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NEW TRENDS; UNCERTAIN FUTURE
Facing increased scrutiny and successful state tort reforms, Trial Lawyers, Inc. has reformed its asbestos model.
Notwithstanding the inability of Congress to craft a comprehensive solution
to the asbestos litigation problem, there is recent evidence of some positive
trends. The large volume of asbestos filings not claiming malignancy has plummeted,
signifying, at least temporarily, a major shift in the tort bar’s business
model.
But Trial Lawyers, Inc. is nothing if not innovative, and it has continued
to find new ways to make money off its old asbestos cash cow. First, litigators
have picked up shop and moved from states that passed tort reforms to other,
more favorable, jurisdictions. Second, lawyers have been able to extract higher
settlements by capitalizing on dramatically rising jury awards. Trial Lawyers,
Inc. continues to add to the list of companies to sue; because the original
asbestos manufacturers have gone through bankruptcy, these defendants are ever
more tenuously linked to alleged injuries. The litigation industry has found
a new way to double-dip by filing on behalf of single plaintiffs multiple claims
against different defendants and trusts around the country, and premising these
various claims on wholly distinct theories of causation. Finally, new mass screenings
have been popping up around the country—an ominous sign that the old Trial
Lawyers, Inc. business model may not be dead but merely dormant.
The End of an Era?
 Recent
trends suggest that Trial Lawyers, Inc. has, for the moment, significantly dropped
its long-standing asbestos business model—overwhelming defendants by filing
tens of thousands of dubious claims—in favor of new approaches. The numbers
speak volumes: from a peak, in 2002, of 70,412 nonmalignant and 6,435 malignant
claims, the filing volume fell, in 2007, to 2,462 malignant and 2,596 nonmalignant
claims (see graph at top).253 Data from PACE, a unit of Navigant Consulting,
show the fastest recent declines in the tort reform states Texas, Ohio, and
Mississippi.254 Indeed, Ohio and Mississippi have now fallen out of the top
five states for number of filings.255
What accounts for the drop? To begin with, exposure: after Judge Jack’s
groundbreaking revelations of massive double-dipping—and, more recently,
the scandals alleged by CSX in West Virginia—the tort bar has had to tread
more carefully. Also contributing to the drop in filings is the spate of tort
reforms passed in states that had been magnets for asbestos litigation. Finally,
many of the asbestos bankruptcy trusts, such as Manville, have introduced more
stringent claim criteria.
For some of the old-school asbestos litigation firms, these developments have
been painful. Asbestos powerhouse Baron & Budd of Dallas laid off 240 employees
in the first nine months of 2007, citing changes in Texas law as decimating
its asbestos cases in the state. “We had to kind of do a right-sizing of
the law firm,” said managing shareholder Russell Budd.256
New States, New Defendants, More Dollars
 But
like pesky moles, asbestos lawyers blocked in one state simply dig their way
to new venues (see chart at right). Baron & Budd has been moving its cases
to California since 2004, when Texas passed its comprehensive tort reform.257
Lamented San Francisco Superior Court Judge Tomar Mason, “[A]sbestos cases
are the dominating form of work to which our civil judges attend.”258
Similarly, Illinois powerhouse asbestos firm Simmons Cooper has been moving
cases to Delaware since the state’s preeminent “judicial hellhole,”
Madison County, began to clean up its act.259 In Delaware, new cases involving
exposure in other states now exceed in-state exposure cases in number.260
Trial Lawyers, Inc. is also expanding its pool of target defendants to include
even “mom and pop” hardware stores and suppliers that can barely afford
a local attorney.261 The litigation industry has had to seek new targets out
of necessity, as its traditional defendants have gone bankrupt: one plaintiff
’s lawyer recently called asbestos litigation “the endless search
for a solvent bystander.”262 Before it is over,
the number of defendants that have faced asbestos lawsuits is expected to swell
from the 8,400 identified by RAND263 to 12,000.264
Hungry asbestos litigators aren’t waiting for clients to come to them;
sophisticated new computer technology now joins high-powered media advertising
campaigns to “assure a steady stream of new clients”265 and help the
lawyers “get found, get contacts, get verdicts.”266
Like pesky moles, asbestos lawyers blocked in one state simply dig their
way to new venues.
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More defendants are balking at settlements and going to trial, but trials are
a two-edged sword. The size of jury awards is increasing, sometimes dramatically
(see graph, opposite page at bottom). Notes defense lawyer Edward McCambridge,
“The vast majority of times, plaintiffs are going to win in these very
emotional trials.”267 In addition, most jurors today never knew asbestos
as a vital tool of the
American economy; they know it mostly as a scary monster.
A New Form of Double-Dipping
Even as Judge Jack was discovering and exposing asbestos plaintiffs’ double-dipping
into the silicosis pool, the litigation industry was developing a new scam involving
asbestos bankruptcy trusts—the remnants of the 80 asbestos-related companies
that were put out of business by Trial Lawyers, Inc.268 These trusts have some
$17 billion in assets, with billions more on the way.269 And the dirty little
secret behind them is that they are overseen by the biggest plaintiffs’
law firms in the business. For example, Baron & Budd is involved with nine
bankruptcy trusts, and New York firm Weitz & Luxenberg oversees seven.270
With the foxes guarding the henhouse, it’s little wonder that Trial Lawyers,
Inc. has found some new golden eggs to feast on.
The bankruptcy-trust double-dipping problem gained needed attention in January
2007, when Ohio Court of Common Pleas Judge Harry Hanna barred the asbestos
law firm Brayton Purcell from practicing in his courtroom.271 The firm, noted
Forbes, had taken “an assembly-line approach to litigation: Lawyers there
once filed 5,000 claims in a single day.”272 In Hanna’s courtroom,
Brayton Purcell had been seeking damages from Lorillard Tobacco Company on behalf
of the estate of Harry Kananian, who died from mesothelioma in 2007.273 The
firm claimed that Kananian was exposed to asbestos as a smoker of Lorillard’s
Kent cigarettes during the brief period, in the 1950s, when asbestos was used
in that brand’s filters.274
The problem for Brayton Purcell arose when it became clear that it and other
law firms had filed claims on behalf of Kananian with a number of asbestos trusts,
under a variety of theories of causation: that he had been exposed on his World
War II naval vessel, or in shipyards, or in a factory as a teenager.275 And
from these bankruptcy trusts, Kananian’s lawyers had collected as much
as $700,000.276
To halt this sort of bankruptcy-trust abuse, reformers have called for greater
transparency. The American Legislative Exchange Council (ALEC) is urging states
to adopt its model Asbestos Claims Transparency Act, which would require full
and timely disclosure of all actual and potential asbestos claims. The model
legislation’s drafters hope that it would “facilitate communication
between the asbestos trusts and the tort system in an effort to keep claimants
from collecting damages from both sources.”277
Mass Screenings Reappear
Although Trial Lawyers, Inc. had temporarily modified its business model in
reaction to tort reforms and increased scrutiny, such a change has proved to
be short-lived. As Professor Brickman wrote in a scathing December 2007 opinion
column in the Wall Street Journal,278 Justice Department inaction involving
past abusive practices by the trial bar in essence gave new mass screenings
a green light. Brickman’s warning proved prescient: as he more recently
noted, “The lawyers are again doing screenings to gin up bogus cases.”279
Mass screenings are indeed back, with two held in Oklahoma in a four-month
period and a third scheduled.280 The Texas law firm Nix Patterson & Roach
is doing these screenings using old-school marketing tactics: newspaper, broadcast,
and direct mail advertising are used to attract workers, and screenings are
held in attractive venues such as lodge halls, where they share space with bars,
bingo halls, and card games.281
 At
least on the surface, Nix Patterson has somewhat improved the quality of screenings
in comparison with past practice: the firm’s medical contractor, SafeWorks
Illinois, has three doctors and a physician’s assistant (PA) in top management.282
According to a Nix Patterson spokesperson, a physician or PA individually evaluates
each worker at screenings, and if the evaluation does not reveal a medical basis
for an X-ray, “the worker is sent home. This is a decision made without
any input from an attorney.”283
Nevertheless, legal-representation agreements handed out at screenings make
clear that virtually all control of litigation will rest with attorneys, not
allegedly injured claimants, once the latter sign up. According to these contracts,
clients must let their lawyers settle their claims “in whatever manner,
and using whatever negotiation strategy” the lawyers want, and the clients
must allow aggregate settlements.284 Attorneys can dump clients they consider
uncooperative or if “attorneys decide that they cannot continue to be involved
in the Claim.”285 Under the representation agreement, the client is liable
for all expenses already incurred even if the attorneys decide against representing
him, and the same goes for clients who decide not to go forward with a lawsuit
“for any reason whatsoever.”286 The attorney’s 40 percent contingency
fee comes off the top of any judgment or settlement, with all expenses and court
costs deducted from the client’s remaining share.287
 Nix
Patterson & Roach retained local counsel and used their names in newspaper
ads. For the March 31 through April 4 screening conducted in Pryor, Oklahoma,
local counsel was State Representative Ben Sherrer.288 Nix Patterson handled
all the details, and Sherrer said he never read the legal representation agreement,
knew little about asbestos litigation or controversies involving screenings,
and never visited the screening site.289 Sherrer said he was comfortable being
involved in the case because Nix Patterson has a “good reputation.”290
Conclusion: A Reform Blueprint
While a federal solution to the asbestos litigation problem seems unlikely
in the near future, state legislatures can act to prevent the worst of Trial
Lawyers, Inc.’s documented abuses. First, medical criteria laws that specify
strict standards for establishing injury can prevent many massscreening abuses.
A good example of such a law was passed by Texas in 2005; the Texas legislation
outlaws mass screenings, requires a certified medical report, and places mesothelioma
and other malignant cases at the front of court dockets.291
Second, states can prevent trial lawyers from shopping for the most pro-plaintiff
forum, at least within their own borders. For example, Mississippi in 2004 reformed
its venue rules so that a plaintiff could file a claim only in the county in
which he resided, where the defendant corporation was headquartered, or where
the injury actually occurred.292 In addition, Mississippi’s reform required
that the rule apply to every plaintiff so that lawyers could not bundle claims
together and ship them to a permissive county where only one of the plaintiffs
resides.293
Third, states can adopt joint-and-several liability reforms to remedy the “solvent
defendant” problem, in which plaintiffs’ lawyers sue companies essentially
unconnected to asbestos manufacture. Companies like Raybestos-Manhattan and
Johns-Manville with early knowledge of asbestos dangers are long gone, and companies
that used but did not make asbestos were unaware of its most serious risks before
the seminal 1964 Selikoff study.294 While not shielding such companies entirely,
reforms that protect them from being found “severally liable”—i.e.,
responsible for as much as 100 percent of damages, regardless of their degree
of culpability—comports with basic procedural fairness.295
Mass screenings are back, with two held in Oklahoma in a four-month period and a third scheduled.
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Fourth, states should head off Trial Lawyers, Inc.’s new double-dipping
fraud by passing some version of ALEC’s transparency act to ensure that
bankruptcy trusts and corporate defendants are not scammed. Efforts in California,
Louisiana, and West Virginia, as well as Ohio, the home of the Kananian case,
are under way to adopt such rules.296
Finally, it is important to emphasize that judges, prosecutors, and even corporate
defendants must be involved in defeating the asbestos litigation morass. Judges
need to take claims and settlements seriously, in the mold of Judge Jack, instead
of merely trying to clear their dockets. Prosecutors must punish frauds so that
unscrupulous attorneys have a reason to stop perpetrating them.297 And corporate
defendants should fight back, as CSX has done in West Virginia or as W. R. Grace
has done, more recently, in bankruptcy court.298
Originally forming the basis of a vital American industry, asbestos now forms
the foundation of Trial Lawyers, Inc.’s most lucrative business. The product
once dubbed the “magic mineral” has killed tens of thousands, and
those individuals genuinely injured deserve compensation. The problem with handling
such compensation through the courts, without reforms, is Trial Lawyers, Inc.’s
avaricious and unscrupulous business model, which too often transfers money
to the lawyers’ own bottom line by taking from real victims and innocent
defendants alike. Eventually, the number of individuals injured by asbestos
will dwindle to nothing. Unfortunately, Trial Lawyers, Inc.’s business
model will be used in other litigation and is thus likely here to stay.
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253. Tanella, supra note 11, at 12, and Oct. 11, 2007 e-mail
correspondence.
254. See id. at 11 and email.
255. See id. at 4-8, 11 and email.
256. Baron & Budd Announces More Job Cuts, Dallas Bus. J., Sept.
10, 2007.
257. Telephone Interview, In-House Counsel of Defendant Industry (Mar. 31, 2008)
(notes on file with author).
258. Harris Martin, Judicial Roundtable, Columns: Asbestos, July 2004,
at 3.
259. Steve Korris, Asbestos Shift to Delaware Is Sign of Distinction for
Madison County, Madison-St. Clair Record, July 7, 2005; American Tort Reform
Foundation, Judicial Hellholes 2007 19 (“After ranking as the #1 Judicial
Hellhole in 2002, 2003 and 2004, Madison County dropped to #4 in 2005 and then
inched its way into “Purgatory” at #6 in 2006. Thanks to the comprehensive
reform efforts of Chief Judge Ann Callis, Judge Daniel Stack’s continued
diligence in dismissing out-of-state asbestos claims and other positive trends,
the county avoided designation as a Hellhole this year.”). Unfortunately,
there are signs that Madison County may be once more attracting out-of-state
asbestos claims. See Editorial, Stop the Asbestos Surge, Madison-St.
Clair Record, Mar. 16, 2008.
260. See Recorded Statement of Superior Court Judge Joseph Slights III,
New Castle County, Del., Mealey’s Conference on Asbestos Litigation (Sept.
27, 2007).
261. Id.; see also Recorded Statement of Supreme Court Justice Richard
Aulisi, 4th Judicial District of N.Y., Mealey’s Conference on Asbestos
Litigation (Sept. 27, 2007).
262. Recorded Statement of Lisa Oberg, Defense Attorney and Partner, McKenna
Long & Aldridge, quoting Plaintiffs’ Attorney Richard Scruggs, Mealey’s
Conference on Asbestos Litigation (Sept. 26, 2007).
263. Carroll, supra note 2, at xxv.
264. Recorded Statement of Edward J. McCambridge, Segal, McCambridge, Singer
& Mahoney Ltd., Mealey’s Conference on Asbestos Litigation (Sept. 27,
2007).
265. eJustice, The Lawyer’s Guide to Making the Internet Pay (2006). The
report, a sales tool handed out at lawyers’ conferences, exhorts readers,
“To the victor go the spoils, so read on and arm yourself with the knowledge
to profit.”
266. Einstein Law flyer distributed at Mealey’s conference (Sept. 27, 2007).
It offers a “mesothelioma exclusive statewide strategy” that includes
videos and web advertising and management. By the opening of the conference,
the company said, it already had sold packages to six firms practicing in 13
states and the District of Columbia.
267. McCambridge, supra note 264.
268. Cf. Overview, supra note 3, at 32.
269. See Daniel Fisher, Double-Dippers, Forbes, Sept. 4, 2006.
270. See id. Neither Baron & Budd nor Weitz & Luxenberg have
themselves been accused of double-dipping among asbestos bankruptcy trusts;
however, having leading plaintiffs’ law firms responsible for the oversight
of such trusts is presumptively unhelpful in ensuring that said trusts embrace
transparency and other policies likely to most effectively discourage the practice.
271. Editorial, Cuyahoga Comeuppance, Wall St. J., Jan. 22, 2007.
272. Fisher, supra note 269.
273. See id.
274. See id.
275. See id.
276. See id.
277. See, e.g., S. 220, 2008 Sess. (W. Va. 2008); H.R. 484, Reg. Sess.
(La. 2008).
278. Lester Brickman, DOJ’s Free Pass for Tort Fraud, Wall St. J.,
Dec. 26, 2007, at A11.
279. Email to the author, April 7, 2008.
280. The screenings were held December 3-7, 2007 in Bartlesville, Okla. and
March 31-April 4 in Pryor, Okla. A third was scheduled April 28-May 2 in Durant,
Okla. All were sponsored by Nix Patterson & Roach of Daingerfield, Texas.
281. Personal observations of and documents collected by City Editor Chris Edens
of the Oologah (Okla.) Lake Leader newspaper during a visit to the Pryor,
Okla., screening on April 4, 2008.
282. See
http://www.safeworksillinois.com/safeworks-team.php (last visited April
11, 2008).
283. Email and telephone interviews April 12, 2007 with Eric Wetzel of Shipley
& Associates Inc., an Austin, Texas strategic consulting, communications,
and research firm which handles some public relations work for Nix Patterson
& Roach.
284. Contract and power of attorney document distributed at the Pryor, Okla.,
screening on April 4, 2008. The fee is set in Section II, the other cited provisions
are in Sections III and VI. The agreement is for NP&R and local counsel,
Law Office of Ben Sherrer, P.C.
285. Id.
286. Id.
287. Id.
288. Id.
289. Email and telephone interview with State Rep. Ben Sherrer, D-Chouteau,
April 11, 2008.
290. Id.
291. See American Tort Reform Association, State Reforms: Texas, available
at http://www.atra.org/states/TX.
292. See American Tort Reform Association, State Reforms: Mississippi,
available at http://www.atra.org/states/MS.
293. See id.
294. See Huber, supra note 30, at 40.
295. Rather than eliminating several liability altogether, many states limit
several liability to apply only if the jury determines that a defendant is 50
percent responsible for the plaintiff ’s injuries. See, e.g., Miss.
Code Ann. § 85-5-7(2).
296. Discussion with Linda Kelly, Vice President, Institute for Legal Reform
(Apr. 17, 2008). See, e.g., S. 220, 2008 Sess. (W. Va. 2008); H.R. 484,
Reg. Sess. (La. 2008).
297. Cf. Brickman, supra note 278, at A11.
298. Steven Church & Jack Kaskey, W.R. Grace to Settle Asbestos Claims
for $1.8 Billion (Update6), Bloomberg.com, Apr. 7, 2008, available at
http://www.bloomberg.com; Ted Frank,
BREAKING: W.R. Grace Settles, PointofLaw.com, Apr. 7, 2008, available at
http://www.pointoflaw.com/archives/2008/04/breaking-wr-grace-settles.php.
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