Recently in Asbestos Category

"A West Virginia jury found two members of a Pittsburgh law firm liable of civil racketeering for conspiring with a radiologist to fabricate evidence in asbestos lawsuits against railroad operator CSX." [Fisher @ Forbes; earlier on POL]

The verdict of $429,000, subject to possible trebling and attorneys' fees, is, of course, just a drop in the bucket of asbestos fraud, which has essentially gone unprosecuted criminally as it has sapped billions of dollars belonging to actual asbestos victims and to productive sectors of society. Congratulations to POL reader Marc Williams for his role in the victory. Lester Brickman, of course, has written widely on the problem of mass tort screening fraud.

More could be done to protect the innocent if Congress passed asbestos trust reform requiring more transparency in the notoriously corrupt process.

Two Pennsylvania attorneys and a West Virginia doctor they hired to read clients' X-rays have just been found liable by a federal jury in Wheeling, WV for violating the (federal) Racketeer Influenced and Corrupt Organizations Act, and for (state-law) fraud, in connection with asbestos claims made against CSX Transportation. The jury awarded $429,240.47, which was the amount CSX said it had spent to defend the 11 claims, against Pittsburgh attorneys Robert Peirce and Louis Raimond and Bridgeport, WV radiologist Ray Harron.

Peirce had filed more than 14,000 asbestos cases against CSX. Harron had diagnosed tens of thousands of asbestos claims for the attorneys. Harron's diagnoses were first called into question in 2005 by a judge in Texas that heard cases involving the lung disease silicosis. CSX filed its lawsuit later that year, claiming Kentucky railroad worker Earl Baylor was fraudulently diagnosed with asbestosis. At the trial, CSX attorneys argued that Harron had initially found hundreds of patients clear of asbestosis, but later switched his diagnosis. It presented only 11 of those cases, likely because of statute of limitations or solvency issues.

The West Virginia verdict follows a May 2012 federal appeals court ruling upholding a $420,000 fraud verdict against two Mississippi lawyers, William Guy and Thomas Brock, for committing fraud during an asbestos lawsuit they filed in 2001.

Jarrett Dieterle
Legal Intern, Manhattan Institute's Center for Legal Policy

Last month the Pennsylvania Supreme Court raised the bar for proving causation in asbestos cases. Previously, plaintiff attorneys could argue that any exposure to a product that contained asbestos was sufficient to establish substantial causation for asbestos-related diseases.

The defendants in Betz v. Pneumo Abex LLC et al., 2012 Pa. LEXIS 1208, filed a motion challenging this so-called "any exposure" theory. "Any exposure" causation is problematic because it seems to fly in the face of the general scientific consensus that asbestos-related diseases are "dose responsive" - meaning there is a relationship between the amount of a person's exposure to asbestos and the amount of the disease that person is likely to have.

If asbestos-related diseases are dose-responsive, then this would suggest that small levels of asbestos exposure may not cause asbestos-related diseases. The plaintiff's expert in Betz tried to claim both that asbestos-related diseases were dose responsive and that "any exposure" to asbestos was enough to establish substantial causation. The court rejected this argument:

In this regard, Dr. Maddox's any-exposure opinion is in irreconcilable conflict with itself. Simply put, one cannot simultaneously maintain that a single fiber among millions is substantially causative, while also conceding that a disease is dose responsive.

Given this recent ruling, it will be interesting to see how asbestos cases that rely on dubious causation arguments fare in the state of Pennsylvania.

According to government mortality tables, an 85-year-old male has a life expectancy of another 5.65 years. Unfortunately for Bobbie Izell, who worked in construction in the 1960s and 1970s, he was diagnosed with mesothelioma when he was 85, so his expectancy is a couple of years shorter. A year later, this month, a Los Angeles jury decided that this entitled him to $30 million in "compensatory" damages from ten defendants; coincidentally, the jury also found that the five defendants who were bankrupt or had otherwise settled were only 5% responsible collectively, while the deepest pocket, Union Carbide, was 65% responsible. Another $18 million in punitive damages were awarded against Union Carbide, on the theory that it should have unilaterally stopped selling asbestos in 1967, but didn't do so until 1985. Union Carbide denies liability entirely; the press coverage doesn't give any evidence on that one way or the other, or bother to explain the defendant's likely legitimate grievance. (Though precedent pretends otherwise, a jury that awards an irrational amount of damages almost certainly assigned irrational amounts of liability.) But the $30 million compensatory damages, nearly all of which is non-economic damages, is obviously absurd. What's the point of constitutional limits on punitive damages if the jury can effectively assess punishment twice under the guise of compensatory damages? [Similar on POL in 2006; law.com/NLJ]

Note that we have apparently gotten to the point where a $48 million verdict is dog-bites-man, and not especially newsworthy; this didn't make the Los Angeles Times or national news coverage other than specialty legal papers; the only blogs to cover it are the splogs that are advertising for asbestos attorneys.

The attorneys were from Baron & Budd; press coverage doesn't indicate whether they'd be sharing what would be millions of dollars of their fee with a "chicken catcher" lawyer who did nothing but recruit the client and pass along the file. Press coverage also doesn't indicate whether Izell has made paid claims with asbestos bankruptcy trusts inconsistent with the claims made at trial, or whether the defendants were able to obtain discovery from the trusts.

We've previously noted the extent of the problem of asbestos bankruptcy trusts being used as trial-lawyer piggy banks to fund litigation against third parties on legal and fact theories different than those used to obtain recovery from the trusts. The May 10 hearing on the subject created some fireworks when Democratic Rep. Steve Cohen called chicken-catcher attorneys who contacted him about a potential case "parasites." [LNL; ILR; Professor Todd Brown testimony; more from ILR; unpersuasive SE Texas Record editorial]

StlToday.com reports:

Judge Clarence Harrison dealt a swift blow to the Madison County asbestos litigation system by ordering all 2013 asbestos cases to be set on a "case-by-case basis." The order came just three days after Harrison heard arguments for and against a previous judge's order allowing certain law firms to reserve trial dates in 2013, even though many of the cases weren't on file with the court.

Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), issued a statement applauding Madison County Circuit Judge Clarence Harrison's decision to end the pre-assignment of asbestos trials to plaintiffs' law firms. After recent controversy involving Judge Barbara Crowder, who was removed from the asbestos docket after her campaign committee received $30,000 from plaintiffs' lawyers shortly after she awarded their firms most of the court's 2013 trial times, asbestos trials will now be set on a case-by-case basis.

Fed. R. Civ. Proc. 53 permits a judge to appoint a "special master" to resolve complicated pretrial matters that the judge does not have time to do; most state courts have similar procedures. Such special masters are typically experienced attorneys who charge the full billing rate of experienced attorneys; rather than being put out for competitive bid, judges often pick a friend for the lucrative assignment. The existence of a rule as a safety valve allows courts to handle heavier dockets, but that in itself has its own distorting effects. A judge has reduced incentive to narrow the scope of discovery; heck, the privilege log disputes alone can generate hundreds of thousands of dollars, and create unreasonable standards that add tremendous expense to litigation beyond what is paid to the special master.

A recent scandal in New York reported by the Daily News suggests other possible problems: in 1999, Manhattan Supreme Court Justice Sherry Klein Heitler appointed Laraine Pacheco special master in a series of asbestos cases, and in 2005, Pacheco was making $368,000 a year overseeing settlement discussions. Pacheco lost her lucrative position last week when it was learned that she had overbilled parties—including city and state taxpayers—$400,000. Pacheco had previously come under fire for wanting to hold these settlement discussions near her vacation home in Tucson, Arizona, inviting lawyers to do so as a junket (and suggesting they shop at her daughter's jewelry store).

This is an area that merits much more study by the legal reform community.

A website owner plans to make a lot of money by renting out its well-situated domain names to asbestos plaintiffs' firms. The existence of the market demonstrates the effective cartelization of asbestos plaintiffs' practice: if asbestos firms competed on price, instead of consistently overcharging clients with riskless "contingency" fees, there would be no incentive for third parties to try to grab a share of the rent-seeking through the race to elbow one's way to the top of the search results for asbestos litigation websites. (See also the phenomenon of "chicken catchers" and "chicken pluckers.") Money that should end up in injured plaintiffs' pockets is instead finding its way into website-owners' pockets, via lawyers' excessive fees. I'm quoted in the LNL coverage. Earlier on POL.

In the mid-1960s, Lt. Patrick O'Neil served on the USS Oriskany, a 1940s-era aircraft carrier. O'Neil's work in the boiler-room exposed him to asbestos insulation manufactured by Johns Manville, and, decades later, he contracted mesothelioma. O'Neil isn't allowed to sue the Navy; Johns Manville is bankrupt from previous asbestos litigation. So O'Neil sued innocent third parties that happened to sell products to the Navy that didn't contain asbestos on the theory that they should have warned users about the risks of asbestos from other products that might be used in conjunction with their harmless products. O'Neil also sued a company that sold a part in 1943 that did contain asbestos (pursuant to Navy requirements), but whose asbestos components had been replaced by the time O'Neil encountered them.

Fortunately, in last week's O'Neil v. Crane, the California Supreme Court unanimously rejected this attempt to expand tort law beyond all moorings. When "the consequences of a negligent act must be limited to avoid an intolerable burden on society, policy considerations may dictate a cause of action should not be sanctioned no matter how foreseeable the risk." Unfortunately, in the absence of federal law on the subject, this means that future plaintiffs are simply going to forum-shop their asbestos litigation to other states that have not so dispositively rejected such expansive theories, so innocent manufacturers who happened to sell products to the Navy are not going to be off the hook yet. But good precedent is good precedent, and it's important that the California Supreme Court is willing to acknowledge that the fact that there are some injured plaintiffs who don't have recovery does not require courts to invent theories to permit collection from distant defendants. And as Beck points out, the decision has consequences for intermediate California courts that have held that pharmaceutical manufacturers can be held liable for the sales of similar products by generic manufacturers. [Jackson; Beck; Wajert; PLF; PLF amicus; Stier; Cal Biz Lit via @walterolson; LNL; Recorder/law.com; Ruskin]

Once the subject of an inspiring tale of recovery in the context of civil justice reform, Madison County, Illinois has found itself yet again featured in the American Tort Reform Association's annual 'Judicial Hellholes' report. Ranked fifth on ATRA's list, Madison County has unfortunately reclaimed its reputation as the nation's "epicenter" for asbestos litigation.

ATRA's report cites some alarming statistics:

In 2003, asbestos filings in the county peaked at 953. After Judicial Hellholes reporting spurred public scrutiny of the magnet jurisdiction, judges became more serious about transferring cases that belonged in other areas. By 2006, asbestos filings in Madison County reached a low point of 325. Since then, however, the number of such filings has increased each year to 455 in 2007, 639 in 2008, 814 in 2009, and 840 in 2010, as documented by Illinois Lawsuit Abuse Watch (I-LAW). Only about 1 in 10 of Madison County's asbestos cases are filed by people who actually live or work there, or have any other connection to the area, according to an Illinois Civil Justice League study. According to one local defense lawyer, asbestos claims account for nearly 60 percent of Madison County suits seeking more than $50,000, eclipsing the claims of local residents.

Defendant companies and other legal observers note that plaintiffs' lawyers flock to Madison County because the court sets aside about 500 trial dates for asbestos cases. The trial dates provide a steady stream of business for favored local law firms, with whom out-of-state lawyers must work to pursue their cases. Defendants are placed at a disadvantage given the expedited treatment of cases and the power given to plaintiffs' lawyers to set the trial schedule. Because defendants may not know which cases will go to trial until the last minute, they often prepare for multiple cases simultaneously, pay for expert reports they do not need, and must travel across the United States to take depositions.

Judge Crowder denied a connection between the donations and her "activities on the bench", but, there was no denying the appearance of impropriety especially in light of Madison County's notoriety with regard to asbestos litigation. Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, called on the court to "fix the fundamental flaw of Madison County's asbestos docket calendar system that in effect puts court time up for sale."

The Chamber's Institute for Legal Reform called for this and more in a report in 2010 focusing solely on reforming Madison County's warped asbestos litigation system, concluding even then:

The solution to this problem is simple: apply the law as written. If venue rules are enforced, fair procedures for trial allocation and scheduling adopted, discovery of the bankruptcy trusts provided and the Lipke rule regarding alternative cause implemented as mandated by the Illinois Supreme Court, the jurisdiction would return to normal and appropriate operations.

It was hoped that Judge Crowder would clean up the asbestos litigation abuse mess when she took over last year, however, it seems that fundamental procedural changes have to be implemented to effectively repair Madison County's civil justice system.