The disgraced Mississippi lawyer, who entered a guilty plea on Monday in the judicial corruption scandal, has been a major player in asbestos and pharmaceutical plaintiff's work, in suits against HMOs and nonprofit hospitals, in the great tobacco heist, and on and on. I've got a pair of posts up on Overlawyered now briefly summing up Langston's litigation exploits and political involvements. For details on some of the other extraordinary developments in the Scruggs saga that have emerged over the past two days -- including newly surfacing names of other persons allegedly involved in the attempts to bribe Judge Lackey -- check David R.'s site as well as the other usual up-to-date sources.
Judge James T. Vaughn Jr. of Delaware Superior Court, described as the state's top judge, has appointed a panel to investigate business complaints of a flood of out-of-state asbestos claims into the state of Delaware. "James A. Wolfe, the state Chamber's president and chief executive officer, noted that there were 62 cases -- nearly all alleging exposure in Delaware -- on the court's docket in 2004. But between May 2005 and Sept. 30 of this year, 577 more cases were filed -- 445 by nonresidents who largely allege they were exposed to asbestos in another state." (Dec. 3 issue of Business Insurance, Dave Lenckus, no free link). Earlier coverage here. Chrysler's Steven Hantler also discussed the issue while guesting at Overlawyered last summer.
Forbes's Daniel Fisher profiles efforts of lawyer David Bernick, representing W.R. Grace, to persuade a federal bankruptcy judge to assess at zero tens of thousands of asbestos claims where product-exposure or medical evidence is in Grace's view lacking. It's not just a question of whether Grace winds up paying money to the marginal claimants; it's also a question of whether their lawyers will be allowed to retain veto power over Grace's plan of bankruptcy reorganization, which must pass muster with 75 percent of claimants, a flimsy case getting the same vote as a strong one.
In a scathing WSJ op-ed -- subscriber-only at the moment -- Cardozo lawprof and friend of this site Lester Brickman assails the U.S. Department of Justice for its apparent unwillingness to pursue signs of fraud in mass asbestos and silicosis litigation. Discussion: Cliff Hutchinson (applauding the article), Esoteric Appeal (taking the interesting view that it isn't fraud for a "party trying to prove their case" to tailor a diagnosis to fit). Plus: related Examiner editorial.
Here comes the court challenge.
How a specialized court to handle claims arising from asbestos and other injurious dusts has operated since 1989 in Australia's largest state, New South Wales (official LawLink site and FAQ; 2007 regulation, Law Society site; Wikipedia page). Note that the tribunal hears civil claims and is an entirely separate entity from what is known as the Dust Diseases Board, which compensates industrial dust ailments on a no-fault workers' comp model. In the United States, by contrast, neither the courts nor the workers' comp system have developed specialized branches devoted to this type of claim.
P.S. Ted writes to point out, "Depends on your definition of 'specialized.' There's no formal 'Asbestos Court,' but most jurisdictions (including the federal courts) consolidate their asbestos dockets and place them under a single judge -- Madison County notably stopped being a magnet jurisdiction for asbestos cases when they switched who the asbestos judge was."
More background on U.S. District Judge (and civil justice reform celebrity) Janis Jack, from the Chamber-backed Southeast Texas Record. P.S. And the related Madison County Record (tale of how Judge Jack "found an honest silicosis suit among 10,000 phony ones, but attorneys for the honest plaintiff torpedoed his case and no other silicosis attorney would take him for a client.")
As has been noted on more than one occasion, there are some not-implausible arguments to be made for the federal government's shouldering the cost for a goodly chunk of the asbestos litigation mess, simply because exposure to asbestos during the building and use of World War II Victory Ships accounts for such a big share of later asbestos illness. As is equally well known, the general sense in Washington is one of unwillingness to shoulder any such responsibility, leaving the financial burden instead to fall on private companies whose degree of guilt on the matter varies considerably, to say the least.
Do not imagine, however, that the feds have managed to dodge the financial fallout entirely. A news item from the Lancaster, Pa. New Era (courtesy Chamber's ILR) discusses one of the consequences of the bankruptcy of locally based Armstrong World Industries, a long-celebrated name in flooring and other building supplies, which was forced into Chapter 11 in 2000 by asbestos suits. By creating a trust valued at $1.8 billion, the firm handed over a majority stake in itself to asbestos claimants and their legal representatives. "The expense of funding the trust pushed Armstrong into tax net operating losses, which it could carry back over 10 years, triggering $180 million in tax refunds from those years." In addition, it expects further federal tax write-offs to come. Multiply those sorts of sums by dozens of large firms on the bankruptcy lists, and it turns out after all that the federal government is probably worse off by at least many billions from the litigation, in the form of forgone and refunded tax revenues. All of which would be one thing, of course, if the costs consisted mostly of payments to claimants seriously ill from asbestos exposure, and is quite a different thing given the central role in the litigation of 1) middlemen of various sorts, and 2) claimants with little or no impairment reasonably attributable to asbestos.
Back in July Michael posted about the indictment of Texas attorney Warren Todd Hoeffner and two former employees of Hartford Insurance on charges that Hoeffner paid $3 million to the adjusters, and bought them BMWs, in connection with settlements of silicosis suits that grossed $34 million for his clients and brought more than $5 million in fees for himself. Hoeffner has now filed an answer and cross-claim (PDF) which lays out his side of the story. The WSJ law blog summarizes some of the high points of the answer, which depicts Hoeffner as himself the victim of extortion by the Hartford and its employees.
Following up on our earlier correspondence, attorney Nathan Schachtman of Phillips Lytle LLP writes:
There is a widespread misconception that the dangerousness of asbestos to end users was somehow not known before Dr. Irving Selikoff publicized it with his work in 1964. Not so. The insulators union's publication, Asbestos Worker, shows an awareness of the hazard before then; indeed, that's why the union approached Selikoff to conduct studies on their membership. The U.S. Navy was also well aware of the hazards (and thus did not need to be warned by anyone), as can be seen in an article entitled "Asbestosis" by Capt. H.M. Robbins & W.T. Marr in the October 1962 issue of the Navy's Safety Review.
We've posted the Robbins/Marr article as a two-page PDF here.