Asbestos shift to Delaware is sign of distinction for Madison County

Steve Korris Jul. 7, 2005, 3:56pm

Richard Samp

Lawrence Hamermesh

A recent flood of asbestos lawsuits filed in Delaware stands as a sign of progress in Madison County, according to a court observer familiar with the first state's system.

Richard Samp of the Washington Legal Foundation reacted to news that the SimmonsCooper law firm of East Alton had shifted its new asbestos cases from Madison County Circuit Court to New Castle County Superior Court in Wilmington, Del.

“If Madison County attorneys have started filing asbestos suits in Delaware, people in Madison County ought to consider it to be a mark of distinction, a real plus,” Samp said.

The Washington Legal Foundation, which identifies itself as an advocate for freedom and justice, has filed many amicus curiae briefs, including a recent one in a federal asbestos bankruptcy in Delaware.

“Plaintiffs go to places they believe are stacked most heavily in their favor,” Samp said.

According to court records in Wilmington, plaintiffs filed 40 asbestos suits from May 13 to June 3, and 11 benzene suits from June 7 to July 7.

Much like the massive number of asbestos suits filed in Madison County, the Delaware suits name multiple defendants. Many of them operate as Delaware corporations, though they do business in other places.

The Wilmington law firm of Bifferato, Gentilotti and Biden filed most of the asbestos suits and all the benzene suits.

Joseph Biden III, son of U. S. Senator Joseph Biden Jr., is a partner in the firm.

In its asbestos complaints, the Bifferato firm lists SimmonsCooper as “of counsel.” SimmonsCooper cannot file a suit in Delaware--only Delaware attorneys can.

In at least one such asbestos suit, Michael Angelides appears as counsel for SimmonsCooper. In a benzene suit, Tim Thompson and G. Michael Stewart are named as of counsel for SimmonsCooper.

Samp said it did not surprise him that SimmonsCooper teamed with a politically connected firm. He called it a common tactic to curry favor with local judges.

He said it occurred to him that in proposed federal law, a defendant could not remove a state case to a federal court if the defendant is sued in its home state.

“If you do business in one state and register in another, you are deemed a citizen in both,” he said. “The advantage, in a friendly state court, is that defendants could never remove to federal court.”

A defendant could argue that it is not appropriate to involve Delaware, he said.

“The registration is the hook,” Samp said, “but a lot of courts would say a piece of paper is not enough to be heard here.”

Lawrence Hamermesh, professor of corporate law and business at Widener University School of Law in Wilmington, said a defense motion for transfer would have to make a compelling connection to another court.

“If an Illinois plaintiff asserts an injury in Illinois,” he said, “it would be interesting to see how that motion came out. I’m not sure there’s much in case law.”

Corporations prefer Delaware registration for many reasons, he added.

“The statute that created corporations was enabling legislation, not regulatory,” Hamermesh said. “It leaves the choice of rights and responsibilities to the parties in the business so they can create the relationship they want.”

Delaware judges know corporate issues well, he said. The state's budget depends in part on income from registrations.

“Shareholders like having their cases heard in such a system,” said Hamermesh. “The legislature takes care not to offend any business constituency."

Hamermesh compared Delaware registration to a Swiss watch.

“Reputable corporations go there and investors invest in them.”

“If you are going public as a Wyoming corporation, you probably have some explaining to do to investors.”

Widener University, of Chester, Pa., offers the only law school in Delaware.

“I would be surprised if Delaware was anxious to cultivate a reputation as the home for asbestos litigation," Hamermesh said.

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