The Garlock asbestos bankruptcy has generated significant interest from attorneys representing plaintiffs and defendants as well as from companies and insurers involved in asbestos litigation.  Although the impact on litigation throughout the country has been uneven, courts seem to be more willing to take a proactive role in ensuring that transparency is provided in disclosing information related to bankruptcy trust claims.

In the meantime, the allegations of potential withholding of alternative exposure evidence seems to have contributed to Garlock’s agreement with future asbestos claimants.  The company recently announced a $358 million settlement of all asbestos injury claims and a revised reorganization plan.

The new agreement, while representing nearly double the $125 million a bankruptcy judge had estimated as Garlock’s liability is significantly lower than the $1 billion plaintiffs’ lawyers were requesting from Garlock.

Consequently, if the Garlock reorganization plan is approved, other companies may find asbestos bankruptcy more feasible than previously.

Additionally, as Daniel Fisher, writing for Forbes notes, other companies and insurers with potential asbestos liability are expected to continue to monitor the Garlock decision and seek to use files emerging from the case to help dispute claims that the companies or insureds’ products were the primary cause of plaintiffs’ illnesses in litigation or to show that plaintiffs may have made conflicting claims against other companies.

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Continue Reading Will “Unprecedented” Garlock Asbestos Bankruptcy Deal Be a Game Changer?

Ben Franklin famously warned that “you may delay, but time will not, and lost time is never found again.” These words of wisdom appear to be lost on the Illinois state legislature, which recently abolished the ten-year statute of repose for personal injury claims related to asbestos exposure under 735 ILCS 5/13-214. Far from an esoteric legal issue, the amendment has become the front line in the latest battle of the national divide on the issue of tort reform. Some have warned that the Madison County Illinois asbestos docket, already one of the busiest and most plaintiff friendly in the country, will see a wave of new litigation from plaintiffs who missed the deadline to bring suit. The change to the statute however, may not be the seismic shift that some have forecast.

The statute in question, commonly known as the “construction statute,” previously held that “no action based upon tort…may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission.” The amendment adds a subsection which reads that the limitation does not apply to “an action that is based on personal injury…resulting from the discharge into the environment of asbestos.”

This legislative action hasn’t abolished the statute of limitations in all asbestos-related claims. It has only abolished the ten-year statute of repose for claims that fall under the limited ambit of the construction statute. In other words, defendants who are commonly named in asbestos suits won’t likely see a sizeable increase in claims unless they are also involved in the construction industry.

For those who previously fell under the protection of the statute, however, the change could be as dramatic as advertised. Given the long latency period for many asbestos-related diseases, contractors, engineers and architects were often immune from suit, as some persons exposed to asbestos on a given job site may not discover their condition until well after the 10 year statute of repose had expired. With the amendment, these Defendants may find themselves named in lawsuits as often as manufacturers of asbestos-containing products.  Fortunately for them, many cases filed in Madison County arise out of exposures from other states, and in those cases, the statute will not likely apply.

Consistent with the abolition of the statute of repose, the state also recently passed a law reducing civil juries from twelve to six members. This is a shift which generally favors Plaintiffs as smaller groups are more likely to be influenced by emotion or a strong personality in the jury room.

Embedded is a link to the American Tort Reform Foundation Judicial Hellholes® Listing.  We’ll be watching to see where Illinois falls on the next list.
Continue Reading Not Satisfied with its 5th Place Finish in the American Tort Reform Foundation Judicial Hellholes® Listing, Illinois Makes A Push For Number One

Overview:

In an opinion written by Justice Henry DuPont Ridgely, a unanimous panel of the Delaware Supreme Court recently threw out a $2.8 million verdict in the case of Michael Galliher v. R.T. Vanderbilt.  Defense Litigation Insider previously covered the verdict and Trial Court’s post trial opinion.  Here, R.T. Vanderbilt (“Vanderbilt”) appealed the verdict claiming the Trial Court failed to include a necessary jury instruction and certain testimony from plaintiff’s witnesses prejudiced the trial.  Plaintiff cross appealed and claimed he should receive post-verdict interest on the award, but the Supreme Court did not reach that issue.  Instead, the Court ordered a new trial based on the fact that Dr. Barry Castleman provided inadmissible testimony and the Trial Court did not provide a jury instruction on the duty of care owed by Mr. Galliher’s employer.

Dr. Castleman’s Testimony:

During cross examination, Dr. Castleman made several statements that were non-responsive to questions of defense counsel, including some information that had been specifically excluded by the Trial Court.  Dr. Castleman testified that: (1) Johns-Manville employees had called Vanderbilt “liars;” (2) Vanderbilt spent millions of dollars on studies to undermine government regulatory action with respect to its talc; and (3) it was “buying senators and lobbying the government.”  The Court determined Dr. Castleman’s unsolicited testimony during cross examination was inadmissible and its prejudicial effect required a new trial.

Jury Instructions:

The Court also overturned the verdict because the Trial Court did not include an instruction to the jury on the duty of care owed by Mr. Galliher’s employer.  Vanderbilt sought apportionment of fault to the employer and requested a duty of care instruction.  While the Trial Court indicated it would include such an instruction in the final set of jury instructions, it omitted the instruction from the set given to the jury.  The Court found that was an error and such an instruction must be added for the re-trial, which has since been scheduled for March 9, 2015.

 

Trial Tip Take Aways:

  1. All parties should carefully review the final jury instructions and be prepared to address any omissions or errors with the Court prior to or, if necessary, immediately after the instructions are given to the jury, so any errors can be corrected immediately.
  2. All parties should be sure to tell witnesses of evidentiary rulings that impact their testimony and instruct them to limit their testimony accordingly.
  3. Video testimony played by plaintiff at trial included a line of testimony that the Trial Court had ruled was inadmissible.  Although the Court did not thoroughly analyze this issue in this ruling, it created an appealable issue and all parties should be sure to review final cuts of videos before they are played to the jury to avoid potential appellate issues.
  4. Defense counsel should be armed with this opinion in future trials where Dr. Castleman will testify and be prepared to immediately address his testimony with the Court if his answers start to stray from the questions asked.  This opinion may encourage Trial Courts to


Continue Reading Delaware Supreme Court Tosses $2.8 Million Verdict in Galliher Asbestos Trial

Despite efforts to increase efficiency and save money, most businesses set aside substantial budgets for litigation costs. With the ever-changing landscape of litigation, discovery is usually one of the most expensive line-items. In fact, Inside Counsel points out a Gartner forecast showing, “revenue in the enterprise e-discovery software market will grow from $1.8 billion in 2014 to $3.1 billion in 2018”.

Although discovery costs are necessary, the way a business operates can have a significant impact on its bottom line.  The following list provides six steps companies should consider implementing to make the discovery process more efficient and save money.

1. Determine Which Parties Are Most Important to the Case

In discovery your attorney needs to determine where essential documents can be located and who has knowledge most relevant to the case.  This can result in attorneys having to interview several people within a company to determine: (a) who is the best candidate to represent the entity as the Person Most Knowledgeable; (b) where crucial information can be found; and (c) who has access to that information.  Doing some of the initial legwork yourself can save your business many hours of attorney fees and will allow your legal counsel to hit the ground running.

2. Be Aware of Deadlines

When attorneys receive discovery requests from opposing counsel, they are on the clock.  In California for example, attorneys have 30 days to respond to most forms of written discovery.  This entails analyzing the discovery requests, determining which objections should be made, drafting responses, and providing the client time to review and approve the responses.    To prevent delays, tell your attorneys at the outset of the case how much time you will need to review discovery responses.  You can also request to be notified when discovery requests are received to plan ahead and set aside time in your schedule to review the responses.

3. Provide Reliable Modes of 24/7 Communication

Poor communication results in increased costs in all industries, and litigation is no exception.  Unanswered emails, missed telephone calls, and other communication misfires can quickly rack up fees.  This is especially true when a discovery deadline is approaching and counsel needs to reach you to acquire information for discovery responses or verification forms.  Inform your counsel of the best ways to reach you.  If you do not typically respond to work emails or phone calls after a certain hour, let your attorney know.  Consider creating an email chain with all parties involved in the case copied to ensure information is communicated simultaneously rather than multiple times.

 

4. Determine Your Theme

Litigation can be an art, but usually benefits from an organized, structured presentation of the legal issues raised in a case.  A company theme, or Good Company Story, is often used to provide a common thread during a jury trial to help counteract opposing counsel’s efforts to vilify a company.  By creating a theme at the outset of a case, companies can often maintain
Continue Reading Discovery Costs: How Companies Can Increase Efficiency and Save Money in the Process

Court Ruling

Background: Garlock Sealing Technologies, LLC (“Garlock” or “Debtors”) filed for Chapter 11 bankruptcy protection in June 2010.  Garlock had been an active asbestos defendant for its asbestos-containing precut gaskets, sheet gasket material, and packing materials.  In January, after extensive discovery and a trial held under seal, the Bankruptcy Court issued an opinion (pdf download) in which it estimated Garlock’s liability for present and future mesothelioma claims.  The Court adopted the Debtors’ estimate of $125 million despite the $1-$1.3 billion estimate of the representatives of current and future claimants (“Claimants”).

Estimation Analysis: In the past, bankruptcy courts have taken a variety of approaches to estimating liability for present and future claims, which has led to billions of dollars being set aside for claimants in asbestos bankruptcy trusts.  Here, Debtors requested that the Court follow a “legal liability” approach, in which the merits of claims are considered and an econometric analysis is conducted to determine the likelihood of recovery.  Meanwhile, Claimants requested that the Court follow a “settlement approach” based on extrapolating data from Garlock’s past settlements in the tort system.

Before making a determination, Judge George R. Hodges allowed Garlock to conduct additional discovery in 15 cases that it settled or took to trial.  Plaintiffs in these cases were represented by 5 major asbestos plaintiff firms.  In every case, Garlock found that evidence of alternative exposure was withheld.  The Court found on average pre-settlement disclosure of exposure to 2 bankrupt entities’ products, but after settlement those same plaintiffs made claims to an average of 19 bankruptcy trusts.  The Court found several occasions when lawyers misrepresented a plaintiff’s exposure history to judges and juries only to later file claims against trusts for products to which they had previously denied exposure.  Garlock has filed civil lawsuits against several plaintiff firms based on allegations of fraud.  For more details on the allegations and related litigation see the Court’s opinion and accounts from NPR, Forbes, and BusinessWeek.

While the Court recognized a comfort in relying on settlement history to estimate liability, it found in this case a “divorce” from that process was necessary and it adopted the Debtors’ approach and estimate.  The Court determined that the Claimants’ approach did not adequately account for cases in which exposure evidence was withheld and it did not take into consideration the cost of litigation as a driving factor in settlements.  The Court concluded that Garlock’s products were made of low potency chrysotile asbestos and generally Claimants had also been exposed to more potent amphibole asbestos from other manufacturers’ products.  Based on this alternative exposure and the fact that some claimants had never been exposed to asbestos from a Garlock product, the Court concluded Garlock should be responsible only for a small percentage of each claimant’s recovery and only if exposure actually occurred.

The Court adopted the analysis of Dr. Charles E. Bates of Bates White.  It found that $25 million was a reliable estimate of Garlock’s liability to its approximately 4000 current mesothelioma
Continue Reading North Carolina Bankruptcy Court Limits Garlock’s Asbestos Liabilities and Ford Wants the Court Records Unsealed