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In the mid 1980s,
court decisions dramatically enlarged insurance companies'
liability for asbestos-related injury. At the same time,
defendants and their insurers began to pay asbestos claims
without demanding much in the way of proof of injury or
liability. Plaintiffs' lawyers responded opportunistically. As a
consequence, asbestosis litigation, which had previously focused
on malignancies and other debilitating injuries, shifted
radically from the traditional model of an injured person
seeking a lawyer, to an entrepreneurial model that reversed the
process. Lawyers spent millions to sponsor mass screenings of
upwards of 750,000 industrial and construction workers. Of the
850,000 asbestos claimants that have so far brought suit against
over 8,400 different defendants, about 600,000 have been
recruited by these mass screenings.
Most of these 600,000
plaintiffs claim a mild form of asbestosis (a scarring of lung
tissue), or other nonmalignant condition, but suffer no symptoms
or lung impairment. They have no asbestos-related injury
recognized by medical science and no significant probability of
manifesting an asbestos-related malignancy in the future.
Nevertheless, lawyers charging 40% contingency fees have
extracted tens of billions of dollars in settlements, after
hiring a comparative handful of doctors who consistently read
X-rays and "diagnose" disease in 60% to 80% of those screened.
According to medical
science, however, asbestosis is a "disappearing disease" and
only 2%-4% of claimants now generated by screenings have an
actual nonmalignant condition resulting from asbestos exposure.
This had led me to previously conclude that the X-ray readings
and "diagnoses" of these litigation doctors were not a product
of good faith medical judgment but rather a function of the
millions of dollars a year that the lawyers pay these doctors
for their litigation services. Overwhelming evidence in support
of these conclusions about asbestos litigation has recently come
to light in the not-unrelated litigation based on exposure to
silica or sand.
Silicosis, like
asbestosis, is a scarring of the lungs but is caused by the
inhalation of large quantities of fine sand dust. Like
asbestosis, silicosis, once a scourge, is a disappearing disease
because of strict government regulations and employer practices.
Deaths attributable to silicosis have dropped over 80% in the
past 30 years. But beginning in 2002, claim filings in state
courts, mostly in Mississippi, reached "epidemic" proportions.
The reasons for the
"epidemic" are that key states began to adopt comprehensive
asbestos litigation reform and Congress took up consideration of
a fund (paid for by defendants and insurance companies) to pay
claims as a way of taking asbestos litigation out of the tort
system. Worried about the future of their enterprise, lawyers,
doctors and screening companies abruptly shifted gears from
ginning up claims based on asbestosis to claims based on
silicosis. As one lawyer acknowledged, "why reinvent the wheel."
All this became clear
when 10,000 of the 35,000 pending silica claims were centralized
into a federal multi-district litigation (MDL), presided over by
U.S. District Court Judge Janis Jack, a Clinton appointee.
During the course of the MDL, one of the doctors who diagnosed
3,617 of the 10,000 plaintiffs as having silicosis recanted all
of his diagnoses, provoking Judge Jack to observe that "it's
clear this . . . diagnosing] business is fraudulent." She went
on to issue an unprecedented order that allowed defendants to
cross examine every doctor in her presence who had provided a
silicosis diagnosis as well as the owners of the screening
companies.
It turns out that
6,000 of the plaintiffs had previously filed asbestosis claims.
Nevertheless, pulmonary experts testifying at a U.S. Senate
hearing stated that while it was theoretically possible to have
both asbestosis and silicosis, they had never seen a single dual
disease case in the course of their extensive practices.
Moreover, many of the X-ray readings on which the silicosis
diagnoses were based were by the same doctors who had previously
read the X-rays as "consistent with asbestosis"-but who had
never mentioned silicosis.
Judge Jack concluded
that "the lawyers, doctors and screening companies" were "all
willing participants" in a "scheme [that] manufactured
[diagnoses] for money"-the equivalent of a finding of pervasive
fraud.
Judge Jack did what
no judge had ever done before with regard to claims generated by
mass screenings: she permitted extensive discovery of the
doctors and screening companies involved. If the same level of
discovery were to be permitted in asbestos lawsuits, I have no
doubt that it would elicit similar information about the mass
screenings-suits that have resulted in billions of dollars in
settlements.
The same screening
companies, X-ray readers and diagnosing doctors excoriated by
Judge Jack have been a hallmark of asbestos litigation for
almost 20 years. As Judge Jack observed, the "evidence of the
unreliability of the [X-ray] reads performed for this MDL is
matched by evidence of the unreliability of [X-ray] reads in
asbestos litigation."
Sitting in Judge
Jack's courtroom during the cross examinations was an assistant
U.S. Attorney from the Southern District of New York. {note:
David Siegal} He was there because a federal grand jury had been
convened in mid 2004 to consider possible criminal charges
arising from claims of exposure to silica and asbestos and the
use of witness-coaching techniques to implant false memories
about product exposure.
Asbestos litigation,
meanwhile, has led to the loss of 500,000 jobs that would have
been created but for the diversion of capital due to over 70
asbestos-related bankruptcies. Plaintiff lawyers have exercised
undue influence over the asbestos bankruptcy process,
essentially obtaining ratification of the claim-generation
process that Judge Jack condemned. Here too, the worm appears to
be turning. In a series of decisions, the Third Circuit Court of
Appeals, echoing the exact words I used to describe the ongoing
Congoleum bankruptcy proceeding, stated that to approve a
reorganization plan tainted by lawyers' engaging in conflicts of
interest and securing preferential treatment for their clients
in order to generate additional fees, "would be a perversion of
the bankruptcy process."
The next shoe to drop
may be in federal court in New York. If indictments are
forthcoming-and lawyers who sponsored the mass screenings and
collected billions of dollars in fees are among those
indicted-the ensuing process could shine a floodlight on a
fraudulent scheme so massive as to qualify nonmalignant asbestos
litigation for entry into the pantheon of such great American
frauds as Enron, WorldCom, OPM, Credit Mobilier and Teapot Dome.
Despite having
written volumes on asbestos litigation, the legal academy has
reacted to the mounting evidence of pervasive fraud with a
crescendo of silence. This may be explained by the fact that
most tort scholars share common interests with tort lawyers.
Tort lawyers benefit from and ratify the validity of tort
scholars’ theories for expanding the scope of liability in the
tort system by uncovering examples of egregious corporate
conduct. Moreover, tort lawyers, one of the largest single-issue
contributors to political campaigns, account for a substantial
portion of the Democratic Party’s funding. Without their share
of the profits from tort suits, the Democratic Party’s ability
to advance policies and positions that many torts scholars
espouse could be in jeopardy. It is this political dimension of
the tort system that may account for the silence of the legal
academy in the face of evidence of a massive civil justice
system failure.
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