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Attorney Thomas J. Kavaler was not using hyperbole Wednesday when he called Dallas-based Baron & Budd and other members of the plaintiffs’ asbestos bar “criminals” engaged in racketeering. Kavaler, a litigator in New York’s Cahill Gordon & Reindel, who represents an asbestos company, compared asbestos plaintiffs’ lawyers to “legbreakers” who threatened manufacturers with “nuclear war” if they continued to press for legislation limiting attorneys fees in asbestos cases. He also said his allegations that Baron & Budd suborned perjury and committed fraud in prosecuting claims would stand up at trial. Kavaler was urging federal Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York to deny a motion to dismiss in a case filed earlier this year against plaintiffs’ firms Baron & Budd; Ness, Motley, Loadholt, Richardson & Poole, based in Barnwell, S.C.; and Weitz & Luxenberg, located in New York. The motion to dismiss was brought by lawyers for the three law firms, who argued Wednesday that the asbestos companies were upset because Congress declined to pass the Fairness in Asbestos Compensation Act (FACA), and they retaliated by suing the firms under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. �1964(c). Elkan Abramowitz, who defended Weitz & Luxenberg, called the RICO suit brought by the asbestos industry “a vicious and vindictive attack on its adversaries in litigation.” He added that Kavaler’s clients had committed “libel and slander” in claiming that his clients were criminals. The suit was filed by G-I Holdings Inc., the successor to the New Jersey asbestos maker GAF Corporation. G-I Holdings claimed it was ousted from an industry lobbying group because the group was under severe pressure from the plaintiffs’ bar to oppose the asbestos compensation act. Baron & Budd and other plaintiffs’ firms opposed the act because it would defer the claims of those who had been exposed to asbestos but had yet to become sick, and it would cap contingency fees at 25 percent. G-I Holdings alleged that the law firms unleashed “a barrage of extortionate and retaliatory activity against those who have publicly supported the legislation,” including the threat that the law firms would immediately file hundreds, if not thousands, of claims against the industry on behalf of those who had yet to become sick from asbestos exposure. In addition to alleging the law firms interfered with GAF’s right to petition Congress, Baron & Budd was named in the suit as a separate racketeering enterprise for “intentionally generating false testimony” in an attempt to “induce inflated settlements” of asbestos claims. EXHIBIT A Exhibit A on this claim is the so-called “Baron & Budd memorandum” on coaching witnesses for depositions. The memorandum, G-I Holdings alleges, “instructs clients to falsely claim equal exposure to all products,” and directs that “clients should deny that they ever saw warnings or had any knowledge concerning the harmful effects of asbestos.” Abbe David Lowell of Manatt, Phelps & Phillips in Washington, D.C., who represents Baron & Budd, said the complaint amounted to “throwing macaroni against the wall,” and “hoping something will stick.” Lowell said the plaintiffs “made up a tort” when they claimed “malicious interference with the right to petition Congress.” He also said the lawsuit was a collection of unsubstantiated allegations that failed, by a wide margin, to allege the predicate acts and the conspiratorial structure necessary to sustain a claim under RICO. “This is a terrible abuse of the RICO statutes,” Lowell said. But Kavaler, taking his turn before Judge Sweet, attacked his opponents for engaging in a conspiracy to bankrupt asbestos companies if they continued to stand up to the plaintiffs’ bar on Capital Hill. He called that conspiracy the basis for “the quintessential RICO case,” and reminded Sweet that he, like judges in hundreds of other cases, have cautioned against trying to elevate garden variety contract actions into RICO cases, a practice that Sweet has likened to “crying wolf.” Kavaler’s next comment drew chuckles from the lawyers in the audience — and caused Lowell to shake his head in disbelief. “Well, the wolf is here, Judge,” Kavaler said. “I know [they assign cases to judges] by picking them out of the wheel, but if we could have picked the judge, we would have picked you.” Abramowitz addressed one of the central arguments of the complaint — that the law firms threatened to engulf the asbestos industry with meritless claims unless it stopped supporting the asbestos compensation act. “Plaintiffs have conceded by settling thousands of these cases that the cases had merit,” Abramowitz said. “In any event, there are remedies for dealing with meritless cases — and they do not include the filing of a RICO claim.” Judge Sweet reserved decision on the motion. Abramowitz is a member of Morvillo, Abramowitz, Grand, Iason & Silberberg, based in New York. Pamela Marple is Lowell’s co-counsel. Steven Storch of New York’s Storch Amini & Munves represented Ness Motley.

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