On January 10, 2014, a U.S. Bankruptcy Judge George Hodges entered a sixty-five page “Order Estimating Aggregate Liability” for Garlock Sealing Technologies, LLC. Garlock manufactured asbestos gaskets, and became a frequent defendant in mesothelioma cases. Judge Hodges noted that generally the gaskets were sealed under other asbestos, and “released asbestos only when disturbed, such as by cutting, scraping, wire brushing or grinding- procedures that were done sporadically and then generally only after the removal of the thermal insulation products which caused a ’snowstorm’ of asbestos dust.”
The purpose of the order was to “determine Garlock’s responsibility for causing mesothelioma and the aggregate amount of money that is required to satisfy its liability to present claimants and future victims.” Judge Hodges determined that liability to be $125 million. The opinion notes Garlock’s own proposed Plan of Reorganization included at fund of $270 million for resolution of present and future asbestos related claims (Garlock was subject to claims by over 4000 existing mesothelioma claimants, and was involved as a defendant in twenty thousand mesothelioma cases, before entering into bankruptcy). The Asbestos Claims Committee (”ACC”) created for the bankruptcy action, members of the plaintiffs’ law firms representing the present mesothelioma claimants, estimated Garlock’s liability at $1- $1.3 billion.
Judge Hodges held a hearing “that took place over seventeen trial days and included 29 witnesses and hundreds of exhibits.” Judge Hodges’ opinion discussed:
1) The “science” evidence relating to asbestos and asbestos disease; 2) The “social science” evidence relating to practices in asbestos tort litigation; 3) The case law in asbestos estimation cases; and 4) The resulting estimation of Garlock’s aggregate liability.
Judge Hodges’ opinion includes an eighteen page discussion of the science of asbestos exposure and its relationship to mesothelioma. The judge then explored the history of asbestos claims. Judge Hodges notes that as other manufactures went bankrupt, including those who created the insulation surrounding Garlock’s gaskets, Garlock became a more frequent primary target of lawsuits. Although the rest of Judge Hodges’ opinion is interesting reading, the part of the opinion significant to this blog, does not appear until page 30 of the opinion. Beginning at page 30 of the opinion, Judge Hodges engages in a lengthy discussion of the fact that in cases against Garlock:
[O]ften the evidence of exposure to those [other] insulation companies’ products also “disappeared.” This occurrence was a result of the effort by some plaintiffs and their lawyers to withhold evidence of exposure to other asbestos products and to delay filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries from Garlock (and other viable defendants).
Judge Hodges detailed the facts of several specific cases in which evidence was suppressed by plaintiffs’ counsel, including a Philadelphia case:
A Philadelphia case involved a laborer and apprentice pipefitter in the Philadelphia shipyard which Garlock settled for $250,000. The plaintiff did not identify exposure to any bankrupt companies’ asbestos products. In answers to written interrogatories in the tort suit, the plaintiff’s lawyers stated that the plaintiff presently had “no personal knowledge” of such exposure. However, just six weeks earlier, those same lawyers had filed a statement in the Owens Corning bankruptcy case, sworn to by the plaintiff, that stated that he “frequently, regularly and proximately breathed asbestos dust emitted from Owens Corning Fiberglas’s Kaylo asbestos-containing pipe covering.” In total, this plaintiff’s lawyer failed to disclose exposure to 20 different asbestos products for which he made Trust claims. Fourteen of these claims were supported by sworn statements, that contradicted the plaintiff’s denials in the tort discovery.
Judge Hodges noted in every one of the fifteen previously settled cases for which he permitted “full discovery,” plaintiffs had not disclosed other exposures to asbestos. Garlock “identified 205 additional cases where the plaintiff’s discovery responses conflicted with on of the Trust claim processing facilities or balloting in bankruptcy cases.” Judge Hodges noted:
The limited discovery allowed by the court demonstrated that almost half of those cases involved misrepresentation of exposure evidence. It appears certain that more extensive discovery would show more extensive abuse. But that is not necessary because the startling pattern of misrepresentation that has been shown is sufficiently persuasive.
Based upon his findings, Judge Hodges found the exposure of Garlock for liability to existing and future claims would be very limited.
On the same day Judge Hodges released his opinion, Garlock filed under seal a fraud and RICO complaint against four law firms, including Philadelphia based Belluck & Fox and the Shein Law Center. This is not the first case of asbestos defendants suing plaintiffs’ lawyers, as we reported last year, an award of $1.3 million was entered against Robert Peirce & Associates due to an alleged conspiracy with radiologist Ray Harron to fabricate evidence. Although we are not aware of any asbestos plaintiffs’ lawyers who have faced disciplinary action as a result of suppression or destruction of evidence, it is not an uncommon basis for disciplinary actions or even criminal prosecution.
-Josh J.T. Byrne, Esquire (H.T. – N.P.R. and B.C.B)