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The Intersection Among Torts, Science, Corporate Law, Insurance & Bankruptcy

Asbestos Plaintiff Lawyers Move Forward With Lawsuit Targeting The Estate of a Former Partner in a Defense Law Firm as an Alleged Conspirator With Travelers Insurance

Posted in Asbestos, Litigation Industry, Mass Tort Issues

Lawsuits against law firms continue to be part of the increasing complexities of asbestos litigation. A recent example arises from asbestos plaintiffs receiving – after a decade – permission to proceed with a lawsuit against the estate of a former partner at Arter & Hadden, a defense law firm that worked on cases for Combustion Engineering. The recent outcome was reported by Mealey’s Litigation Report: Asbestos in Judge Allows Joinder Of Hawaii Asbestos Law Firm In Fraud Case, Remands Action,  V. 31, Issue 20  Mealey’s Litig. Rep. Asb. at 18 (2016).

Mealey’s explained the case as follows;

“[Multiple plaintiffs] filed a class action lawsuit in Hawaii on behalf of all individual who settled asbestos claims with Combustion Engineering Inc. (CE) in Hawaii between 1982 and 2000. At issue were responses to interrogatories in which CE allegedly falsely claimed to have not sold asbestos-containing products in Hawaii and that it had no knowledge that its products were used in Hawaii. The Baclaan plaintiffs claimed that Travelers Insurance Co. and Travelers Indemnity Co. (Travelers defendants) withheld information on these points in an effort to entice the plaintiffs to accept “nuisance value settlements.” The Baclaan plaintiffs claimed that CE employed Arter & Hadden acted as national counsel and Char, Hamilton, Campbell & Thom as local counsel. The plaintiffs alleged that those who participated in the fraud owed them the difference between what they recovered and what they were rightfully due.”

The case is Lorenzo Baclaan and Naomi Baclaan v. Combustion Engineering, et al., No. 03-325, George H. Toro and Vivian Toro, et al. v. Combustion Engineering, et al., No. 03-326, Theodore K. Hopkins and Ruby Hopkins v. Combustion Engineering, et al., No. 03-401, D. Hawaii.”

Health Insurers Seek $19+ Million of Cancer Care Costs from Some Members of the Asbestos Litigation Industry (Six Plaintiff Firms)

Posted in Asbestos, Cancer, Litigation Industry

Mealey’s recently highlighted the latest example of financiers and entrepreneurial claiming creating change in the asbestos litigation industry.  Specifically, Humana Inc., United Healthcare Services Inc. and Aetna Inc. recently took another step in recovering costs of cancer care from at least some members of the asbestos litigation industry; the step involves a recent “subrogation” lawsuit in federal court in Texas. This “subrogation” lawsuit is notable for multiple reasons. At the human level, the lawsuit  is notable because it highlights some of the many the conflicting forces at work in the already difficult lives of persons with cancers that arise out of workplace exposure to “toxins” (or alleged toxins).   At the finance level, the lawsuit further alters the already complicated calculus involved in trying to accurately calculate the real direct and indirect real costs of health care and mass tort litigation. At the entrepreneurial level, it highlights the reality that multiple different interest groups seek to profit from cancers said to arise from “mass tort” claims, such as cancers that actually or allegedly arise out of intake of asbestos fibers.

The $19.5 million suit was filed by Humana Inc., United Healthcare Services Inc. and Aetna Inc, and is pending in Houston, Texas in federal court (the Southern District of Texas).  “The suit names Brent W. Coon P.C., a/k/a Brent Coon & Associates; Reaud, Morgan & Quinn; The Bogdan Law Firm; Foster & Sear; Hissey Kientz; and Shrader & Associates,” as is described in a November 23, 2016 article, Insurers Claim Asbestos Lawyers Facilitate Double Dipping, Seek Injunction, 20 Mealey’s Litig. Rep. Asb. 19 (2016), at 31. (free access available upon signing up for a trial subscription).

The suit has a core fact pattern involving health care services provided to 297 persons who asserted asbestos litigation claims. As explained by Mealeys, “the insurers claim they matched 297 insureds (matched insureds) for whom they provided asbestos-related medical care coverage to individuals represented by the named law firms. The insurers claim that they have paid $19.5 million on the matched insureds’ claims.” The suit, however, seeks broader declaratory and injunctive relief.

There are many financial and human factors at work in asbestos litigation, but many people are not aware of the myriad factors at work.  Kudos to Bryan Redding and Mealey’s for highlighting this aspect of the complexity of asbestos litigation. The US Chamber of Commerce frequently complains about plaintiff lawyers in asbestos litigation – e.g here. However, one suspects the Chamber will not be bashing this set of contingent fee plaintiff lawyers involved in the endless search for a deep pocket that may yield  profits from the misery of persons suffering from cancers actually or allegedly related to intake of asbestos fibers.

Product Liability Defendants Lose Big in California and Texas

Posted in Asbestos, Litigation Industry, Punitives

The last 10 days have been notably adverse for product liability defendants.

One big defense side loss arrived through the California Supreme Court’s December 1, 2016 opinion in two consolidated cases involving “take home” exposures to asbestos.  The opinion is described in a December 1, 2016 article by LAW360.

To close out the adverse stretch, Johnson and Johnson lost a $1+ billion verdict in a hip implant bellwether trial in federal court in Dallas. The trial involved six plaintiffs represented by Mark Lanier.  Some of the specifics are outlined in a December 2, 2016 article by LAW360.

ACI’s 22nd Asbestos Claims & Litigation Forum

Posted in Asbestos, Litigation Industry, Science

ACI’s 22nd Asbestos Claims & Litigation forum, January 12-13 at the Union League of Philadelphia, is an event where law, science, and medicine will intersect to provide practitioners with more clarity and certainty with respect to pressing issues in the asbestos litigation industry.

Top reasons to join this year’s conference:

1.    New sessions have been added to tailor to your practice:
Ø Uptick in Talc Cases: Litigating Cases Involving Cosmetic and Industrial Talc and Explaining the Rise in Ovarian Cancer Claims – View Details

Ø Correlation Between Lung Cancer and Asbestos – View Details

Ø Medicare Language Releases: How to Construct One, Settlement Documents, Liens, and Statutory Fines for Failing to Comply – View Details

2.    In-House speakers will discuss strategy, best practices, settlement negotiations, and case management. Click here to view full list of speakers.

3.    You will gain invaluable networking opportunities with in house counsel and learn from top jurists and leading law firms in the country. The medical professionals speaking at this conference will connect the law and science and provide the details and nuances so you can strengthen your case and benchmark your strategies.

REGISTER TODAY
to ensure your place by calling 888-224-2480, faxing your registration form to 877-927-1563 or registering online.  Global Tort readers receive 15% off current registration rates with Code: B00-843-XXXX.

Kudos to the Few Who Invest in Molecular Science and Will Be Most Able to Create a Positive Out of the EPA List Naming Asbestos as a Top 10 Candidate for a Complete Ban or other Action

Posted in Asbestos, Cancer, Litigation Industry, Science

It’s not been a good run of days for asbestos defendants and other current and former sellers of alleged toxins. Yesterday,  under the new TSCA legislation, EPA issued its required list of its top 10 substances to investigate for a possible ban or other action.  “Asbestos” made the top 1o list. Not crocidolite. Not amosite. Just “asbestos.”  

Some will claim this new action is a black swan. Not so. The EPA’s action was well more than foreseeable. Indeed,  back in December of 2009, I was pointing out the ongoing revolution in molecular biology logically would lead to new regulation, and the same post provided extensive quotes from remarks by regulators who were making the same point, but with far more scientific knowledge. And of course this year the outcome became certain. 

Now what happens? At least for the next couple of years, plaintiff’s lawyers will have a field day with this topic, in multiple ways. Over the longer haul, defendants that invest in real molecular science actually might be able to turn EPA’s action around the other way. It certainly would not be easy, but the issues are out there and are going to get attention from EPA, and conclusions will be written up and published, with or without useful input from insurers and other defense-side stakeholders.  It is at least possible that defendants who do invest in molecular science might be able to turn a negative into at least a partial positive. But, as some of us know too well, 99% of the insurers and defendants fail to invest in real molecular science, and have no idea what is happening with molecular science and cancer in general, much less as to asbestos in particular. Many plaintiff lawyers also fail to invest in molecular science and understanding.

Kudos to the few who are are way out ahead of the pack and will be most able to weigh in effectively and shape the future.

Not a Surprise: Projected Asbestos Loss for Insurers Raised by 18% by A.M. Best

Posted in Asbestos, Cancer, Litigation Industry, Science

A projected 18% increase in insurance company asbestos losses was announced yesterday by A.M. Best. Some of us are not surprised. Indeed, over the last two years, some of us wrote and sold two different white papers that explained why insurer losses would be going up (here and here). The white papers, it appears, helped some people better focus on scientific and legal realities. In fact, it’s actually been a pleasure to interact with the open minded segment of the actuarial community on multiple occasions on this topic (e.g. here)  And, some insurers actually raised reserves last year But some other insurers chose not to read the papers, think more expansively or to increase reserves.

The A.M Best press release is pasted below. You can buy a copy for $145.

_________________________________________________

A.M. Best Special Report: A.M. Best Increases Estimate for Net Ultimate U.S. Asbestos Losses to $100 Billion

November 28, 2016 08:30 AM Eastern Standard Time

OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has increased its estimate for losses that U.S. property/casualty insurers can ultimately expect from third-party liability asbestos claims by approximately 18% to $100 billion. The $15 billion increase to the net ultimate asbestos loss estimate comes as insurers are incurring approximately $2.1 billion in new losses each year while paying out nearly $2.5 billion on existing claims. The updated figures are contained in a new Best’s Special Report, titled “A.M. Best Increases Estimate for Net Ultimate Asbestos Losses to $100 Billion.”The report also states that A.M. Best is not making any change to its $42 billion estimate on net ultimate environmental losses; therefore, A.M. Best’s view of ultimate industry losses for asbestos and environmental (A&E) is now $142 billion.

“A.M. Best Increases Estimate for Net Ultimate Asbestos Losses to $100 Billion.”

According to the report, industry funding of the $142 billion in net A&E exposures has reached approximately $124 billion, broken out by $98.1 billion in cumulative paid-to-date losses and $26.3 billion in reserves set aside for future payments. This translates into a funding rate of 88% of ultimate A&E exposures, or approximately $85 billion of asbestos funding (85% funded) and $40 billion of environmental funding (94% funded).

A.M. Best utilizes a combination of three approaches when evaluating an insurer’s A&E reserve adequacy: historic premium market share, post-1990 paid loss share (1991) and three-year survival ratios. Consistent with historical trends, the industry has continued to pay out more losses than it has incurred (funded) since 2006, paying out $16.7 billion for asbestos and environmental claims over the past five years, while incurring $13.5 billion in losses. The industry has incurred $10.5 billion in asbestos losses over the past five years, while paying out $12.7 billion. A&E reserves have not declined by a significant amount, but they have decreased in nine of the past 10 years, including a 2.9% fall in 2015, with the only exception being a slight uptick in 2010.

A.M. Best believes the property/casualty industry’s asbestos losses will continue to be an issue given an unstable environment faced with evolving litigation, increasing secondary exposure cases and an increase in life expectancy. Asbestos losses continue to dominant the discussion around the industry’s A&E exposures, comprising more than 80% of total A&E liabilities. However, it is extremely difficult to quantify the industry’s ultimate loss exposure, given the evolving nature of asbestos litigation, tort reform and the growing incidence of lung cancer being linked to asbestos exposure. A.M. Best will continue to monitor asbestos litigation and losses and will periodically revisit its benchmarks as needed.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=256155.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright ©2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Brian O’Larte
Associate Director
+1 908 439 2200, ext. 5138
brian.o’larte@ambest.com

or
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

or
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Asbestos Defendants Take Another Strong Hit; the Rost Ruling from the Pennsylvania Supreme Court

Posted in Asbestos, Cancer, Litigation Industry

2016 has not been a good year for defendants in asbestos cases. The point has been illustrated several times. A prime example is the Dummit opinion from the New York Court of Appeals; it delivered  “very bad news”  for defendants in asbestos cancer cases, as explained by some smart product liability lawyers.  More bad news for insurers and asbestos defendants arrived just before Thanksgiving, this time through an opinion by the Pennsylvania Supreme Court.  The Rost opinion explicitly rejected most or all of the “science arguments” offered by “low dose” defendants as to the amount and type of evidence needed to prove causation in asbestos cancer cases, and approved a jury verdict for plaintiff based on 3-4 months of work in the early 1950s as a “gofer” in a car repair facility.  See Rost v. Ford Motor Co.,  2016 Pa. LEXIS 2638 (Nov. 22, 2016). Two judges dissented, here (Saylor), and here (Baer). Justice Saylor’s dissent highlights the extent of the loss. Amicus briefs on “asbestos cancer science” had been filed by multiple interest groups.

There are other factors to consider as to Pennsylvania, but some do not bode well for defendants. As a reminder, the recent election outcomes in Pennsylvania indicate it likely will be several years before defendants can hope to change the members of the court, and perhaps thereby change outcomes.  It’s also worth noting the opinion was issued after the court ordered reargument of Rost and over 25 other cases due to turmoil in the court, and new judges arriving after elections. The reargument order is described in a January 22, 2016 article at LAW360.

On the other hand, in June 2011, the legislature in Pennsylvania changed the rules for the playing field in asbestos litigation through the  Fair Share Act, and may have reduced the risks for some defendants. That act eliminated some joint and several liability rules, and created additional rules for comparison of fault and allocation of losses. That said, footnote 7 of the Rost opinion explicitly mentioned the act and included language that appears adverse for defendants. Thus, in footnote 7, the court referred to notable past asbestos rulings (Gregg and Betz), and commented as follows:

“It is important to recognize that this Court settled on these principles based on a policy concern: that it is fundamentally unfair to hold a defendant jointly and severally liable for a mesothelioma  plaintiff’s injuries for a de minimis contribution to the plaintiff’s overall exposure. Gregg, 943 A.2d at 227 (“The result, in our view, is to subject defendants to full joint and several liability for injuries and fatalities in the absence of any reasonably developed scientific reasoning that would support the conclusion that the product sold by the defendant was a substantial factor in causing the harm.”); Betz, 44 A.3d at 57 (same). Pennsylvania has now eliminated joint and several liability in most cases through amendment of the Fair Share Act, 42 Pa.C.S.A. § 7102. The Rosts’ claims accrued prior to the effective date of the amendment to the Fair Share Act (June 28, 2011).

When the Rosts’ claims accrued, joint tortfeasors in Pennsylvania, including those in products liability actions, remained jointly and severally liable for the plaintiff’s damages. Baker v. AC&S, Inc., 562 Pa. 290, 755 A.2d 664, 669 (Pa. 2000). Accordingly, this Court did not consider any potential countervailing policy implications to adoption of the “frequency, regularity, and proximity” test. See Gregg, 943 A.2d at 226 (citing Comment, The Threshold Level of Proof of Asbestos Causation: The “Frequency, Regularity and Proximity Test” and a Modified Summers v. Tice Theory of Burden-Shifting, 24 Capital U. L. Rev. 735, 750 (1995) (explaining that the “‘frequency, regularity and proximity’ [*25]  test imposes an inappropriately high burden of proof upon many asbestos victims,” as it “distort[s] the medically proven fact that significant injury can result without ‘frequent’ or ‘regular’ exposure”)).

Resolute Takes a Hit; Amtrak Wins Broad Discovery

Posted in Asbestos, Litigation Industry, Resolute

Resolute’s asbestos claims management is in the gunsights of many, for multiple reasons. Resolute just took a notable discovery hit from Amtrak and Anderson Kill. Specifically, a November 23, 2016 opinion reaffirms and extends prior orders requiring broad production of documents and/or privilege logs. The new opinion and order is  Certain Underwriters at Lloyd’s v. Amtrak, No. 16-MC-2778 (FB), 2016 U.S. Dist. LEXIS 162783 (E.D.N.Y. Nov. 23, 2016). The ruling provides the following broad overview of the outcome:

“Currently pending before the Court is Amtrak’s motion to enforce a subpoena duces tecum served upon non-party Resolute Management, Inc. (“RMI”), which directs litigation, manages discovery and conducts the handling of Amtrak’s claims for coverage, including those at issue in the underlying action, on behalf of all the Underwriters at Lloyd’s who are parties to the coverage case and on behalf of a number of additional London insurers and non-London insurers. See Amtrak’s Motion to Compel (Oct. 11, 2016) (“Amtrak Mot.”), DE #1. In the underlying action, the Court previously ruled on, and in substantial part denied, a motion for a protective order filed by the RMI-represented entities concerning the same subpoena served upon RMI. See Minute Entry (Aug. 9, 2016) (“8/9/16 Minute Entry”), DE #423.

For the reasons set forth below, the Court grants Amtrak’s motion to compel, except to the limited extent described herein.”

The 2016 Election Version of the Philadelphia/Pennsylvania Story as to Tort Law

Posted in Asbestos, Litigation Industry

Elections of course bring changes in courts and legislatures, and various arguments and theories about what may happen. For tort system defendants in Pennsylvania, the indications are that the 2016 election brought adverse news, as described in a November 11, 2016 article in Philadelphia Magazine (with thanks to an east coast friend for the reference). The article includes the following synopsis:

“Barring someone leaving the court for another reason — a conviction, retirement or death, for example — the seven-member Pennsylvania Supreme Court will be Democratic for a while. Dems already have three seats into the 2030s. Thanks to the constitutional amendment that passed, Supreme Court justices in Pennsylvania can now serve until they are 75, with retention votes every 10 years. Last year, Pennsylvania had three open Supreme Court seats. Three Democrats — Christine Donohue, David Wecht and Kevin Dougherty — won the election. Wecht and Dougherty are 54. They can serve until 2037. Another Democratic justice already on the seven-member court, Debra Todd, can now serve until 2032. Democrats just need to replace Baer (who retires in late 2022) or Donahue (who retires in 2027) with a young Democrat to ensure the Supreme Court stays blue until the early 2030s.
Read more at http://www.phillymag.com/news/2016/11/11/johnny-doc-trump-supreme-court-pa/#Embmeg2fJQMfIhz2.99