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November 17, 2018

Plaintiff Lawyer Offers Inside Look At `Institutionalized Fraud' At Asbestos Trusts

The trusts lawyers set up to pay the asbestos claims of bankrupt companies are platforms for “institutionalized fraud,” a former plaintiff lawyer says, thanks to lax rules that allow claimants and their relatives to obtain money without firm evidence they were ever actually exposed to asbestos. With lists of work sites and asbestos product names conveniently provided online and no process for verifying most reports of exposure, attorney Thomas M. Wilson says, the trusts are virtual factories for processing claims that wouldn’t pass muster in court.

“When you’re the one drafting the trust documents, you draft it so you and anyone else are able to take advantage of the trust process,” Wilson told me.

There’s nothing in Wilson’s May 7 article in Mealey’s Litigation Report (available online for $25) that would surprise a lawyer involved on either side of asbestos litigation. What’s surprising is the author, a former partner with the Cleveland plaintiff firm of Kelley & Ferraro who represented asbestos plaintiffs from 1999 to 2013 and helped set up some of the trusts he now accuses of facilitating fraud.

Wilson is now with Wargo & Wargo, a Berea, Ohio firm that does no asbestos work. “I have no dog in this fight any more,” the Cleveland-Marshall College of Law graduate told me.

And despite the use of the inflammatory `F’ word, Wilson says he isn’t accusing anybody of breaking the law.

“That’s the basis of the article — there’s nothing improper being done, from any point of view,” he said. “The people who are ultimately profiting from the bankruptcy trusts, properly, are the people who made them.”

Asbestos fibres - a single fibre is believed t... Asbestos: The $15 billion substance. (Photo credit: Wikipedia)

Readers might disagree about the “proper” part after reading how easily the trusts are gamed. In details Wilson said are entirely from public materials, the former asbestos plaintiff lawyer explains how the trusts are designed to be tapped by claimants with little evidence of exposure. That they’ve done, to the tune of more than $15 billion so far, as lawyers drive manufacturers into bankruptcy with asbestos lawsuits and then draft the documents governing the trusts that will pay their claims. From the article:

Plaintiff asbestos lawyers then use the millions of dollars of fees obtained from the system they were instrumental in building, to run countless advertisements designed to obtain more clients so that they can submit more claims and obtain more fees. Thus, institutionalized fraud, as built into the system, allows the system to perpetuate itself.

Here’s how the fraud is perpetuated:

  • Job site/exposure lists. The USG Asbestos Trust, set up to pay U.S. Gypsum claims, provides a helpful “Approved Site List” identifying job sites where workers may have been exposed to asbestos. The website also provides a “Significant Occupational Exposure Rating,” listing jobs like Insulator, Laborer and Boilermaker Helper, that are presumed to have led to asbestos exposure. Combine the two, Wilson says, and no further evidence is needed. Claimants don’t have to prove they touched any specific products, worked with them, or even worked inside a building where they were present.
  • Easy claim forms. While the plaintiff lawyers guarding the trusts require their clients to file a form specifically claiming they were exposed to that company’s products, it’s not a terribly demanding task. The claim forms must be signed, but they aren’t affidavits and don’t meet state or federal evidence standards. In fact, if the information matches what’s in an attorney’s file then it is “accurate,” even if incorrect. The whole process resembles the robosigning scandal at mortgage companies: Once lawyers sign an electronic filing form, Wilson says, information can be automatically merged into the claim forms “which can then be bulk uploaded, by the thousands.”
  • No cross-checking. While many states allow courts to consider the relative liability of a company if the plaintiff was exposed to other, more dangerous asbestos products, lawyers have dropped that from trust documents. Some trusts specifically advise claimants that they don’t want information about exposure to other products, meaning plaintiffs can tap multiple trusts with conflicting stories about how they think they got sick without worrying about getting caught.
  • Lax exposure affidavits. Family members can file these on behalf of a deceased claimant, without any personal knowledge of the facts. The Plibrico trust, for example, allows family members to make “factual assertions” about someone else’s work history and exposure that wouldn’t be admitted in any court.
  • Product lists. A claimant theoretically should be able to identify the product he says made him sick. The trusts make this easier by providing lists of asbest0s-containing products on their websits, including the years they were manufactured. That makes it easy to provide accurate documentation of exposure without actually remembering anything.

These articles typically generate outraged comments from plaintiff lawyers who accuse me of being an “industry stooge” or worse. In this case, the material comes from one of their own. And the effect of all this gamesmanship is to deplete the trusts of assets that could be used to pay future claimants. As with most large settlements, the asbestos trusts were set up to compensate lawyers and their clients in the here and now, with less concern for future claimants and their lawyers. The companies, of course, also get a benefit by capping their liability and moving on. By putting their assets in the hands of plaintiff lawyers with an inherent conflict of interest with future claimants, they set the stage for fraud.

Link: 

Plaintiff Lawyer Offers Inside Look At `Institutionalized Fraud' At Asbestos Trusts

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.

Read more: 

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.

Link to original: 

Embattled Gasket Maker Sues Asbestos Lawyers For Fraud

Yes Rep. McCarthy, You Should Drop Your Asbestos Lawsuit

English: Congressional portrait of Carolyn McC...

U.S. Rep. Carolyn McCarthy. (Photo credit: Wikipedia)

New York Times Columnist Joe Nocera has a hard-hitting piece today about the sheer cynicism of U.S. Rep. Carolyn McCarthy’s attempt to get money from some 70 companies for her lung cancer, which was almost certainly caused by her pack-a-day smoking habit.

I wrote about this last week, of course, drawing a lively set of comments from lawyers who accused me of everything from misunderstanding the science — wrong — to lacking objectivity — maybe, but I don’t earn a fee based on the outcome of my reporting. And Nocera also suggests McCarthy should drop her case, because it merely highlights what a corrupt exercise asbestos litigation has become.

I agree McCarthy should, as a member of Congress, drop her attempt to get money from companies that almost certainly had nothing to do with her illness. Her lawsuit, filed by the politically connected law firm of Weitz & Luxenberg, displays what a routine exercise this has become. The suit lists scores of companies that once manufactured, distributed or handled products containing asbestos, from water-heater maker A.O. Smith to Yuba Heat Transfer, which makes heat exchangers for power plants. General Electric General Electric is in there, as is Flowserve Flowserve, the Long Island Power Authority and Goodyear Goodyear Tire.

The actual complaint conveys a sort of poetic imagery in its cynicism: NYAL – WEITZ &LUXENBERG, P.C. STANDARD ASBESTOS COMPLAINT FOR PERSONAL INJURY No.7.

McCarthy claims, in answers to questions from defendants, that she is “fearful of death” and her “asbestos-related condition has disrupted my life, limiting me in my everyday activities and interfering with living a normal life.” Amazingly, for a woman who appears to have been exposed to just about every company in the asbestos-production chain, Rep. McCarthy denies regular exposure to a large number of other dangerous substances including acids, aluminum, coal dust, live chickens, toluene and silica.

She does admit to a 30-year smoking habit, at times amounting to a pack a day, which she ended in May 2013 when she received her diagnosis of lung cancer. But did she know cigarettes cause cancer? Apparently not. In response to the question of whether she was ever told by a physician that she was “suffering from any disease or illness caused by or contributed to by tobacco,” the former nurse answered, under penalty of perjury, “no.” Neither was she “advised by any physician or any other person that use of tobacco products could adversely affect” her health. Nor was she “ever advised to stop using tobacco products.”

I am not sure how anybody could get through nursing school, even decades ago, without learning the dangers of smoking. Or be under the regular care of physicians at Walter Reed National Military Medical Center, as McCarthy says she was for the past 16 years, without ever once being alerted to the fact that cigarette smoking is a habit best quit. Or how her physicians at Memorial Sloan Kettering Cancer Center failed to mention smoking as a possible cause of her lung cancer.

But her “no” answers could come in handy should the Congresswoman ever decide to sue a tobacco company.

For now, McCarthy is pursuing a claim that she was exposed to stray asbestos fibers brought home on the clothing of her father (cause of death: massive stroke) and brother who worked in shipyards and power plants in the area. But she also found herself in harm’s way when she visited and picked up her father and brother “at various work sites including Navy Yards, Bridges, Hospitals, Schools, Powerhouses and other sites where I breathed the asbestos dust and from asbestos containing equipment being worked on, installed and removed by my father, brother and other workers.”

It’s a well-worn strategy of asbestos lawyers to sue companies like brake-pad manufacturers and gasket makers for contributing to the lung disease of aging workers, most of whom smoked. The theory is they inhaled asbestos fibers as they walked past somebody else replacing the gasket in a steam pipe. Never mind that asbestos exposures must be high and continuous to cause disease; lawyers have come up with a scientifically dubious theory that even one stray fiber can cause cancer, the flutter of a butterfly’s wings causing a metastatic cascade ending in death.

With her complaint, McCarthy carries this to the extreme. How many New York residents have not been exposed to asbestos at least at the level of Rep. McCarthy? Are they all entitled to payouts from Goodyear and GE?

The point of this post isn’t to cause further suffering to McCarthy, who is already going through a horrible experience. But as a lawmaker, she should reconsider engaging in litigation with such dubious underpinnings. I know it is standard practice to sue everybody and sort out the real perps in discovery. That pattern strays into the extortionate with asbestos litigation, however, where each of the named defendants can be rid of a case with the payment of a few thousand dollars, or risk a potentially devastating jury award if they resist.

For an example, look no further than the Weitz & Luxenberg website, which proudly announces a $190 million verdict lawyers there won in July on behalf of five industrial workers who came down with mesothelioma. Those are the stakes for companies that decline to play the game.

More:

Yes Rep. McCarthy, You Should Drop Your Asbestos Lawsuit

Chain-Smoking Congresswoman's Asbestos Suit Shows New Trend

Beschreibung: Konventionelles Rntgenbild des ...

Uh-oh. (Photo credit: Wikipedia)

If anybody should understand what caused her lung cancer, it’s New York Congresswoman Carolyn McCarthy. The 69-year-old Democrat spent 30 years as a nurse before being elected to the U.S. Congress, and reportedly was a heavy smoker for more than 40 years.

Yet McCarthy is suing more than 70 asbestos companies to pay for her cancer, saying she was actually sickened by asbestos fibers carried home on the clothes of father and brothers, who worked on navy ships and in utilities.

McCarthy’s suit has drawn well-deserved criticism, both for the implausibility of her claims and because her lawyers are the politically connected firm of Weitz & Luxenberg, which employs the speaker of the New York General Assembly, Sheldon Silver. Odds are most of the companies she’s suing will settle for that reason alone.

But McCarthy also illustrates a potentially disturbing new trend for both corporate defendants and the true victims of asbestos-related disease. Having exhausted the pool of mesothelioma claimants, plaintiff lawyers are turning to lung cancer again, reviving a strategy that fell into disuse after courts started removing cases not directly claiming asbestos disease from the docket. They’re filing thousands of cases on behalf of smokers who claim that stray asbestos fibers, not cigarettes, made them sick.

If the strategy works, plaintiff lawyers will succeed in draining bankruptcy trusts set up for the benefit of asbestos victims, leaving less money for people with mesothelioma and asbestosis, which are both directly linked to asbestos exposure. It may even set up a conflict between lawyers who pay millions of dollars for TV and Internet advertising to get the 2,500 or so patients diagnosed with mesothelioma each year, and higher-volume law firms representing lung cancer plaintiffs.

Lung-cancer claims in Madison County, Ill. and Delaware, two of the most active venues for asbestos litigation, have more than doubled since 2010, to more than 600 a year in each court system, according to a new article in Mealey’s Asbestos Bankruptcy Report. Southern California courts are also seeing an upturn. And an analysis of claims in the Philadelphia Court of Common Please found that 75% of the claimants suing over asbestos-related lung cancer revealed a smoking history, with three-quarters of them smoking at least a pack a day for an average of 39 years.

The report, by Peter Kelso and Marc Scarcella of Bates White Economic Consulting and Joseph Cagnoli, a partner with the defense firm of Segal McCambridge Singer & Mahoney, says lung-cancer claims have fluctuated up and down over the years, not because of changes in the rate of cancer — new diagnoses run around 200,000 a year in the U.S. and are declining steadily — but due to “changing economic incentives for plaintiff law firms.”

Lawyers made billions of dollars in the 1980s and 1990s by setting up mobile X-ray screening sites at union halls and other locations with concentrations of industrial workers, l0oking for claimants with lung scarring or other signs of asbestos-related disease. Because lung cancer is clearly caused by smoking, workers with cancer and a history of smoking were considered to have lower-value cases than n0n-smoking workers with asbestosis.

Using a time-honored strategy, lawyers bundled those weak and strong cases together, leveraging larger overall settlements than if the cases were presented separately. The most valuable cases have always involved mesothelioma, a cancer of the chest lining that is closely linked to asbestos exposure (although it clearly has other causes; the death rate has been rising in recent years despite a steep decline in industrial asbestos use since the 1970s.). In one example cited by the authors, G-I Holdings G-I Holdings settled 160,000 cases in the 1990s in groups of 250 or more, paying out two-thirds of the money to non-mesothelioma claimants.

So-called n0n-malignant cases plunged a decade ago after courts around the country stopped allowing them on their active dockets, thus removing them from the pool of cases lawyers could bundle for settlement. Non-malignant claims fell from 90% of claims and 50% of payments to 2% of settled cases. Mesothelioma grabbed the vast majority of the money from court settlements.

Since lawyers spent an estimated $500-$1,000 per plaintiff for mass screenings, the authors say, the decline of non-malignant claims made it less economically viable to perform mass screenings. One side effect was fewer lung-cancer claims.

But at the same time, many asbestos manufacturers declared bankruptcy and set up trusts, typically under the control of plaintiff lawyers, to pay out claims. Those trusts, now with more than $30 billion in assets, often provide “expedited review” that allows plaintiffs to collect small awards — $4,000 to as little as $250 — with minimal paperwork and no requirement to disclose smoking history.

The authors say the trusts have paid out $1.2 billion in lung-cancer claims since 2009, and estimate that each claimant might hit 20-30 trusts for payment, meaning as much as $106,000 for a case of lung cancer likely caused by smoking. That provides enough fee income for lawyers to start mass screenings again, the authors say. Out of 1,000 workers screened, lawyers could be expected to turn up 40 cancer claims worth about $3 million in fees after expenses, compared with perhaps 10 cases of asbestosis.

Without judicial mechanisms to more carefully vet these cases, they write, “there is nothing preventing plaintiff law firms from bringing mass quantities of meritless lung cancer cases against asbestos defendants.”

Originally from – 

Chain-Smoking Congresswoman's Asbestos Suit Shows New Trend

Chain-Smoking Congresswoman's Asbestos Suit Shows New Trend

Beschreibung: Konventionelles Rntgenbild des ...

Uh-oh. (Photo credit: Wikipedia)

If anybody should understand what caused her lung cancer, it’s New York Congresswoman Carolyn McCarthy. The 69-year-old Democrat spent 30 years as a nurse before being elected to the U.S. Congress, and reportedly was a heavy smoker for more than 40 years.

Yet McCarthy is seeking money from more than 70 asbestos companies, saying she was actually sickened by asbestos fibers carried home on the clothes of father and brothers, who worked on navy ships and in utilities.

McCarthy’s suit has drawn well-deserved criticism, both for the implausibility of her claims and because her lawyers are the politically connected firm of Weitz & Luxenberg, which employs the speaker of the New York General Assembly, Sheldon Silver. Odds are most of the companies she’s suing will settle for that reason alone.

But McCarthy also illustrates a potentially disturbing new trend for both corporate defendants and the true victims of asbestos-related disease. Having exhausted the pool of mesothelioma claimants, plaintiff lawyers are turning to lung cancer again, reviving a strategy that fell into disuse after courts started removing cases not directly claiming asbestos disease from the docket. They’re filing thousands of cases on behalf of smokers who claim that stray asbestos fibers, not cigarettes, made them sick.

If the strategy works, plaintiff lawyers will succeed in draining bankruptcy trusts set up for the benefit of asbestos victims, leaving less money for people with mesothelioma and asbestosis, which are both directly linked to asbestos exposure. It may even set up a conflict between lawyers who pay millions of dollars for TV and Internet advertising to get the 2,500 or so patients diagnosed with mesothelioma each year, and higher-volume law firms representing lung cancer plaintiffs.

Lung-cancer claims in Madison County, Ill. and Delaware, two of the most active venues for asbestos litigation, have more than doubled since 2010, to more than 600 a year in each court system, according to a new article in Mealey’s Asbestos Bankruptcy Report. Southern California courts are also seeing an upturn. And an analysis of claims in the Philadelphia Court of Common Pleas found that 75% of the claimants suing over asbestos-related lung cancer revealed a smoking history, with three-quarters of them smoking at least a pack a day for an average of 39 years.

The report, by Peter Kelso and Marc Scarcella of Bates White Economic Consulting and Joseph Cagnoli, a partner with the defense firm of Segal McCambridge Singer & Mahoney, says lung-cancer claims have fluctuated up and down over the years, not because of changes in the rate of cancer — new diagnoses run around 200,000 a year in the U.S. and are declining steadily — but due to “changing economic incentives for plaintiff law firms.”

Lawyers made billions of dollars in the 1980s and 1990s by setting up mobile X-ray screening sites at union halls and other locations with concentrations of industrial workers, l0oking for claimants with lung scarring or other signs of asbestos-related disease. Because lung cancer is clearly caused by smoking, workers with cancer and a history of smoking were considered to have lower-value cases than n0n-smoking workers with asbestosis.

Using a time-honored strategy, lawyers bundled those weak and strong cases together, leveraging larger overall settlements than if the cases were presented separately. The most valuable cases have always involved mesothelioma, a cancer of the chest lining that is closely linked to asbestos exposure (although it clearly has other causes; the death rate has been rising in recent years despite a steep decline in industrial asbestos use since the 1970s.). In one example cited by the authors, G-I Holdings G-I Holdings settled 160,000 cases in the 1990s in groups of 250 or more, paying out two-thirds of the money to non-mesothelioma claimants.

So-called n0n-malignant cases plunged a decade ago after courts around the country stopped allowing them on their active dockets, thus removing them from the pool of cases lawyers could bundle for settlement. Non-malignant claims fell from 90% of claims and 50% of payments to 2% of settled cases. Mesothelioma grabbed the vast majority of the money from court settlements.

Since lawyers spent an estimated $500-$1,000 per plaintiff for mass screenings, the authors say, the decline of non-malignant claims made it less economically viable to perform mass screenings. One side effect was fewer lung-cancer claims.

But at the same time, many asbestos manufacturers declared bankruptcy and set up trusts, typically under the control of plaintiff lawyers, to pay out claims. Those trusts, now with more than $30 billion in assets, often provide “expedited review” that allows plaintiffs to collect small awards — $4,000 to as little as $250 — with minimal paperwork and no requirement to disclose smoking history.

The authors say the trusts have paid out $1.2 billion in lung-cancer claims since 2009, and estimate that each claimant might hit 20-30 trusts for payment, meaning as much as $106,000 for a case of lung cancer likely caused by smoking. That provides enough fee income for lawyers to start mass screenings again, the authors say. Out of 1,000 workers screened, lawyers could be expected to turn up 40 cancer claims worth about $3 million in fees after expenses, compared with perhaps 10 cases of asbestosis.

Without judicial mechanisms to more carefully vet these cases, they write, “there is nothing preventing plaintiff law firms from bringing mass quantities of meritless lung cancer cases against asbestos defendants.”

Link to original – 

Chain-Smoking Congresswoman's Asbestos Suit Shows New Trend