In 2014, a federal bankruptcy judge ruled that plaintiffs’ attorneys from a Houston law firm had engaged in unethical practices to maximize recovery against Garlock Sealing Technologies. He denounced “the effort by some plaintiffs and their lawyers to withhold evidence of exposure to other asbestos products and to delay filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries from Garlock.”
Assertions made by attorneys and their clients in the suit against Garlock varied dramatically from assertions they made in trust claims.
“The strategy of suppressing evidence of plaintiffs’ exposures to the bankrupts’ products was designed to maximize plaintiffs’ and their counsel’s recoveries by driving up Garlock’s settlement and defense costs and litigation risk, thus compelling Garlock to settle many cases that were lacking in merit,” asbestos litigation scholar Lester Brickman noted at the time.
Garlock’s decision to fight the fraud has inspired other firms, such as Georgia Pacific, to do the same.
When GP was restructured four years ago, a former division, Bestwall Gypsum, became a separate entity and filed for bankruptcy in North Carolina
In the bankruptcy petition, company counsel cited a 2005 Madison County case that Georgia Pacific settled with a plaintiff who later submitted 21 trust claims and ballots in nine bankruptcy cases based on exposures and products not disclosed in litigation.
This past March, bankruptcy Judge Laura Beyer authorized the sending of questionnaires to lawyers representing clients with claims against Georgia Pacific. Most of the firms ignored the questionnaires or returned them incomplete. How’s that for contempt?
In the meantime, U.S. District Judge Staci Yandle of the Southern District of Illinois dismissed a challenge to the order requiring asbestos plaintiffs to answer questions about exposure history. “Plaintiffs’ redress,” she noted, “is in the district court of the Western District of North Carolina and the Fourth Circuit appellate court.”
Now other bankrupt asbestos companies are following Garlock and GP’s lead and fighting back against double-dipping plaintiff attorneys. Ferro Engineering, for one. CertainTeed, for another.
There’ll be more. The double-dipping days are done.