NCPA - National Center for Policy Analysis


April 5, 2005

Last week, U.S. District Court Judge John Fullam told the ugly truth about the asbestos bar and cut its allowance to boot, says the Wall Street Journal.

The case involves Owens Corning, one of the 70 or so companies driven into bankruptcy because of runaway asbestos claims often filed by plaintiffs who aren't even ill. The lawyers had demanded $11.1 billion to pay off their clients, while the banks placed the sum at closer to $2 billion on grounds that many claims were bogus or had been inflated at the state level. Judge Fullam split the baby, ordering Owens Corning to pay $7 billion.

More important, however, was the judge's legal reasoning. Most federal judges have refused to challenge the methods or "facts" put forward by asbestos litigators, but Judge Fullam took aim at their unethical practices:

  • He pointed out their penchant for "venue shopping," or filing cases in states famous for "runaway jury verdicts."
  • He noted the mass screenings that "attorneys" and "labor unions" have used to round up plaintiffs, as well as their habit of hiring "biased" and "unreliable" X-ray readers (who detect disease even when there is none).
  • The judge also described "group lawsuits" in which lawyers lump the very sick with perfectly healthy patients, resulting in "higher verdicts," and he noted that companies often settle with healthy people simply to avoid defense costs.

And he repudiated the methodology for estimating claims that has been used by a trial lawyer "expert" witness, one Dr. Mark Peterson, in many bankruptcy cases. The lawyers usually get about 30 percent of any settlement, so by reducing this one by $4 billion Judge Fullam cut their windfall by $1.3 billion.

Source: Editorial, "Asbestos Truth Telling," Wall Street Journal, April 5, 2005.

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