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Two big-city attorneys are scheduled to face off later this month in a courtroom in Angleton -� a small Gulf Coast community that has been friendly to plaintiffs in the past -� to begin a trial in an asbestos-related suit in which the plaintiff wants up to $6 billion in damages. But it’s not just the plaintiff’s quest for a 10-figure payoff that makes this asbestos case different. Stung in the past by litigation brought by plaintiffs alleging they’ve been injured by exposure to asbestos, California-based Kelly-Moore Paint Co. Inc. has turned the tables on Union Carbide Corp. and UCC’s successor, Dow Chemical Co. The paint company is seeking $1.2 billion in actual damages and treble punitive damages from UCC and Dow for allegedly not telling KM about the risks involved in using asbestos-containing products. KM contends that UCC and Dow are liable to KM for the loss in business value it suffered as a result of past and anticipated future asbestos litigation. “Because Kelly-Moore has had this big asbestos albatross around its neck, this has devalued its business,” says Houston attorney Mark Lanier, who represents the plaintiff in Kelly-Moore Paint Co. Inc. v. Union Carbide Corp., et al. Scott D. Lassetter, UCC’s lead counsel and the managing partner of Weil, Gotshal & Manges in Houston, contends the suit is without merit. “It’s basically a kamikaze case,” Lassetter contends. “It doesn’t have any basis at all. They made up a lawsuit, and they’re going to try to fake a jury into believing it.” UCC has petitioned the Texas Supreme Court for an emergency writ of mandamus that raises, among other issues, a question about whether the 23rd District Court in Angleton has jurisdiction to consider KM’s claim for damages based on anticipated future court judgments against the paint company. The defendants allege in In Re Union Carbide Corp., filed on Dec. 29, 2003, that KM is “improperly attempting to secure an unconstitutional advisory opinion” that UCC is responsible for future asbestos personal-injury cases that have yet to be filed against KM and for which judgments have not been rendered and may never be. The 23rd District Court denied UCC’s motion to dismiss the suit on the jurisdictional issue in November and the 14th Court denied a mandamus petition in December 2003. KM filed the suit in May 2002 in the 23rd District Court, where the trial is scheduled to begin on March 22. The paint company alleges in its fifth amended petition that UCC engaged in fraud and negligent misrepresentation when it sold KM raw asbestos fiber under the brand name Calidria in the 1960s and 1970s. Lanier, head of the Lanier Law Firm in Houston, says the fraud case is probably the first of its kind in an asbestos setting. “The issue is, did Union Carbide lie about asbestos health effects in order to seduce Kelly-Moore into buying more asbestos? I think the answer is yes,” Lanier says. Lassetter alleges that everything KM claims it did not know about the hazards of asbestos, it in fact did know. He says that KM, with about 2,400 employees, claims that nobody in the company knew in the 1960s and 1970s that there were dangers associated with using asbestos, although much of the world knew at the turn of the 20th century that asbestos could kill. Jeff Rensberger, a South Texas College of Law associate dean who teaches courses on civil litigation, says it’s not that unusual in products liability litigation for a defendant in a suit to seek to pass liability upstream to a manufacturer or supplier. What’s unusual in Kelly-Moore, Rensberger says, is that a company that has been a defendant in the past is “hopping over” to be a plaintiff. Another irony, he says, is that KM’s counsel is Lanier, who has successfully represented injured workers in suits against companies like Kelly-Moore that have used asbestos in their products. Rensberger says Lanier has done so well with injured workers’ suits that he apparently has developed a new category of asbestos cases. “There’s a huge scramble to find assets in asbestos,” Rensberger says. “A lot of the original [asbestos] defendants are in bankruptcy.” Lisa Blue, a shareholder in Dallas’ Baron & Budd, says the case will be difficult, and the plaintiff’s chances of winning could depend on the temperature of the jury pool at the time of trial. News reports in recent years have focused attention on dishonest deeds in the corporate world, says Blue, who is an asbestos litigator and jury consultant. “I think that could have a huge impact on a jury trial,” she says. Lassetter alleges that KM sued UCC and Dow because the companies that were KM’s main suppliers of asbestos are bankrupt. UCC supplied less than 8 percent of all the asbestos that KM used, he says. Lanier says it’s true that KM bought only a small percentage of the asbestos it used from UCC. But Lanier contends that UCC faced serious economic problems in the late 1960s and 1970s and, during that period, targeted KM as one of the companies with which it could increase sales. KM alleges in its petition that UCC induced KM to buy the Calidria brand by concealing or failing to disclose the true hazards of that material. As alleged in the petition, UCC sold KM tons of raw asbestos fiber between 1963 and 1978 for use in KM’s joint compounds, manufactured under the PACO brand name, and other products. In the petition, KM alleges that Dow and UCC reviewed and edited a document entitled “Safe Use of Calidria” in 1973 that contained “half-truths” about the risks of asbestos. The defendants represented that Calidria was safer to use than traditional chrysoltile fiber, although Calidria actually was more hazardous, KM alleges. The paint company further alleges in the petition that the defendants knew the use of asbestos below the threshold limit value (TLV) of 5 million particles of asbestos dust per cubic feet would result in physical injury to the users of PACO and other asbestos-containing products but continued to represent to the public and to KM that the TVL was a “safe level of exposure.” A 1967 report written by T.C. Sayers, a UCC analyst, points out that a “number of informed people” no longer accepted the TLV. The report, which is an exhibit for the upcoming trial, also states that on the basis of evidence at the time, UCC was “not entitled under any circumstances to state that our material is not a health hazard” and had a duty to caution a potential customer how to minimize the danger. Lassetter says that UCC provided KM with a toxicology sheet on the asbestos fiber the first time it did business with the paint company in the mid-1960s. UCC also placed warnings about asbestos on every bag it sold, beginning in 1968, he says. Prior Victory Lanier says he filed Kelly-Moore in Angleton because a portion of the cause of action accrued in Brazoria County and Dow’s principal place of business is located there. However, the trial gives him an opportunity to return to the town where, in 1998, he scored one of his greatest trial victories in Aaron, et al. v. Abex Corp., et al. In Aaron, Lanier represented 21 Alabama steelworkers who alleged they were injured from exposure to asbestos when they used a grinding wheel manufactured by the Carorundum Co. to cut steel pipe. Jurors found that the defendant’s negligence and gross negligence caused the plaintiffs’ injuries and that the defendant acted with malice. The jury awarded the steelworkers $115.6 million, including $100 million in punitive damages. [ See "Deals & Suits," Texas Lawyer, March 9, 1998, page 14.] Lanier eventually settled the case for about $15 million. Senior Judge J. Ray Gayle of Angleton will preside over Kelly-Moore, which Lanier predicts will take six weeks to try. UCC and Dow made another attempted to derail the case in the fall of 2003 by filing five motions for summary judgment. In one motion, based on the statute of limitations, the defendants argued that KM had knowledge that it could be harmed by the sale of asbestos-containing products when the first asbestos suit was filed against it in 1977. In another summary judgment motion, the defendants alleged that KM’s claim that it relied solely on UCC for information about asbestos is not justifiable as a matter of law because the paint company manufactured and marketed asbestos-containing products for at least three years before it purchased asbestos from UCC. The defendants also filed summary judgment motions on KM’s conspiracy and aiding and abetting claims, speculative future damages and judicial estoppel. Gayle granted summary judgment on the civil conspiracy claim and denied the other motions in October 2003. Lassetter says that if Lanier sells KM’s allegations to the jury, any verdict returned will be shot down on appeal. “There is no way this case would survive on appeal.” Lanier says UCC and Dow seem to believe that regardless of the merits of the case, they’ve got a victory at the appellate courts assured. “That’s a point I disagree with,” he adds.

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