Asbestos firm attempting to block racketeering claims by John Crane Inc.

By John O'Brien | Feb 24, 2016

Jeffrey Simon, founding shareholder of Simon Greenstone  

LOS ANGELES (Legal Newsline) – After a second company it targeted with asbestos lawsuits accused it of racketeering, a Dallas asbestos law firm is asking a federal judge to declare the firm's actions do not amount to that.

On Friday, the plaintiffs firm Simon Greenstone Panatier Bartlett filed a breach of contract lawsuit against John Crane Inc. in Los Angeles federal court. The firm, which has an office in that city, is also asking a judge to rule that JCI is breaching previous settlement agreements.

The complaint was filed in response to JCI’s January motion that seeks approval to join a Racketeer Influenced and Corrupt Organizations lawsuit against Simon Greenstone. JCI wants to make its own racketeering claims in addition to those already stated by Garlock Sealing Technologies.

“In a desperate effort to avoid future multimillion-dollar verdicts and punitive damage awards, JCI has embarked on a campaign to chill Simon Greenstone’s advocacy efforts and to discourage JCI’s victims from hiring Simon Greenstone by threatening to file suit against Simon Greenstone for racketeering…” the complaint says.

“Simon Greenstone has a real and reasonable apprehension that JCI will institute litigation against Simon Greenstone and has suffered and will continue to suffer injury until the actual controversy between them is resolved.”

Simon Greenstone is alleged to have gamed the asbestos recovery system in order to pin more blame on Garlock and JCI in civil asbestos lawsuits, thereby driving up the amount of settlements and verdicts against the company.

The firm, and four others, allegedly did this by delaying the submission of its clients’ claims to trusts that were established by bankrupt former asbestos defendants.

These companies were forced to establish trusts because they could not afford to pay their asbestos liabilities. Asbestos victims submit claims to the trust in a process separate from the victims’ civil lawsuits against companies that are not bankrupt.

JCI and Garlock claimed asbestos firms delayed filing trust claims so more blame could be pinned on them in civil lawsuits.

A federal bankruptcy judge agreed in 2014 during the same week Garlock filed its racketeering lawsuits against the firms. Garlock had submitted evidence in 15 cases during a trial to determine how much it would need to place in its trust.

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

Garlock’s RICO cases echo the claims it made in its bankruptcy proceeding. The other defendants are Belluck & Fox in New York City, Stanley-Iola of Dallas, Shein Law Center of Philadelphia and Waters & Kraus of Dallas.

However, Simon Greenstone is taking the offensive in its defense, even filing a counterclaim that says Garlock is guilty racketeering. It allegedly withheld evidence of the dangers of its products in order to lower the costs of verdicts and settlements.

“Garlock claimed that it did not learn of the relationship between exposure to asbestos fibers and lung cancer until the ‘early 1970’s,’” the complaint says.

“But in truth, Garlock learned no later than March of 1956, at a meeting of the Asbestos Textile Institute, that exposures to asbestos as short as six months cause lung cancer.”

Simon Greenstone filed its counterclaim and answer to Garlock’s complaint more than two months after a federal judge refused to dismiss Garlock’s complaint. The firm has appealed that decision to the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va.

The two sides are also debating whether a stay should be implemented on Garlock’s case while the appeal is sorted out.

JCI entered the fray in January by asking to join the Garlock case. It claims it was harmed by the same conduct and has a significant interest in the case.

Simon Greenstone’s response to this motion accuses JCI of breaching several settlements between the two. It says the company routinely obstructs the administration of justice when defending itself in asbestos cases.

“Eliminating the threat of retaliatory RICO lawsuits by state court losers like JCI will allow other lawyers to continue advocating vigorously for their clients and prevent JCI from disrupting the administration of justice in California,” the complaint says.

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

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