CHARLOTTE, N.C. (Legal Newsline) – Citing a federal judge’s assertion that more discovery into more asbestos cases would reveal more abuse by plaintiffs attorneys, Garlock Sealing Technologies is arguing for just that.
On April 24, the company filed a response to plaintiffs firm Belluck & Fox’s fight to prevent more discovery in a racketeering lawsuit Garlock has filed against it.
Belluck & Fox, of New York, is one of four plaintiffs firms the company filed racketeering lawsuits against in January 2014.
According to Garlock, and a ruling by bankruptcy Judge George Hodges, plaintiffs attorneys manipulated evidence in order to maximize settlements and verdicts in lawsuits against the company.
Belluck & Fox is fighting subpoenas issued by Garlock that seek information of 157 individuals. A magistrate judge ruled Belluck & Fox should have to comply with the subpoenas, and the firm filed an objection in early April.
“Defendants’ objections are yet another transparent effort to conceal evidence of the scheme and the mechanisms that allowed them to employ it,” Garlock’s attorneys wrote.
“Considering what Garlock has learned in the context of its bankruptcy case, Defendants’ doggedness in fighting to keep this evidence from seeing the light of day is perhaps the best evidence of its relevance.”
During a trial that determined how much money Garlock needed to put in a bankruptcy trust to compensate asbestos victims, the company was permitted full discovery into the cases of 15 plaintiffs.
What the company found showed that plaintiffs attorneys routinely delayed submitting claims to bankruptcy trusts while lawsuits against solvent defendants, like Garlock used to be, were pending.
This was done with the intention of pinning more blame on Garlock, the company said.
Hodges’ landmark 2014 ruling agreed with the company’s assertions, and he ordered the company to put $125 million in the trust – more than $1 billion less than plaintiffs attorneys had requested.
“These fifteen cases are just a minute portion of the thousands that were resolved by Garlock in the tort system,” Hodges wrote in a passage the company cited in its recent court filing.
“And they are not purported to be a random or representative sample. But the fact that each and every one of them contains such demonstrable misrepresentation is surprising and persuasive.
“More important is the fact that the pattern exposed in those cases appears to have been sufficiently widespread to have a significant impact on Garlock’s settlement practices and results… It appears certain that more extensive discovery would show more extensive abuse.”
Belluck & Fox argues that Garlock never made any allegations in its complaint regarding the 157 individuals on whom it now seeks information.
The firm’s objection says Garlock typically sought to resolve cases all of the firm’s cases at one time each year.
“Garlock never asked Belluck & Fox, during these inventory settlement negotiations, to represent or prove whether the firm’s client had been exposed to other companies’ products; that issue was simply not part of the settlement discussions,” the objection says.
By 2009, the settlement values were determined by a matrix. The Belluck firm Garlock did this to avoid the costs of discovery.
It called Garlock’s stance during its bankruptcy estimation trial an “about-face.”
“Under Garlock’s own theory, bankruptcy trust claims matter only because they purportedly show that the discovery responses were false,” the objection says.
“Garlock does not – and cannot – allege that bankruptcy trust claims, in and of themselves, are fraudulent, or that there is anything wrong in principle with a claimant settling with a solvent defendant and also making a claim to a bankruptcy trust.”
Specific objections to the order, as written by the firm’s attorneys, are:
-Trust claims of 157 individuals who are not alleged to have made any misrepresentations to Garlock are not relevant;
-The creation and internal deliberations of the trusts are not relevant;
-The trusts’ communications with firms or individuals with no connection to the lawsuits are not relevant;
-Discovery into the trust claims of the 157 individuals is unreasonably cumulative and duplicative;
-Evidence of the trusts’ procedures can be obtained from more convenient sources; and
-The burden and expense of including discovery into the 157 cases outweigh any likely benefit.
From Legal Newsline: Reach editor John O’Brien at email@example.com.