CHARLOTTE, N.C. (Legal Newsline) – Four complaints that accuse asbestos law firms of racketeering were recently unsealed, providing a glimpse into information a federal bankruptcy judge likely relied on when he found those firms have committed “a startling pattern of misrepresentation” through the years.
In January 2014, Garlock Sealing Technologies filed four Racketeer Influenced and Corrupt Organizations Act lawsuits against four plaintiffs firms – Shein Law Center of Philadelphia, Belluck & Fox of New York City, Waters & Kraus of Dallas and Simon Greenstone Panatier Bartlett, also of Dallas.
“By concealing exposure evidence and telling different stories about what caused their clients’ injuries to Garlock on the one hand and (bankruptcy) trusts on the other, Defendants obtained inflated settlements and verdicts from Garlock and committed fraud against Garlock,” the complaints say.
Meanwhile, Simon Greenstone's attorney says the unsealed information shows the firm never concealed evidence of misled Garlock.
"To the contrary, it is clear that Garlock knew that it was responsible and was desperate to avoid having the evidence against Garlock aired in public in fron tof a jury," Michael W. Magner said.
"It is beyond the pale that Garlock would make such boldly false claims in order to try and work a better deal for themselves in the bankruptcy."
The RICO complaints came days before the judge handling Garlock’s bankruptcy, George Hodges, ruled that asbestos verdicts against and settlements with Garlock had been inflated because plaintiffs attorneys had withheld evidence of other exposures to asbestos while pursuing civil lawsuits against Garlock, which manufactures gaskets.
His ruling ordered Garlock to put $125 million in a trust, roughly $1 billion less than plaintiffs attorneys requested. Garlock recently reached a $358 million agreement with a group that represents the interests of future asbestos complainants.
Though originally filed under seal, the lawsuits were ordered to be unsealed by Jan. 15. Similarly, during Garlock’s estimation hearing before Hodges, he closed the courtroom to the media and had Garlock’s evidence filed under seal.
After Legal Newsline appealed, a district judge overruled Hodges, and that information is expected to be unsealed in April.
Each complaint lists a “prime example” of each firm’s alleged fraud.
The complaint against Shein Law Center lists the case of Vincent Golini, who was diagnosed with mesothelioma in 2009 and hired the firm to represent him.
The complaint says Golini identified 14 different asbestos-containing products he either worked with or worked around. Each of those products was manufactured by a company that had already established a bankruptcy trust to compensate asbestos victims.
Shein Law prepared 14 statements detailing Golini’s exposures to those products before filing a lawsuit in Pennsylvania state court against other companies.
“This was the real story of workplace asbestos exposure that caused Golini’s mesothelioma, but Defendants decided it was not yet time to tell it,” the complaint says.
“Defendants conjured up a different story for Golini’s lawsuit against Garlock.”
Shein Law purposely concealed those exposures during the lawsuit and falsely answered interrogatories in which Golini swore he had no knowledge of exposure to any asbestos product produced by companies other than those he was suing.
Once Golini received settlements from the defendants, Shein Law used the statements Golini had prepared before the lawsuit was filed to submit at least 20 claims to the bankruptcy trusts.
“The beauty of the scheme for Defendants was (and remains) that the two stories permitted multiple recoveries for one injury,” the complaint says.
“And, because the trusts’ governing documents have confidentiality provisions that require them to preserve the secrecy of trust claims, Defendants had good reason to believe the perjury they had suborned in state court to inflate Golini’s claims against Garlock would never be discovered.”
Similar allegations are contained in the other lawsuits. Belluck & Fox is accused of working with The David Law Firm, of Woodlands, Texas, to hide exposure evidence for a lawsuit on behalf of Peter Homa, who eventually filed 22 trust claims after a civil lawsuit.
Garlock said it was specifically told that Homa had no trust claims.
The complaint against Simon Greenstone said 24 trust claims submitted on the part of Charles White a month before the company paid a settlement told a different exposure story.
Magner said in the three cases brought by Simon Greenstone specifically identified by Garlock, the client identified exposure to asbestos insulation products in their own depositions.
"And Simon Greenstone's and other defense experts all likewise admitted to and testified about those exposures," he said.
Magner said Garlock's motivation is essentially to rel-litigate cases it settled many years ago.
"Garlock's management and attorneys pursued a strategy of settling their cases early to mitigate their losses and save on attorneys fees, and they should not be allowed to unravel their deal long after these plaintiffs have died from their illness," he said.
Waters & Kraus concealed Robert Treggett’s exposure to Pittsburgh Corning’s Unibestos product, successfully preventing a jury from determining that Pittsburgh Corning was partly responsible for Treggett’s disease, Garlock claims.
That jury awarded Treggett $24 million – the largest verdict against Garlock in its history. Seven months prior, Waters & Kraus had asserted Treggett’s voting rights in the Pittsburgh Corning bankruptcy.
Two months after the trial, the firm submitted a claim to the Pittsburgh Corning bankruptcy trust.
During Garlock’s bankruptcy, Hodges permitted Garlock to bring evidence that roughly 220 settled cases included instances of withheld evidence.
“It appears certain that more extensive discovery would show more extensive abuse,” Hodges wrote in his January 2014 order.
“But that is not necessary because the startling pattern of misrepresentation that has been shown is sufficiently persuasive.
“While it is not suppression of evidence for a plaintiff to be unable to identify exposures, it is suppression of evidence for a plaintiff to be unable to identify exposure in the tort case, but then later to be able to identify it in Trust claims. It is that practice that prejudiced Garlock in the tort system.”
During Legal Newsline’s appeal, several solvent asbestos defendants like Ford Motor Company, as well as the insurer of Pittsburgh Corning and Bondex, also fought to make the evidence public.
From Legal Newsline: Reach editor John O’Brien at email@example.com.