Segal McCambridge Legal Blog

Two articles from Law.com and Forbes.com on the recent GAO report detailing the secrecy issues surrounding asbestos bankruptcy trusts

LAW.com: GAO Reports Shines Light on Secretive Asbestos Trusts

GAO Reports Shines Light on Secretive Asbestos Trusts
The Government Accountability Office released a new report on Wednesday analyzing asbestos injury trusts, detailing a multi-billion-dollar system of plaintiff claims and payouts that operates largely in secret.

By Brian Glaser

10-20-2011

The Government Accountability Office released a new report on Wednesday analyzing asbestos injury trusts, shining some light on a multi-billion-dollar system of plaintiff claims and payouts that operates largely in secret.

The report, Asbestos Injury Compensation: The Role and Administration of Asbestos Trusts [PDF], reviewed 52 asbestos-related bankruptcy trusts that “have paid about 3.3 million claims valued at about $17.5 billion.”

The GAO found that while the majority of the trusts made general data available, very few provide detailed information about their activities without being directed to by a court of law: “Most asbestos trusts we reviewed publish for public review annual financial reports and generally include total number of claims received and paid. Other information in the possession of a trust, such as an individual’s exposure to asbestos, is generally not available to outside parties but may be obtained, for example, in the course of litigation pursuant to a court-ordered subpoena.”

In fact, the report found that only “one trust’s financial report contained claimant names and amounts paid to these individuals.”

Forbes reporter Daniel Fisher, in a review of the GAO findings, wrote that the report “gives fuel to critics who say the plaintiff lawyers who largely oversee the operation of these trusts prevent them from sharing information about how much their clients have been paid. That allows some plaintiffs to hit up multiple trusts with claims that may contradict each other.”

The month-old report was given to the House Judiciary Committee on September 23, at the request of Texas Republican Lamar Smith, the committee chairman, and is now being released to the public following a 30-day hold.

Accompanying the release of the report was a statement from Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform. Rickard said, “It is becoming clear that rather than acting to prevent abusive claims, the asbestos trusts are effectively encouraging fraud by inhibiting claims information sharing between the trusts and the tort system. We hope that Congress’s growing attention to this important issue will ensure that the trusts operate in a manner fair to asbestos victims and job-creating businesses, not plaintiffs’ lawyers and fraudulent claimants.”

Fisher’s analysis of the report pinpoints several findings of processes in the current trust system that could result in fraudulent claims:

The GAO report said 98% of trust claims go through “expedited review” process that requires only a claim form with “documented evidence” of exposure such as work history, invoices, or deposition testimony of plaintiff or coworkers plus a medical report. Prior investigations have shown how a tiny number of physicians have submitted tens of thousands of diagnoses of asbestos-related disease, many of them subsequently found to be incorrect.

One solution would be to require the trusts to share basic claims information in a central database. But the GAO said 65% of trusts reviewed treated claims information as confidential under rules that consider information submitted as part of a legal settlement process as privileged. Defendants and insurers say the trusts should be treated as non-adversarial settlement vehicles. They frequently seek information about claims paid so they can set off any court award by the amount the plaintiff has already obtained elsewhere.

The report itself does not claim to have documented any regular occurrences of fraud, however, and includes review of the trust distribution procedures (TDP) that each trust has in place: “Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust’s focus is to ensure that each claim meets the criteria defined in its TDP, meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees. Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud.”

Forbes.com: GAO Report Details Secrecy Of Asbestos Trusts

By Daniel Fisher

A General Accountability Office study of asbestos injury trusts released today shows that trusts with some $36 billion in assets operate largely in secret, submitting annual financial reports to bankruptcy courts but only revealing information about claims under the threat of subpoena.

The report, conducted at the request of Rep. Lamar Smith (R-Texas), the chairman of the House Judiciary Committee, gives fuel to critics who say the plaintiff lawyers who largely oversee the operation of these trusts prevent them from sharing information about how much their clients have been paid. That allows some plaintiffs to hit up multiple trusts with claims that may contradict each other. The trusts paid 461,000 claims totaling $3 billion in 2010. They have disbursed $17 billion so far to millions of workers who claim they came down with breathing disorders or cancer due to asbestos.

The report looked at 52 of the 60 trusts created in the wake of asbestos-related bankruptcies and found that only one publicly disclosed the identity and claims of people it had paid. Most of the rest resist such disclosure, citing the confidentiality of claimant medical records. The report's authors downplayed the risk of fraud, however, saying most trusts audit claims.

"Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust's focus is to ensure that each claim meets the criteria defined in its (trust rules), meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees. Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud.

The U.S. Chamber, which represents companies targeted by asbestos lawsuits, wasn't convinced. In a release accompanying the report Lisa Rickard, president of the Chamber's Institute for Legal Reform, said:

"It is becoming clear that rather than acting to prevent abusive claims, the asbestos trusts are effectively encouraging fraud by inhibiting claims information sharing between the trusts and the tort system. We hope that Congress's growing attention to this important issue will ensure that the trusts operate in a manner fair to asbestos victims and job-creating businesses, not plaintiffs' lawyers and fraudulent claimants.

The report was completed Sept. 23 but only became available today after a 30-day hold.

Critics of the asbestos-trust system point to examples like the Kananian case in Ohio, where lawyers were sanctioned for submitting conflicting work histories to multiple trusts on behalf of a man who died of mesothelioma, which is usually attributed to asbestos. In that case lawyers filed papers placing their client in harm's way throughout his life, from laying on the top berth of a ship with rattling asbestos-clad pipes above his head in World War II, to removing asbestos-laced linoleum flooring in his basement himself, to smoking Camel cigarettes with asbestos filters that were marketed toward women for a couple of years in the 1950s. Internal documents revealed one of Kananian's lawyers telling colleagues to "immediately brief all personnel ... that they are not to 'make up' information to make a claim qualify."

A similar scandal erupted in Texas after a federal judge demanded the records for thousands of plaintiffs claiming they'd come down with silicosis and found most had already hit up the asbestos trusts for money. Doctors say the two conditions almost never occur in the same patient and the outbreak of silicosis claimed in the lawsuits would have dwarfed any recorded in the medical literature.

Approximately 100 companies have declared bankruptcy at least partly due to asbestos-related liability so far. In the usual pattern lawyers for asbestos plaintiffs claim they represent the largest class of creditors and set up a trust to hold the bankrupt company's assets and disburse them to their clients over time. The trusts have grown from 16 with $4.2 billion in assets in 2000, to 60 with $36.8 billion in assets this year.

The GAO report said 98% of trust claims go through "expedited review" process that requires only a claim form with "documented evidence" of exposure such as work history, invoices, or deposition testimony of plaintiff or coworkers plus a medical report. Prior investigations have shown how a tiny number of physicians have submitted tens of thousands of diagnoses of asbestos-related disease, many of them subsequently found to be incorrect.

One solution would be to require the trusts to share basic claims information in a central database. But the GAO said 65% of trusts reviewed treated claims information as confidential under rules that consider information submitted as part of a legal settlement process as privileged. Defendants and insurers say the trusts should be treated as non-adversarial settlement vehicles. They frequently seek information about claims paid so they can set off any court award by the amount the plaintiff has already obtained elsewhere.

Lawyers have a way around that, however: They simply wait until the trial is over before submitting claims to the bankruptcy trusts.

During hearings, three plaintiff attorneys said everything the defendants want is available through discovery in litigation and the trusts are "analogous to ay other settling party and related negotiations and payments are privileged."

Defendants argue more information should be disclosed because payment information might reveal plaintiffs have already gotten more than the claims are worth.

The Institute for Legal Reform proposes quarterly reports disclosing every claim made and details including exposure history. The GAO report said quarterly reports won't necessarily root out fraud and one person receiving payments from several trust "does not itself reveal impropriety."

Congress Examines Alleged Fraud by Asbestos Claimants
September 9, 2011
By Dionne Searcey

Asbestos litigation may seem like a blast from the mass tort past, but it continues to be the key breadwinner for many a plaintiff attorney's family.

Aided by a bevy of advertising on the Internet and TV, asbestos claims are on the rise. And the payouts are still big. Today in Congress, a House Judiciary Committee heard testimony on alleged fraud and abuse in the asbestos compensation system.

The committee reviewed transparency issues in asbestos trusts, which are massive pools of money set up by companies in bankruptcy to pay off asbestos claims. Defense attorneys have long claimed that plaintiffs double dip and get inflated payouts by filing multiple asbestos claims, both in court and with asbestos trusts, for the same injury. Because settlements are secret and the trusts aren't required to make public their payouts, it's difficult to verify whether claimants are getting overpaid.

In a written statement, Charles Siegel, a partner at the Dallas plaintiffs' firm Waters & Kraus LLP, disputes that point, saying, "there is no windfall of money available to mesothelioma claimants, and plaintiffs cannot and do not 'game the system' such that solvent tort defendants pay the liability shares of bankrupt companies."

See Reuters advanced take on the Congressional hearings here.

Reuters points out that complaints about asbestos litigation have been mounting for years on the Hill yet lawmakers never passed any kind of reform bill. It remains to be seen what the outcome will be of today's hearings.

For now the asbestos litigation train keeps rolling. Later this month in San Francisco, attorneys will gather for a Perrin conference to hear about the state of the asbestos litigation, a roundup of legislation affecting asbestos suits, and a discussion about the future of asbestos bankruptcies.

A link to a recent article quoting Segal McCambridge shareholder Jason Kennedy

Our article is here

The entire article at Inside Counsel can be found here

The Daily Docket: Garlock Loses Bid to Look into Old Asbestos Bankruptcies.

Judge Denies Garlock Bid To Revisit Old Asbestos Bankruptcies

Jacqueline Palank 10 October 2011

A judge denied Garlock Sealing Technologies LLC’s bid to obtain legal documents from decade-old asbestos bankruptcies, warning the consequences of doing so would upend previously struck resolutions to billions of dollars in claims.

U.S. Bankruptcy Judge Judith K. Fitzgerald on Friday denied Garlock’s request to reopen old bankruptcies and to page through documents in which law firms disclosed their clients in those cases, according to court papers.

The judge decided that Garlock failed to provide a valid reason to support its request, which she warned would result in “enormous” consequences if granted.

“The negative publicity with the likely effect on stock and bond prices for those publicly traded entities, employee morale, resulting management issues and administrative burdens…cannot be justified in these circumstances where Garlock did not appear or participate in while the cases were open and active and did not seek access to the 2019s during the life of the cases,” Fitzgerald wrote.

An attorney for Garlock couldn’t be reached for comment Monday.

Garlock sought to pull records from and intervene in bankruptcies filed between 2000 and 2004 by 12 manufacturers that, like Garlock, had been hit with hundreds or even thousands of personal-injury claims by individuals exposed to asbestos in their products.

Until the “bankruptcy wave” began, Garlock said it was able to defend itself from many of these claims by arguing that its products didn’t release “medically significant” amounts of asbestos into the air. Instead, Garlock argued, plaintiffs were likely more harmed by the larger amounts of asbestos contained in other manufacturers’ products.

But once those other manufacturers sought court protection, all pending litigation against them ground to a halt. Since Garlock wasn’t in bankruptcy, plaintiffs were free to continue pursuing litigation and settlement talks against it.

Garlock now questions the resulting settlements it struck with plaintiffs, arguing that law firms and plaintiffs may have lied about whose products exposed them to asbestos in order to collect what they could from Garlock rather than take their chances in bankruptcy.

That’s why Garlock sought the client lists filed in the bankruptcies of such manufacturers as Armstrong World Industries Inc., Pittsburgh Corning Corp., USG Corp. and W.R. Grace & Co. Garlock, which filed for Chapter 11 protection in June 2010, thought the documents could possibly show evidence of plaintiffs’ exposure to asbestos through the bankrupt manufacturers’ products, potentially reducing Garlock’s liabilities.

Fitzgerald, however, discredited this argument as “disingenuous” and said the harm Garlock is alleging it suffered is “imagined.”

“To date [Garlock] has not identified a creditor in its case who also was a creditor in one of these bankruptcy cases and whose exposure evidence was allegedly concealed,” Fitzgerald wrote.

Garlock, of Palmyra, N.Y., manufactures hydraulic and metallic gaskets, conveyor belts and other products. It has been a defendant in asbestos personal-injury lawsuits for more than three decades.

From LegalNewsline.com

The science of asbestos: A survey of experts

WASHINGTON (Legal Newsline) – There are some who say all forms of asbestos are unsafe and to be exposed to any amount is hazardous, while others say that one form of asbestos can be handled safely. Then there are some who are not sure.

Some of the leading scientific researchers, experts in the field of mesothelioma research and occupational medicine, have divergent opinions on the nature of the hazards caused by asbestos.

Four scientists were asked four questions about asbestos. Each one of them has distinguished themselves in some way in the field of asbestos science.

One of them was an American Cancer Society Research Scholar. One was the recipient of the Collegium Ramazzini’s Irving Selikoff Award and recently made a discovery in the field. One is an official with the National Institute of Environmental Health Sciences. One received an award by the American Thoracic Society.

The questions asked of the researchers were:

-Is it true that there is no general consensus that chrysotile causes mesothelioma?

-Is it true that there is controversy that crocidolite is the most dangerous type of asbestos in terms of causing mesothelioma?

-Is it true that much of the science, about asbestos and its toxicity, has been influenced by the litigation? Have studies funded by companies and or lawyers or politically ideological groups been tendentious because of the money involved? and

-Is it possible to reconstruct how someone who has mesothelioma was exposed to asbestos by working with brake shoes or in some other occupationally related manner, if it occurred several decades earlier?

None of the scientists interviewed currently participate in asbestos litigation for defendants or for plaintiffs.

The scientists interviewed are:

-Michele Carbone, M.D., PhD. He is the Director of the Cancer Research Center of Hawaii, University of Hawaii, Honolulu. He was an American Cancer Society Research Scholar in 2004;

-Joseph R Testa, PhD, FACMG, is the Chair in Human Genetics and the Chair of the Mesothelioma Working Group at Fox Chase Cancer Center, Philadelphia. He was the 1999 recipient of the Collegium Ramazzini’s Irving Selikoff Award. He received the award for “outstanding contributions in understanding the origins of mesothelioma.”;

-Brooke T. Mossman, PhD., is the Director of the Environmental Pathology Program, University of Vermont, College of Medicine. She was the recipient of the 2008 Wagner Award from the International Mesothelioma Interest Group Meeting, Amsterdam, NL, for Historic Contributions to Mesothelioma Research. She was also awarded Career Achievement Recognition Award for Scientific Accomplishments by the American Thoracic Society in 2007; and

-Dr. Aubrey Miller, MD, MPH, is the Senior Medical Adviser at the National Institute for Environmental Health Sciences. A medical epidemiologist and a captain in the U.S. Public Health Service, he has worked as a Senior Medical Officer and Regional Toxicologist for the U.S. Environmental Protection Agency.

Here are their responses:

Is it true that there is no general consensus that chrysotile causes mesothelioma?

Prof. Carbone: There is unanimity that amphibole causes mesothelioma. There is no agreement that chrysotile causes mesothelioma.

Prof. Testa: Regarding chrysotile, there is much controversy about whether it causes mesothelioma. I am not sure the controversy is based on strong science. Based on my reading of the literature, there seems to be considerable evidence that chrysotile can cause mesothelioma based on epidemiological and rodent studies.

Prof. Mossman: Correct. The majority of scientists acknowledge that chrysotile is less pathogenic than crocidolite or amosite (amphibole) types of asbestos and must be inhaled at larger amounts to cause mesothelioma, as supported by lung fiber burden studies (see data by A. Churg and V. Roggli), but the difficulty is that we all have chrysotile (the most common type of asbestos) predominately in our lungs and the workers who have mesothelioma have been largely exposed to mixed types of asbestos fibers.

Dr Miller: I would say that is not true in terms of government and public health people from our standpoint at the National Institute of Environmental Health Sciences and the Center for Disease Control it is clear that it does.

Is it true that there is controversy that crocidolite is the most dangerous type of asbestos in terms of causing mesothelioma?

Prof. Carbone: Crocidolite is the most dangerous of the asbestos minerals in terms of causing mesothelioma.

Prof Testa: I don’t think that there is much controversy that crocidolite is the, or at least one of the, most dangerous forms of asbestos in terms of causing mesothelioma. Crocidolite and other types of amphibole asbestos are thought to be more carcinogenic than chrysotile.

Prof. Mossman: No, I think the vast majority of scientists believe this is true

Dr. Miller: I would ask what is the most dangerous? We have seen more in those exposed to crocidolite. The animalsstudies indicate that crocidolite is the worse.

Is it true that much of the science has been influenced by the litigation? Have studies funded by companies been tendentious? Have studies been ideological?

Prof. Carbone: Some of the scientific literature has been influenced by the litigation. Read the acknowledgment section of many papers and see who financed the study, check whether the writer is a true scientist, someone with NCI or NIH or ACS or other credible peer-reviewed funding, whether the author has ever published anything important in a high impact journal (as defined by impact factor journal). (These are) all things easy to spot if you are in science but difficult to spot if you are not.

Prof. Testa: I think that it is likely that a small amount of science has been influenced by asbestos litigation. I have read that some studies funded by asbestos companies are biased, but I have no personal experience about this. As to whether some studies have been ideological, it is possible, given the enormous amount of money at stake, between product sales and asbestos litigation.

Prof. Mossman: Absolutely, this is why I have never participated as an expert witness in this arena. The legal community attends, advertises at, and supports a number of scientific meetings on asbestos. The Collegium Ramazinni meeting on the “Third Wave of Asbestos Diseases” held in NYC and organized by Philip Landrigan in the early 1990s… was supported by the plaintiff bar, labor unions and asbestos removal companies. It was questioned in a Science article.

Dr. Miller: Science which is funded by biased interests give biased results. We try to bring the best science to bear to find the effects of exposures. But clearly asbestos is one of those areas which has a lot of interest groups. Findings are questionable based on influences and biases.

Is it possible to reconstruct how someone who has mesothelioma was exposed to asbestos by working with brake shoes or some other occupationally related manner if the exposure occurred several decades earlier?

Prof. Carbone: If I ask you how many hours you spent working on a given task some 40-60 years ago, how accurate would your answer be? Now, imagine if you ask the question to the wife or friends of the subject because he is deceased. Imagine you ask my mom and my high school friends if when I grew up if I was exposed to asbestos, how accurate would the answer be? In short, these kinds of questions have some value when you look at a cohort, but individually? Well unless you are lucky to have good records, that almost never are available, then you are guessing.

Prof. Testa: With regard to your question about reconstructing how someone who has mesothelioma was exposed to asbestos occupationally several decades earlier, I would say the following: If a person were working occupationally with an amphibole fiber, and that type of fiber were persistent in the lung 40 years later, one could deduct that there was a causal connection. For chrysotile, the physical parameters of the fiber are such that they may not be found in the lung after several decades, but a carcinogen does not have to remain in the lung to cause mesothelioma. It could cause the initial genetic damage and disappear.

Prof. Mossman: No.

Dr. Miller: It is not difficult. We reconstruct exposure history all the time. This is how it is done for epidemiology studies.

After having read the answers of four distinguished scientists to four questions that are often at the center of asbestos litigation, one learns that there is near unanimity on some issues. But while there is unanimity on some things there are also divergent opinions on others – such as the gravity of the danger caused by chrysotile and if exposure history can be reconstructed.

While these are not scientists who work for or are funded by special interests groups, the same cannot be said uniformly about advocacy groups. Industry organizations that favor the use of asbestos, such as the Chrysotile Institute, will be criticized in the media as being biased.

The same type of scrutiny and the same standards could also be applied to those groups that oppose the use of asbestos.

For example, the website of the Asbestos Disease Awareness Organization – “the voice of the victims” – listed its 2011 conference sponsors. The list included, Shein Law Center, Simmons Attorneys at Law, the law firm of Belluck and Fox, the law firm of DeLuca and Nemeroff, and the Canadian Autoworkers Union.

But as the responses by the four scientists interviewed for this article indicate, even science has its controversies about asbestos.

From a very useful legal blog, Above The Law

A recent post from Mark Hermann, Vice President and Chief Counsel — Litigation at Aon.

Inside Straight: Reporting On Depositions

When is a litigator thinking most keenly about a specific witness's testimony?

There are two days: The day you're taking (or defending) the deposition of the witness, and the day — months or years later, if ever — when you're examining the witness at trial. So when should you be making notes about the witness's testimony and your reaction to it? That question answers itself: You should make quick notes of key points during the deposition, and you should write notes to yourself immediately after the deposition ends. "Immediately after": Not later in the week; not the next morning. Now, when your brain is fully engaged.

Those notes don't have to be comprehensive, but they have to memorialize the things that you noticed during the deposition that you're likely to forget by either the next morning or the day, a month later, when you're reviewing the transcript. The notes are quick and easy. Write an e-mail to yourself that says: "Today I took Smith's deposition. These were the highlights: (1) He admitted A; (2) He denied B; remember to create some other admissible evidence on that point; (3) He evaded on C; there's something fishy going on there; (4) Opposing counsel started interrupting when I got near D; we should press harder on that point; (5) His testimony opens up issue E; let's do some legal research." There might be a half dozen points; there might be a dozen. But the key is to record immediately the fleeting ideas that you had while your brain was most in gear.

During the deposition, you're as attentive as you'll ever be. Don't lose the moment; capture it.

What do you use those notes for?

Many things. First, as outside counsel, those notes force you to focus your attention on a key event at the very time that the event occurred. Before you get in a cab, sit down in a quiet room, think hard about what you just lived, and distill the key points. You're at your best then; use it.

Second, you use those notes as a memory aid. Three months from now, when you next think about Smith, you can look back at your notes and remember, "Oh, yeah. I forgot that. Opposing counsel did get antsy when I raised D. Let's look into it." (In the words of some great sage: "Everything has been thought of before. The difficulty is to think of it again.")

Third, you can use those notes to keep your colleagues abreast of what's happening in the case. You can, of course, wait to prepare notes until you have a transcript, and then choose from among the many bad choices: Have your six colleagues working on the case all read the transcript. Have a legal assistant prepare a long and unbearable deposition summary, which doesn't differentiate between the important stuff and the witness's job history. Read the transcript yourself to write a report, hoping you still remember the things that struck you on the day you were living the deposition. But all of those are second-best alternatives, and none of those are instantaneous. The best, cheapest, and quickest way to share information is to write the bullet-point memo as soon as the deposition ends.

What does this mean for in-house lawyers?

If you agree that bullet-point memos are a valuable tool, then insist that all outside counsel prepare them. Ask outside counsel to copy you on that memo as soon as it's ready. By receiving the memo, you'll stay abreast of the case in real-time; you'll see how counsel is reacting to events; you'll have a chance to discuss new ideas that should (or should not) be explored as a result of the testimony.

You'll also be able to plug others into the loop. The hierarchical structure of most in-house legal departments means that more-senior lawyers are further removed from the facts of specific cases. It doesn't help the people who are supervising a case from a distance to hear the usual pablum from outside counsel: "The deposition went pretty well." Or: "I killed him." Or, when outside counsel defended a deposition and the witness gave away the ranch: "He was a terrible witness. I did everything I could, but he just wasn't educable."

(I'm starting to wonder why the good stuff always results from outside counsel's keen skills, and the bad stuff is always due to fate. It's never: "I really botched the witness preparation, so the witness performed poorly." And it's never: "We wrote a brief that was too long, so the judge didn't read it, and we weren't able to convince him orally." No, no: It's always a bad witness or a lazy judge. Remarkable.)

As an in-house lawyer, if you receive the bullet-point memo for every deposition, then you can easily let others gently monitor a case in real-time. You — the in-house lawyer responsible for the case on a daily basis — know everything. A supervisor can ask for the bullet-point memos in all cases, or select cases, or for select witnesses. For the monster cases, the supervisor's supervisor can read the bullet-point memos, keeping that person abreast of the litigation, keeping that person's mind gently in the case, and giving comfort that smart people are tending to important cases diligently.

If outside counsel need other ways to track testimony, they can of course do what's necessary to prepare a case for trial. But consider requiring instant bullet-point memos, to focus your outside counsel's mind at the right moment, and to give you real-time information in a format you can easily share with others.

From the Indianapolis Star

Law firm sues State Fair on behalf of all stage collapse victims

By Carrie Ritchie

August 23, 2011

An Indianapolis law firm has filed a class action lawsuit on behalf of all victims of the Indiana State Fair stage collapse. Cohen and Malad claims in the lawsuit, which was filed Monday in Marion Superior Court, that the State of Indiana and companies who were hired to set up the stage were negligent and didn't ensure that the stage was safe. It also claims there were design and manufacturing flaws in parts that held up the stage's roof.

The stage collapsed Aug. 13 before Sugarland was about to perform.

In a press release issued today, the law firm says it will donate its services so more of the damages can go to victims.

Several victims, including the families of three people who died in the accident, have already sued or say they intend to sue.

From the Indianapolis Business Journal

Damage cap limits state’s potential losses from concert tragedy

Scott Olson
August 18, 2011

Total damages the Indiana State Fair could pay victims of last Saturday’s concert tragedy would be capped at $5 million—an amount personal-injury lawyers say is far too low for the injuries and deaths involved.

Because of a state law that limits individual damage claims against the state to $700,000 and overall claims to $5 million per event, several other entities besides the state fair might become targets of negligence lawsuits, legal experts say. They could include the designer and builder of the stage or even the promoter of the concert, according to lawyers.

"I think there will probably be a large number of defendants listed, just because there's a limited pot of money," said local defense lawyer Tom Schultz.

Saturday night's accident happened when a wind gust estimated at 60 to 70 mph toppled the roof of the stage and the metal scaffolding holding lights and other equipment. The stage collapsed onto a crowd of concertgoers awaiting a show by the country act Sugarland at the fair’s grandstand. Five people died and more than four dozen were injured, some critically.

Several people are still hospitalized, including at least two victims with brain injuries.

Litigation arising from the deadly accident is likely as several local attorneys already have been contacted by family members considering their legal options.

Dan Chamberlain, a partner at the Indianapolis personal-injury firm of Doehrman Chamberlain, said his firm could file suit on behalf of one victim within the next week.

"You've got 50 people injured, five who have been killed, and you've got $5 million in coverage," Chamberlain said. "It's nowhere close to fairly and adequately compensating the families."

It remains unclear whether anyone had inspected the concert stage that toppled over, or if anyone was supposed to do so.

Fair officials said they have hired New York engineering firm Thornton Tomasetti Inc. to investigate the accident. The firm was involved in a similar investigation of the 2007 collapse of the Interstate 35 bridge over the Mississippi River in Minneapolis.

Indianapolis lawyer Mark Ladendorf, who expects to represent at least two families of the victims, said most firms will launch their own investigations.

"We're going to have to get answers for our clients," he said. "We succinctly can't rely on what the government is going to tell us and what someone hired by the government will tell us."

Under the Indiana Tort Claims Act, lawyers must notify the state entity they intend to sue within 270 days of the accident.

State fair spokesman Andy Klotz said the fair is self insured against such lawsuits under the Indiana State Tort Claims Act.

He acknowledged to WISH-TV Channel 8 on Wednesday that the fair didn't follow its own severe weather procedures by failing to inform concertgoers that the National Weather Service had issued a severe thunderstorm warning for the area.

Indianapolis meteorologist Paul Poteet told WXIN Fox 59 that fair officials disregarded his warning to delay or cancel the show.

Questions about whether the fair did enough to anticipate a storm have loomed over the event. Some fairs hire their own meteorologists for just such a scenario.

The local law firm of Wilson Kehoe & Winingham LLC has retained a meteorologist and a structural engineering consultant in anticipation of representing family members, firm partner Bruce Kehoe said.

"When you have that type of catastrophe and that kind of loss, it would be unusual for folks not to want to get answers that are difficult to obtain," he said.

Schultz, the defense lawyer who is a former president of the Defense Trial Counsel of Indiana, expects numerous claims will be filed.

"The question is, is there fault somewhere?" he asked. "Right now, we don't know."

From The Economist and the August 13, 2011 print edition

Alternative law firms – gain briefs – Technology offers 50 ways to leave your lawyer
 
CONVENTIONAL law firms charge vast hourly fees and then hand the work to underlings while the partners play golf at clubs their clients are too poor to join. At least, that is how it seems to many clients, whose irritation at being overcharged turned to fury during the recession.

Some clients are switching to unconventional law firms, which claim to offer equally good lawyering for much less money. Take Clearspire. The firm's 20 or so lawyers work mostly from home, collaborating on a multi-million-dollar technology platform that mimics a virtual office. A lawyer checking in on a colleague automatically sees a picture of her on the phone when she is, in fact, on the phone. Clients use the platform too, commenting on and even changing their own documents as they are being drawn up. Conventional lawyers are far less open.
…
It is more than a decade since the internet made book-buying cheaper and more convenient. If technology now helps cut gargantuan legal bills in America and elsewhere, it will be better late than never.

The entire article can be found here

Selected portions below from the Wall Street Journal

Company Lawyers Sniff Out Revenue

By VANESSA O’CONNELL

Companies are warming to a new way of generating revenue: suing for it.

Ford Motor Co., Tyco International Ltd. and Michelin SCA, among others, say their lawyers are devoting more time and effort to bringing in extra cash by thinking like plaintiffs.

Following in the footsteps of several big drug and technology companies, which have aggressively pursued alleged patent infringers, companies in a range of industries have stepped up legal action, not only in the patent arena but also against suppliers, insurers and even utilities they think have done them wrong or owe them money.

The sums they win from these “plaintiff recovery” lawsuits usually aren’t big enough to be singled out in earnings statements. Nor do individual cases typically have a material impact on the bottom line. But, taken together, they can produce hundreds of millions of dollars in added revenue for a company in a single year, potentially turning its legal department into a profit maker.

“It adds up to real money over time,” says Tom Sager, general counsel at chemical maker DuPont Co. In one case, DuPont won roughly $92 million in a settlement with its insurers, which it had sued in Texas seeking reimbursement of asbestos claims against the company.

Now, DuPont is looking into pursuing money from parties whose alleged mistakes or faulty equipment, it says, led to shutdowns or production disruptions at its plants. It is also expanding its recovery efforts abroad, including to Russia, Kazakhstan and China. That may require filing more lawsuits in emerging markets.

The recent enthusiasm for litigation—or threats of litigation—as a revenue-raising tool comes as companies move toward trimming their overall legal spending and asking their in-house legal staffs to do more.

The trend also coincides with a big push by business lobbyists for caps on damage awards in certain types of lawsuits and steps to make it tougher for consumers to band together to sue companies.
…
The strategy was inspired in part by intellectual-property litigation, which can yield lucrative technology-licensing deals.

Since 2008, corporate spending on intellectual-property litigation in the U.S. has risen by an average 3.4% a year, according to BTI Consulting Group Inc., a Wellesley, Mass., firm that surveyed 370 lawyers at Fortune 1000 companies.

That compares with an average yearly increase of 1.9% in spending on all U.S. commercial litigation and a 1.5% average annual increase in corporate spending on all litigation, BTI says.
…
At DuPont, lawyers recovered nearly $3.6 million during the first quarter of 2011. That came on the heels of the $454.7 million it took in last year from 198 separate recoveries—half of them outside the U.S. The individual sums ranged from less than $16,000 to almost $185 million. Half required litigation or a formal arbitration process, according to DuPont’s Mr. Sager.

Companies have long pursued recoveries on a case by case basis, but what’s different now is that in-house lawyers are making the chase a priority, says Judith A. Reinsdorf, Tyco’s general counsel. In March lawyers at the Switzerland-based manufacturer launched an “Asset Recovery” program under which it will seek to collect unpaid debts, royalties or refunds from suppliers or others that it thinks will require legal action. “We hope to help the company’s bottom line,” Ms. Reinsdorf said. “It’s about getting smarter.”
…
To some, the trend smacks of misplaced priorities. Kenneth S. Resnick, general counsel at General Electric Co.’s GE Oil & Gas, says it suggests that a business is “failing at something else if it has to rely on lawyers” to recover money for supplier errors.

Suing to recover revenue also risks becoming a distraction for management, other critics say. “The legal department could be subjecting its senior management to having to give depositions, and it certainly is opening the company up to discovery, in the form of answering interrogatories and producing company documents,” says E. Berton Spence, a former head of litigation for Regions Financial Corp, a lender in the Southeast.

Lawsuits that look like “slam dunks” often turn into “long, hard fights for little reward,” he adds.

The full article is here

The Wall Street Journal Law Blog also has a post, entitled “Corporate America Discovers Its Inner Plaintiffs' Lawyer“