Heather Isringhausen Gvillo Oct. 31, 2014, 2:53pm

CHARLOTTE, N.C. (Legal Newsline) – Roughly two weeks after Bankruptcy Judge George Hodges ruled in favor of Legal Newsline and other proponents of public access in the Garlock Sealing Technologies bankruptcy case by granting access to essentially the entire record, he released an order on Friday specifying what information is to be redacted and detailing the unsealing protocol.

At the Oct. 16 hearing, Hodges ordered all documents pertaining to the Garlock bankruptcy proceeding to be unsealed and made available, effectively denying every motion to seal that had been filed by asbestos plaintiffs lawyers and Garlock before a Sept. 11 deadline. The documents at issue include evidence submitted by Garlock that allegedly showed a pervasive pattern of misrepresentation and suppression of evidence on the part of asbestos plaintiffs and their attorneys.

After considering the motions to seal, objections and replies, the court concluded that it was proper to unseal the estimation record with a few exceptions. Hodges held that specific personally identifying information is to be redacted before the public may have access.

The following information was ordered to be redacted and permanently sealed:

-Social security numbers (except for last four digits);

-Dates of birth (except year);

-Names of identifiable minors (except initials);

-Financial account numbers (except for last four digits); and

-Medical information (except claimed asbestos-related disease).

The action arose out of Hodges’ Jan. 10 ruling in favor of Garlock ordering the gasket manufacturer to put $125 million in its bankruptcy trust, which is roughly $1 billion less than what plaintiffs attorneys requested as Garlock’s liability.

Hodges found that the amount of previous awards and settlements paid by the company in the civil justice system were not reliable because plaintiffs' attorneys had withheld evidence of their clients' exposure to asbestos-containing products manufactured by other companies in order to maximize recovery against Garlock.

According to Hodges’ redaction protocol, the debtors were ordered to employ a third-party vendor to review the “voluminous” estimation record materials and redact the specified personal information.

The debtors – which includes Garlock, Garrison Litigation Management Group and The Anchor Packing Company – and the Asbestos Claimants Committee, or ACC, are required to train the vendor’s staff on properly redacting the information.

They must also periodically sample the vendor’s work to ensure that redactions are being applied correctly.

While Hodges did not provide a specific timeline for when the documents would be available to the public, he ordered the debtors and the ACC to “act diligently, but consistent with due care,” to provide public access to the redacted estimation proceeding materials as soon as “reasonably practicable.”

Then, when all of the estimation record materials have been reviewed and redacted, the debtors are required to provide the court a complete copy of the redacted record, which the court will make available to the public upon request.

Outside the hearing, counsel for the ACC said it did not plan on filing an appeal, but it is unknown whether plaintiffs firms will appeal the decision. Counsel for Garlock stated that he did not believe the debtor would appeal, but that a final decision had not yet been made.

According to the Bankruptcy Rules of Civil Procedure, the parties have until Nov. 14 to appeal Hodges’ order.

If any movant appeals the order and seeks to stay the unsealing of the record pending the appeal, the court will suspend the redaction protocol only as it related to those materials impacted by the appeal and only until the motion to stay is resolved. The information will then be treated in accordance with the appeal.

However, information not impacted by any appeal will remain subject to the outlined redaction protocol even if an appeal or motion to stay is still pending.

In other words, an appeal by any movant would not suspend the unsealing of the entire record, but would only potentially impact the particular materials that are the subject of that particular movant’s appeal.

Hodges’ ruling comes after U.S. District Judge Max O. Cogburn, Jr.’s July 23 ruling in favor of Legal Newsline and other proponents of public access. He concluded that evidence alleging fraud on the part of asbestos attorneys should not have been sealed.

Cogburn, a President Barack Obama-appointee who took the bench in 2011, ruled that sealing documents and witness testimony is the exception, not the rule, to handling confidential information. As a result, he reversed Hodges’ denial of the motions seeking access to evidence admitted under seal and remanded the proceedings back to the bankruptcy court with instructions on how to handle the unsealing process.

“As a gatekeeper, a judge must consider sealing as the exception to the rule, give the public notice of its intent to seal, require counsel to provide valid reasons for such extraordinary relief, and then explain that decision as well as the reason why less drastic alternatives were not employed,” Cogburn wrote.

As a result, Hodges released instructions and deadlines for the unsealing process in the Garlock proceeding.

According to Hodges’ instructions, any party wishing to keep documents under seal must file a motion to seal proving confidentiality is appropriate.

Cogburn’s order, in the United States District Court for the Western District of North Carolina, came after a July 15 hearing addressed consolidated appeals from Legal Newsline, solvent asbestos defendants and other interested parties.

Legal Newsline’s first appeal came prior to the Garlock estimation trial on July 31, 2013, in response to Hodges’ decision to close portions of the trial and documents associated with it. It then filed an additional appeal seeking access to the evidence and sealed trial transcripts from the January decision.

After Hodges’ ruling, several interested parties filed similar motions requesting access to sealed Rule 2019 filings.

Cogburn agreed that the proceedings were improperly closed, and, therefore, reversed the closure and the denial of Legal Newsline’s motion.

On remand, Hodges entered an order establishing a protocol for consideration of unsealing evidence from the estimation hearing.

Hodges' landmark January ruling said plaintiffs' attorneys had manipulated their clients' exposure evidence while trying to maximize recovery against Garlock in civil lawsuits.

“This occurrence was a result of the effort by some plaintiffs and their lawyers to withhold evidence of exposure to other asbestos products and to delay filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries from Garlock,” Hodges wrote.

“It appears certain that more extensive discovery would show more extensive abuse,” he continued. “But that is not necessary because the startling pattern of misrepresentation that has been shown is sufficiently persuasive.”

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com


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