Legal Newsline

Wednesday, November 20, 2019

Garlock estimation testimony resumes

By T.K. Kim | Aug 6, 2013


CHARLOTTE, N.C. (Legal Newsline) - As Garlock Sealing Technololgies ongoing bankruptcy trial prepared to break for lunch after more than three hours of cross examination of an economist Monday, Judge George Hodges relayed a bit of dead pan levity.

A plaintiff's attorney, a defense attorney and a statistician all go out deer hunting, the joke went. The plaintiff's attorney takes a shot and misses five yards to the right. The defense attorney takes a shot and misses five yards to the left. The statistician, observing both shots and acting in his capacity as spotter, then hollers out, "Got him!"

The joke almost perfectly encapsulated the sentiments of the dozens of lawyers in his courtroom sitting through a mind-numbing back and forth volley between attorneys representing claimants suing the gasket manufacturer for asbestos exposure and an economist Garlock tapped to give the court estimates for how much money the company should place in a trust for future mesothelioma victims who might sue the company over exposure to asbestos from their products.

The jovial end of the morning session contrasted with the moment of silence Hodges began the day with in remembrance of the passing of famed North Carolina civil rights attorney Julius Chambers who died Friday.

Charles Bates, chairman of the economic consulting firm Bates White LLC and former assistant professor in the economics department at Johns Hopkins University, first testified about an estimation report his firm created to assess how much Garlock should put in the trust to compensate valid claimants last Friday.

Bates estimated $25 million was the net present value enough to sufficiently cover payouts for pending asbestos claims with $100 million being the net present value of the amount he said was needed to cover claims by future mesothelioma victims. He said he arrived at that figure by taking into account factors such as the estimated number of future claimants. He said he used an epidemiological model to estimate how many more mesothelioma claims are likely to arise. Bates said Garlock's proposal to fund the trust with $270 million would be sufficient to satisfy all of the future and pending claims.

"They wanted me to provide them an estimate of what their future expenditure might be," Bates said. Garlock wanted his opinion on how much money would be needed to "get out of the litigation."

On Monday, claimant attorneys attacked Bates' report questioning his methodology and a letter in which he stated that $485 million was within the range needed to properly fund the trust.

The attorneys questioned his data and analysis, implying his conclusions were skewed in favor of minimizing Garlock's financial responsibility. Bates repeatedly countered the critical analysis of his report saying that the examples being raised by the claimant attorneys meant to contradict his report came from cherry picked data giving skewed results.

Following Bates' testimony, Garlock attorneys called Richard Magee, another lawyer who previously represented Garlock, to the witness stand. Magee, the senior vice president for EnPro, Garlock's parent company was the former general counsel for EnPro and oversaw much of the Garlock asbestos tort litigation. Following a few brief questions on direct examination, Hodges closed his courtroom to members of the public and media who had not signed confidentiality forms.

Last Wednesday, Judge Hodges denied a Legal Newsline motion to keep all of the witnesses testifying in this case open including the testimony of former Garlock attorney John Turlik, currently a partner in the firm Segal, McCambridge Singer & Mahoney. Legal Newsline also is seeking to unseal closed portions of testimony given by a law professor the week prior.

In a written order explaining his decision, Hodges stated several factors including the circumstances of certain asbestos plaintiffs' cases, plaintiffs' particular exposures, "how the law firms responded to discovery, the questions they asked their clients in so responding, and how the law firms approached settlement negotiations," amounted to "trade secrets, confidential business information, and attorney-client privileged information about which the parties involved have significant privacy rights. The court has concluded that those rights outweigh the public's interest in those matters."

The bankruptcy trial, which began two weeks ago at the U.S. Bankruptcy Court for the Western District of North Carolina and is expected to last three weeks, will determine the estimated liability of the company for current and future asbestos claims. One of the central questions that will help establish how much Garlock will owe the claimants revolves around whether Garlock products, many removed decades ago, and no other sources of asbestos, led to cases of mesothelioma.

To try and limit the company's liability, its attorneys are asserting that some plaintiffs, taking advantage of confidentiality provisions enacted for special trusts established to pay claimants who came into contact with asbestos, are using the provisions to allow them to sue multiple defendants while using the same argument that each respectively was the cause of their illness.

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