Company wants its lawsuits against asbestos attorneys to be consolidated; firm argues cases aren’t related

By Jessica Karmasek | Aug 19, 2016

CHICAGO (Legal Newsline) - A company that has been frequently targeted by asbestos attorneys now wants the lawsuits it filed in June against two separate firms to be heard before a single judge.

But Shein Law Center, one of the firms sued by John Crane Inc., argues that JCI’s motion for a finding of relatedness and for reassignment should be denied.

The Philadelphia firm, in its opposition filed in the U.S. District Court for the Northern District of Illinois last month, contends JCI’s request is “premature” since certain issues haven’t been framed or decided.

Shein also argues that JCI hasn’t satisfied the conditions for reassignment.

“These cases are not premised on the same events or transactions and do not involve the same issues of fact or law, reassignment is not likely to result in any saving of judicial time or effort, and the cases are not susceptible of disposition in a single proceeding,” the firm wrote in its July 27 memorandum.

In early June, JCI filed lawsuits against Shein and Dallas law firm Simon Greenstone Panatier Bartlett PC under the Racketeer Influenced and Corrupt Organizations Act. The basis of the claims is evidence uncovered by Garlock Sealing Technologies three years ago during its bankruptcy proceeding.

“The defendants devised and implemented a scheme to defraud JCI and others, and to obstruct justice,” the JCI complaints state.

“The defendants fabricated false asbestos ‘exposure histories’ for their clients in asbestos litigation against JCI and others and systematically concealed evidence of their clients’ exposure to other sources of asbestos.”

In its motion to reassign, filed two weeks after initially suing Shein and Simon Greenstone, JCI argues both actions assert related claims arising out of the “same pattern of fraudulent conduct directed at JCI and others over an extended period of time.”

“There is no need for two judges in this Court to learn the same technical background or hear the same motions on the same legal issues and discovery disputes,” JCI wrote in its June 20 filing in Shein. “Similarly, having one judge decide these issues will insure uniformity as to the rulings on these common issues.”

JCI wants its later-filed case against Simon Greenstone, currently pending before Judge Amy J. St. Eve, consolidated with Shein. Judge John J. Tharp Jr. is presiding over the Shein lawsuit.

Last week, Shein filed a motion to dismiss the lawsuit altogether.

The firm argues it isn’t subject to personal jurisdiction in the Chicago federal court.

Even more so, Shein contends JCI’s lawsuit is just an “overt attempt” to re-litigate Pennsylvania state court proceedings from more than six years ago.

“JCI’s Complaint should be recognized for what it is -- an untimely and wholly baseless effort to deter aggressive advocacy on behalf of victims of exposure to JCI’s dangerous products -- and should be dismissed forthwith consistent with the Supreme Court’s directive that defective pleadings ‘should be exposed at the point of minimum expenditure of time and money by the parties and the court,’” the firm wrote.

But JCI argues that both of its lawsuits seek “redress” for what the U.S. Bankruptcy Judge George Hodges, of the U.S. District Court for the Western District of North Carolina, has referred to as “wide-ranging, systematic and well-concealed fraud” against asbestos defendants such as itself.

In 2014, Garlock used the evidence from its 2013 bankruptcy estimation trial to file lawsuits against five firms -- Shein, Simon Greenstone, Belluck & Fox of New York City, and Dallas firms Waters & Kraus and Stanley-Iola.

The Garlock lawsuits alleged the five firms told different stories about their clients’ exposures to asbestos in civil lawsuits than they did in the bankruptcy trust system.

Hodges agreed in a landmark 2014 decision.

The firms delayed the submission of their clients’ claims to trusts that were established by bankrupt former asbestos defendants. This was done so Garlock could not assign blame for the plaintiff’s disease to the companies in the trust system, the judge ruled.

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

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,” 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 evidence, which was originally sealed but eventually uncovered by a successful legal challenge from Legal Newsline, showed that after several dozen asbestos defendants established bankruptcy trusts, its own liabilities increased. The company’s average mesothelioma settlement rose from almost $10,000 in 1999 to nearly $80,000 by 2010.

Garlock’s allegations were part of a strategy to limit the amount it would need to put in the trust it is establishing to resolve its asbestos liabilities. Hodges ruled Garlock needed to only put $125 million in its trust, more than $1 billion less than plaintiffs attorneys had requested.

A recent proposed settlement put a stay on Garlock’s RICO lawsuits. They apparently will be dismissed when the settlement, which requires the establishment of a $480 million trust, is finalized.

Before the stay, JCI sought to intervene. Now it has filed its own complaints instead.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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Organizations in this Story

John Crane Inc. Shein Law Center Simon Greenstone Panatier Bartlett PC U.S. District Court for the Northern District of Illinois

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