CHARLOTTE, N.C. (Legal Newsline) – Asbestos lawyers are going to court to keep secret their clients’ claims as one company hopes to uncover double-dipping.
In the last month, at least three firms have filed motions to quash subpoenas issued by Bestwall, a spinoff company of Georgia Pacific that has declared bankruptcy to establish a trust to pay asbestos claimants.
The trust, like dozens of others created by once-popular asbestos defendants, allows Bestwall to pay claimants in a quicker and less expensive manner than litigation. But Bestwall suspects asbestos lawyers fudge the truth when it comes to their clients’ exposure history by claiming whichever company they are putting a claim into is the one most responsible for their clients’ illness in order to maximize recovery.
It’s a pattern that was brought to light in the bankruptcy of Garlock Sealing Technologies, which was allowed to investigate 15 cases it faced in civil court prior to its bankruptcy. Bankruptcy judge George Hodges found asbestos lawyers delayed submission of claims to trusts while the cases against Garlock were pending so Garlock could not assign blame for the plaintiff’s disease to the companies in the trust system.
“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.”
Bestwall is seeking similar discovery in its bankruptcy. The judge there ordered asbestos lawyers to respond to questionnaires about exposure claims and settlements, but only four out of more than 800 complied.
Georgia Pacific created Bestwall in 2017, by assigning assets to a New GP entity and assigning liabilities and insurance proceeds to Bestwall.
Bestwall petitioned for bankruptcy protection and asked for trial to estimate future liabilities, which Judge Laura Beyer granted. In response, asbestos firms claimed Bestwall could estimate future liabilities on the basis of past settlements.
Bestwall rejected the idea, claiming fraud inflated the settlements. Subpoenas for info sent to Texas firm Waters & Kraus, Florida’s Ferraro Law Firm and Maryland’s Law Offices of Peter Angelos are the subjects of three new motions to quash.
“(T)he Subpoenas are objectionable on several grounds based on the applicable rules and case law,” Waters & Kraus wrote on Jan. 3. “As a threshold matter, the Subpoenas were issued to the Law Firm, a nonparty to the underlying bankruptcy case, without authorization by the Bankruptcy Court as required by Rule 2004 of the Federal Rules of Bankruptcy Procedure.
“During a meet and confer between counsel on December 30, 2021, counsel for Bestwall indicated that the Subpoenas were related to the discovery of asbestos trust claims information relevant to forthcoming estimation proceedings in the Bankruptcy Case; however, the Law Firm is not a party to that contested matter.”
The size of the records request also places a burden on the firm, Waters & Kraus wrote, while violating its clients’ right to privacy.
“The Law Firm cannot provide information to which access has been restricted by a court order. Bestwall must comply with those orders as well,” the motion says.