CHARLOTTE – Insurers acting as friends of bankruptcy court have endorsed discovery into asbestos settlements.
The insurers asked bankruptcy Judge Craig Whitley to grant a motion of DBMP, an entity that CertainTeed created, for examination of settlements.
Judge Laura Beyer of the same court authorized such an examination for Bestwall, an entity Georgia Pacific created.
For the insurers, Mark Behrens of Washington and Caroline Gieser of Atlanta traced skepticism about settlements to its roots.
Their Oct. 1 amicus brief explains that the original primary defendants were companies that mined asbestos or made insulation. But following a bankruptcy wave among those defendants, from 2000 to 2002, the litigation became an endless search for solvent bystanders.
Billions of dollars are available in asbestos trusts, and filing claims is far quicker than court, the brief says. And claimants often receive payments from multiple trusts.
“One might assume that asbestos plaintiffs would obtain quick payments from the trusts while pursuing tort actions against solvent defendants,” the brief states.
“But plaintiffs routinely delay the filing of trust claims while tort cases are pending.”
The tactic, according to the brief, allows them to suppress evidence of trust-related exposures that defendants could use to impeach them or apportion fault.
Where defendants overcame suppression, exposures set forth in trust claims differed markedly from exposures asserted in the tort system, the brief says.
As a result, defendants pay inflated settlements, it says.
The brief describes contradictory allegations that came to light in courts of Maryland, Virginia, and Delaware.
It further describes contradictory allegations that Garlock Sealing Technologies found in four cases through its bankruptcy proceedings in 2014.
Appellate judges in Oregon granted a new trial in light of contradictions a defendant found after verdict, it says.
Behrens and Gieser filed the brief on behalf of Coalition for Litigation Justice.
Members are Century Indemnity, Great American, Nationwide Indemnity, San Francisco Reinsurance, and TIG.
Third party administrator Resolute Management also is a member.