CHICAGO - U.S. District Judge Robert Gettleman dismissed a racketeering suit against John Simmons’s asbestos firm of Alton and seven of the firm’s lawyers on March 18.
Gettleman cited a precedent that an employer and its employees cannot constitute an illegal enterprise under federal racketeering law.
He found plaintiff J-M Manufacturing, which has settled about 70 asbestos suits with the Simmons firm, failed to identify an enterprise that included parties outside the firm.
He found liability depended on showing that defendants conducted the affairs of the enterprise and not just their own affairs.
He found J-M alleged a hub and spoke enterprise with Simmons at the hub instructing witnesses and clients as spokes providing false testimony.
“But plaintiff fails to allege any rim enclosing the spokes," Gettleman wrote.
He dismissed allegations of fraud, conspiracy and unjust enrichment under state law, without prejudice to filing those claims in state court.
J-M counsel Ashwin Ram of Los Angeles filed the suit last May, identifying J-M as a plastic pipe manufacturer in Los Angeles with more than 800 employees across the nation.
He claimed that from 1983 to 1988 J-M sold a limited amount of cement pipe that contained asbestos, to accommodate water districts until they transitioned to polyvinyl chloride.
“Over the last 20 years Simmons Hanly and its professionals have used asbestos litigation to enrich themselves," he wrote.
He claimed former firm partner Scott Peebles alleged in a lawsuit that the firm engaged in unlawful and unethical conduct to gain the upper hand in asbestos litigation.
He claimed the conduct included false statements, subornment of perjury and other acts of moral turpitude, dishonesty, and corruption.
He claimed the firm filed hundreds of cases against J-M, causing it to spend significant sums of money in defense of sham suits.
He claimed the firm used a coordinated, well-developed, and long running strategy that involved evidence suppression and shifting narratives.
He claimed the risk of a runaway verdict in its hand picked forum provides settlement leverage even in dubious lawsuits.
He alleged the enterprise consisted of the firm, various professionals working in and with the firm’s asbestos department, certain plaintiffs, witnesses, and firms serving as co-counsel.
Simmons retained John Storino of Chicago, who moved to dismiss the complaint last July.
He claimed J-M took a position that routine litigation activities constituted racketeering.
“Courts consistently reject lawsuits like this one where the claims stem from perceived unfavorable litigation outcomes," he wrote.
He claimed J-M tried to blame others for foreseeable consequences of its decision to make and sell a deadly product.
He claimed J-M could have moved to sanction the firm or unwind settlements, or it could have alleged misconduct before attorney regulators.
Ram opposed the motion and claimed J-M asserted separate enterprises, one within the firm and the other for association in fact.
Gettleman found J-M didn’t plead a plausible enterprise based on either theory.
He found J-M didn’t adequately allege that entities other than the firm were part of an enterprise by association in fact.
He found allegations to these nameless persons or entities were sparse and conclusory.
He found no allegations that witnesses, clients or local counsel communicated with those in other cases.
“Nor does plaintiff allege that these entities acted in their discrete litigation to benefit others in the other litigations as opposed to just themselves," he wrote.