A showdown in an Austin courtroom Tuesday may unseal the 20 year old deposition of renowned plaintiff’s attorney Russell Budd that might help lead to the exposure of the illegitimacy of thousands of asbestos lawsuits. We have all seen the ads from the most high-profile and politically connected law firms in America seeking mesothelioma plaintiffs – but now it is coming to light how these attorneys may have been engaged in corrupt conspiracies
Tort reform has always seemed a solution that can cause worse problems than it solves. True, plaintiffs’ lawyers are often predatory characters, yet they provide legal services, and some measure of purported justice, to clients of limited means. If we take away their highly lucrative contingency fees, or hurl endless obstacles to curb their avid marketing schemes, millions of Americans will simply be deprived of access to effective representation.
To be sure, this argument remains a significant caveat to all efforts by business interests to curb abuses. Yet the interests of the plaintiffs themselves, not just corporations, are inevitably disserviced when their lawyers flaunt ethical decency or even commit blatant fraud or suborn perjury. At the end of the day, the lawyers pocket millions as their clients settle for pennies on the dollar.
In the last half-century, the worst case in point has been asbestos litigation. Nowhere else is lawyerly malfeasance more blatant. Nowhere else are blameless companies so unfairly targeted. Nowhere else are clients so cynically manipulated into what’s often unwitting complicity.
Happily, outraged voices are rallying from diverse sectors. On December 14, for example, an important new film was pre-screened at the National Press Club in Washington, DC. UnSettled from filmmaker Paul Johnson follows the travail of a California car dealership buried in litigious quicksand. It never manufactured or knowingly installed asbestos. In fact, asbestos was never even found on the dealership’s premises.
Meanwhile, a white paper commissioned by the U.S. Chamber Institute for Legal Reform (ILR) and released earlier in December, grimly and specifically chronicles how asbestos lawyers perpetuate such reigns of terror. Since most of the actual asbestos manufacturers are now out of business or safely restructured, the lawyers are targeting parts manufacturers or hapless third and fourth parties like that dealership in California. Legal, maybe. Honest? Not close.
Among other abuses, plaintiffs’ lawyers are flagrantly double-dipping, obtaining recoveries from lawsuits against currently solvent businesses as well as payments from trusts set up for victims of the defunct companies like Johns Manville historically responsible for the problem. It is a flaw in our system that allows claimants to collect from both, yet it still requires some overt malfeasance to fully exploit the glitch.
For example, plaintiffs manipulate the timing of when claims against the trust are filed, delaying those claims until after they’ve won or settled personal injury cases. They withhold information as to alternative exposures that could exculpate defendants in those cases while alleging conflicting times, locations, and levels of exposure in order to file multiple cases against multiple companies.
“This is not a victimless behavior,” says Lisa Rickard, president of ILR. “Abuse today leaves less for future claimants, and creates economic damage when companies are forced to pay more than their fair share.”
Not that asbestos lawyers necessarily worry all that much about causation in any event. In 1997, plaintiffs’ firm Baron & Budd inadvertently disclosed an internal memo self-assuredly advising that defendants simply cannot establish if claimants lie about their exposure to asbestos sources. A Russel Budd deposition may be unsealed in Austin, TX today further exposing plaintiff attorney abuses in this litigation. The memo has remained a cause célèbre in legal annals, even generating a dedicated Wiki page. No matter, such firms were protected then, and they’re protected now, by the friendly legislators, mainly Democrats, whom they bankroll – but this could change on Tuesday.
Good news came in 2014. With regard to Garlock Sealing Technologies, LLC, a North Carolina judge reduced the defendant’s liability by a whopping 90% because evidence of alternative causation was withheld. The case is powerful precedent for defendants nationwide and they’re using it, but judges don’t make the law. Legislatures do, and that’s a state-by-state crapshoot. The ILR paper focuses on Virginia, specifically Newport News where asbestos was widely used in shipbuilding. There were 732 asbestos cases filed there from January 2013 to September, 2016. Virginia has not yet passed “transparency” legislation as other states have; it certainly needs to forthwith.
“There are villains in this story and there are many, many victims – but there are no real heroes, at least not yet,” says author, producer, and radio show host Lincoln Brown, who also attended a screening of UnSettled. “Maybe Democrats who typically vote in whatever way that trial lawyers ordain can step up and start to play the role. It would take courage but it would be a game-changer.”
Speaking of courage, UnSettled was screened in The Murrow Room at the National Press Club. That’s appropriate, as Edward R. Murrow was a social reformer who no doubt had zero tolerance for vultures wearing that disguise.
John Ransom is finance and economics writer/editor with offices in DC, Singapore and SE Asia specializing in global markets and security.