A second company has accused plaintiff lawyers of using fraudulent tactics to win asbestos lawsuits, citing evidence uncovered after a federal judge opened records obtained in the bankruptcy of Garlock Sealing Technologies.
John Crane Inc., which like Garlock made industrial gaskets containing asbestos fibers, has asked a judge to allow it to join Garlock’s racketeering case against the Simon Greenstone law firm in Dallas and the Shein Law Center in Philadelphia.
Federal bankruptcy Judge George Hodges in February took a bold step against asbestos litigation fraud, and the good deeds continue. The North Carolina jurist has decided to unseal all the evidence in his high-profile asbestos case.
Asbestos claims drove gasket-maker Garlock Sealing Technologies into bankruptcy in 2010, and the tort bar demanded the company hand over $1.3 billion. Judge Hodges allowed for discovery into some of the claims and issued an opinion skewering the plaintiffs’ lawyers for a “startling pattern of misrepresentation.” He detailed how the tort bar was essentially double-dipping—filing claims with outside asbestos trusts in which they blamed non-Garlock products for their diseases, even as they blamed Garlock in court.
The worst public scandals are often those that travel in plain sight, and a prime example is the asbestos litigation racket. We’ve been writing about it for years, and now a judge in North Carolina has issued a remarkable opinion exposing just how rotten it is.
The case involves Garlock Sealing Technologies, a gasket maker forced into bankruptcy in 2010 by a flood of bogus claims. Plaintiffs lawyers were insisting that Garlock set aside $1.3 billion for victims of the deadly asbestos-related disease, mesothelioma. Last month federal bankruptcy judge George Hodges instead accepted Garlock’s liability estimate of $125 million and roasted the plaintiffs bar for dishonesty.
In May, Carolyn McCarthy, a nine-term congresswoman from Long Island, was diagnosed with lung cancer. Her treatment began almost immediately, causing her to take a lengthy absence from her office while she fought the disease. At the same time, McCarthy, 69, ended a pack-a-day cigarette habit that she’d had for most of her life, presumably because she understood the link between cigarette-smoking and lung cancer. Scientists estimate that smoking plays a role in 90 percent of lung cancer deaths.
“Since my diagnosis with lung cancer,” she wrote in a recent legal filing, “I have had mental and emotional distress and inconvenience. I am fearful of death.” She added, “My asbestos-related condition has disrupted my life, limiting me in my everyday activities and interfering with living a normal life.”
Yes, that’s right. It’s hard these days for smokers to sue tobacco companies because everyone knows the dangers of cigarettes. Instead, McCarthy has become part of a growing trend: lung cancer victims who are suing companies that once used asbestos.
Six weeks ago, I wrote a column about a ridiculous lawsuit being brought by Carolyn McCarthy, a congresswoman from Long Island. A smoker for most of her life, McCarthy has lung cancer. Yet her lawyers claimed that it was her “exposure” to asbestos, through the work clothes of her father and brother, both boilermakers, that triggered her cancer. Though McCarthy certainly deserves our sympathy as she fights cancer, it is hard to see her lawsuit as anything but an undeserved money grab — and the latest twist in asbestos litigation, the longest running tort in American history, with no end in sight.
Then again, maybe there is finally an end in sight. Late Friday afternoon, Judge George Hodges, a federal bankruptcy judge in North Carolina, wrote a breathtaking decision, in which he essentially pulled the lid off another form of asbestos scam. Though he shrank from labeling the actions of the plaintiffs’ lawyers involved in asbestos litigation as “fraudulent,” he did describe the litigation as “infected with the impropriety of some law firms.” It’s a potential game-changer.
Q&A: What’s the Asbestos Risk Today?
Three decades after Manville Corp. collapsed under an avalanche of asbestos litigation, personal-injury claims continue to pile up at a rate of 85 per day.
They find their way to a small office building in suburban Virginia, where processors evaluate the paperwork of pipe fitters and welders and shipbuilders who say they contracted debilitating lung diseases from the company’s insulation products. By last March, a Manville bankruptcy trust had already paid out nearly $4.3 billion.
So when a beneficiary of one David E. Knight came to the trust saying the former seaman had succumbed to the deadly cancer mesothelioma, the administrators didn’t blink. Within five weeks, the claimant received a check for $26,250.
Fraudulent claims for asbestos exposure are shortchanging companies and legitimate victims, former judge and McCarter & English attorney Peggy L. Ableman testified today in support of legislation aimed at curtailing false claims on an estimated $30 billion in assets.
Under the current system, people claiming harm from asbestos can seek damages from trusts set up by bankrupt companies and simultaneously sue non-bankrupt companies, using inconsistent information about how and when they were exposed, Ableman said in a hearing before the U.S. House of Representatives Subcommittee on Regulatory Reform, Commercial and Antitrust Law today.
Companies are “often led to believe — erroneously — that their products were far more responsible for the plaintiff’s disease than what may have been the case, because they have no way of knowing the substance of an individual plaintiff’s claims,” Ableman said.
EDWARDSVILLE, Ill. (Legal Newsline) – A recent ruling by a bankruptcy judge that exposed “double dipping” has an attorney in the nation’s asbestos litigation epicenter calling for more transparency between the two systems set up to compensate people sickened by asbestos.
“The real issue for me is whether the courts will require claimants to file trust forms before trial,” said Brian Huelsmann of HeplerBroom in Edwardsville, Ill. “What defendants are looking for is more transparency with trust filings.”
Huelsmann was reacting to a decision out of the Western District of North Carolina, in which U.S. District Judge George Hodges found a “startling pattern of misrepresentation” by plaintiffs’ attorneys in manipulating evidence of exposure as it pursued Garlock Sealing Technologies, first in court and then in bankruptcy proceedings.
Plaintiffs wanted to settle Garlock’s liability in bankruptcy for up to $1.3 billion; Garlock valued its liability at $125 million. Hodges found Garlock’s figure to be a reliable estimation.