CSX: Asbestos firm wants Fourth Circuit 'left in the dark'

John O'Brien Aug. 13, 2010, 1:58pm

Robert Peirce

RICHMOND, Va. (Legal Newsline) - CSX Transportation says the dismissal of 1,400 asbestos cases in West Virginia has everything to do with its fraud case against a Pittsburgh law firm.

Peirce Raimond & Coulter had asked that CSX's notice of the dismissals be stricken from the record of the fraud case, which alleges the Peirce firm teamed with a radiologist to fabricate asbestos claims and hid them among several others.

CSX's lawsuit was ruled by a district court to have been filed after the statute of limitations, and the company appealed to the U.S. Court of Appeals for the Fourth Circuit.

"(The Peirce firm's) basic submission is that it is impermissible... to apprise a federal court of appeals of a recent development in related state-court litigation," CSX's attorneys wrote Tuesday.

"In fact, it is commonplace."

Attorneys for CSX submitted to the Fourth Circuit a June order from Kanawha County Circuit Court that dismissed 1,400 claims filed by the Peirce firm, which argued they should be dismissed without prejudice. Judge Arthur Recht did not agree, and he dismissed them with prejudice.

Recht had implemented new rules that required plaintiffs to certify they were aware of their lawsuits, that their claim was "well-founded in fact" and that they wished to continue pursuing litigation.

"That order also required the production of 'all materials... relating to Plaintiff's alleged exposure to asbestos,' including 'medical records' and 'materials relating to occupational illness screenings sponsored by the Peirce firm and attended by Plaintiff,'" Dan Himmelfarb of Mayer Brown in Washington, D.C., wrote July 30 to the U.S. Court of Appeals for the Fourth Circuit.

"Rather than making the necessary representations on behalf of the remaining plaintiffs, the Peirce firm moved to voluntarily dismiss the 1,400-plus claims -- except for 62 malignant cancer claims and two non-malignant claims -- and ultimately stipulated that the claims should be dismissed with prejudice."

The Peirce firm says the dismissal of the 1,400 claims has nothing to do with the fraud case against it.

"The dismissal order contained no findings that the dismissed claims lacked merit and no findings as to whether the dismissed plaintiffs may have record amounts from third-party defendants," wrote Walter DeForest, of DeForest Koscelnik Yokitis Kaplan & Berardinelli.

"This is simply factual information that is not in the record, which CSX is improperly trying to place before the court, without context, for the apparent purpose of attempting to influence the court's review of rulings of the district court that were made before the events recited in CSX's letter."

Former Bridgeport radiologist Ray Harron was accused of diagnosing lung disease in patients who did not have it. CSX says the Peirce firm then hid those plaintiffs with thousands of others, preventing it from being able to adequately investigate each complaint.

In 2005, federal court judge Janis Graham Jack made national headlines when she uncovered duplicate and fraudulent silica diagnoses in her Texas courtroom. Many of those diagnoses were made by Harron and were made on plaintiffs who had already brought asbestos claims.

In Jack's opinion dismissing the claims, she said "These diagnoses were driven by neither health nor justice - they were manufactured for money."

Following Harron's admission that he did not even make the diagnoses of the patients whose x-rays he read, Jack noted that most of "these diagnoses are more the creation of lawyers than doctors."

CSX's attorneys wrote Tuesday that had the dismissal order been entered sooner it would have included its information during the briefing stage.

"Appellees' position ultimately seems to be that this Court should be left in the dark about a recent development in related litigation," they wrote.

"That position has no basis in logic and, as we have explained, it certainly has no basis in law."

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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