CSX can contact former Peirce clients for fraud case

Steve Korris Nov. 11, 2011, 8:15am


WHEELING, W.Va. (Legal Newsline) - CSX Transportation can contact former clients of Pittsburgh asbestos lawyer Robert Peirce, U.S. District Judge Frederick Stamp has decided.

"CSX is free to communicate with clients whose relationship with the Peirce Firm has terminated," Stamp wrote Wednesday.

He wrote that the firm doesn't maintain an attorney-client relationship with them.

CSX seeks evidence from former employees that Peirce represented for its civil fraud and racketeering suit against Peirce and associates Mark Coulter and Louis Raimond.

Stamp allowed contacts not only with former clients but also with current clients pursuing third-party claims against other businesses and bankruptcy trusts.

He also ruled that no one from the Peirce firm can represent former clients or current third-party clients at depositions.

He disqualified the entire firm due to conflict of interest.

"In this case, the Peirce Firm defendants' primary goal is to defend against allegations of racketeering, fraud and conspiracy," he wrote. "This goal is inconsistent with the desire to protect their clients' interests in the asbestos related claims.

"Thus, at least a risk exists that the Peirce Firm defendants may use the representation of their clients to protect their personal interests.

"Mr. Peirce has a personal interest in defending any allegation of impropriety that occurred during the course of his representation of his former clients, while his former clients have an interest in appropriately testifying regarding all of the details of the pursuit of their asbestos claims."

CSX started contacting former clients earlier this year after Stamp reopened the case at the direction of the U.S. Court of Appeals for the Fourth Circuit.

Stamp had ruled that a statute of limitations ran out on CSX, but Fourth Circuit judges decided that CSX could fix the problem by amending the complaint.

In April, Peirce asked Stamp to prohibit contacts with clients.

CSX asked for a hearing in May, but Stamp reached a decision without a hearing.

He wrote that CSX claims the Peirce Firm orchestrated a scheme to inundate CSX and others with thousands of asbestos cases without regard to their merit.

He wrote that the claims are separate and distinct from third party asbestos claims and claims against CSX.

"Significantly, the power of attorney agreement executed by the Peirce Firm's asbestos clients does not establish an attorney client privilege that continues indefinitely with regard to all asbestos related matters in general," he wrote.

He wrote that it authorizes the firm to represent the client only in a claim for damages from asbestos exposure.

He rejected Peirce's argument that former clients might bring claims in the future.

"The Peirce Firm defendants cannot properly claim to represent every former client as to every action that could possibly be filed," he wrote.

Stamp has set trial for December 2012.

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