products liability law

I'm writing several times a day about products liability for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

Garlock Sealing Technologies LLC and two other related defendants are opposing motions to keep sealed the names of asbestos plaintiffs and the amounts of settlements they have reached with those plaintiffs.

The judge presiding over the Garlock’s bankruptcy proceedings has set up a process to unseal evidence that led him to make findings of alleged misrepresentation by plaintiffs.

Garlock also wants to unseal questionnaires submitted by claimants in its bankruptcy case and submissions made by claimants to trusts formed out of other companies’ asbestos-related bankruptcies.

“A large portion of the asbestos claimants whose names appear in the estimation record have open claims and are therefore the putative creditors (and parties in interest) in this case,” Garlock said. “The [U.S. Court of Appeals for the Fourth Circuit] has held that parties should be allowed to litigate anonymously only in ‘extraordinary circumstances’ justifying a ‘rare dispensation.’”

Claimants’ names are routinely disclosed in asbestos tort litigation and in marketing materials disseminated by the law firms representing them, Garlock said.

In a separate motion , the official committee of asbestos personal injury claimants objected to Garlock’s request to seal some of the bankruptcy filings, including the major expense authorizations that memorialize the reasons Garlock settled mesothelioma cases for the amounts it did and trial evaluation forms completed by Garlock’s outside counsel about cases going to trial.

“Until now, the debtors have been enthusiastic advocates of disclosure, casting themselves as crusaders on the public’s behalf,” the committee said. “Now, without any sense of irony, the debtors maintain that their own documents—critical pieces of the ‘full story’—should remain sealed and shielded from public scrutiny.”

Those documents cannot be shielded by attorney-client or work-product privilege because Garlock had its attorneys testify during the proceeding held to estimate its liability to asbestos plaintiffs about why they settled cases, the committee said.

According to the committee, those “contemporaneous documents” are at odds with why Garlock says it settled its cases.

Last winter, U.S. Bankruptcy Judge George Hodges of the Western District of North Carolina estimated that Garlock likely owes $125 million to asbestos plaintiffs. He rejected the plaintiffs' argument that Garlock's liability is around $1 billion to $1.3 billion after finding evidence of misrepresentation by plaintiffs' lawyers in several cases that Garlock settled in the past or in which Garlock lost jury verdicts.

According to both sides, the parties agree that there should be redactions of most plaintiffs’ Social Security numbers, birth dates, the identities of minors, account numbers and medical information except that related to asbestos exposure.

I've been covering an asbestos bankruptcy  in which there are major allegations that plaintiffs lawyers misrepresented that their clients were exposed to certain sources of asbestos in the tort system, while indicating something different when seeking payments from opaquely-run trusts formed out of the bankruptcy of companies that made products containing asbestos. Last week, a district court ruled that court proceedings should not have been closed to the public and the press on the issue. I reported on the case for Law.com:

A trial held to estimate the liability of a company undergoing an asbestos-related bankruptcy should not have been closed to the public and press, a federal district court judge, sitting on appeal, has ruled.

U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina remanded the case back to a bankruptcy courtroom in order for the lower court to conduct fact-finding about the public's right of access because of the common law or because of the First Amendment.

Senior Bankruptcy Judge George R. Hodges has been presiding over gasketmaker Garlock Sealing Technologies LLC's bankruptcy. During hearings held to estimate Garlock's liability to claimants who allegedly developed fatal mesothelioma because of exposure to asbestos from Garlock products, Hodges closed part of the trial.

Hodges concluded that past settlements Garlock had entered into were not a reliable way to estimate the company's liability. Discovery into 15 of those cases showed a pattern of misrepresentation by plaintiff's lawyers. Plaintiffs' counsel allegedly indicated their clients were exposed to certain sources of asbestos in the tort system, while indicating something different when seeking payments from opaquely-run trusts formed out of the bankruptcy of companies that made products containing asbestos.

Later, Hodges rejected the request to unseal the evidence upon which he concluded that there was a pattern of misrepresentation regarding claims made against Garlock.

Hodges should not have relied upon a confidentiality order alone to close the estimation trial because that “shifted the presumption that favors open courts to a presumption favoring the closure of proceedings based on confidentiality designations by counsel,” the district court found.

Legal Newsline, a business-oriented news outlet owned by the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce, was the media outlet that sought access to the Garlock case.

“The court finds that, although done with the best judicial intentions of providing for the efficient administration of justice, Judge Hodges' decision to seal the estimation hearing and maintain the seal as to judicial filings and the transcript of those proceedings after his estimation order was contrary to the requirements of prevailing case law,” Cogburn said.

Separately, Cogburn has ordered that the Garlock's claims. asserting that plaintiffs' lawyers violated the Racketeer Influenced and Corrupt Organizations Act and engaged in fraud, be consolidated in front of one U.S. magistrate judge for pretrial case management, including any motions by the plaintiffs' counsel to transfer venue to their home districts.