CHICAGO (Legal Newsline) - The prominent asbestos law firm Simmons Hanly Conroy has defeated accusations that it cheated its way to billions of dollars for its clients.
Chicago federal judge Robert Gettleman on March 18 granted the motion to dismiss of Simmons Hanly Conroy, which was targeted in a lawsuit last year by one of the companies it frequently names as a defendant when pursuing asbestos cases.
J-M Manufacturing's lawsuit accused the Simmons firm of racketeering and crossing "all objective legal and ethical boundaries." But Gettleman said the allegations failed to show an "enterprise" that justifies the racketeering claim.
"(T)he complaint here fails to plausibly plead that the asbestos plaintiffs, witnesses and law firms serving as co-counsel functioned with Simmons Hanly and its employees as an enterprise," he wrote.
Needing to show an ongoing formal or informal organization in which various associates function as a continuing unit for a common purpose, J-M's case fell short - "That is missing here," Gettleman wrote.
The pipemaker has been targeted with roughly 6,000 asbestos lawsuits through the years, including more than 400 from the Simmons firm, which boasts that it has recovered more than $10 billion for asbestos clients.
J-M started its investigation after a former asbestos lawyer at Simmons sued the firm for retaliation for reporting alleged wrongdoing. Scott Peebles ultimately settled his case, but J-M got involved with an effort to unseal certain portions of his allegations.
J-M claimed in its lawsuit that its probe has discovered clients were coached on what to say about exposure to an asbestos-containing pipe the company produced, or they outright lied.
Key to asbestos claims is product identification. Plaintiffs are asked to recall products used decades ago on jobsites so their lawyers can sue the companies associated with them, though it is tough to determine the accuracy of the testimony.
The complaint cites a group of cases resolved within the last five years, including Sebastian Bretado's. He claimed he contracted mesothelioma while doing "line drainage" for landscapers in the 1980s.
During a deposition, Bretado was shown products and labels and asked if he remembered working with them. He answered that he had used a power saw and power drill on J-M's pipe, though the company says he couldn't remember any specific location he ever worked, the full name of any co-workers or the names of any customers.
He provided the name of three employers, including Oak Ridge Landscaping. The two individual employers have passed, but their family members testified that they never ran any landscaping businesses, while the principal of Oak Ridge said the company never used the J-M pipe and that he didn't remember Bretado.
The complaint tells several similar stories. Also alleged is the somewhat familiar pattern of hiding exposure claims against companies that went to the bankruptcy system (where payouts are limited) to first pursue maximum recoveries in the tort system, where a jury verdict could be eight-figures.
One of those big verdicts had J-M on the hook for more than $22 million of a $30 million penalty in California.
In a July motion to dismiss, the Simmons firm said J-M "has repeatedly sought to blame everyone but itself."
"According to J-MM, sick and dying asbestos victims are liars, plaintiffs' lawyers are criminals, courts that allegedly refuse to 'sanction the firm or rein it in' are corrupt, and - when juries hold J-MM accountable for its actions - its own lawyers are incompetent," the motion said.
The Simmons firm said litigation activities like finding favorable courts and preparing clients for depositions can't constitute mail or wire fraud and that J-M missed the RICO Act's statute of limitations. If J-M wanted to challenge its conduct, J-M could've done so in individual cases, Simmons said.
The firm and attorneys with whom it works were named as defendants, plus unnamed John and Jane Does. Allegations against the Does were "sparse and conclusory," Gettelman wrote.
"(E)ven if the unnamed entities were the specific entities from the specific cases discussed in the complaint, those entities are alleged only to have been involved in their discrete cases - that is, the entities in each specific case had no alleged involvement in any other case," he added.
If the Simmons firm is the hub and the other defendants are spokes, J-M failed to allege any rim holding the spokes in place, Gettleman said.
"Indeed, 'there are no allegations that' the witnesses or clients or unnamed local counsel in each case 'are in communication with' those in the other cases 'or are even aware that others are part of the enterprise,'" he added.
"Nor does plaintiff allege that these entities acted in their discrete litigation to benefit others in the other litigations as opposed to just themselves."
Remaining in the complaint are claims made under state laws - common law fraud, unjust enrichment and civil conspiracy. Gettleman, after tossing the federal claims, refused to exercise jurisdiction on the rest.