As Sheldon Silver heads to retrial, NYC's asbestos court still a plaintiff's playground

By Dan Fisher | Apr 28, 2018

NEW YORK (Legal Newsline) - The retrial of former New York State Assembly Speaker Sheldon Silver began Monday on charges including allegations he collected millions of dollars in improper payments from a prominent asbestos law firm, Weitz & Luxenberg. 

Meanwhile Weitz & Luxenberg still dominates the special court in New York that oversees asbestos cases, a court that defendants say features rules that are unfairly skewed in favor of plaintiffs.

Silver was convicted in 2015 of illegally accepting more than $3 million in fees from Weitz & Luxenberg – prosecutors called them “kickbacks” -- for referring clients he obtained from a mesothelioma doctor whom he aided with $500,000 in state grants. His conviction and 12-year sentence were overturned in July 2017 after the U.S. Supreme Court significantly narrowed the leeway for prosecutors to prove official corruption.

Silver’s retrial beginning Monday will likely focus on the same allegations that he traded official favors for millions of dollars in kickbacks from law firms. His connection with Weitz & Luxenberg also cast harsh light on the practices of the New York Consolidated Asbestos Litigation docket, however, which handles asbestos lawsuits arising in the five boroughs of New York. As Speaker of the State Assembly, Silver named Arthur Luxenberg to the Judicial Screening Committee for the First Department, which includes NYCAL.

The special court draws its jurors mostly from the island of Manhattan and has a reputation of delivering large plaintiff verdicts, including a $60 million jury award earlier this month and a $75 million verdict last year. Plaintiffs win more than 80% of jury trials in New York City, compared with a 50/50 success rate in upstate New York and other parts of the country. 

As a result, defendants say, lawyers try to place their cases in the NYCAL system even if their clients can only claim fleeting exposures to asbestos in New York City. Most asbestos lawsuits are over mesothelioma, a cancer of the pleural lining that can be caused by sustained exposure to asbestos. 

The court took a dramatic turn in favor of plaintiffs in 2014 when, at the behest of Weitz & Luxenberg, then-presiding Judge Sherry Sherry Klein Heitler reinstated punitive damages after a 16-year hiatus. Heitler overruled objections by defendants that punitive damages were unmerited for claims dating back decades for practices by businesses that often no longer exist, as well as complaints punitives drain off assets that should be preserved to pay future asbestos claimants.

Heitler was removed from NYCAL in 2015, but defendants complain her replacements have done little to restore balance to the court. A new Case Management Order adopted in 2017 after more than a year of discussions between lawyers for plaintiffs and defendants retained punitive damages and introduced an “accelerated docket” that defendants say forces them to prepare for hundreds of trials a year while plaintiff lawyers effectively get to cherry-pick the minority of cases that will actually be scheduled to go before a jury.

“After Judge Heitler was replaced, a number of defendants held out hope, but I wouldn’t say much has changed,” said Mark Hsu, a partner with Hawkins Parnell Thackston & Young who represents asbestos defendants. “In fact, with punitive damages in play, there is more risk than ever for defendants."

Weitz & Luxenberg is the most powerful plaintiff law firm operating in NYCAL. The fact it would pay Silver more than $3 million for what Silver admitted was doing little more than supplying the names of potential clients demonstrates the profitability of the asbestos practice, especially in New York. 

The firm didn’t immediately respond to a request for comment. But in court filings, plaintiff lawyers say defendant companies benefit from special rules that are more restrictive than the general rules of procedure in New York courts, including strict limits on the number of plaintiffs that can be included in a single trial and requirements for extensive pre-trial documentation of claims.

Defendant companies have complained bitterly about NYCAL for years and it regularly appears on the American Tort Reform Association’s list of “Judicial Hellholes.” 

The lititgation climate swerved sharply pro-plaintiff after Heitler reinstated punitive damages. Defendants said the move fit a pattern of favoring the law firm in court rulings and other actions, such as allowing Weitz & Luxenberg to “cherry pick” cases set for trial. By restoring the threat of punitive damages, plaintiff lawyers could negotiate for higher settlements because defendants would fear blockbuster verdicts if they took their cases before a jury.

Heitler was replaced at NYCAL in 2015 and defendants hoped her replacement, Peter Moulton, would revise the Case Management Order governing how cases proceed and are selected for trial. Driving their push for new rules was the shift away from companies that distributed amphibole asbestos, the most dangerous form used mostly in insulation, which have largely been driven into bankruptcy. 

The companies now defending themselves in NYCAL tend to be solvent corporations like Honeywell, Ford Motor Co. and Mondelez International, whose liability stems from acquired businesses or even brand names, or products that until recently weren’t considered dangerous.

They argued strenuously for changes including eliminating punitive damages and preventing multiple-plaintiff trials, which defense lawyers say confuse jurors and prejudice their clients. In June 2017 Moulton unveiled a revised CMO but it provided little relief for defendants. 

Trials were limited to a maximum of three plaintiffs, or a single plaintiff if punitives were sought. And plaintiff attorneys were ordered to inform the defense if their clients intended for file claims with trusts set up by bankrupt asbestos companies, which defense attorneys say is necessary for them to determine if the plaintiff’s illness was caused by exposure to the products of other companies.

Defense attorneys say other pro-plaintiff practices have remained the same under Moulton’s successor, Judge Manuel Mendez. Those include an “accelerated docket” for plaintiffs who are dying of mesothelioma which allows for clusters of 100 or more cases twice a year. 

Defendants complain NYCAL allows cases to remain on the docket even after plaintiffs die, undermining the logic of speeding trials for the living. NYCAL also allows plaintiff attorneys to effectively pick the minority of cases that will ultimately be set for trial but only after defendants have been forced to prepare for all of them, expending time and money obtaining documents and deposing witnesses.

Defense attorneys also complain of pro-plaintiff practices such as requiring defendants to show the plaintiff wasn’t exposed to their products to obtain summary judgment, a reversal of the rule in other jurisdictions where plaintiffs must show strong evidence of exposure in order to proceed.

Despite these complaints and a blizzard of court filings by interested groups, a New York appeals court rejected their arguments on March 22. In its decision, the appeals court said NYCAL’s rules ”do not deprive defendants of their due process or other constitutional rights.”

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Honeywell International U.S. Attorney for the Southern District of New York U.S. District Court for the Southern District of New York Weitz and Luxenberg

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