COLUMBIA, S.C. (Legal Newsline) - Asbestos defendants have made increasingly vocal complaints about the judge in charge of South Carolina’s asbestos docket as she has overruled jury verdicts, ordered simultaneous trials in multiple counties and named an insurance company the “alter ego” of a long-defunct contracting company.
The complaints culminated with Zurich Insurance filing a mandamus petition with the South Carolina Supreme Court this week seeking the recusal of Judge Jean Toal because her rulings “would lead a reasonable person to question her impartiality.” Toal was the first female justice on the South Carolina Supreme Court before retiring as Chief Justice in 2015, after which she was appointed the state’s asbestos judge in 2017.
Since then she has issued a string of decisions that favored plaintiffs. In one 2018 case, she stripped the bankrupt Covil insulation-contracting company of most of its defenses after Covil’s lawyers were unable to produce documents they said were destroyed in a fire. Despite the seemingly devastating sanctions, the jury ruled in Covil’s favor. Months later, Judge Toal invoked South Carolina’s unusual “13th juror” doctrine to overturn the verdict and order a new trial.
The judge ordered the defendants to pay plaintiff lawyers $300,000 in another case they lost, and increased a jury verdict against two companies from $300,000 to $1.9 million.
Courts rarely grant mandamus petitions, even less so when they seek to throw a judge off a case. But Zurich and other angry companies can cite this and other decisions by Judge Toal that favored plaintiffs and made it more difficult and risky for asbestos defendants to fight their cases in court.
In her most recent decision, Judge Toal granted a plaintiff request to consolidate five lawsuits into one trial to be held in Richland County that starts on the same day in September that three other trials in the state start. The judge acted after being stopped with an earlier plan to hold a hearing in April amid a court shutdown over the COVID-19 crisis.
In motions to overrule the consolidation order, defendants including Pfizer, Air Liquide and Carrier Corp. complain that it is unfair to force them to defend lawsuits involving multiple plaintiffs, living and dead, who worked at more than 100 job sites in 19 states in at least five different occupations.
Repeating a complaint often made about consolidated asbestos trials, the companies say jurors will be unable to separate individual claims and defenses and instead order damages to be paid by the entire group of defendants. They also say Judge Toal issued the consolidation order on April 8, one day after defendants said they would oppose consolidation but before they had any chance to file papers.
South Carolina is home to Motley Rice, a law firm that grew rich on asbestos litigation stemming from exposures in the state’s shipyards, but recently the plaintiff docket has been dominated by Dean Omar Branham Shirley of Dallas. In a statement, Dean Omar said “we believe that Justice Toal’s rulings in these cases are both appropriate and conform to both the letter and the spirit of the law” and the mandamus appeal is “without merit.” Zurich declined comment.
Judge Toal ruled Zurich was the “alter ego” of Covil after the insurer declined to attend mandatory mediation sessions and asserted it couldn’t speak on behalf of the insulation contractor, which failed in 1993. While courts frequently find majority shareholders and other entities with controlling influence over a company to be alter egos subject to liability, it is unusual for an insurer to be thrust into that role.
In at least one other case in Wisconsin, an insurer was found to be capable of answering for a defunct asbestos defendant after no one from that company could attest to the accuracy of its documents. The receiver for Covil also attempted to invoke the alter ego theory in state court cases but was enjoined from doing so by a federal court.
Zurich complains Judge Toal acted without citing any evidence or even providing the insurance company its constitutional right to appear in court and be heard. She had repeatedly discussed the theory on her own, saying in one case that “Covil does not and has not existed since 1993. It has been nothing more than a shell operated, controlled and abused by its insurers and those who purport to be attorneys for Covil.” In another case she called Covil “nothing more than a façade behind which the insurers stand.”
Most asbestos lawsuits are essentially against insurance companies since nearly every manufacturer or distributor of asbestos products has been driven into bankruptcy. As part of those bankruptcy plans, the defendant companies turn over their equity and insurance proceeds to trusts overseen by plaintiff lawyers, which pay out claims. Decades of litigation and court rulings have established rough guidelines for tapping insurance policies that expired years before plaintiffs developed asbestos-related disease.
Judge Toal’s order appears to go further, by assigning all Covil’s asbestos liability to Zurich instead of just requiring it to defend Covil and pay out according to the terms of its insurance contracts. The company says her impartiality is in question because she issued the order without accepting any evidence or allowing Zurich to be heard.
The judge, in her order refusing Zurich’s first request to recuse herself, said “The law requires recusal only where a judge’s alleged bias stems from an extrajudicial source” and Zurich provided no evidence of that.
“In truth, Zurich simply disagrees with this Court’s rulings,” the judge wrote.