CHARLOTTE, N.C. (Legal Newsline) – Ford Motor Company wants to know the specific conduct exhibited by asbestos attorneys who, according to a federal bankruptcy judge, created “a startling pattern of misrepresentation” while pursuing their clients’ claims against multiple companies.
On Friday, Ford moved to unseal evidence presented during Garlock Sealing Technologies’ bankruptcy case. In 2013, the company submitted the evidence in an effort to prove prior recoveries against the company in civil courts had been inflated because asbestos attorneys withheld evidence that their clients could blame other companies for their asbestos exposure.
In an order released in January, U.S. Bankruptcy Judge George Hodges agreed with Garlock’s argument but did not release the specific evidence cited. Legal Newsline, which was kept out of the courtroom during the trial by Hodges, has filed a motion to unseal the evidence.
Ford is wondering if it, like Garlock, has paid more than it should have.
“Having reviewed the scant information presently available, it appears that Ford may have been induced into inflated settlements in some of the same cases examined by this court,” attorneys for the company wrote.
“This Honorable Court having found that ‘(i)t appears certain that more extensive discovery would show more extensive abuse,’ Ford must be granted access to the information currently under seal. Indeed, this pattern of misrepresentations may have affected Ford in circumstances not yet ascertainable.”
Hodges’ order spurned asbestos attorneys who requested Garlock place more than $1 billion in a trust for present and future asbestos claimants.
Hodges instead ruled that the amount of previous awards and settlements paid by the company in the civil justice system were not reliable because plaintiffs attorneys had withheld exposure evidence in order to maximize recovery against Garlock.
He ruled that Garlock needed to put $125 million in its bankruptcy trust and that math produced by plaintiffs attorneys wasn’t reliable because Garlock had suffered large jury verdicts as a result of claimants previously focusing their lawsuits on Garlock while losing evidence to other asbestos exposure in the process.
“This occurrence was a result of 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,” Hodges wrote.
Garlock brought evidence to the bankruptcy hearing demonstrating that the last 10 years of its participation in the asbestos litigation system “was infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”
According to Garlock’s evidence, one firm issued to its clients 23 pages of directions on how to testify. Evidence also showed one lawyer stated, “My duty to these clients is to maximize their recovery, okay, and the best way for me to maximize their recovery is to proceed against solvent viable non-bankrupt defendants first, and then, if appropriate, to proceed against bankrupt companies.”
Hodges permitted Garlock to bring evidence proving that roughly 220 settled cases withheld evidence. Then after settlement, clients made claims against roughly 20 companies’ bankruptcy trusts.
“It appears certain that more extensive discovery would show more extensive abuse,” Hodges continued. “But that is not necessary because the startling pattern of misrepresentation that has been shown is sufficiently persuasive.
“While it is not suppression of evidence for a plaintiff to be unable to identify exposures, it is suppression of evidence for a plaintiff to be unable to identify exposure in the tort case, but then later to be able to identify it in Trust claims. It is that practice that prejudiced Garlock in the tort system.”
Ford routinely finds itself as a defendant in asbestos lawsuits. Plaintiffs allege they were exposed to the material while working with or around chrysotile-containing brake pads.
“(L)egitimate concerns about the disclosure of other information shown to fall within an exception can and should be addressed by redacting information, where necessary, or placing limits on subsequent disclosure,” the company argues.
“But a blanket refusal to disclose this information – to enable asbestos claimants and their attorneys to sweep this information back under the rug – will ensure that any ‘unlawful injur(ies)’ to Ford remain unredressed.”
Garlock has filed sealed lawsuits against the asbestos firms it alleges committed fraud. The lawsuits were filed under seal because they contained information previously determined by Hodges that should remain confidential.
A hearing on Legal Newsline’s motion is scheduled for April 17.
Also seeking information from the bankruptcy proceeding is health insurer Aetna.
The company says it is the health insurer of many asbestos claimants and thus has subrogation rights for claims against Garlock. Aetna says it has provided millions of dollars in benefits to plan members to treat their asbestos-related diseases.
“The public is presumptively entitled to access judicial records,” attorneys for Aetna and The Rawlings Company wrote.
“Rule 2019 Statements, along with the exhibits filed but not placed on the electronic docket, are judicial records. There is no countervailing interest to overcome the presumption that movants, as members of the public, are entitled to access the Rule 2019 Statements.”
A hearing on Aetna’s motion was scheduled for Thursday but postponed to March 27.
From Legal Newsline: Reach editor John O’Brien at email@example.com.