Fraudulent claims in the asbestos cases

Wall Street Journal Editorial:

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Enter W.R. Grace, and its lead attorney, David Bernick, a veteran of the tobacco and breast-implant wars. Mr. Bernick has taken the unheard-of position that federal rules of evidence apply even in bankruptcy court. He has argued that the only way Judge Judith Fitzgerald can make a legitimate ruling on Grace's liability is for her to decide first how many claims have scientific merit. This is revolutionary stuff.

To her credit, Judge Fitzgerald has allowed Grace to investigate those claims, and present her with its results. The stakes are enormous. At the end of this process, Judge Fitzgerald will make a finding on W.R. Grace's ultimate liability. The plaintiffs claim it is as much as $6 billion, a figure that would make Grace insolvent. The company claims the money necessary to cover legitimate claims is closer to $500 million, a number that would allow it to rejoin the land of the living.

On the evidence so far, Grace's number is correct. The company entered Chapter 11 with some 120,000 pending claims. But Judge Fitzgerald allowed it to send a medical questionnaire to those plaintiffs, and to request proof of a claim. Some 35,000 didn't bother to finish that process.

The judge has also seen a videotape of the "doctors" who diagnosed many of the remaining 85,000 claims. These are some of the same characters from the recent silicosis legal scam, and the court was treated to scenes of doctors recanting their diagnoses or invoking the "Fifth Amendment" to avoid answering questions. One doctor admitted that he charged $35 for a negative X-ray reading, but $70 for a positive one. A retired epidemiologist from the Centers for Disease Control testified there were no more than 28,000 medically plausible cases of asbestosis in the U.S. male population between 1989 and 2001. Grace was hit with more than 200,000 claims over that period.

In another instance, a doctor presented a study involving 807 X-rays from Grace claimants. Doctors hired by the plaintiffs lawyers had found evidence of asbestosis in about 80% of those X-rays. In a double-blind study in which doctors didn't know the purpose of the work, they found evidence in only 7% of X-rays.

All of this underscores what has long been obvious: The vast majority of asbestos claims are bogus. The plaintiffs lawyers know it, which is why, instead of trying to defend these claims, they've fought every attempt by Grace to examine them. Now that they've lost that battle, they argue that because Grace settled such claims in the past, they should continue to pay them going forward.

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If the bar association were doing its job it would be looking at whether these attorneys deserve to keep their licenses. Attorneys who bring good faith claims that they can not prove are one thing. Where you have recruited "clients" making up a class where only a fraction of the claims are legitimate is another thing entirely. It is hard to see how these could be called good faith claims. They look more like an attempt to corrupt the judicial system to extort money from defendants. It is cases like this that gave the term "trial lawyer" a bad name.