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A Message from the Director
When the Manhattan Institute’s Center for Legal Policy
released its first Trial Lawyers, Inc. report, in 2003, we called asbestos
litigation the “longest-running mass tort in U.S. history and arguably
the most unjust.”[1] Even as the incidence of new
cases of the serious lung cancers caused by asbestos remained constant —for
mesothelioma, at 2,000 to 4,000 per year—new asbestos claims exploded,
nearing 100,000 in 2001 (see graph below).[2]
This report describes Trial Lawyers, Inc.’s asbestos litigation
business line in more detail. A flame retardant originally thought to be a “magic
mineral,” asbestos ended up causing the death of thousands of individuals;
likewise, litigation that originally sought redress for the truly injured metastasized
into a big business that in too many cases recruited sham victims to beef up
the plaintiffs’ bar’s bottom line.
The business model underlying such abusive litigation uses sophisticated
marketing to attract thousands of claimants, generates cases with flimsy medical
diagnoses, and packages claims together to overwhelm defendants and courts.
Ultimately, the attorneys bully besieged defendants into settlements that enrich
Trial Lawyers, Inc., while leaving genuinely injured claimants high and dry.
The overall cost of asbestos litigation is staggering, totaling
over $70 billion in direct losses (see graph below) and bankrupting 80 companies.
[3] Of that $70 billion, fully $40 billion has gone to
lawyers (see graph, next page).[4] And as those bankruptcies
have moved corporate defendants out of Trial Lawyers, Inc.’s crosshairs,
asbestos lawyers have targeted companies with ever more tenuous ties to asbestos’s
manufacture. Ironically, then, much of modern asbestos litigation has involved
the filing of lawsuits by individuals who aren’t sick against companies
that never made the product alleged to have caused their sickness. Asbestos
litigation today is thus exceptionally costly, extremely inefficient, and unfair
to defendants and legitimate plaintiffs alike.
In addition, asbestos litigation has threatened the very integrity
of the legal system itself. As recently noted by Chief Judge Dennis Jacobs of
the Second Circuit U.S. Court of Appeals, judges in asbestos litigation have
all too often processed massive caseloads “without regard to whether the
claims themselves are based on fraud, corrupt experts, perjury, and other things
that would be deplored and persecuted by the legal profession if done within
other commercial fields.”[5]
 In
2005, as we documented in a Trial Lawyers, Inc. Update,[6]
U.S. District Court Judge Janis Graham Jack proved a striking exception to this
historical trend. Judge Jack uncovered massive fraud in the asbestos litigation
industry: thousands seeking recovery for alleged injuries purported to be caused
by silica exposure, 60 percent of whom had already recovered from lung injuries
supposedly caused by asbestos.[7]
As well as documenting asbestos-silica “double-dipping,”
Judge Jack highlighted how asbestos and silica lawyers were shuffling plaintiffs
through bogus medical exams geared toward finding injuries. Recent cases have
echoed her findings: in one case last year in West Virginia, defendants said
they had discovered claims filed by fictitious plaintiffs and diagnoses conducted
by fictitious doctors.[8] Others paint a portrait of even
broader corruption: a Miami asbestos lawyer stole millions from his own clients,[9]
and a Pennsylvania judge was convicted of soliciting bribes from attorneys with
asbestos dockets before him.[10]
 State-level
tort reforms and Judge Jack’s documentation of fraud have made trouble
for Trial Lawyers, Inc.’s traditional asbestos litigation business model.
With judges—and prosecutors—watching more closely, the number of new
filings in which plaintiffs have not developed malignancies has plummeted over
96 percent.[11] Large asbestos law firms have had to trim
hundreds from their payrolls.[12]
Still, it would be foolish to assume that Trial Lawyers, Inc.
will give up its long-running revenue stream without a fight. Lawyers have been
shifting cases into new states without tort reform laws. Hundreds of thousands
of claims remain outstanding. Many billions of dollars in asbestos bankruptcy
trusts are still to be paid out to future claimants. Lawyers have begun developing
a new double-dipping strategy in which they try to recover money from both the
trusts and in court, in different jurisdictions, without any disclosure or offset.
And Trial Lawyers Inc. begun setting up mass asbestos screenings to generate
more plaintiffs.
How can we fix asbestos litigation? The solution must rely on
all three branches of government. The striking evolution of the trial lawyers’
business model after Judge Jack’s decision shows the importance
of strong and continual judicial supervision of the asbestos docket. Judges
should not only look to ensure that claims are legitimate but also scrutinize
settlements to ensure that they are fair. Prosecutions are
needed as well to punish and deter wrongful conduct.
 Legislatively,
efforts to develop a comprehensive federal solution—after years of trying—have
proved to be fruitless. Several states have, however, made progress, and a piecemeal
state-by-state approach to the problem may be the only feasible way to ameliorate
the asbestos litigation climate in the near future. Reforms might include: insisting
on real medical standards of evidence; barring lawyers from shopping their cases
to lowest-common-denominator jurisdictions; revising joint-andseveral liability
laws to protect tertiary defendants from shouldering costs caused principally
by others; and adopting transparency rules to ensure that asbestos claimants
are not double-dipping into the bankruptcy trusts and multiple jurisdictions.
This latest edition of Trial Lawyers, Inc. is not intended to
cover comprehensively the intricacies of asbestos litigation and the various
policy remedies being pushed. We do hope that it will help readers understand
the business model underlying the asbestos lawsuit machine—unfortunately,
a paradigm for the litigation industry as a whole.
James R. Copland
Director, Center for Legal Policy
Manhattan Institute for Policy Research
next section>>
1. Manhattan Institute Center for Legal Policy, Trial Lawyers,
Inc.: A Report on the Lawsuit Industry in America, 2003 10, available at
http://www.triallawyersinc.com/html/part05.html.
All descriptions of “Trial Lawyers, Inc.” in this report, as in others
in this series, refer to the business model used by some plaintiffs’ lawyers.
For each and every mention of Trial Lawyers, Inc. or the litigation industry,
the Manhattan Institute and this report’s authors do not intend to convey
that all plaintiffs’ lawyers, or any specific plaintiffs’ lawyer or
firm, fit under this description or participate in the questionable practices
described in this report.
2. See Stephen J. Carroll et al., Asbestos Litigation 71 & tab. 4.1
(Rand Inst. for Civ. Just., 2005), available at http://www.rand.org/pubs/monographs/2005/RAND_MG162.pdf.
3. See id. at 106; American Academy of Actuaries’ Mass Torts Subcommittee,
Overview of Asbestos Claims Issues and Trends 32 (Aug. 2007) [hereinafter
“Overview”], available at http://www.actuary.org/pdf/casualty/asbestos_aug07.pdf.
4. See Carroll, supra note 2, at 103-04.
5. Hon. Dennis Jacobs, The Secret Life of Judges, 75 Fordham L. Rev.
2855, 2858 (2007).
6. See James R. Copland, Trial Lawyers, Inc. Update No. 1: Silicosis
(Aug. 2005), available at http://www.triallawyersinc.com/updates/tli_update_0805.html.
7. See Jonathan D. Glater, Many Silica-Damage Plaintiffs Also Filed
Claims Over Asbestos, N.Y. Times, Feb. 5, 2005, at C1 (citing Claims Resolution
Management Corporation) (“[O]f 8,629 [silicosis] plaintiffs . . . 5,174
had already filed asbestos claims.).
8. See CSX Transportation v. Gilkison, No. 05-cv-202, (N.D. W. Va. July
5, 2007) (Am. Compl. ¶¶ 110-52); CSXT appended the documentation of
the fictitious doctor to a response filed Dec. 13, 2006 (Document 146-8).
9. See USA v. Robles, No. 06-20286 (S.D. Fla. Sept. 15, 2007) (Doc. 129,
Factual Basis in Support of Entry of Guilty Plea ¶ 19).
10. See Chris Osher, Tearful Jaffe Sentenced to Federal Prison, Fined
$5,000, Trib.-Rev.(Pittsburgh, Pa.), June 6, 2003.
11. See James Tanella, Managing Director, PACE, a unit of Navigant Consulting,
Inc., presentation at Mealey’s Asbestos Super Conference, Sept. 26, 2007,
p. 12 of hard copy and Oct. 11, 2007 e-mail correspondence.
12. See Baron & Budd Announces More Job Cuts, Dallas Bus. J., Sept.
10, 2007. May 6, 2001.
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