Legal Newsline

Tuesday, February 25, 2020

Garlock trial winds down; judge closes courtroom again

By T.K. Kim | Aug 13, 2013


CHARLOTTE, N.C. (Legal Newsline) -- The ongoing bankruptcy trial for Garlock Sealing Technologies wound down Monday with attorneys for the gasket manufacturing company and those representing asbestos claimants calling their last few witnesses with the judge closing the courtroom one more time during a lawyer's testimony.

The bankruptcy trial, which began in July at the U.S. Bankruptcy Court for the Western District of North Carolina and is expected to end later this month after a week-and-a-half break, 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. Judge George Hodges will ultimately decide the estimated liability of the company for current and future asbestos claims and how much money the company will need to devote to a trust to escape bankruptcy.

David Glaspy, a California lawyer who has defended Garlock on more than 25,000 asbestos claims, testified that having disclosure of exposure information claimants against the company would have helped the company significantly in their defense.

To try and limit the company's liability, Garlock 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.

As Glaspy prepared to testify about specific claimants whose claims have aroused suspicion, Hodges closed the courtroom to anyone who had not signed a confidentiality agreement. Hodges previously closed the courtroom during testimony of other attorneys testifying about the same claimants.

Two weeks ago, Hodges denied a Legal Newsline motion to keep all of the proceedings open to the public and to unseal transcripts of the closed testimony. 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."

Garlock attorneys also questioned the billion plus figure a consultant for the claimants said would be needed to adequately fund the trust to pay out all of the company's pending and future claims and why she included more than $300 million in estimated defense costs in her figure.

Francine Rabinovitz, president of Hamilton, Rabinovitz & Associates said she used historical trends for her estimation and said the defense cost could also serve as a proxy for the administration costs that will be required to operate it.

She previously testified the company would need to devote $1,293.3 billion to the settlement trust. Rabinovitz said she relied on a recent five-year span of asbestos litigation data to come up with the figure. A Garlock consultant previously testified the company would need to devote a significantly less amount -- $270 million. Rabinovitz said she arrived at her figure by estimating the size of the population exposed to asbestos, the proportions of persons exposed to asbestos who develop mesothelioma, and the cost of defending asbestos claims among other factors.

The trial is scheduled to resume Aug. 22.

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