BALTIMORE (Legal Newsline) – The successor of Georgia-Pacific says it is well within its rights to see if asbestos lawyers are gaming the compensation system to make it pay more than it owes.
That company is Bestwall and it has issued subpoenas to asbestos lawyers it suspects are blaming more than one company for the majority of their clients’ injuries. Like dozens of others popular asbestos defendants, Bestwall is setting up a trust for compensation instead of continuing to fight in civil courts – but how much it will be ordered to put in that trust is still up for debate.
It says it needs to know if plaintiff lawyer arguments are supported by shenanigans. Garlock Sealing Technologies pursued the same strategy years ago and won when a federal bankruptcy judge determined asbestos lawyers were delaying blaming companies with trusts in order to maximize recovery against defendants in civil lawsuits.
Three firms have filed motions to quash these subpoenas. They are the Texas firm Waters & Kraus, Florida’s Ferraro Law Firm and Maryland’s Law Offices of Peter Angelos – the owner of the Baltimore Orioles who made his fortune in asbestos lawsuits.
Angelos’ firm filed its brief Jan. 6 in Baltimore federal court, claiming the subpoenas impose an undue burden, seek discovery from opposing counsel and violate its clients’ right to privacy. And also because the Angelos firm is not a party in the Bestwall bankruptcy, it argued the subpoenas should be quashed.
Bestwall countered on Jan. 19, arguing the information sought relates to the trust estimation proceedings, which hinge largely on using past payouts to predict future ones. Bestwall wants to see if it paid more in past civil lawsuits than it should have.
“Bestwall has evidence that certain plaintiffs and their law firms failed to disclose to Bestwall evidence of plaintiffs’ exposures to other companies’ asbestos-containing products, and their clients failed to acknowledge such exposures,” the company’s lawyers wrote.
“This practice inflated settlement payments because, without that evidence, Bestwall was not able to show that plaintiffs’ asbestos-related diseases were caused (in whole or in part) by exposures to other entities’ products.
“As a result, Bestwall was forced to pay more than if the plaintiffs’ full exposure histories had been disclosed. Those settlements therefore are not a reliable basis for of estimating Bestwall’s current and future liability for asbestos claims.”
The request for clients’ exposure claims to trusts does not require the disclosure of confidential settlement amounts or medical records, the company adds.
The Garlock case shined a light on the business practices of some asbestos lawyers and their strategies for maximizing their clients’ recovery. It also led to 17 states passing laws that required automatic disclosure of trust claims to defendants in civil lawsuits so they could find out who was being blamed for what.
Bestwall is the successor in asbestos liability to G-P’s joint compound, which it maintains did not contain asbestos despite plaintiffs’ claims to the contrary. Its bankruptcy proceeding is taking place in Charlotte, N.C., federal court, as did Garlock’s.
Elsewhere in this realm, Honeywell International is arguing in Pittsburgh that the figures in charge of processing the asbestos claims are turning a blind eye to clearly fraudulent exposure histories. That company periodically funds the North American Refractories Company trust.