John O'Brien Oct. 13, 2010, 1:56pm
LOS ANGELES (Legal Newsline) - Delaware Attorney General Beau Biden has decided to withdraw from a whistleblower lawsuit against pipemaker JM Eagle.
Attorneys for the State wrote Friday that they believe there is substantial evidence to support the whistleblower's allegations but that the State lacks the resources to maintain its status as an intervenor.
"The Relator is well-positioned to represent the interests of Delaware. We also reserve our rights to intervene in this case at a later date..." attorneys wrote.
"The state of Delaware also requests that all parties continue to serve on it all papers filed in this case."
Three states -- Virginia, Tennessee and Nevada -- remain as intervenors. The federal government has already decided not to intervene. The state of California also declined, but 47 municipalities and water districts are intervenors.
Four other states have until Oct. 29 to make up their minds. They are New Mexico, Illinois, Indiana and New York.
In the complaint, filed in 2006 under seal, 11 states and the District of Columbia were named as real parties in interest.
The law firm Phillips & Cohen is representing whistleblower John Hendrix, who was an engineer for J-M Manufacturing's product assurance division in New Jersey. J-M was JM Eagle's corporate predeccessor.
Hendrix was fired less than two weeks after writing a memo that said the pipes tensile strength was substandard, Phillips & Cohen said.
"JM Eagle has conducted a scorched-earth litigation strategy against the governmental entities that have intervened in the case, demanding millions of pages of documents," said Mary A. Inman, a San Francisco attorney with Phillips & Cohen.
"Delaware simply decided that it did not have the resources to fight JM Eagle on its own. We are pleased that the state believes we will represent its interests successfully."
JM Eagle attorney Lanny Davis has said that none of the states put much time into investigating the claims. Nevada Attorney General Caroline Cortez Masto was the only attorney general with whom the company interacted.
Jason Miller, a spokesman for Biden, has said the state has experienced "no known failures of the pipe."
The U.S. Attorney's Office in Los Angeles subpoenaed tens of thousands of documents and conducted what attorney Davis called a "mini-trial" in which expert testimony was given.
"I'd never seen that before," said Davis, former special counsel to President Bill Clinton. "At the very end of the process, they sent in people to take samples of the pipes, going over several years.
"They told us they were going to test the pipe, then we didn't hear from them anymore."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.