Updated – Secrecy, the Garlock Liability Estimation Opinion, and Garlock’s Suits Against
An Update – the post below is going to be edited and updated. Why? Because, it’s been pointed out to me that I was not precise enough in my writing, and may have left the impression that Garlock blithely accepted secrecy for the trial proceedings. It did not – in fact, Garlock tried to stop the trial secrecy by filing a motion to preclude secrecy for matters at trial. It lost that effort. I apologize for not making that clear in the first writing – my error. A later post will provide more specifics on the sequence of events and the positions of the parties.
That said, what I was thinking about was that in fact Garlock and the rest of the parties started the secrecy ball rolling downhill when they agreed to a typical confidentiality order. Orders of that sort allow the relatively easy assertion of a secrecy claim, and requires relatively significant effort to challenge the secrecy claim. Such orders are of course expedient and reduce litigation costs. That said, it’s plain that penny-pinching on fees is anything but the norm in asbestos bankruptcies. In fact, the Garlock case docket includes some breath taking bills from a wide range of professionals.
Unfortunately, another reality is that busy (and underpaid) judges tend to indirectly encourage such orders by making it painfully clear that they do not have the time or patience to be peppered with issues about secrecy for this document or that document absent some compelling big picture information lurking in the document at issue. Perhaps an answer is to let/require the parties to pay more special masters to resolve secrecy issues one by one, and hopefully narrowly. That solution seems possible since it seems likely there soon will be a growing number of law professors looking for extra work due to dropping enrollments. And more litigators are living longer and looking for things to do after trying cases has lost its thrill or has become just too much effort.
The end of last week brought notable new developments in the world of asbestos litigation. First, Garlock apparently sued three plaintiff’s firms for fraud for failing to disclose alternative exposure evidence. The complaints, however, are under seal. See here for an overly partisan article from a writer focused on corporate side interests. The law firms sued are the Schein Law Center, Simon Greenstone, Waters & Krause, and Belluck & Fox.
Second, the Garlock bankruptcy court ruled on liability estimation. In short, it accepted Garlock’s $125 million estimate instead of the $ 1+ billion estimates from the ACC and the FCR. The opinion is tightly tied to facts proved by Garlock regarding claims against it and lack of timely disclosure of claims by the same plaintiffs against asbestos bankruptcy trusts. Myriad others will offer their own takes, and so I will leave it to them to dissect and/or spin the significance of the lawsuits and the opinion. One defense slanted summary is here by Legal News Online.
The point I will focus on is the problem of secrecy in litigation, a topic highlighted by Garlock secret lawsuits and the judge’s highly limited opinion. The judge’s opinion more or less accuses lawyers of fraud, but does not name names. During trial, the judge tossed people out of the courtroom if they were not affiliated with a party. Really, he did, based on stipulations of the parties. All of that is absurd – tort cases do not involve state secrets, such as the method for making briefcase sized atom bombs.
Unfortunately, secrecy has become expedient and so courts allow it too often. And both plaintiff interests and defense interests like secrecy, for their own reasons. Indeed, here, the plaintiff’s bar sometimes supported secrecy even more than did the defense interests. And, sadly, the futures representative went along too. Due to all the secrecy in Garlock, the whole story is not very much revealed by the opinion, and so various constituencies will be relatively freer to issue sound bites and spin that will be hard to test factually.
The bottom line is plain – sunshine indeed is the best disinfectant and secrecy is usually (not always) a bad idea. The point is highlighted here by the absurdity of secret trial evidence, and the continuing absurdity of asbestos trust secrecy that did not exist when in the past, and still could be changed. Asbestos trusts face major issues. Among the issues is the reality that future claimants are getting screwed (to use a term of art) by secrecy because funds are running out of money way too early. Other interest also are being gored. How can policy makers make decent choices when they cannot get factual information about what is or is not happening in the tort resolution trust system (which goes beyond asbestos trusts)? Responsible people need to come together to reign in the use of secrecy. All sides have much to lose from using secrecy in order to continue playing games with the facts. Happily, Legal News Online has challenged the sealing order – see here for more on the challenge.