CHARLOTTE, N.C – Asbestos lawyers want U.S. District Judge Robert Conrad to keep a Georgia Pacific entity from hunting for double recoveries among 15,000 individuals who filed injury claims in trusts and courts.
On April 7, they appealed an order of bankruptcy judge Laura Beyer that would require answers to questions of debtor Bestwall LLC about trust payments.
Beyer found the information necessary for estimating future litigation liability.
A committee of plaintiff lawyers in her court lost an argument that Bestwall should base its estimate on Georgia Pacific’s litigation history.
Bestwall prevailed on an argument that Georgia Pacific would have paid less if it had recovered setoffs from plaintiffs who received trust payments.
Kenneth Dantinne of Charlotte, appealing Beyer’s order on behalf of an official committee of asbestos claimants, called it a mandatory injunction.
Dantinne argued that it provided an opportunity to cast multi billion dollar companies as victims, and not tens of thousands of sick and dying individuals.
The objective of the questionnaire was “to criticize, accuse and harass current claimants with contentions that they are untruthful, their exposure is insufficient or that they have pursued other sources of recovery and have therefore received full compensation for their injury,” Dantinne claimed.
In his brief, he wrote that the questionnaire requires everyone who alleged a mesothelioma claim based on diagnosis on or before May 1, 2020, to answer Bestwall’s questions under penalty of perjury.
He claimed civil and bankruptcy courts don’t permit compelling sworn testimony. He claimed neither Beyer nor the questionnaire disclosed the consequences that might befall someone who doesn’t return it.
He further claimed Beyer retained exclusive jurisdiction to enforce her order to the full extent permitted by law.
He wrote that claimants must know the consequences, “so that they can determine whether to submit to the court’s jurisdiction.”
“Discovery related to pending litigation must be conducted within the confines of that pending litigation and cannot be circumvented by a class action style effort to consolidate the litigation,” he wrote.
He claimed the automatic stay of bankruptcy court on state court cases governed discovery of evidence related to state court cases.
“Because they are stayed, the debtor may obtain discovery in those proceedings only if the stay is lifted,” he wrote.
He claimed Bestwall had every incentive to stay in bankruptcy as long as possible.
Bestwall counsel Garland Cassada of Charlotte opposed the appeal on April 20, claiming Beyer didn’t issue a final order.
Cassada argued that an appeal would delay establishment of a trust and payment of claims.
He claimed that in 2017, Bestwall faced about 64,000 asbestos claims in nearly every state, more than a third of them in active litigation.
He claimed courts have used questionnaires in mass tort bankruptcies across the country for many years, and that courts and parties find them helpful and efficient for estimation.
Glenn Thompson, replying for the claimant committee on April 27, argued the unique nature of Beyer’s order rendered it final.
He claimed irreparable harm bolstered the argument for finality.
He wrote that challenges to the order “could take a variety of forms and a host of objections before a multitude of different courts.”
Separate litigation sprang up in Delaware district court on April 19, when asbestos trusts moved to quash subpoenas that Bestwall served on April 2.
Beth Moskow-Schnoll of Wilmington claimed for the trusts that Bestwall sought production of information submitted by more than 15,000 claimants.
She wrote that trust claimants submitted information on health, finances, and family, all disclosed with the expectation that it would be kept confidential.
As an alternative to quashing the subpoenas, she proposed to limit production to a sample of no more than ten percent.
She claimed ten percent would provide a statistically significant sample of the claims in issue, sufficient to satisfy any right Bestwall might have.
She claimed Bestwall’s database would create a powerful analytical tool that might be abused to discern patterns and reveal insights on unrelated subjects.
She further claimed a group administrator for the trusts should anonymize the data rather than Bestwall’s consultant as Beyer ordered.
On April 23, Bestwall counsel Chad Stover of Wilmington moved to transfer the motion to Charlotte.
He argued Delaware litigation could disrupt proceedings in bankruptcy court and transfer would avoid a risk of inconsistent rulings.
He claimed discovery must close on Sept. 30, and even a brief delay could make the timetable untenable.
He claimed Bestwall served its trust motion on the trusts and the trusts chose to remain on the sidelines.
He moved to extend the deadline for responding to the motion until ten days after the court resolved his transfer motion.
Moskow-Schnoll opposed the extension on April 26, and recommended expedition.
She claimed Bestwall didn’t explain how resolution of the motion to transfer would impact its response to the motion to quash.
She requested the court address the motion to quash before May 28, when trusts must produce claims data.
On April 28, Stover replied that a venue issue should be resolved at the outset.
He claimed Beyer became familiar with an extensive record and overruled objections identical to those the trusts raised in the motion.
He agreed with the trusts that the motion to quash should be resolved in an expedited fashion.
The clerk assigned District Judge Colm Connolly.
The court in Charlotte left its mark on asbestos in 2014, when District Judge George Hodges let Garlock Sealing Technologies compare claims of 20 plaintiffs.
Eight had received payments that Garlock didn’t know about.