Posts Tagged ‘asbestos’

Supreme Court OKs asbestos suits against non-asbestos manufacturers

Tuesday’s 6-3 decision in Air & Liquid Systems v. DeVries took an expansive view of asbestos liability in the maritime context. I discuss at Cato at Liberty:

…By requiring makers of components to pay for damages they did not cause in the name of warnings that the U.S. Navy almost certainly would not have heeded, the Court yields to an impulse to round up deep pockets lest a sympathetic set of litigants otherwise go uncompensated….

In his dissent, Gorsuch points out that [the new standard formulated by Justice Brett Kavanaugh for the majority] not only has no evident grounding in existing tort doctrine but is not in fact easy to apply or predict. …

But it seems almost quaint to ask whether a newly announced legal standard can readily be applied and predicted in the context of asbestos law, a sui generis creation in which the courts regularly extract vast sums from defendants on the basis of legal standards assuredly not recognized in law at the time those defendants acted in the 1950s, 1960s, and 1970s. The implications of assigning retrospective liability to actions lawful at the time loom large and disturbing over continuing expansions of liability like the one announced in today’s case.

Liability roundup

“Science Favors J&J in Talcum Powder Lawsuits”

For years lawyers have been suing Johnson & Johnson claiming that its baby powder has caused ovarian cancer, a theory that has mostly met with failure in court. This summer, however, a St. Louis jury found liability and ordered the company to pay $4.69 billion, on a related theory that asbestos contaminants in the product (as opposed to talc itself) caused the disease. On December 14 Reuters followed with a lengthy piece laying out, and implicitly siding with, the plaintiff lawyers’ accusations; the piece drew wide publicity, and the company’s shares sank by about $50 billion. Some analysts have written that J&J’s lawsuit payouts on the issue could reach $20 billion.

Now a leading business columnist has explained why he doubts that outcome. “Why? Because whether or not the company’s talcum powder contains asbestos, and whether or not it hid that fact from the public, the science remains firmly on J&J’s side.” [Joe Nocera, Bloomberg] How so? “There is no evidence that women who use talcum powder are any more likely to get ovarian cancer than women who don’t. In both California and New Jersey, judges have tossed out cases on exactly this basis.” So while plaintiffs make the most of their dark imputations of a cover-up, what they haven’t shown is that women who used the baby powder are any more likely to contract cancer than those who did not. Nocera: “And this is one mass tort where I’m convinced the science is going to win.”

Meanwhile, Mark Lanier, the Texas-based lawyer who won the St. Louis verdict, freely agrees that his efforts have helped affect J&J’s stock price. “It serves my purposes as a litigator to say, ‘Yes, get their attention; keep driving the stock down.'” [Matthew J. Belvedere, CNBC] And: “New York’s specialized court for asbestos lawsuits could become a pivotal battleground for litigation over talcum powder as plaintiff lawyers seek to establish a record of wins in a court system known for liberal rules and big jury verdicts.” [Daniel Fisher, Forbes]

Supreme Court hears “bare-metal” asbestos case

Modern asbestos litigation has been described as an unending quest for the solvent defendant. Air and Liquid Systems v. DeVries, argued in October before the Supreme Court, presents the question of whether to permit suits against companies that made products containing no asbestos, “on the grounds that they had reason to foresee that the mineral would be used in conjunction with the products they did make.” I discuss the case in this new Reason piece.

More coverage of the oral argument from Brandi Buchman, Courthouse News and Ronald Mann, SCOTUSBlog reporting before and after. See also Robert H. Wright, Washington Legal Foundation; Federalist Society link roundup and video with Justin Torres of King and Spalding (& welcome SCOTUSBlog readers).

Feds: we’ll be watching for asbestos-bankruptcy chicanery

For well over a decade it’s been apparent that the distinctive arrangements by which asbestos plaintiff’s lawyers acquire control of the bankrupt remains of defendant corporations they’ve sued, and then exercise control over those firms’ claims, disbursements, and general management, is fraught with self-dealing and sometimes fraud, ranging from the charging of unnaturally high fees to the concealment of double- and triple-dipping by claimants. Business interests have pursued a campaign in the states and Congress to require more transparency and better judicial oversight of asbestos bankruptcy trusts. Now they may have a powerful ally indeed in the federal government, which has weighed in with an early statement of interest in one such bankruptcy to insist on better controls against fraud and abuse. Its standing for such an intervention arises in part from its role as Medicare and Medicaid payor (entitled by law to recoup some health-related outlays) rather than merely from any interest it might have in heading off fraud generally. [Daniel Fisher, Forbes; Daniel Gill, Bloomberg Law] Fisher:

In the Trump administration, at least, the government will no longer look the other way as asbestos lawyers negotiate lenient terms that make it easy for their current clients to get money at the expense of future claimants and federal entitlement programs….

The government’s unusually blunt statement of interest in the Kaiser Gypsum bankruptcy, long before any plan of reorganization has been approved, warns lawyers against including terms that make it hard to ferret out fraud and abuse, including confidentiality requirements that make it impossible to determine how much claimants have been paid and the basis for their claims….

The Justice Department also warned it will be looking for excessive fees and may not allow claimants to deduct those fees from reimbursement due the government for Medicare and Medicaid expenses.

Sequel: Feds object to trustee candidate in Duro Dyne bankruptcy.

Liability roundup

Liability roundup

An elusive asbestos memo

Now you see it, now you don’t: a famous “Preparing For Your Deposition” memo for asbestos plaintiffs, which I wrote about back when, is not quite so easy to lay one’s hands on or read about these days, though clues are still available on the web [David Yates/Southeast Texas Record, Sarah Rafique/KXAN and Sara Corcoran Warner/Huffington Post on First Amendment suit by Christine Biederman over access to court records, Yates/SETR with more, and more]

Liability roundup

The Claire’s asbestos scare

How a plaintiff’s expert consultant, working with others associated with the litigation biz, helped touch off a cosmetics panic. “Jewelry store Claire’s said [Jan. 4] that lab results certified its products as asbestos-free, following allegations of the toxic substance in its products last month.” [Lauren Hirsch, CNBC]