Fraud case will continue against asbestos firm

John O'Brien May 8, 2012, 7:45am

Robert Peirce

WHEELING, W.Va. (Legal Newsline) - The third amended complaint in CSX Transportation's long-running racketeering case against a Pittsburgh asbestos firm has survived a motion to dismiss.

Thursday, U.S. District Judge Frederick Stamp denied the motion to dismiss filed by the firm Peirce, Raimond & Coulter, which is being accused by CSX of teaming with radiologist Ray Harron to fabricate asbestos claims against the company. CSX filed its first complaint in the case seven years ago.

The Peirce firm made five arguments in support of dismissal of the lawsuit. It said CSX failed to properly state any racketeering claims.

"With regard to relatedness, this court's analysis hinges upon whether the predicate acts are defined as only the 11 fraudulent asbestosis claims or whether the mass suits themselves are considered predicate acts," Stamp wrote.

"As both parties acknowledge, the 11 fraudulent claims represent a small percentage of the total number of claims included within the mass lawsuits discussed in the third amended complaint. The lawyer defendants argue that this isolated conduct, a mere 0.2 percent of the asbestosis claims filed by the Peirce firm against CSXT, does not create a pattern of racketeering activity.

"But this court finds that the predicate acts alleged in the third amended complaint arguably encompass more than just the 11 fraudulent claims."

CSX is accusing the firm of filing a massive amount of lawsuits in overburdened courts to prevent the company from any meaningful discovery, which concealed fraudulent claims and leveraged higher settlements.

Stamp granted summary judgment to the defendants in 2009, finding a statute of limitations had run out.

In late 2010, judges of the U.S. Court of Appeals for the Fourth Circuit in Richmond remanded the case to Stamp with instructions to let CSX amend the complaint.

CSX amended the complaint in 2011. The Peirce firm filed counterclaims, which have also survived a motion to dismiss.

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."

From Legal Newsline: Reach John O'Brien by e-mail at

More News