CSX wants to talk to former asbestos plaintiffs for fraud case

By John O'Brien | May 12, 2011


WHEELING, W.Va. (Legal Newsline) - A company that has filed a fraud lawsuit against an asbestos law firm says it has the right to speak with the firm's former clients.

CSX Transportation says the Pittsburgh firm Peirce, Raimond and Coulter has no asbestosis claims remaining against it in West Virginia and that the attorney-client privileges between the firm and its clients are no longer active. CSX claims the Peirce firm conspired with radiologist Ray Harron to fabricate asbestos claims.

In April, the Peirce firm asked U.S. District Judge Frederick Stamp to prohibit contact between CSX and its former clients, as well as obtain a list of those already contacted.

"Although vigorously argued, the Lawyer Defendants' position is legally and factually incorrect," attorneys for CSX wrote Friday.

"The Lawyer Defendants ignore that, on its face, Rule 4.2 of the West Virginia Rules of Professional Conduct only applies when the person with whom the lawyer seeks to communicate is currently represented by counsel."

Stamp once closed the case, but the U.S. Court of Appeals for the Fourth Circuit ruled that CSX did not miss the statute of limitations when filing the case. Discovery is stayed while Robert Peirce pursues an appeal of that decision to the U.S. Supreme Court.

CSX's complaint said Peirce hid nine fraudulent claims among other lawsuits filed by the law firm in West Virginia.

The complaint noted that radiologist Ray Harron, who was found by a Texas federal judge in 2005 to have created fradulent silica claims, lost his license in 2007. Many of the Peirce firm's diagnoses were made by Harron.

The nine lawsuits were filed and settled from 2000-2006. Stamp ruled the four-year statute began when the Peirce firm began targeting CSX.

Allegations arising out of Peirce's representation of Earl Baylor were found to have been timely made. One of the lawsuits CSX tried to include in its second amended complaint was filed with the Baylor claim.

After the case returned to Stamp, CSX claim handler Greg Howard contacted Donald Wiley, who filed one of the suits CSX planned to add to the complaint. Wiley told Howard that Peirce still represented him, and the conversation ended.

Wiley reported the contact to Peirce, who asked Stamp to prohibit further contacts.

On April 6, the attorney representing the Peirce firm wrote, "To leave the clients in an uncounseled situation in which admissions related to the clients' past, present or future claims could be made would, we submit, be a dereliction of the Peirce Firm's duties and obligations to those clients."

He wrote that CSX must contact clients through the firm, rather than directly.

He wrote that "improper contacts in this case were initiated as part of an investigation with the intention of using the resulting information in litigation in a way which might be detrimental to the improperly contacted person."

The Peirce firm's clients had signed a Power of Attorney Agreement that CSX argues does not prevent it from talking to former clients.

"(C)ontrary to the Lawyer Defendants' demonstrably incorrect assertions, the Peirce firm's representation of asbestos clients is expressly limited to 1) a 'claim for damages... as a result of exposure to asbestos against the railroad,' and 2) 'a claim for damages' against 'defendants and manufacturers of asbestos products' identified by the clients in writing," CSX argues.

"Consequently, when a client's claims against the railroad and all previously identified in writing third-party defendants are resolved, the Peirce firm's representation terminates, the client becomes a formerly represented person and Rule 4.2 poses no bar to communication with that person by CSX.

"And even when the Peirce firm continues to represent a client with respect to claims against third-parties only those claims are, in the Lawyer Defendants' and their counsel's own words, 'separate and distinct' from the clients claim against CSX and 'unrelated to this action.'"

In July, Circuit Judge Arthur Recht ordered the dismissal of 1,400 asbestos claims. He had implemented new rules requiring plaintiffs to certify they were aware of their lawsuits, that their claims were "well-founded in fact" and that they wished to continue pursuing litigation.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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