March 17, 2014
by Daniel Fisher
In a motion and accompanying memorandum of law filed with the federal bankruptcy court in Charlotte, N.C. late Friday, Ford is seeking access to sealed testimony and exhibits that Judge George R. Hodges relied upon to conclude that plaintiff lawyers had withheld evidence their clients had made conflicting statements about their asbestos exposure to different courts and bankruptcy trusts set up to pay claimants. The health insurer Aetna filed a similar motion last month, as part of its effort to determine whether it paid the medical expenses of plaintiffs who later recovered money for the same illness.
Ford, like many manufacturers, has been named in thousands of lawsuits as plaintiff lawyers mount an aggressive search for solvent defendants to sue, after most of the companies that made and sold dangerous asbestos products like pipe insulation have filed for bankruptcy protection to settle claims. Plaintiff lawyers target car manufacturers because they sold vehicles with brake pads containing asbestos. Epidemiological studies have failed to show that car mechanics have higher levels of mesothelioma, the cancer most closely associated with asbestos exposure, so Ford has an interest in showing that plaintiffs suing it for such cancers have claimed exposure to more dangerous substances elsewhere.
In his January ruling slashing Garlock’s asbest0s-related liabilities to $125 million, Hodges cited the results of an examination of 15 plaintiff files which found that lawyers had withheld potentially important evidence of asbestos exposure from each of them. The judge stopped just short of calling the activity fraudulent, but said the process “was infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”
Such manipulation is possible because plaintiff lawyers largely control the trusts asbestos manufacturers set up to pay claims, and those lawyers have maintained a system of confidentiality that allows them to tap numerous trusts, often with conflicting stories about how their clients got sick, without fear of having anybody match those claims up against each other. The secrecy also allows them to file lawsuits against solvent companies first and negotiate larger settlements than they otherwise might obtain by failing to acknowledge the more serious exposures their clients will later allege against the bankruptcy trusts.
In the memorandum, Ford says it has been a co-defendant with Garlock, which made asbestos-containing gaskets, in numerous lawsuits. It said it suspects it has been induced to pay out more than it should “in reliance upon similar misrepresentations of asbestos exposures and asbestos trust claims.” It said it believes there is evidence it can use to defend itself among the files of thousands of claimants in the Garlock bankruptcy.
By court order, the statements of those plaintiffs include their law firm, address and partial Social Security numbers, Ford said, information it could use to match up against plaintiffs suing it for asbestos exposure. Lawyers have managed to keep such records secret, citing the privacy of health records. But they also began requesting secrecy in the early 2000s after judges started concentrating thousands of cases in a single court, making it easier to expose unethical fee-splitting arrangements and other practices they’d prefer to keep out of the eyes of the public.
In its filing, Ford said the company, “like everyone else, enjoys a presumptive right to inspect judicial records, or documents filed in the Nation’s courts to adjudicate rights.” Since public access is presumed, the company said, it’s the burden of the plaintiffs to show why the records should remain sealed. Concerns about privacy and identity theft “may be preserved by more reasonable, less restrictive measures.”
Reuters reported last month that Ford cited Hodge’s ruling in another, unrelated case in North Carolina. And health insurers including Humana HUM -1.78%, Aetna AET -1.02% and Blue Cross have filed motions in Philadelphia and New York seeking the records of bankruptcy trusts so they try and recover money they’ve spent treating diseases plaintiffs blame on asbestos exposure.
If Ford is successful, it may help undermine a strategy that has allowed lawyers to earn billions of dollars in fees by suing multiple companies over asbestos exposure with often conflicting stories about how their clients got sick. While some scientists argue in court that even one stray asbestos fiber can cause cancer, most epidemiological studies have found that continuous, heavy exposure to long-fiber amphibole asbestos is necessary to develop asbestosis and mesothelioma.
In order to prevail in court — or to make a legal argument sufficient to obtain a large settlement — plaintiffs must show the company they are suing was the most likely cause of their illness. So it is important to defendants like Ford, whose products have little or no connection to asbestos disease, to be able to show that the person suing them has previously claimed exposure to more potent compounds.