems in all 15. Most of the inconsistencies involved telling one exposure story when seeking payments from bankrupt companies and another version during civil trials against non-bankrupt companies.

Garlock later sued some of the involved plaintiffs’ firms under civil RICO laws, the “Racketeer Influenced and Corrupt Organizations” act often associated with organized crime cases. After a judge ruled there was enough evidence to continue the case, the plaintiffs’ firms settled under undisclosed terms. At least one other RICO case, this one in Illinois, is expected to face a motion to dismiss early in 2017.

In another example of its utility, “Garlock” was oft-cited when the U.S. Chamber of Commerce’s Institute for Legal Reform, known as ILR, published a white paper in December focused on Newport News, Virginia, “where asbestos victims have an 85 percent win rate at trial, the highest in the country.” The report makes the case that some victims’ exposure stories are awfully similar to the Garlock court findings. While the white paper didn’t call out individual attorneys, it clearly showcased Robert Hatten, the dean of Newport News asbestos litigation (and a significant voice in a new documentary about the litigation by Canadian journalist Paul Johnson).

More pus-back can be found in tort-reform-prone Texas, where some of the nation’s largest insurance operations are suing several asbestos-focused firms for millions in medical cost reimbursements. Humana, United Healthcare and Aetna are suing the firms Brent Coon & Associates, Reaud Morgan & Quinn, the Bogdan Law Firm, Foster & Sear, Hissey Kientz and Shrader & Associates in the U.S. District Court for Southern Texas. That lawsuit asserts that the insurance companies have provided medical benefits to plan members who suffered injury due to asbestos exposure, and that they have a contractual right to be reimbursed for those expenses.

In addition, it’s worth noting that the year also ended with “the Boston story” that some feel will lead to more scrutiny on plaintiffs’ firm political connections.

The Boston Globe’s Spotlight team and the Center for Responsive Politics, a D.C.-based nonprofit that tracks campaign financial data (and better known for its website), released a report about apparent “straw man donations” from a prominent asbestos plaintiffs’ firm. The Globe report tracked some $1.6 million to “Democratic Party fund-raising committees and a parade of politicians – from Senate minority leader Harry Reid of Nevada to Hawaii gubernatorial candidate David Ige to Senator Elizabeth Warren…” and matched the donations to “bonuses” paid to partners. The report said more than 280 of the contributions matched precisely the bonus amounts.

Creating “straw man” donations bypasses donation limits and is a federal offense. The case is reportedly being submitted to a federal grand jury.

How big a deal is it? Opensecrets put it clearly: “Violations involving straw donations of $25,000 or more could bring a sentence of five years in prison, for each count, one expert said.”

Under a Trump Administration Justice Department, you have to wonder if the issues raised by Garlock and even the Boston law firm story go unnoticed. It could be the largest push-back trend for asbestos in 2017 will be a more robust government overview of the lawsuit landscape. As that Texas insurance-reimbursement case advances, for instance, officials might begin to wonder if victims receiving compensation met any possible obligations to Medicaid reimbursements.

If that happens, “reform” will not be a joking matter.

Sara Corcoran Warner is publisher of the National Courts Monitor website, “Your Daily Ration of Civil Justice Rationing,” and a frequent commentator on national legal policy and civil courts issues.

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