U.S. Court of Appeals for the Fifth Circuit
NEW ORLEANS (Legal Newsline) - Two asbestos attorneys found by a jury to have committed fraud against a railroad made their argument to a federal appeals court in a brief filed Friday.
William Guy and Thomas Brock say a federal court had no jurisdiction over a fraud case filed against them by Illinois Central Railroad and that the company did not file the suit before the statute of limitations tolled. The two Mississippi attorneys filed their appellate brief with the U.S. Court of Appeals for the Fifth Circuit in New Orleans.
Another issue in the appeal is the award of more than $500,000 in attorneys fees to Illinois Central.
"Oral argument will aid the decisional process in this highly unusual case. Plaintiff-Appellee Illinois Central successfully litigated a claim of settlement fraud in federal court based on events that took place in state court many years earlier, claiming that 'Counsel for Illinois Central is not aware of a similar case,'" attorneys for Guy and Brock wrote.
"That is so because the theory of recovery runs afoul of the statute of limitations and the jurisdictional limits of federal court -- important issues that should be explored in detail at oral argument."
Illinois Central's complaints alleged the company would not have been obligated to pay $210,000 in settlements had it known that Willie Harried joined a mass action, titled Cosey, in 1995 and Warren Turner in 1996.
Harried and Turner both filed suit against Illinois Central in 2001. The complaints say Guy and Brock knew their clients had taken part in the mass action and failed to disclose it
Guy and Brock say Illinois Central filed its fraud lawsuit in federal court only because of adverse rulings from the Mississippi Supreme Court in related cases. They also says the company disclosed that it knew about the alleged harm by Feb. 13, 2004, while investigating possible fraud in another mass action, yet did not inform them.
The lawsuit was filed Jan. 31, 2007, against Turner, and the attorneys were added as defendants later that year.
"Throughout this litigation -including a motion for summary judgment on the statute of limitations - Guy and Brock repeatedly pointed out that Illinois Central had aired its grievances about the Eakins settlement procedure in the state courts, even attaching transcripts of those hearings," the brief says.
"They stressed that Illinois Central had strategically waited to sue in federal court until after it lost the battle in state court. But all to no avail.
"The court consolidated the cases for trial, placing the lawyers in the untenable position of being forced to defend themselves alongside their clients. Illinois Central now had an ideal situation: It could prove that Turner and Harried had given inaccurate information in their discovery responses and questionnaires, and force the jury to blame either the lawyers or the clients."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.