Chris Dickerson Aug. 20, 2013, 8:01pm

CHARLOTTE, N.C. (Legal Newsline) -- The Wall Street Journal says a federal judge in North Carolina is helping the plaintiffs bar keep information about asbestos trusts secret.

In an editorial, The Journal detailed information about the Garlock Sealing Technologies federal bankruptcy trial taking place in North Carolina.

The trial, which began in July and is expected to end later this month, will determine the estimated liability of the company for current and future asbestos claims.

To try and limit the company's liability, Garlock attorneys are asserting that some plaintiffs, taking advantage of confidentiality provisions enacted for special trusts established to pay claimants who came into contact with asbestos, are using the provisions to allow them to sue multiple defendants while using the same argument that each respectively was the cause of their illness.

"The good news about asbestos legal fraud is that there's a straightforward way to expose it," The Journal editorial states. "The bad news is that the judiciary too often remains the roadblock to transparency.

"That's what has been happening in federal bankruptcy court in North Carolina in the case of Garlock Sealing Technologies. The gasket manufacturer never had more than peripheral involvement in the asbestos business, yet it was forced into bankruptcy in 2010 by a flood of frivolous claims."

It claims plaintiffs attorneys are pushing Judge George Hodges "to force Garlock to put some $1.3 billion into a bankruptcy trust for future asbestos claims. Garlock estimates its liability is closer to $125 million, but the trust gambit is a plaintiffs bar favorite to guarantee a perpetual payday."

Garlock claims it has proof that some plaintiffs are "double-dipping," or filing claims with multiple bankruptcy trusts that blame non-Garlock products for their diseases, even as they pursue Garlock in court.

"The tort bar is desperate to continue this scam by keeping trust claims hidden from the public," the editorial states. "The plaintiffs attorneys argued to Judge Hodges that the information Garlock rooted out about their claims ought to remain 'confidential.'Judge Hodges agreed, dismissing Garlock's information as not 'particularly sexy' or of 'interest' to the public. He has repeatedly closed his courtroom when Garlock presented evidence and expert testimony."

Legal Newsline, in fact, appealed Hodges' denial of an order and his decision to close off testimony and portions of the record.

In a written order explaining his decision denying the Legal Newsline motion, Hodges stated several factors including the circumstances of certain asbestos plaintiffs' cases, plaintiffs' particular exposures, "how the law firms responded to discovery, the questions they asked their clients in so responding, and how the law firms approached settlement negotiations," amounted to "trade secrets, confidential business information, and attorney-client privileged information about which the parties involved have significant privacy rights. The court has concluded that those rights outweigh the public's interest in those matters."

The Journal seems to agree with Legal Newsline's stance.

"The judge's airy dismissal of a public interest is astonishing," the editorial states. "A handful of other judges have in recent years exposed egregious cases of double-dipping, inspiring states like Ohio and Oklahoma to pass laws to force trust disclosure. The House Judiciary Committee in May passed the Furthering Asbestos Claim Transparency (FACT) Act, which would require the nation's 60 asbestos trust funds -- yes, there are 60 -- to file quarterly reports that detail claimant names and the basis for their payouts.

"Garlock's evidence could be especially revealing given that lawyers from the firms suing it are on public record denying any double-dipping even as they have led the campaign against transparency."

The Journal editorial ends by saying the public has an interest in reducing fraudulent claims that deplete funds for legitimate victims, and in saving jobs at companies that are the casualties of legal malpractice.

"So the public has a right to know if attorneys suing Garlock are claiming one thing in court but another to numerous asbestos bankruptcy trusts," the editorial states. "Judge Hodges ought to unseal the Garlock evidence and testimony and let the public decide what is 'sexy.'"

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