Results matching “bankrupt asbestos”

Garlock Ruling a Blow for Double Dippers - PointOfLaw Forum

Robert Panzenbeck
Legal Intern, Manhattan Institute's Center for Legal Policy

The Wall Street Journal notes a particularly interesting case out of federal bankruptcy court in North Carolina, where Judge Roy Hodges handed down a decision that strikes a blow against deceptive practices in asbestos litigation.

Garlock Sealing Technologies,a manufacturer of gaskets and packing,entered into bankruptcy in 2010 under the weight of pending and future asbestos claims. When manufacturers like Garlock file Chapter 11 in the face of asbestos claims, these firms are granted immunity on the condition that they meet a number of requirements. Among these requirements is the establishment of an asbestos trust, which establishes payments to be made to past and future victims based on the severity of their illness.

In this case, plaintiff's attorneys demanded that Garlock set aside 1.3 billion dollars for the settlement of mesothelioma related claims. Garlock believed the figure should be much lower, and earlier this month, federal judge Roy Hodges agreed, reducing their liability 90 percent, to 125 million dollars. This is significant, because for years, critics of this system have pointed out an exploitable information gap between the legal system and the trusts. In his opinion, Judge Hodges criticized the plaintiff's attorneys and their methods, noting that the larger number of 1.3 billion dollars was based on various forms of deceit by plaintiff's lawyers and clients, including the deliberate concealment of evidence that might suggest that plaintiff's injuries were the result of exposure to products other than Garlock's asbestos lined gaskets. The Journal notes one particularly poignant incident illustrating the extent of plaintiff misconduct:

Garlock had paid $9 million dollars in a California case involving a former Navy machinist mate. Garlock had attempted to show that the plaintiff had been exposed to asbestos-containing insulation, Unibestos, made by Pittsburgh Corning. The plaintiff denied exposure to insulation products, while his lawyer told the jury there was no Unibestos insulation on the ship. But Judge Hodges found that after the $9 million dollar verdict, the lawyers for the machinist filed 14 claims with other asbestos trusts, including several against insulation manufacturers. The same lawyers who told the Garlock jury there was no Unibestos exposure had claimed in the Pittsburgh Corning bankruptcy that the same plaintiff had been exposed to Unibestos. Judge Hodges wrote that the plaintiffs lawyers "failed to disclose" in court that their client had been exposed to 22 other asbestos products.

The Garlock case is a textbook instance of double dipping, a practice common in the asbestos litigation world. For years, critics of the system have alleged that plaintiff's attorneys "double dip," making claims to multiple asbestos trusts for the same injury. In this case, plaintiff's attorneys distorted or withheld facts while making claims with multiple asbestos trusts, even making allegations that were, as noted above, wholly inconsistent with the basis for rewards in prior decisions. As expected, companies forced into bankruptcy have decided to take action. Prior to this decision, EnPro Industries, Garlock's parent company, filed suit against four prominent asbestos law firms alleging they had concealed evidence about exposure to other products in litigation against Garlock. Judge Hodges' opinion provides significant ammunition for this claim.

The verdict is viewed as a major victory for Garlock, and is not without its critics. Paul Barrett of Bloomberg notes that the decision "obfuscates the long term wrongdoing by companies that didn't swiftly own up to the unintended harm caused by asbestos," while acknowledging that the circumstances present evidence that "influential members of the plaintiff's bar have lost their moral bearings."

It's not just companies like Garlock who have taken note. Congress, in an effort to solve the double dipping problem recently moved on the issue. In November, the House passed H.R. 982, the Furthering Asbestos Claim Transparency (FACT) Act, by a vote of 221 to 191. As BusinessWeek notes, the bill would require asbestos trusts around the country to file quarterly reports about who receives payments and how much they get. The bill is specifically designed to limit double dipping, and ensure that funds set aside for legitimate claims aren't unjustly dispersed to fraudulent claimants.

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

In the midst of the myriad political battles going on in Washington, there is some good news:

On Wednesday, November 13th, the Furthering Asbestos Claim Transparency (FACT) Act, H.R. 982, was passed by the U.S. House of Representatives on a 221-199 vote. The FACT Act is designed to curb fraud and abuse in asbestos litigation by addressing the problem of false and/or inconsistent claims submitted to asbestos bankruptcy trusts and in the civil justice system.


The legislation would amend federal bankruptcy law to require asbestos bankruptcy trusts to submit quarterly reports to the overseeing bankruptcy court which detail each demand made against the trust by a claimant. The Act would, therefore, provide a link between the separate personal injury compensation systems of the bankruptcy trusts and the civil justice system.

The House's passage of the bill serves as an admirable first step in redirecting trust funds to those who are rightfully entitled to them. The Senate should take this signal from the House and pass the bill with all deliberate speed. The interests of the plaintiffs' bar cannot take precedence over justice for aggrieved individuals with legitimate claims. The interests of commerce and the worker are in perfect alignment. The only loser here would be those lawyers who can no longer make fraudulent claims and get away with it.

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

One of our fundamental rights as citizens is the ability to seek redress of our grievances. Over time, this practice spread from government to private industry, as workers' rights against their employers in abusive or harmful situations were codified in legislation.

The establishment of the asbestos bankruptcy trust was meant to offer a compromise path through which employees could achieve restitution for their asbestos-related injuries, and employers could avoid cost overruns and premature bankruptcies.

However, the surreptitious manner in which the trusts have been run has allowed for opportunistic lawyers to take advantage of them by submitting frivolous, fraud-riddled claims.

The goal of the trusts stand as the fulfillment of just compensation for injured workers, but the main beneficiaries are turning out to be lawyers who make claims on behalf of "clients."

To remedy this injustice, the FACT Act was meant to mandate quarterly reporting of claims made on the trust, as well as allow for more compliance with third-party discovery requests made on the trust.

Because there are no compliance costs or other significant burdens associated with the law's passage, we can assume the asbestos industry's opposition to the FACT Act stems from a desire to lessen transparency. If there is no transparency, the industry can continue to make baseless claims and reap fraudulent profits.

Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, has written an op-ed detailing the reasons for the asbestos industry's continued obfuscation.

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.

House Judiciary passes asbestos trust reform - PointOfLaw Forum

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]

Better Scholarship Through Diversity? - PointOfLaw Featured Discussion

Walter K. Olson

Little-known fact: Harvard lawprof Elizabeth Warren once gave a speech to a Manhattan Institute luncheon crowd on the topic of asbestos bankruptcy trusts. As I recall, she gave a deft account of this abstruse but important subject, and I much doubt it would have improved anything had the Institute asked her to address the topic from the special vantage point of a female scholar. Much less did anyone imagine that Warren might bring some special insight to bear from her family tradition of remote Cherokee lineage, which has lately furnished so much grist for critics.
For many readers, the Warren-as-Cherokee brouhaha has been their first close look at the matrix of identity politics in which law schools operate. When HLS administrators began to claim Warren as a minority hire, they were under intense pressure for not having any female minority professors. These days, the relevant pressure is likely to take the form not so much of student occupiers but of relentlessly screw-turning accreditation agencies, a process well described by Gail Heriot.

Is this a mere identity spoils system, or does it amount to something nobler and more high-minded? The strong claim I want to focus on here is that diversity hiring improves the quality of scholarship in the traditional law curriculum by bringing distinctive minority insights that straight white Anglo abled males would not or could not have contributed. (I will leave for another post the question of how it might influence scholarly development on topics that do relate to identity, such as discrimination law.)

There's no definitive way to resolve this claim, I suppose, without agreeing on how to evaluate the now-vast literature advancing (e.g.) feminist approaches to torts, the "queering" of intellectual property law, and so on. I can only say that I must not be reading the right papers in this genre, because the papers I've read haven't impressed me. Given that criticizing identity-studies literature seems to be a good way to get fired from one's writing gig, I'd better stop there.

To me, time has vindicated the basic position staked out by Stephen Carter of Yale in his Reflections of an Affirmative Action Baby. Carter writes of the "Dear Minority Colleague" letters presuming he holds correct views on various topics, and the resentment aimed at minority faculty like himself who choose to specialize in scholarly topics having little or nothing to do with identity. Twenty years later it remains true that many of the minority lawprofs to have made the biggest impact on the outside world have been those who've largely avoided identity themes in their intellectual work, such as Carter himself and Stanford's William Gould, to whose number might be added Elizabeth Warren (to the extent she counts as minority) and Chicago's Barack Obama.

As I put it in reviewing Carter's book: "It doesn't take a white or a black mind to explode a fallacy: it takes a mind."


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]

Masthead - PointOfLaw Forum

MASTHEAD
EDITOR


Ted Frank

Ted Frank is an Adjunct Fellow with the Center for Legal Policy at the Manhattan Institute. The Wall Street Journal has called him a "leading tort-reform advocate."

In addition to his role with the Manhattan Institute, Mr. Frank is the president of the Center for Class Action Fairness, which he founded in 2009. Mr. Frank has written for law reviews, the Wall Street Journal, the Washington Post, and The American Spectator and has testified before Congress multiple times on legal issues. He also writes for the legal blog Overlawyered.com and serves on the Executive Committee of the Federalist Society Litigation Practice Group. In 2008, Mr. Frank was elected to membership in the American Law Institute.

Previously, Mr. Frank clerked for the Honorable Frank H. Easterbrook on the Seventh Circuit Court of Appeals, was a litigator for ten years, served as the first director of the AEI Legal Center for the Public Interest, and was an attorney on the McCain-Palin 2008 campaign. Mr. Frank graduated the University of Chicago Law School with high honors and as a member of the Order of the Coif and the Law Review.

  Articles by Ted Frank

 
MANAGING EDITOR


James R. Copland

Jim Copland is the director of the Center for Legal Policy at the Manhattan Institute. Under Mr. Copland's stewardship, the Center has published recent work on asbestos, class actions, and "toxic mold" litigation. The Center's 2003 report, Trial Lawyers, Inc.: A Report on the Lawsuit Industry in America, received favorable press attention on various television news channels, radio programs, and print sources including The Economist and The Wall Street Journal.

  Articles by James R. Copland

 
WEBLOG CONTRIBUTORS


Marie Gryphon

Marie Gryphon is a Senior Fellow with the Center for Legal Policy. As an attorney in private practice, she worked on ERISA, securities, class action, commercial contract, legal malpractice, and constitutional law cases. She has also been a legal and policy analyst with the Cato Institute, working on issues related to education policy. Her articles have appeared in Business Week, the Washington Post, the Dallas Morning News, the Star-Ledger, Forbes, FoxNews.com, National Review Online, and the Orange County Register. She holds a J.D. from the University of Washington School of Law and is a Ph.D. candidate in public policy at Harvard University.



Paul F. Enzinna

Paul F. Enzinna is a member of the White Collar Defense and Government Investigations Group at Brown Rudnick, LLP in Washington, DC. He represents individuals and corporations in internal and grand jury investigations, and at trial and on appeal. He has represented several death row inmates, and is a member of the Board of Directors of the Mid-Atlantic Innocence Project. In 2002, he was awarded the R. Kenneth Mundy Lawyer of the Year Award by the National Association of Criminal Defense Lawyers' District of Columbia chapter for his work in obtaining a full pardon, on the basis of DNA testing, for a Virginia man sentenced to more than 200 years imprisonment for rape.



Michael Krauss

Michael Krauss, a professor at the George Mason School of Law, is nationally known for his research in torts and legal ethics. He is a leading scholar of the government "recoupment" lawsuits against the tobacco and gun industries, and he recently co-authored the second edition of Legal Ethics in a Nutshell.



Walter K. Olson

Walter Olson is a Senior Fellow with the Cato Institute, a commentator, author, and critic best known for his work on the American litigation system. He has written three widely acclaimed books on the American litigation system: The Litigation Explosion, The Excuse Factory, and The Rule of Lawyers. His writing appears regularly in such publications as the Wall Street Journal and New York Times, and he writes a regular column on American law for the Times Online (U.K.). His approximately 400 broadcast appearances include "Crossfire", the "Lehrer News Hour", CNN "NewsNight", and "Oprah". He founded and continues to run the popular Overlawyered.com weblog. He has frequently given testimony before lawmakers and advised public officials; the Washington Post has dubbed him an "intellectual guru of tort reform."



Hester Peirce

Hester Peirce is a senior research fellow at the Mercatus Center at George Mason University. Peirce's primary research interests relate to the regulation of the financial markets.

Hester Peirce served as Senior Counsel to Senator Shelby's staff on the Senate Committee on Banking, Housing, and Urban Affairs. In that position, she worked on financial regulatory reform efforts following the financial crisis of 2008 and oversight of the regulatory implementation of the Dodd-Frank Act. Among the issues Peirce focused on were derivatives regulation, the use of economic analysis in the development of financial regulations, the regulation of investment advisers and broker-dealers, corporate governance, and the regulation of credit rating agencies. Her oversight work on the Banking Committee focused primarily on the activities of the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Financial Stability Oversight Council, the Financial Industry Regulatory Authority, and the Public Company Accounting Oversight Board.



Jonathan B. Wilson

A seasoned business attorney, Jonathan B. Wilson has experience in corporate, securities, technology, and intellectual property law. He currently practices with the Atlanta firm of Taylor English Duma, LLP and is the former general counsel of two NASDAQ companies. He founded and chairs the American Bar Association's Renewable Energy Committee and in 2005 penned, Out of Balance: Prescriptions for Reforming the American Litigation System, outlining his ideas for legal reform.



Carter Wood

Carter Wood is a speechwriter for Business Roundtable in Washington, D.C., a trade association representing chief executive officers of leading U.S. companies. He previously spent five years as Senior Communications Advisor with the National Association of Manufacturers, where he wrote the blog, Shopfloor.org. A former newspaper reporter in Oregon and North Dakota, Wood served as policy advisor for two governors of North Dakota, a speechwriter for Secretary of Health and Human Services Tommy G. Thompson, a special assistant in the Federal Housing Finance Board, and a D.C. lobbyist for the governor of Indiana. Wood holds a B.S. in history from Reed College and an M.S.J. from the Columbia School of Journalism, New York City.

 
 
CONTRIBUTORS


David Bernstein

A professor at the George Mason University School of Law, David Bernstein is a scholar of wide-ranging interests, including torts, products liability, and scientific and expert evidence. He is co-author of the most extensive treatise to date on expert evidence and co-editor of Phantom Risk: Scientific Inference and the Law. Professor Bernstein is also a contributor to the popular weblog, The Volokh Conspiracy.



Lester Brickman

Lester Brickman is a professor of law at the Benjamin N. Cardozo School of Law at Yeshiva University. His areas of expertise include administrative alternatives to mass tort litigation, asbestos litigation, and contingency fee reform. Professor Brickman has written extensively on these and other topics, he has testified at congressional hearings, and he is widely quoted in the press.



Michael DeBow

A professor at both the Cumberland School of Law at Samford University and the School of Public Health at the University of Alabama at Birmingham, Michael DeBow is a leading researcher on the states' lawsuits against the tobacco companies, judicial selection mechanisms, and the politics of legal reform. He also contributes to the weblog Southern Appeal.



Richard Epstein

The James Parker Hall Distinguished Service Professor of Law at the University of Chicago and the Peter and Kirstin Bedford Senior Fellow at the Hoover Institution, Richard Epstein is one of the most nation's most prolific legal scholars, with writings spanning almost every area of private law. He authored his first book on tort law almost 25 years ago, and he is editor of one of the leading torts casebooks.



Martin Grace

Martin Grace is a professor of risk management and insurance at Georgia State University, as well as the associate director of the school's Center for Risk Management and Insurance Research and an associate of the school's Fiscal Research Center. He also has his own blog on tort law, liability, and insurance, RiskProf.



Philip K. Howard

Phil Howard is the vice-chairman of Covington & Burling and the author of two best-selling books on lawsuit abuse, The Death of Common Sense: How Law is Suffocating America and The Collapse of the Common Good: How America's Lawsuit Culture Undermines Our Freedom. He has contributed the American Law section of the Oxford Companion to American Law for nearly 40 years. More recently, Howard has served as founder and chair of the bipartisan legal reform coalition Common Good, which advocates holistic changes to the tort system.



Daniel P. Kessler

An expert on health care management and medical malpractice reform, Daniel Kessler is a professor at Stanford Business School and Stanford Law School and a senior fellow at the Hoover Institution. His seminal work with Mark McClellan has quantified the effects of medical malpractice liability rules on medical practice. Professor Kessler continues to publish on health care policy, industrial organization, antitrust, and other issues in law and economics journals.



Tom Kirkendall

Tom Kirkendall, a prominent Houston lawyer, opened his own practice in 2002 after twenty years at Maddox, Perrin & Kirkendall, a business litigation firm he helped found in 1981. His areas of expertise include securities law, bankruptcy, and corporate reorganization. He writes the popular blog Houston's Clear Thinkers.



Stephen Presser

Stephen Presser, professor at Northwestern Law School and School of Management, is one of the leading scholars in the field of corporations, particularly on the issue of shareholder liability for corporate debts. He has authored a leading casebook in the field, An Introduction to the Law of Business Organizations. He is also considered an expert in legal history and constitutional law, a title he has earned as editor of the preeminent legal history casebook, as author of the compelling originalist treatise Recapturing the Constitution, and as a regular expert witness to the U.S. Congress on constitutional law issues.



Alexander Tabarrok

Alex Tabarrok is a professor of economics at George Mason University, research director at the Independent Institute, and a research fellow at the Mercatus Center. Along with Eric Helland, he has conducted much of the leading empirical work of the last decade on the law and economics of tort, including research on the effects of judicial election and selection systems on tort awards. Professor Tabarrok co-authors the law and economics weblog MarginalRevolution.com, one of the most widely read economics blogs on the internet, as well as the extensive FDA policies and reform website FDAReview.org.


   

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.

As if in anticipation of ATRA's report, only days before the release of 'Judicial Hellholes', news broke that Circuit Judge Barbara Crowder of Madison County, assigned to oversee the circuit court's asbestos docket, was to be removed to civil assignments. Chief Judge Ann Callis filed the order after discovering that attorneys of three plaintiffs' firms donated, in sum, $30,000 to Judge Crowder's campaign fund only a few days subsequent to being chosen by Judge Crowder to receive a majority of the trial slots on the 2013 asbestos docket.

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.

Congressional hearing on asbestos fraud - PointOfLaw Forum

A House Judiciary subcommittee explored the problem of asbestos fraud and asbestos bankruptcy trusts on September 9. Professor Lester Brickman's testimony presents a good summary of the issue. Businessman Mike Carter testified about the effect on job creation from his family business being repeatedly sued (104 times by 2223 individual plaintiffs) as a tertiary defendant—despite never manufacturing an asbestos product or ever facing a workers' compensation claim for asbestos-related injury. (See also ILR.) Moody's has said that "[r]ecent disclosures by three insurance companies regarding increased asbestos claims are a 'warning flag' for those companies and the U.S. property and casualty industry as a whole." [LNL; LNL; Main Justice; RAND]

Around the web, August 22 - PointOfLaw Forum

  • California appellate court ignores Supreme Court precedent in affirming $13.8 million punitive damages award. [Cal Punitives; ATRA; WLF; BLD; SF Chronicle; Bullock v. Philip Morris; earlier Cal Punitives coverage]
  • Lots of holes in asbestos bankruptcy trusts according to RAND. [Corp Counsel; RAND; earlier from Brickman and POL]
  • "Federal Asset Seizures Rise, Netting Innocent With Guilty" [WSJ]
  • Sixth Circuit takes Rule 23's superiority requirement seriously, reverses class certification when there would be adverse public policy effects from not letting litigation proceed on an individual basis. [Trask]
  • More on the Shelton decision. [WSJ Law blog; WSJ; earlier]
  • All-star lineup at National Press Club September 27 to discuss SCOTUS OT2011. [Fed Soc]
  • The myth of the food desert. [Gratzer; OL]
  • Posner: "The persistence of the depression, however, is due in part at least to surprising failures of the Obama administration--poor leadership, poor management, the sponsorship of incomprehensibly complex health care and financial regulation laws that have created widespread uncertainty that has discouraged consumption and investment, and the inability to explain the nature of the economy's problems to the general public." [TNR]

Kirk Hartley thinks he knows one reason "why asbestos plaintiff's lawyers presently are spending so much time and energy trying to limit the time allowed for depositions of asbestos plaintiffs."

Around the web, April 6 - PointOfLaw Forum

  • "Maybe He Should Avoid Britain for a While": some lawyers eye assertions of "universal jurisdiction" to arrest Pope in abuse furor [Ku/Opinio Juris and more; Rick Esenberg on statutes of limitations and more]
  • "Appeal Confirms Rejection of Asbestos Bankruptcy Plan as Collusive and In Bad Faith" [Hartley]
  • State AGs as HIPAA police: Connecticut's Richard Blumenthal goes after a hospital over privacy lapse [HIPAA Blog]
  • "In Utah, Stopping Speculative Suits Based on Global Warming" [ShopFloor and update]
  • More high-dollar verdicts in suits alleging bullying [Fox/Jottings and more]
  • "Such a strange theory [in Illinois] -- that the legislature can't set limits on damages" -- Ted Olson [sub-only WSJ]

W.V.: More transparency in asbestos payouts - PointOfLaw Forum

"An order filed Wednesday will ensure asbestos plaintiffs don't get paid twice for the same alleged injuries. ... Under this case management order, plaintiffs now must disclose which bankruptcy trusts they have talked to and against any trusts he or she might have a claim." [Chamber-backed West Virginia Record]

P.S. A reader in the Northeast also draws our attention to, in his words,

another recent order, this one entered on February 22, 2010 by Judge Furber in the Montgomery County, PA asbestos litigation, in which plaintiffs are ordered to file, no later than 120 days before trial, whatever claims they believe they have against asbestos bankruptcy trusts and to provide to defendants with copies of all such filings, including affidavits, medical records and reports, and employment documentation. This is one of the most comprehensive orders I've seen in asbestos litigation regarding the trust payment issue and should be very helpful to defendants in these cases.

Around the web, January 18 - PointOfLaw Forum

  • Massachusetts Senate race could give Republicans the added vote they need to block EFCA [Cal Labor Law] New poll shows union members opposing card check [Workforce Fairness Institute via Eric B. Meyer]
  • ObamaCare demonstration projects: "Oregon Seeks $300,000 Tort Reform Grant" [Lund Report]
  • Employers advised to make staff "sign and acknowledge receipt" of not-so-favorable performance reviews [Schwartz]
  • Any and all tactics? Website of Center for Justice and Democracy offers "kudos" for disruption of Detroit Auto Show [Pop Tort]
  • Market for directors' and officers' insurance on the rise in Europe as lawsuit risks mount [Kevin Lacroix]
  • Kirk Hartley of the Global Tort blog, a key stop for coverage of asbestos and bankruptcy issues, is switching law firms.

From the Global Tort blog on how plaintiff's lawyers react when a defendant goes into bankruptcy. The article is here.

Asbestos trusts and tax law - PointOfLaw Forum

Some litigation-created asbestos trusts "engage in transactions of a type the IRS deems dubious," according to Kirk Hartley. He also has been posting on the W.R. Grace bankruptcy: "Asbestos Plaintiff's Lawyers Ask W.R. Grace Bankruptcy Court to Order that Its Findings - on Solvency - Do Not Matter In any Other Forum", along with a followup.

Welcoming blogger S. Todd Brown - PointOfLaw Forum

We are delighted to announce that Buffalo Law School professor S. Todd Brown, who has been guestblogging for Point of Law in recent weeks, has agreed to stay on as a continuing contributor. As we noted in introducing him, he's practiced at such leading law firms as Jones Day and Wilmer Cutler Pickering Hale and Dorr, and his writings have often focused on the intersection of bankruptcy and mass torts, a subject of perennial interest to us here. He's also profiled in a recent issue of the UB Law Forum.

Kirk Hartley comments on S. Todd Brown's August 7 post. Related here, here, here, here, here, here, etc. (asbestos and product liability), as well as here and here (protection of UAW at expense of creditors).

Will Number 25 Be The Charm? - PointOfLaw Forum

As reported at law.com, the long-running Congoleum "pre-pack" asbestos bankruptcy has been given new life by U.S. District Court Judge Joel Pisano. To date, this opinion has received little attention in the media, but it is a fairly significant development in a case that has involved the removal of the debtor's pre-petition counsel who orchestrated the bankruptcy due to conflicts of interest, two dozen plan formulations, alleged "payoffs" to the lead plaintiffs' counsel, a scathing state court opinion that concluded the bankruptcy was arranged in bad faith, and numerous other examples of the potential for misconduct and abusive practices in asbestos bankruptcies. For more background, please see my recent article concerning asbestos bankruptcies, which has an extensive discussion of the history of the case.

Back in February, Bankruptcy Judge Ferguson made good on her promise to either dismiss or convert this Chapter 11 case if the current version of the plan still failed to address all of the concerns she has expressed for the last few YEARS about the structure and inequities of the plan. This was no hasty decision, and all of the parties in interest were on notice of her intentions for months before her decision. Still, Judge Ferguson made it clear that her decision to dismiss the case was more to force the parties to address these issues in the higher courts than anything else.

In an opinion issued Monday, Judge Pisano affirmed Judge Ferguson's order with respect to (a) recognizing the right of insurers to object to confirmation (noting that this was the 8th time that the plan proponents raised this issue and agreeing with the seven previous decisions that insurers have standing) and (b) denying plan confirmation. Neither of these points is terribly clear in the law.com summary, but they are extremely significant. Of course, the fact that the plan in its current form is unconfirmable requires the plan proponents to go back and make some adjustments. More importantly, by once again acknowledging insurer standing and the independent obligation of the court to ensure that the plan complies with bankruptcy law in a fairly strong fashion, Judge Pisano appears to be nudging the parties to stop hanging their hopes on litigation tactics and instead address the substantive concerns raised by the court. Moreover, the court expressly directed briefing on the issues that doomed the latest plan in advance of the confirmation hearing on the next version of the plan.

The emphasis of the law.com article is clearly on Judge Pisano's decision to reverse the bankruptcy court's order to dismiss the case and withdraw the reference from the bankruptcy court. As noted previously, the former is not much of a surprise. With respect to the latter, although not a terribly common procedural move, the district court's decision to withdraw the reference from the bankruptcy court and assume authority over the remaining proceedings is sensible. Judge Ferguson has done an admirable job of overseeing the case for roughly five years now, but her repeated admonitions to the plan proponents have been consistently met with, at best, superficial modifications to the plan, even as administrative expenses in the case hover around the $100 million mark. Due to the design of Section 524(g) and constitutional concerns, the bankruptcy court can only make recommendations concerning some key elements of the plan anyway. And by deciding the issues that have consistently doomed Congoleum's reorganization plans on its own, the district court may be in a better position to press the parties to make meaningful steps toward proposing a confirmable plan.

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