February 18, 2019

Unsealed U.S. lawsuits tell of alleged fraud by asbestos law firms

By Tom Hals

Jan 20 (Reuters) – U.S. personal injury lawyers allegedly concealed evidence and induced clients to commit perjury to drive up asbestos-related settlements and garner bigger fees, according to lawsuits unsealed on Tuesday in the bankruptcy of a gasket maker.

The unsealed racketeering complaints alleged that four law firms sued Garlock Sealing Technologies, which made asbestos-lined gaskets, while hiding evidence that their clients were exposed to asbestos products made by other companies.

The evidence was allegedly hidden because the other companies were bankrupt, making Garlock a much more attractive target for an asbestos lawsuit, according to the complaints.

Garlock, a unit of EnPro Industries, filed for bankruptcy in 2010 in Charlotte, North Carolina, in the face of the mounting cost of asbestos lawsuits.

The unsealed complaints cite many examples of alleged fraud, including the Shein Law Center’s handling of a lawsuit by Vincent Golini, who was diagnosed with deadly mesothelioma in 2009.

Golini allegedly told Philadelphia-based Shein he was exposed to 14 asbestos products made by bankrupt companies including Owens Corning and Armstrong World Industries. But when Golini sued Garlock he denied exposure to any products made by a bankrupt manufacturer, according to the complaint.

After Garlock settled with Golini, Shein had Golini file claims with the asbestos trusts that were set up by Owens Corning and other bankrupt makers of asbestos products. Those trusts often pay only a small fraction of a claim.

Shein’s lawyer, Daniel Brier of Myers Brier & Kelly, said the racketeering lawsuit is completely without merit and Shein represented its clients “ethically and properly”.

Garlock’s Chapter 11 case has drawn national attention due to the company’s allegations that personal injury lawyers fraudulently inflated judgments and settlements.

The racketeering lawsuits were originally filed in early 2014. They were ordered unsealed last summer but only became available to the public on Tuesday.

The allegations in the unsealed documents appeared to have already been discussed publicly in an opinion in 2014 by Judge George Hodges. That opinion set Garlock’s liability for asbestos at $125 million and said the company’s past settlements were tainted by fraud.

The others were Belluck & Fox of New York; and Waters Kraus & Paul and Simon Greenstone Panatier Bartlett of Dallas. Mark Iola, a partner at Iola Galerston, also in Dallas, was also sued.

Attorneys for the law firms said Garlock was trying to relitigate settled cases and blame others for the consequences of its own conduct.

(Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Jessica Dye in New York)

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Unsealed U.S. lawsuits tell of alleged fraud by asbestos law firms

Judge To Open Files Supporting Garlock Asbestos Fraud Claims Next Week

A long-secret trove of court filings that bankrupt gasket maker Garlock Sealing Technologies says illustrate a pattern of fraud in asbestos litigation is expected to be opened to public view next next week, possibly as soon as Monday.

The files, Garlock says, will show how plaintiff lawyers withheld evidence their clients were exposed to multiple asbestos products in order to extract higher settlements and court verdicts from Garlock. In one case that generated a $37 million verdict in California, Garlock says, a lawyer with prominent Dallas asbestos firm Waters Waters & Kraus flatly denied exposure to dangerous insulation that his client had already admitted, under penalty of perjury, in another proceeding.

The records in racketeering lawsuits Garlock filed against several asbestos law firms are to be unsealed after a fierce battle by plaintiff lawyers to keep them secret. In January, U.S. Bankruptcy Judge George Hodges in Charlotte, North Carolina slashed Garlock’s estimated liability for asbestos exposure from $1.4 billion to $125 million after determining that the higher estimates were based upon court cases “infected by the manipulation of exposure evidence by plaintiffs and their lawyers.” In a pattern long known to defense attorneys, plaintiff lawyers coach their clients to “remember” working with only products made by the company they are suing, then file claims with bankruptcy trusts alleging other exposures.

Plaintiff lawyers argued unsealing the records would violate the privacy rights of their clients, even though they largely consist of public court filings. Hodges initially went along with them, and even sealed part of Garlock’s bankruptcy proceedings from the public. But a federal judge sided with Legal Newsline on its First Amendment challenge and ordered the files opened in July.

Hodges agreed to open the entire record in October, in a move that could help other manufacturers and insurance companies including Ford, VW and Aetna Aetna as they try to recover money they’ve paid out to plaintiffs who made duplicative and often conflicting claims about their asbestos exposure. As early as December, the public will have access to records covering more than 100,000 people who filed claims against Garlock as well as hundreds of thousands more who filed claims against nearly every trust set up to process claims against companies forced into bankruptcy over asbestos.

Those files are being redacted now to remove confidential information, although they will retain the last four digits of the claimants’ Social Security numbers so claims can be quickly matched up to uncover evidence of double-dipping and conflicting claims.

In a filing this week contesting plaintiff lawyers’ attempt to reopen the bankruptcy case, Garlock offered a preview of what the public will be able to see as soon as Monday. According to that filing, lawyers at Waters & Kraus won a $36.7 million jury verdict in 2004 after Navy veteran Robert Treggett testified that he was exposed to the asbestos in Garlock gaskets, but not the asbestos in Unibestos pipe insulation, which experts say is a hundreds of times more potent cause of mesothelioma.

His attorney, Ron C. Eddins, also told the jury it was “not true” that Unibestos was on the ship he worked on, even though Treggett had filed a bankruptcy claim under penalty of perjury saying he’d been exposed to Unibestos. That verdict induced Garlock to enter an agreement to settle claims with Waters & Kraus under an annual “cap” of payouts and was among the verdicts plaintiff lawyers cited in their claim that Garlock owed more than $1 billion in bankruptcy. Garlock says it could have won the suit, or been assessed with much less liability, if it had known about the Unibestos evidence.


Judge To Open Files Supporting Garlock Asbestos Fraud Claims Next Week

Aviation Authority looks to recover losses from asbestos removal

By Liz Segrist
Published May 15, 2014

The Charleston County Aviation Authority’s board is looking to recover losses from nearly $670,000 in asbestos remediation at the Charleston International Airport.

Construction crews discovered the asbestos earlier this year during a renovation project. The waterproofing substance that contained the cancer-causing materials was sandwiched between several brick walls at the front of the airport, said Matt McCoy of Michael Baker Inc. during the authority’s board meeting Thursday.

Construction and asbestos abatement continue as part of the Charleston International Airport’s renovation project. (Photo/Liz Segrist)Construction and asbestos abatement continue as part of Charleston International Airport’s renovation project. (Photo/Liz Segrist)

Previous coverage

Contractors were unaware of it until the walls were demolished as part of the

Terminal Redevelopment Improvement Program

. The aviation authority voted Thursday to approve the $670,000 needed to remove the asbestos from the airport.

The board plans to investigate what company or contractor was responsible for using the asbestos-containing material when the terminal was built in 1982, as well as whether the material that was used was legal at the time.

“The asbestos problem bothers me a lot because it was not expected on our construction project, and it should not have been used in 1982,” Airports Director Paul Campbell said.

Arnold Goodstein, the authority’s legal counsel, said there’s a good chance the authority could get some financial reimbursements if they discover who is responsible for using the materials during construction more than three decades ago.

“Once we dig into it and figure out who provided it and who purchased it, we will go from there,” Goodstein said.

Asbestos abatement will delay project’s completion by one month to September 2015.

The board has allocated roughly $1.85 million of its $11.5 million contingency funds thus far for change orders needed for unexpected changes during the construction process.

2015 fiscal year budget

The authority’s total revenue for fiscal year 2015 is projected to be roughly $38.5 million, up 8% from fiscal year 2014. The authority approved its budget for fiscal year 2015, beginning July 1, during the meeting.

The operating revenue for fiscal year 2015 is projected to increase to roughly $33 million, up 8.1% from the year prior. Revenue from parking fees and rental cars continue to be the largest revenue producers for the authority, Finance Director Judi Olmstead said.

Projected revenue for parking for next year is $10.5 million, up 13.9%. Fuel sales are expected to increase by 23% to roughly $1.3 million in projected revenue.

The authority expects its operating expenses to increase by 5.4% from personnel costs, benefits, administrative services, utilities, contractual services and insurance, professional and legal fees.

The budget includes plans for three staff additions, including a staff attorney that would report to the airports director, a legal assistant and a maintenance planner. There will be five title changes in the engineering department, but they will not impact the budget.

The aviation authority’s budget projections are based, in part, on the $200 million renovation project underway at the airport and an increase in both passengers and flights at the airport.

About 622,000 passengers have arrived or departed from the airport during the first quarter of 2014, up 14.5% from the same time in 2013. For fiscal year 2015, the authority forecasts 2.9 million passengers will pass through the airport.

The airport currently has 18 daily non-stop destinations. The American Airlines and U.S. Airways merger is creating some opportunity at the local airport as the airline shifts around flights.

JetBlue Airways will add two nonstop flights from the Charleston airport to the Ronald Reagan Washington National Airport outside Washington, D.C., starting June 19. Southwest is considering the addition of nonstop service to the Charleston airport as well if it acquires two additional gates at Dallas Love Field.

Renovations update

The authority expects that the renovations will have passengers spending more money at the new concessions and shops, as well as renting more cars through the new rental car pavilion.

“About a year from now, you will see a significant change at the airport. … We will be about 80% complete with the project by June,” Campbell said.

The renovation project will upgrade the airport’s baggage claim areas, security checkpoints and terminals, as well as a new rental car center.

The second floor of the Central Energy Plant is now finished. Construction continues at Concourse B for the new B4 gate.

The third new baggage carousel recently opened. The next phase for the baggage claim area will be to raise the ceiling.

Construction has caused some issues for airlines’ baggage operations and the airport looks to finish construction as quickly as possible, said Michael Pena, chairman of the Terminal Redevelopment Improvement Program committee.

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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Aviation Authority looks to recover losses from asbestos removal

The Judge Won't Call Asbestos-Lawyer Shenanigans Fraud, But It Sure Smells Like It

Asbestos (chrysotile)

License to mislead? (Photo credit: Wikipedia)

License to mislead? (Photo credit: Wikipedia)

There’s an old journalistic turn of phrase that keeps us on the right side of the libel laws, while getting the point across: Sometimes it’s a crime what’s legal.

That is an apt description for the shenanigans plaintiff lawyers have engaged in for years as they sucked billions of dollars out of otherwise solvent companies in search of money they say their clients are owed for asbestos-related diseases.

Hold your comments about how asbestos companies engaged in subterfuge. That is true, but it doesn’t relieve lawyers of the responsibility to act like professionals.

There are a few thousand mesothelioma deaths a year in the U.S. that can definitely be attributed to asbestos, and lawyers fight like sharks over those golden tickets, each of which is worth a couple hundred thousand dollars in fees. One measure of this is the word “mesothelioma” is one of the most expensive keywords on Google Google AdWords.

A bankruptcy judge’s 65-page order released late yesterday in the case of gasket manufacturer Garlock Sealing Technologies illustrates, in unambiguous detail, the depths lawyers are willing to plumb to go after those golden tickets. They routinely engage in the type of behavior that would subject them to the fiercest sort of liability were they practicing any other profession. It may be legal — indeed, U.S. Bankruptcy Judge George Hodges was careful to note he made “no determination of the propriety” of the practices he described — but that doesn’t remove the stench.

The law is supposed to be a profession devoted to finding out the truth. In that regard, lawyers are a lot like journalists, only they are also officers of the court, given special powers to ferret out information their opponents would prefer to leave hidden from view. What the Garlock bankruptcy shows is lawyers in the asbestos trade abused these powers to hide information from defendants as well as judges and jurors, to the point that they made a mockery of their duties as officers of the court. If they were engineers, doctors, or corporate executives, these shenanigans would probably cross the line into civil fraud. They might even lose their licenses. But lawyers are particularly bad at disciplining themselves, so I’ll just throw these examples out there for readers to decide whether their activities are compatible with retaining the license to practice law.

As I noted yesterday, Judge Hodges granted Garlock permission to perform full discovery on 15 closed asbestos cases against the company. He conducted this inquiry in secrecy, even throwing reporters out of his courtroom in Charlotte, N.C. when lawyers were discussing what they found. That led reporters like me to think maybe the judge wanted to sweep the evidence under the rug. But his ruling yesterday slashing Garlock’s asbestos liability to a tenth of what plaintiff lawyers were seeking was devastating, and shows that companies can disrupt the asbestos racket if they are willing to fight.

Some background: The game in the Garlock case was to convince the judge that a company whose products almost certainly never injured anyone were responsible for more than $1 billion in asbestos-related liability. In a fierce statement yesterday, one Dallas law firm Garlock is suing for fraud accused the company of being complicit in “deaths of thousands of Navy veterans.” To gin up the numbers, lawyers pointed to a string of jury verdicts and settlements, at escalating amounts, as evidence that Garlock would have to pay at least a couple hundred thousand dollars for each and every one of the 2,500 or so mesothelioma deaths in America each year.

The problem is Garlock made a product where the asbestos was of a type believed to have 1/100 the risk of straight amphibole fibers that lodge in the lungs and pleural cavity and eventually cause cancer. Garlock’s fibers were encased in plastic. And to get to those supposedly deadly gaskets, workers would typically have to peel away flaky pipe insulation exposing themselves to far more dangerous amphibole dust.

To get around these inconvenient facts, asbestos lawyers coached their clients to “forget” having worked with any products but Garlock gaskets when they were suing Garlock, then change their stories when they were suing somebody else. They were helped in this subterfuge by the peculiar nature of bankruptcy trusts set up to pay claims of insolvent manufacturers. Plaintiff lawyers control these trusts, and they have successfully resisted most attempts to open up their records to uncover fraud and double-dipping. That makes it easy for the lawyers to sue the companies that want to fight in court first, with their well-coached clients displaying a highly selective memory of whose products they handled. Then they tap the trusts for money using completely different stories of how they got sick.

Here’s some examples of what Judge Hodges found in the 15 cases he allowed Garlock to examine. In every one of the 15, lawyers withheld evidence of conflicting stories. Bear in mind this company has settled more than 20,000 cases so far.

  • A former Navy machinist won a $9 million jury verdict in California, claiming that 100% of his work in a nuclear submarine was on gaskets. He denied any exposure to amphibole insulation, after Garlock tried to prove he’d been exposed to Pittsburgh Corning’s Corning’s Unibestos amphibole insulation. His lawyers even told the jury there was no Unibestos insulation on the ship. What they didn’t tell the jury was seven months earlier, they’d filed, under penalty of perjury, a claim with Pittsburgh Corning that their client had been exposed to Unibestos. Once the verdict was in, they filed 14 more claims including several against insulation manufacturers.
  • A former pipefitter in Philadelphia settled a case for $250,000 after claiming he had “no personal knowledge” of exposure to other companies’ products. Apparently his lawyers found that not incompatible with his claim six weeks earlier with the Owens Corning Owens Corning bankruptcy trust, in which he “frequently, regularly and proximately breathed asbestos dust emitted from Owens Corning Fiberglas’s Kaylo asbestos-containing pipe covering.” This lawyer filed 20 different trust claims on his client’s behalf, 14 of them supported by sworn statements that contradicted what he said in the Garlock case.
  • A Texas plaintiff won a $1.35 million jury verdict by claiming his only exposure was to Garlock gaskets. He specifically denied even knowing the name “Babcock & Wilcox,” a boiler company that was driven into bankruptcy by asbestos claims. His lawyers told the jury there was no evidence of exposure to Owens Corning insulation. One day before the client denied knowing anything about Babcock & Wilcox, he’d filed a claim against that company’s trust. After the verdict, he filed a claim against Owens Corning. Both were paid, based on his sworn statements he’d handled raw asbestos on a regular basis.

These tales are old news by now, of course. And judging from the traffic on yesterday’s story, most readers just look at the headlines and yawn. But the behavior detailed above is exactly, precisely the sort of subterfuge that subjects companies to fraud lawsuits on a daily basis. Imagine what would happen if a corporate executive told shareholders her company was poised to record the best profits in its history at the same time as she was preparing a bankruptcy filing. Or a food executive who testified in a lawsuit that his products contained no toxins, at the same time as he was reviewing a consultant’s report detailing the exact amount of those toxins in his company’s products.

Lawyers can’t hide behind the claim of zealous representation here. They know what they’re doing is wrong. The shame is their profession lets them get away with it. Self-regulation is always a problem, and it is long since past the time when lawyers need the presence of non-lawyers on their disciplinary committees, as is the practice in the U.K. The asbestos racket shows what happens when lawyers are in charge of disciplining themselves.

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The Judge Won't Call Asbestos-Lawyer Shenanigans Fraud, But It Sure Smells Like It

Embattled Gasket Maker Sues Asbestos Lawyers For Fraud

Asbestos lungs

Whose asbestos did this? (Photo credit: Wikipedia)

Gasket manufacturer Garlock Technologies has sued four prominent asbestos law firms for fraud as it awaits a bankruptcy judge’s decision on how much money the company must set aside to settle thousands of claims against it.

The company says the law firms sued it on behalf of clients who had already made conflicting claims about their asbestos exposure against other companies.

The complaints “allege that these firms concealed evidence about their clients’ exposure to asbestos products and concealed it in litigation against” Garlock, said Don Washington, a spokesman for Garlock parent EnPro Industries. “In essence they double-dipped.”

Named in the lawsuits are: Belluck & Fox and Shein Law Center in Philadelphia; and Simon Greenstone and Waters & Krause in Dallas. Waters & Krause, in a statement, said the lawsuit against it “represents just the latest in a series of actions by Garlock to avoid being held accountable for helping to cause the deaths of thousands of Navy veterans and others from the asbestos found in the company’s products.”

Garlock entered bankruptcy in 2010 after its cost of settling asbestos suits skyrocketed from $5,000 per claim past $70,000, in a familiar cycle as other defendants went bankrupt and lawyers escalated their demands against the few remaining solvent manufacturers. Garlock says it owes plaintiffs nothing because its products contained small amounts of a less dangerous form of asbestos; plaintiff lawyers have suggested the firm owes $1.4 billion. EnPro has said it believes the bankruptcy shields the parent company from asbestos against Garlock division.

Garlock has fought to make evidence of fraud public, but U.S. Bankruptcy Judge George Hodges in Charlotte, N.C. has refused. Hodges even ejected reporters from his courtroom during proceedings this summer in which Garlock’s lawyers presented evidence that plaintiffs making claims against it had denied its products caused their illness when suing other companies. Hodges agreed with plaintiff lawyers that those claims were confidential medical records. To comply with the judge’s rulings, Garlock filed the lawsuits late yesterday under seal.

EnPro said yesterday it expects Judge Hodges to release his opinion estimating its liability after 4 p.m. today.

By suing the asbestos lawyers who are suing it, Garlock is following in the steps of CSX, which in 2012 won a $429,000 fraud verdict against Pittsburgh lawyers Robert Peirce and Louis Raimond after uncovering evidence the lawyers had used phony diagnoses from discredited Dr. Ray Harron to fabricate asbestos cases against the railroad. Evidence in that case included internal memos suggesting the lawyers knew Harron was “very, very liberal” with his diagnoses, but, Peirce said in one letter, “even a disputed diagnosis case has some value.”

The lawyers also hired an unlicensed tech to run a mobile X-ray screening program, and let a doctor use an automatic signature stamp to sign medical reports.

It isn’t clear what’s in the complaints Garlock filed under seal, but attorney Samuel Tarry with McGuire Woods in Richmond, who represented CSX, told me fake diagnoses lie at the core of most such cases.

“If we’re going to see more of this litigation it’s because there are unfortunately still doctors who are willing to say whatever lawyers ask them to say,” said Tarry, who declined to comment directly on the CSX case because it is on appeal.

Garlock previously accused another law firm of fraud for making conflicting stories about how its client was exposed to asbestos. Plaintiff lawyers accused the company of trying to game its bankruptcy by disrupting long-settled methods of assessing liability based upon previous court verdicts.

Pursuing law firms for fraud is difficult because plaintiff lawyers try to shield all of their documents under the attorney-client privilege.

“It’s a challenge to prove intent unless you have smoking-gun documents,” Tarry said.

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Embattled Gasket Maker Sues Asbestos Lawyers For Fraud

Rick Nemeroff Of The Nemeroff Law Firm Returns As Co-Chair For National Asbestos Litigation Conference

DALLAS, Aug. 14, 2013 /PRNewswire/ — Rick Nemeroff, owner of The Nemeroff Law Firm and leading representative of mesothelioma victims, was selected to return as co-chair and moderator for the 2013 Asbestos Litigation Conference: A National Overview and Outlook. The event gives thought leaders in the asbestos field an opportunity to discuss how trends in litigation may impact future cases.

(Photo:  http://photos.prnewswire.com/prnh/20130814/NE63658)

The event, hosted by Perrin Conferences, brings asbestos insurance, legal, corporate and scientific leaders together to review the direction and climate of asbestos litigation. Topics for discussion include emerging and specialized claims, recent verdicts, decisions and events, as well as strategies on litigating cases in particular states and leading jurist’s perspectives.

“We’re proud to have Rick Nemeroff chair our National Asbestos Conference once again,” said Lynnsey Perrin, founder of Perrin Conferences. “Rick’s vast experience in this highly competitive field and enviable record of results place him at the forefront of asbestos litigation.”

Practicing since 1993, Nemeroff has established himself as a leading trial lawyer, combining compassion with aggressive litigation skills to fight for individuals and families who have been harmed by the actions of negligent corporations. He is a sought-after speaker and presenter for all aspects of asbestos litigation.

“I’m honored to return as co-chair and moderator for this year’s conference,” said Nemeroff. “It’s a great opportunity for us, as representatives of victims and their families, to discuss industry and legal developments and what those might mean for our clients.”

Established in 2009, the National Asbestos Litigation Conference offers a vibrant and open forum to help attendees understand the trends currently driving asbestos litigation and what the future will present. The conference will be hosted at the Fairmont Hotel in San Francisco on Sept. 16-18.

About Nemeroff Law Firm

With offices in Dallas, Houston, New Orleans and Pittsburgh, The Nemeroff Law Firm is a nationally recognized trial firm dedicated to helping individuals and families who suffer from asbestos related mesothelioma, harmful pharmaceuticals, and catastrophic personal injuries or death as a result of the wrongful or negligent conduct of others. Led by attorney Rick Nemeroff, the firm serves clients throughout the United States and Mexico, combining compassion and caring with aggressive litigation skills to deliver life-changing results.  For more information, contact The Nemeroff Law Firm at 866-435-1831, go to www.nemerofflaw.com or follow them on Twitter.


Gigi Westerman



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Rick Nemeroff Of The Nemeroff Law Firm Returns As Co-Chair For National Asbestos Litigation Conference