Ford Motor Company wants access to the sealed information that led a North Carolina bankruptcy judge to find that some plaintiffs lawyers have had a practice “to withhold evidence of exposure to other asbestos products and to delay filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries” from the defendant.
In a case of first impression, U.S. Bankruptcy Judge George R. Hodges of the Western District of North Carolina, overseeing a gasketmaker’s insolvency proceeding, found that course of conduct included cases that resulted in a $9 million verdict in California and a $1.35 million verdict in Texas.
Ford has been named a defendant in asbestos cases where plaintiffs claim to have worked with or around brake paid containing chrysotile asbestos, according to court papers.
“Ford, like Garlock [Sealing Technologies LLC], resolved a number of those same asbestos claims and did so in reliance upon similar misrepresentations of asbestos exposures and asbestos trust claims,” Ford said in its motion. “However, the evidence upon which the court found systematic misrepresentations remains under seal. The court’s’ continued seal is preventing Ford access to information it needs to adequately investigate the nature of potential funds.”
The sealed testimony and exhibits relied upon the court in finding a widespread pattern of misrepresentation by asbestos claimants should be open to public access, Ford said.
“Any interest harbored by the asbestos claimants and their lawyers in ‘avoiding embarrassment’ or legal responsibility for their misdeeds plainly cannot trump that of the public in preventing abuse of the court system or of Ford in recovering monies fraudulently paid,” Ford further argued.
In a separation motion, Legal Newsline has sought for a second time to unseal the trial testimony and exhibits on which the court based its Jan. 10, 2014, order. The first motion was denied and is on appeal to District Court for the Western District of North Carolina.
That appeal divests the bankruptcy court of subject-matter jurisdiction over Legal Newsline’s second motion to get access to the sealed evidence, the official committee of asbestos personal injury claimants argued in court papers.
Garlock, under the judge’s authorization, took discovery in 15 cases and demonstrated that evidence of the plaintiffs’ exposure to other products was withheld in every one of those cases, according to the judge’s opinion from January.
Garlock filed for bankruptcy in June 2010 after its insurance money ran out, and Garlock had negotiated settlements in over 99 percent of the 20,000 mesothelioma cases in which it was a defendant, the judge said.
Hodges wrote his opinion after he held a hearing to estimate Garlock’s remaining liability for mesothelioma claims. The court concluded Garlock faces liability of $125 million, which was what the defendant estimated its liability to be. In contrast, plaintiffs lawyers estimated that Garlock’s aggregate liability would be $1 billion to $1.3 billion.
Amaris Elliott-Engel is a contributing writer for law.com.