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A 3d U.S. Circuit Court of Appeals panel’s rationale for recently disqualifying a district court judge from five major asbestos-related bankruptcy cases could serve as a primer for other judges hearing mass tort cases. The lessons include making sure that ex parte communications�which are common in complex bankruptcies�are formally stipulated to by all parties, and choosing advisors with care, or avoiding them all together. But the judge who was removed offers a piece of advice to his colleagues: beware. “I think the opinion is unfortunate for judges in the federal system who will now feel constrained to avoid case-management measures that may be extraordinary or unique,” said U.S. District Judge Alfred Wolin of New Jersey. “Judges will now be looking over their shoulder fearful that a lawyer whose client is in jeopardy may attack the judge for his or her case-management methods,” he added. “And what that means is that litigation will become far more costly and extended.” Wolin, a neophyte to asbestos litigation, was asked 30 months ago by then 3d Circuit Chief Judge Edward Becker to handle the consolidated Chapter 11 bankruptcies of Owens Corning, W.R. Grace & Co., USG Corp., Armstrong World Industries Inc. and Federal-Mogul Global Inc. Wolin appointed five advisors. Two of them were alleged by petitioners in their writs to be representing future asbestos tort plaintiffs’ interests in bankruptcy proceedings in another court. The clients potentially had a future interest in the litigation in Wolin’s court. A third adviser was accused of breaching his fiduciary duties by revealing secrets to Wolin that the adviser had learned during licit attempts to mediate disputes. That advisor was also accused of regularly attending meetings with plaintiffs’ asbestos tort bar members. The petitioners also accused Wolin of having numerous ex parte communications with counsel. After nine months of litigation, a divided 3d Circuit panel found the petitioners’ allegations to be true and frowned on the conduct, but also said that the record had not “revealed the slightest hint of any actual bias or partisanship” on Wolin’s part. In re Kensington Int’l Ltd., 368 F.3d 289. Wolin resigned from the bench following the ruling, effective on June 30. David Bernick of Chicago’s Kirkland & Ellis, who represents W.R. Grace, filed a brief in the 3d Circuit to set the factual record straight, he said, but took no position on removal. While he said the decision was well reasoned, he agrees with Wolin about what the decision will mean to future litigation. “It will be harder for judges in the future,” he said. “[I]t makes judges always vulnerable because it leaves questions unanswered. How does a district court judge make sure that objections are made in a timely manner? If a court is going to have advisors, what is the latitude for selecting them?” Two former federal judges, who asked not to be identified, asserted that Wolin had overstepped his bounds in the asbestos litigation, while defending his integrity and his good intentions in the litigation. They noted the tensions created in managing complex litigation. Both former judges frequently had ex parte communications with counsel in their courts, but sought concurrence on the record. Wolin defended his method. “There were 250 lawyers in court and hundreds of potential plaintiffs who are unknown to the court�I’m speaking of creditors, not tort claimants,” Wolin said. “You can’t get waivers from those who aren’t there,” and you want them to know the rules should they enter the case. “If they thought they were being unfairly treated they knew how to object,” he added. The litigation was two years old and there have been dozens of ex parte communications with all sides before the recusal motion was made, he said. On the subject of advisers, Wolin was unapologetic: “I never got advice about how to rule on an issue nor would they have ever offered it. There’s a difference between the discussion of options and variables and giving advice.”

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