Legal Newsline

Tuesday, August 20, 2019

Another company making racketeering claims against asbestos lawyers

By John O'Brien | Jan 26, 2016

Jeffrey Simon

CHARLOTTE, N.C. (Legal Newsline) – A company that is frequently targeted in asbestos lawsuits wants to add its own racketeering claims to those already pending against a prominent plaintiffs law firm.

On Jan. 25, John Crane Inc. asked a federal court to allow it to intervene in the Racketeer Influenced and Corrupt Organizations Act lawsuit against the Dallas firm Simon Greenstone Panatier Bartlett.

The original RICO case was filed by Garlock Sealing Technologies in January 2014, days before the judge in its bankruptcy proceeding ruled that asbestos lawyers had manipulated the recovery system to pin more blame on Garlock.

Garlock was in the process of setting up a bankruptcy trust to compensate claimants, while JCIis still defending itself in the civil courts system.

“(JCI) and (Garlock) were both harmed by the same fraudulent enterprise operated by Defendant Simon Greenstone Panatier Bartlett and various of its principals who are also defendants,” Crane’s motion says.

“(JCI) therefore has a significant interest in both the underlying fraudulent transactions – various asbestos-related tort cases – and this action itself.”

During its bankruptcy case, Garlock was able to prove to Judge George Hodges that a handful of law firms had delayed filing their clients’ claims with bankruptcy trusts in order to attach more responsibility to Garlock in civil lawsuits.

Garlock did this by examining 15 different cases in which it paid a settlement or verdict. Hodges ruled asbestos attorneys had been telling one story about their clients’ exposures in civil lawsuits while telling another with the companies that have established bankruptcy trusts.

This was done to maximize verdicts and settlements against the company, Hodges ruled.

Hodges ordered Garlock to put $125 million in its trust – more than $1 billion less than what plaintiffs attorneys had hoped.

“These fifteen cases are just a minute portion of the thousands that were resolved by Garlock in the tort system,” Hodges wrote.

“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.”

The 15 cases are at the center of Garlock’s RICO cases against Simon Greenstone, Shein Law Center of Philadelphia, Belluck & Fox of New York City, Stanley-Iola of Dallas and Waters & Kraus, also of Dallas.

Hodges closed his courtroom during the introduction of the evidence and later sealed it. However, Legal Newsline appealed that decision, and its court victory made the information public.

In November, a study from Bates White Economic Consulting viewed the information through the eyes of Crane Co., a Connecticut-based company that also faces asbestos lawsuits.

Eighty percent of claim forms to bankruptcy trusts were not disclosed to Crane Co. during civil lawsuits, the study said.

“Once (JCI) was permitted access to the Garlock estimation trial record and was able to conduct a thorough review and analysis, (JCI) learned it was defrauded in the same way as Garlock was defrauded in those and other cases,” the company wrote in its memorandum in support of its motion to intervene.

Garlock’s case against Simon Greenstone is the most active. The firm has appealed the denial of its motion to dismiss to the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va.

The firm has also filed a counterclaim against Garlock, maintaining that the company engaged in racketeering by making fraudulent misrepresentations and withholding evidence of the dangers of its products in order to lower the costs of verdicts and settlements.

Garlock recently issued subpoenas to 29 law firms, seeking information on hundreds of more asbestos claimants.

Simon Greenstone's attorney, Mike Magner, released a statement to Legal Newsline:

"We have reviewed the claims made by John Crane and will be prepared to address them with the court at the appropriate time. In the meantime, we can say the following:

"This claim represents nothing more than retaliation by a company that consistently loses its cases against Simon Greenstone. Since the firm was formed, it has tried multiple cases against John Crane and has prevailed in the great majority of them, with total jury awards that surpass $100 million.

"Crane appealed three of the cases all the way to the Supreme Court of California and lost every time. In some of these cases, not only did the court find that John Crane sells a product that kills and seriously injures innocent people, but also that it did so with maliciousness, recklessness, and/or a conscious indifference to their health and well-being. 

"Accusing the attorneys at Simon Greenstone of engaging in wrongdoing is a cynical effort by John Crane to drive Simon Greenstone out of the courtroom and convince other trial lawyers to pull their punches when litigating against John Crane.

"The strategy won’t work. We will defend any case against Simon Greenstone aggressively and use the opportunity to show the public that John Crane has a callous disregard for human life and no concern for anything but its own bottom line. In the meantime, our attorneys are committed to the highest ethical standards and will continue to represent their clients to the very best of their ability. 

"John Crane’s allegation that dying mesothelioma claimants, most of whom were Navy veterans, lied under oath, is false and offensive, and is the ultimate insult upon injury to the many people juries have found John Crane fatally poisoned."

From Legal Newsline: Reach editor John O’Brien at jobrienwv@gmail.com.

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