Recently in Ethics Category

A novel means of processing asbestos claims was initiated in 1988, when the Johns-Manville corporation emerged from bankruptcy and established the Manville Personal Injury Settlement Trust, the first "bankruptcy trust" set up to pay out money to asbestos claimants. Unfortunately, plaintiffs' attorneys controlled the trust's claimants committee and set up procedures for the trust that were advantageous to themselves, rather than potential claimants. The trust rules minimized requirements of proof of actual injury or causation (exposure to Johns-Manville products). The trust thus paid out a lot of money quickly to the attorneys, all the while exhausting its funds for potential future claimants.

In just its first nine months of operation, the trust paid out some $500 million to 12,600 claimants -- and by the end of 1989, 89,000 more claimants were outstanding. Eventually, the trust had to sharply curtail payments to claimants -- to 10 percent in 1995, and 5 percent in 2001. Injured claimants were literally getting a nickel on the dollar. "As of June 30, 2006, the trust had received more than 773,000 claims and paid out about $3.4 billion--just $4,400 per claimant."

Asbestos litigation has been around a long time. Early on, nothing like modern product liability law existed (see Richard Epstein's discussion here); lawsuits resided in workplace injury law when filed in the 1920s and 30s, and were soon subsumed in workers compensation reforms.

Modern asbestos litigation began after the Selikoff study was published in 1964. In December 1965, Texas attorney Ward Stephenson filed a case on behalf of Claude Tomplait, who had worked as an asbestos insulator. Four years later, Stephenson extracted a settlement for $75,000 from seven defendants.

Notwithstanding this meager beginning, Stephenson persisted in asbestos litigation and won a major victory in Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (1973), in which the Fifth Circuit Court of Appeals found asbestos manufacturers strictly liable for their workers' injuries. The Borel court rejected statute of limitations, contributory negligence, and assumption of risk defenses; and modern asbestos product liability litigation was born.

The litigation got another shot in the arm when New Jersey attorney Karl Asch uncovered the "Sumner-Simpson papers," which "described in great detail the efforts of Raybestos, Johns-Manville, and other manufacturers to find out about the hazards of asbestos, develop strategies to deal with them, and--most important--to keep that knowledge from the public and workers." These documents were put to great effect by South Carolina lawyer Ron Motley, who actually used the papers to convince a South Carolina circuit judge to grant a new trial after a jury had ruled in favor of asbestos defendants. Motley of course went on to become an asbestos super-lawyer and an architect of the multibillion-dollar multistate tobacco settlement; his antics are well-known to long-time readers of this site.

Two more foundational cases are worthy of mention. In 1981, the D.C. Circuit ruled that insurers who had written asbestos policies were liable for the maximum insured between exposure and diagnosis, rather than only in the year of diagnosis. See Keene Corp. v Insurance Co. of North America, 667 F.2d 1034 (D.C. Cir. 1981). Given the long latency between asbestos exposure and ultimate illness, the level of insurance exposure was suddenly massive. Circuit Judge Patricia Wald warned that the court's decision "requires a leap of logic from existing precedent, for it concerns diseases about which there is no medical certainty as to precisely how or when they occur."

In 1982, the New Jersey Supreme Court threw out the "state of the art" defense for asbestos manufacturers, in essence holding that it mattered not whether business practice was the best available to the industry at the time the injury occurred. See Beshada v. Johns-Manville Products Corp., 442 A.2d 539 (N.J. 1982). The court opined, "The burden of illness from dangerous products such as asbestos should be placed upon those who profit from its production and, more generally, upon society at large which reaps the benefits of the various products our economy manufactures. "

Thus, in less than a decade, the law was radically shifted, and asbestos litigation was born: "The decade after Borel saw 25,000 asbestos cases filed. By 1981, more than 200 companies and insurers had been sued; by 1982, defendants' costs had topped $1 billion." But these early years were just the beginning...

Yesterday, I had the privilege to do a brief interview with Lester Brickman, a professor of law at Cardozo School of Law in New York. Professor Brickman is one of the nation's leading legal ethicists and the national adacemic expert on asbestos litigation. The discussion is available as a podcast, downloadable here.

I'm happy to see that my initial post -- which doesn't really include any details of yet -- has already begun to spark debate in the comments. I have thoughts on the views expressed, but I'll begin with some background. This information might be old hat to those familiar with the asbestos mess, but it's essential for those with little knowledge. This summary largely follows the account from the introduction to our Trial Lawyers, Inc.: Asbestos report.

Asbestos manufacturing in the United States was ubiquitous. At one point, asbestos-related industries employed as many as 2.5 million Americans. Asbestos commercial mining began in the U.S. in 1874, and after the Johns-Manville corporation was founded in 1890 with a patent for a process that blended short asbestos fibers with magnesia, asbestos manufacturing exploded: "asbestos consumption went from only 956 metric tons in 1890 to a peak of 803,000 tons in 1973."

While asbestos ultimately proved deadly, it was originally thought to be a "magic mineral," as it was dubbed at the 1939 World's Fair. The word asbestos itself is derived from the Greek for "indestructible," and the product is an incomparable flame retardant: it insulated generations of schoolchildren from fire and indeed fireproofed our World War II Pacific fleet.

But asbestos has also long been known to be dangerous when inhaled--as far back, perhaps, as the days of Pliny the Elder. In the early 20th century, asbestos was deemed as dangerous as lead and mercury (two products that have themselves spawned much litigation). In 1918, the U.S. Department of Labor declared that there was an "urgent need for more qualified extensive investigation" into the harms of asbestos, and in 1938, the U.S. Public Health Service issued a "good-practice" guideline for Threshold Limit Values of asbestos exposure.

Thus, asbestos was known publicly to be dangerous when virtually everyone suffering from asbestos-related illness was exposed. The extent of the danger, however, was not known definitively until 1964, when a seminal study by Mount Sinai Hospital's Irving Selikoff established a definitive link between asbestos exposure and lung cancers and asbestosis.

Subsequently, evidence indicated that asbestos manufacturing companies knew more about asbestos' dangers than they originally let on, and indeed in some cases hid that information from the public. Still, as my colleague Peter Huber pointed out in his review of Paul Brodeur's Outrageous Misconduct, a much-cited book that harshly criticizes the asbestos industry, the asbestos companies' early knowledge about asbestosis--asbestos-related lung injury that is rarely fatal, and was generally known--should not be confused with knowledge of the deadly lung cancer mesothelioma, which was exposed by the Selikoff study: "In his account of who knew what when--the core of his cover-up theory--Brodeur systematically obscures the difference between asbestos-related cancer and asbestosis, usually a much less serious disease, and understood and discussed in the Manville boardrooms much earlier."

In any event, the original asbestos manufacturers like Johns-Manville have long been bankrupt due to litigation exposure. (Johns-Manville, ranked 181 on the Fortune 500 with over $2.2 billion in sales, declared bankrupcty in 1982 due to its looming caseload of 16,500 cases, and projections of up to 200,000 in the future.) The story of how that litigation evolved will be the subject of my next post.

I can't say how excited I am to be here as a guest at overlawyered -- the first legal blog still in existence! I'll never be the indefatigable blogger that is my colleague Walter, or my friend and fellow legal reformer Ted, but I jumped at the opportunity to come over here to Mr. Olson's "other" blog (he and Ted are also the mainstays of the Manhattan Institute's, to which I occasionally contribute).

Overlawyered's long-time readers have doubtless read a lot about asbestos. And we've covered asbestos litigation very extensively over at Point of Law. But there's a lot of new material in the Manhattan Institute's just-released Trial Lawyers, Inc.: Asbestos, as well as a lot of background for those new to the subject. Over the next week, I'll be going through both.

I'd urge anyone interested to read the entire report, available here. Those who want a quicker review of some of the newer material should read my column in the Washington Examiner, which ran yesterday. And there's a good overview of my thoughts in an on-line interview available here.

I'll be back shortly to begin my walk-through of the report, looking at the underpinnings of the trial lawyers' big asbestos machine.

Don't X

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Another bunch of things not to do if you're a member of the legal profession.

  • Send insulting letters to opposing counsel. (G.F. Pignato, ordered to write an article about civility.) [Legal Profession Blog via ABA Journal]
  • Leave your innocent client in jail by failing to act on new evidence. (William S. Gebbie, surrenders his California license; also accused of stealing client funds.) [ABA Journal]
  • Use the NY Yankees trademark without permission in advertising for asbestos clients. [ATL]
  • Make "jerk-off" motions in court. (Adam Reposa, Texas, sentenced to ninety days for contempt of court; many in blogosphere are appalled at what they call an overreaction.) [ATL; Simple Justice; Mark Bennett and again; and Patterico notes an interesting coincidence]
  • Mock the plaintiffs' attorney at a jury trial with "Overruled" signs and soccer-style red cards. (Judge James M. Brooks, admonished.) [ATL]
  • As a prosecutor, conceal exculpatory evidence. (Former Sonoma County Deputy District Attorney Brooke Halsey Jr., suspended.) [ABA Journal]
  • And even if you're a pro se, don't send a death threat to opposing counsel by fax. [Milwaukee Journal-Sentinel]

Earlier: Feb. 24.

The law firm of Leeds Morelli & Brown has recently been embroiled in controversy over episodes in which it has settled batches of employment discrimination claims while contemporaneously entering agreements in which the defendants agree to hire it (the Leeds Morelli firm) for substantial sums. Now an African-American woman who was once a vice president at Prudential Insurance and then sued the company for racial bias as a Leeds Morelli client "is asking a federal judge to set aside an arbitration award, alleging her lawyers were given improper financial inducement to keep her claim and hundreds of others out of court. According to Linda Guyden, the company paid $5 million to the law firm representing her and 358 other employees, in return for which Prudential's total exposure was capped at $10 million and the claims were kept secret just as the company was about to be taken public." (Mary Pat Gallagher, "Bias Plaintiff Says Lawyer Sell-Out Warrants Vacating of Arbitration", New Jersey Law Journal, Apr. 8). For a cognate controversy over Leeds Morelli's settlement of employment claims with Nextel Corp., see Leigh Jones, "Columbia's Simon Blasts Professors' Role in Nextel Bias Case", National Law Journal, Nov. 26; Bluestone, New York Attorney Malpractice Blog, Feb. 12, 2007.

"The Massachusetts Commission on Judicial Conduct recommended a $25,000 fine, a 30-day suspension without pay and a public censure for state court Judge Ernest B. Murphy for sending improper letters to Boston Herald publisher Patrick J. Purcell that demanded settlement of Murphy's libel lawsuit against the newspaper." (Sheri Qualters, "Suspension, Fine Recommended for Boston Judge Who Sent Improper Letters to Newspaper", National Law Journal, Apr. 2). For more on Judge Murphy's "fascinatingly repellent" letters and their "'Surrender, Dorothy' flavor", see Dec. 23 and Dec. 8, 2005.

In Sunday's Times reporter Anthony DePalma takes a much-needed look at attorney Paul Napoli and his Napoli Bern law firm, which is now representing thousands of plaintiffs claiming injury from 9/11 dust inhalation and before that made its name in the fen-phen litigation. Among the controversies that have trailed it to the present day from that affair: charges that it divvied up settlements in a way favorable to its own fee interests, and that it used unreliable "echo mill" expert reports from echocardiologists attesting injury to fen-phen claimants. Prof. Lester Brickman, friend of this site, is quoted extensively. See our extensive earlier coverage at Overlawyered: Dec. 16, 2002, Sept. 21, 2003, etc. (echo mills); Dec. 28, 2001, Feb. 14, 2005, and Mar. 29, 2007 (settlement practices); Feb. 25, 2008 (broad net cast in 9/11 suits)(cross-posted from Point of Law).

Updating our Jan. 6, 2007 post: "The Alabama Supreme Court has ruled that a county judge accused of ethical wrongdoing before he became a judge cannot be disciplined by the state bar until he leaves the bench. A dissenter claimed the majority opinion leads to 'absurd consequences' and gives the judge, Stuart DuBose, 'unwarranted immunity.'" Voters elevated DuBose to a circuit judgeship despite his publicized role "in an estate in which he collected a $1.2 million fee for writing a client's will without ever meeting the dying man," to quote our earlier post. (Debra Cassens Weiss, "Facing State Bar Ethics Charges in Alabama? Become a Judge", Mar. 20).

Now this could crimp the business plans of quite a few attorneys:

A Manchester lawyer who threatened to sue a Concord salon for pricing haircuts differently for men and women and then took money to settle the matter was found guilty of theft by extortion.

A jury took about 1½ hours to convict Daniel Hynes, 27, on Wednesday. Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state.

One arrived Dec. 20, 2006, at Claudia's, the North Main Street hair salon owned by Claudia Lambert. In the letter, Hynes said prices should be based on the time a cut takes or on the length of hair, instead of on gender. He wrote: "I demand payment in the amount of $1,000 in order to avoid litigation," according to court documents. ...

Hynes said yesterday that he plans to appeal.

"The conviction goes against the First Amendment," he said. "People have a right to petition the courts. In my case, I wanted to address my concern with the Human Rights Commission."

Asked why he sent letters to salons instead of contacting the commission directly, Hynes said lawyers often settle out of court.

"I believe it's more appropriate to attempt as amicable a resolution as possible," he said.

... In one court document, he argued that the price structure that he saw as discriminatory had caused him stress and mental anguish, despite the fact that prices for men were less than those for women. He said he was being denied an "inherent benefit in being treated equally."

(Chelsea Conaboy, "Lawyer guilty of salon extortion", Concord Monitor, Mar. 21; Greenfield, Mar. 23; Above the Law, Mar. 25; Pasquale, Concurring Opinions, Mar. 24).

Prof. Bainbridge (Mar. 25) cites California's experience with the now somewhat reformed s. 17200 unfair business practices law, which empowered freelancing lawyers to send out demand letters to businesses over a wide variety of alleged infractions. He concludes that the answer is to amend underlying laws which sweep too broadly in banning business practices, authorize damage claims unrelated to actual injury, and so forth. Although I much appreciate the kind suggestions for further reading he offers in his post, I can't say I entirely go along with the idea that the scope for possible abuse would vanish if only the underlying laws were written properly. At Concurring Opinions, incidentally, one commenter draws a connection to RIAA's mass production of demand letters against file-sharers, while another warns that for a target to complain to the authorities of extortion, as did the New Hampshire salon owner, might itself be construed by many courts as "retaliation" against the filer of a discrimination claim and thus as grounds for penalties on its own.

Our weekend post questioning defense attorney John Keker's assertions of the innocence of client Dickie Scruggs ("prosecutors have concocted a 'manufactured crime' in which his client had no part") drew a couple of comments from readers who saw Keker's statements as no more than the zealous advocacy we should expect of a defense attorney. They've also been discussing the issue over at the WSJ law blog, where they quote defense attorney Benjamin Brafman's rapidly disproved boast that his client Mel Weiss "will be fully exonerated," as well as Monroe Freedman, the Hofstra legal ethicist and regular antipode of views expressed on this site, who

says that generally speaking, he doesn't see problems with a lawyer making aggressive statements to the press in defense of his client. "We don't know what the client told the lawyer when the lawyer made the statements," he says. "We don't know what Scruggs told his lawyer. We don't know if Scruggs said I did it, but I want to fight it or something else entirely."

George Sharswood's Essay on Professional Responsibility, the standard American text on legal ethics before the modern period, contains the following assertion (pp. 99-100 of Google Books digitized version): counsel can with propriety and good conscience express to court or jury his belief in the justice of his client's cause, contrary to the fact. Indeed, the occasions are very rare in which he ought to throw the weight of his own private opinion into the scales in favor of the side he has espoused. If that opinion has been formed on a statement of facts not in evidence, it ought not to be heard -- it would be illegal and improper in the tribunal to allow any force whatever to it; if on the evidence only, it is enough to show from that the legal and moral grounds on which such opinion rests.

Letter to the editor, WSJ, Mar. 22 (via YallPolitics):

It's bad enough and sad enough to read the sorry story of the greed of tort-king "Dickie" Scruggs. The evidence and the transcripts was, of course, damning.

It was really nauseating, however, to read the absurd assertion by John Keker, his lawyer, that Mr. Scruggs was innocent and that the "prosecutors have concocted a 'manufactured crime' in which his client had no part" ("A Lawyer's Trials: Tort King's Path to Bribery Charge," page one, March 14). So, according to Mr. Keker, the prosecutors could freely be accused of trying to frame an innocent man.

All Mr. Keker should have said was that his client had pleaded not guilty and that the matter would proceed to trial.

One assumed that when Mr. Keker made factual assertions he was accurately reporting what Mr. Scruggs had told him, since he presumably knew Mr. Scruggs's side of the story through lengthy interviews under the protection of the attorney-client privilege.

Then we learned, a few hours later, that Mr. Scruggs was guilty all along. Either Mr. Keker knew this or he was ignorant.

Why lawyers in criminal-defense cases feel compelled to make factual assertions about their clients' innocence, facts which they couldn't possibly know, is beyond me.

Every day these lawyers appear on television and in the papers repeating the ridiculous alibis of their clients, not as their clients' legal positions but as facts, only to be ultimately made foolish by a plea or a trial.

Innocent or guilty, a lawyer should retain his dignity and that of his client, if possible.

Felix M. Phillips
Attorney at Law

More: Discussion continues in this Tuesday post.

Class action lawyers who went after the various deep pockets in the Enron Corp. collapse -- the team was led by now-disgraced William Lerach -- want what may be a world record fee for an action of the sort. Highlight: Columbia lawprof John Coffee, whom lawyers often bring in to testify for fee requests, says courts' eventual rejection of the lawyers' claims against banks and investment companies -- after some had paid fortunes to avoid the risk of trial -- is actually a reason to pay the lawyers more, 'cause it shows that they were being creative and taking risks:

The Columbia professor, who was hired to submit a declaration supporting the award of legal fees, said it was a testament to Lerach's skills that he convinced large corporations to pay billions in a case that turned out to be fatally flawed. "We now know it was an extraordinarily high-risk case because, ultimately, you lost it," he said.

Texas Attorney General Greg Abbott is among those objecting to the fees as excessive. (Josh Gerstein, "Judge To Mull $695 Million Legal Fee", New York Sun, Feb. 29; "Texas Objects To Enron Fees", Mar. 13).

Detroit mayoral scandal


Lawyers are coming under fire for numerous alleged derelictions in the Motor City's abuse-of-executive-power scandal, which involves claims of "false testimony, concealment of information from the city council and possible destruction of evidence. ... 'There's so much wrongdoing, it's hard to know where to start,' says professor John Brennan of Thomas M. Cooley Law School. 'The city attorneys are not acting like lawyers, they're acting like (Mayor Kwame) Kilpatrick's legal bodyguards. They've forgotten who their clients are.'" (Martha Neil, "Lawyers in ‘Ethical Minefield’ in $8.4M Detroit Settlement Scandal", ABA Journal, Mar. 6; Joe Swickard, "Attorneys' conduct questioned in the Kilpatrick text-message scandal", Detroit Free Press, Mar. 6).

"Police officer Michael Harrington sued after getting snookered out of $44.63 in overtime pay. He later settled for $10,500 and sought about $46,000 in attorney fees. If that seems out of proportion, Los Angeles' 2nd District Court of Appeal agrees with you. The court reduced the fee award to $500. 'At the risk of understatement,' Justice Miriam Vogel wrote last week, 'there is no way on Earth this case justified the hours purportedly billed by Harrington's lawyers.'" (Mike McKee, The Recorder, Mar. 5).

Pellicano trial begins


"Anthony Pellicano, the so-called private eye to the stars, masterminded a 'thriving criminal enterprise' that used illegal wiretapping and bribery to squash the legal problems of Hollywood's rich and famous, a prosecutor told a Los Angeles court yesterday. ... Pellicano has worked for lawyers who represented Tom Cruise, Michael Jackson and Elizabeth Taylor." (Catherine Elsworth, "Pellicano's Hollywood criminal enterprises", Daily Telegraph (U.K.), Mar. 7). Earlier here.

Don't IX

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Another bunch of things not to do if you're a member of the legal profession.

  • Don't get caught pursuing forged fen-phen claims. (Robert Arledge, Vicksburg, Mississippi, sentenced to 6.5 years, the only lawyer to date to be sentenced in a much larger fen-phen scandal.) [ABA Journal]
  • Don't try to dissuade a witness from testifying at a deposition. (Cleary Gottlieb, which said it would appeal the judge's order of sanctions.) [WSJ Law Blog]
  • Don't inflate your GPA and include fake awards on your resume. (Gregory Haun, DC, recommended for suspension, resigned his six-digit BigLaw associate job.) [Legal Times]
  • Don't end your jury service by casting a vote to break a deadlock and then sign a statement drafted by the plaintiffs' attorney asking for a new trial saying that you did so so you can return to work. (California bar has recommended disbarment for Francis Fahy.) [ABA Journal; Recorder ($); ($)]
  • Don't steal money from your clients by forging their signatures on insurance company releases to get their settlement money. (Richard Boder, New York, caught as part of a larger scandal involving the illegal use of paid runners to bribe hospital employees about auto accident injuries, sentenced to a year in prison.) [NY Law Journal]
  • Don't read Maxim in the courtroom. (Todd Paris, held in contempt by North Carolina judge.) [WSJ Law Blog]
  • Don't have an affair with a judge you're practicing in front of, or vice versa. (Federal Way, WA, Municipal Court judge Colleen Hartl resigned after bragging about an affair with public defender Sean Cecil, who still has 5 Avvo stars for professional conduct, but has been the subject of a formal complaint to the bar.) [AP/Post-Intelligencer; Federal Way News; Lat]
(Earlier: Nov. 5, etc.)

Looks like some have found ways to game the state's employment rules:

Five Long Island school districts falsely reported to the state that a part-time private attorney was a full-time employee in each district, enabling him to earn a public pension of nearly $62,000 and health benefits for life.

At the same time, the districts paid his law firm more than $2.5 million in fees, records show.

The attorney, Lawrence W. Reich, was listed as full time by five different school districts at once - Baldwin, Copiague, East Meadow, Bellmore-Merrick High School and Harborfields, according to records supplied by the New York State comptroller's office. In 2000, for example, he was credited with working 1,271 days in one year. The year before, he was credited with working 1,286 days....

Under Internal Revenue Service rules, a person cannot be paid both as an independent contractor and employee for the same job.

"Clearly, it's an attempt to manipulate the system so that a person can receive Cadillac fringe benefits that a person in the private sector would otherwise not be entitled to," said Paul Sabatino, a municipal lawyer who is also former Suffolk chief deputy county executive. ...

"I followed essentially a practice that was very common among my colleagues in the industry," [Reich] said.

(Sandra Peddie, "Five districts falsely reported lawyer job status", Newsday, Feb. 15).

"A prominent class-action lawyer facing sentencing today for secretly paying plaintiffs to file securities lawsuits, William Lerach, is suggesting that the under-the-table practice was widespread and was not isolated to the firm he helped run for decades, Milberg Weiss. ... Despite the highly publicized travails of what was once America's leading class-action law firm, there has been little public discussion of whether other firms may have emulated the secret payment scheme Lerach and other Milberg lawyers devised." Notwithstanding a request by Lerach's lawyers that the letters from his friends and supporters asking clemency be sealed from public inspection, most of the letters have become public, revealing the identities of such entirely unsurprising Lerach backers as Ralph Nader (who in this one particular case did not favor prison for white-collar criminality) and Ben Stein, known to readers of these pages (though apparently not to many readers of his New York Times column) as an expert witness hired repeatedly by Lerach to help portray sued companies' conduct in the harshest possible light. (Josh Gerstein, "Lerach Says Payoffs Were Widespread", New York Sun, Feb. 11). Another letter writer: Sen. Carl Levin (D-Mich.) And the list of letter-writers (PDF) includes "two redacted names in between Gordon Churchill and Charles Cohen", leading to speculation that one or both surnames might be "Clinton". It seems unlikely, though, that either prominent ex-White House resident would have risked the sort of negative publicity involved even as a gesture to acknowledge Lerach's past favors. (CalLaw "Legal Pad", Feb. 8)(corrected shortly after posting to reflect release of most letters by stipulation of parties, not judicial order). Update 4 p.m. EST: sentence is 24 months.

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