Court order disrupts asbestos world, but what of the ‘perjury pawns’?

It started, literally, with a billion-dollar question. The answer came with a scathing judge’s order saying attorneys from several national firms have “disappeared” evidence, misled courts and committed all sort of hijinks, setting the multi-billion-dollar asbestos litigation community aflutter.

At issue is a bankruptcy case involving Sealing Technologies, a gasket manufacturer owned by a parent company in Charlotte, N.C. As part of Garlock’s bankruptcy case, a federal judge had to determine how much the company must put into a trust to pay future asbestos-related claims, especially those involving mesothelioma — yes, the same disease you hear on all those ads and the most expensive search word on Google.

What the judge decided was that plaintiff’s lawyers had abused the system, and that instead of the $1.3 billion that victims representatives wanted set aside for mesothelioma liability, he was going to order that only $125 million be reserved. An appeal is assumed, but of course the impact was immediate.

“Judge throws manufacturers a lifeline with asbestos ruling,” was a Reuters headline over a Feb. 12 story that began, “A judge who found what he called a ‘startling pattern’ of abuse by plaintiffs’ lawyers may have shifted the landscape of asbestos litigation with a ruling in favor of manufacturers.”

A National Public Radio report cited the judge’s findings that:

… in Texas, one plaintiff said his only exposure to asbestos was from Garlock — after his lawyers filed a claim with another company. In California, a plaintiff’s lawyers misled a jury to make Garlock look worse. And in Philadelphia, lawyers made evidence of their client’s exposure to 20 different asbestos products disappear. Those are just a few of the old cases that federal bankruptcy judge George Hodges gave Garlock’s lawyers permission to re-examine back in late 2012.
Maybe a nice little statement about perjury across state lines here, giving new meaning to concept of judicial review?

Of course, plaintiff attorneys do not agree with this assertion. They point out that something like 60 other similar bankruptcies did not allow for the type of discovery that the judge ordered in Garlock. They also note that the judge is new to asbestos cases and might not understand the different rules for trust funds as opposed to courts. They say the case is an “outlier.”

It may be an outlier, but it’s already a big deal, and NPR added some context by citing reports from the U.S. Government Accountability Office saying companies have set aside more than $30 billion for mesothelioma victims since the 1980s and that asbestos lawsuits have played a role in about 100 companies going bankrupt. I know in my hometown of Los Angeles, our already crowded court dockets can be awash in asbestos cases.

But what’s missing in the sports-like reporting so far is any look at what this all means for actual mesothelioma victims who turn to those trusts.

If the implications of Garlock hold up, and of course we’ll see on the appeal, it means that trusted attorneys have been leading clients to tell one story for one trust and another story for another trust and maybe a third story for an actual jury — and on and on. Much of this is under oath, so the implication is an almost assembly line approach to perjury.

Most of those trusts are paying only pennies on the dollar of actual liability. So a person honestly identifying the company causing harm gets minimal payment, while others might go trust-to-trust with claims. Who is looking out for the victims who played by the rules? What are the impacts on our over-crowded civil courts that have been hearing cases that would have been dismissed with proper evidence?

The NPR report got it right when it said “no one argues that people suffering from mesothelioma shouldn’t get compensated. Instead, it’s a matter of the right companies paying the right amounts.”

My sources in the civil litigation world would assure me that asbestos cases are known for passionate victim’s advocates who sometimes get caught up with “winning at any cost,” especially when facing large corporate defense firms. Still, with Garlock, the judge found problems with all 15 cases where discovery was allowed, which discounts or minimizes the weight of the “mistakes were made” argument.

Those insiders also “hint” that we might soon see congressional hearings and speculate that law enforcement might even be interested in Garlock; I only hope that increased attention brings increased awareness that real victims deserve zealous advocates, but they don’t need to become perjury pawns for those who would game the system.