BY ARICKA FLOWERS
When General Motors filed for bankruptcy three months ago, legal analyst Bob Dorigo Jones said he was caught by surprise upon learning that mass tort litigation cost the auto giant close to $1 billion last year.
Spokesperson for the Foundation for Fair Civil Justice, Dorigo Jones said the cost of litigation defense, including asbestos, certainly played a factor in bringing down the mighty GM.
“It took the company’s bankruptcy process to bring into public light just what a burden litigation has been on one of the largest manufacturing companies in the world,” he said.
Dorigo Jones credits U.S. District Judge Eduardo Robreno, who presides over an asbestos Multi District Litigation docket in the Eastern District of Pennsylvania, for scrutinizing mass cases and dismissing 500,000 claims in four months.
Ultimately, the promise for extra scrutiny could save the defendants on Robreno’s docket a great deal of money, he said.
“Judge Robreno’s actions are going to protect other American job providers from suffering the same kind of fate that GM or Chrysler suffered in having to defend themselves against lawsuits that did not have any merit,” Dorigo Jones said.
“The plaintiffs’ lawyers are retreating because the veil of secrecy they had been using to basically extort money out of companies has been removed by a federal judge.”
Even if defendants have to spend money on the front end by defending cases rather than settling, Dorigo Jones said Robreno’s approach will change the types of cases that are filed; thereby saving defendants money.
“In the short term, it will force defendants to spend more to prove their innocence,” he said. “But in the long run, it will save them money by discouraging frivolous lawsuits that are based on junk science. And that is good for the employees that are working for those companies and fighting for their jobs.
“It’s good for retirees whose money is tied up in mutual funds that invested in those types of companies,” he said. “The only people it’s not good for are the plaintiff’s lawyers who have been getting rich off these schemes.”
Richard Epstein, a University of Chicago distinguished professor of law, agrees that careful review of asbestos cases will drive down asbestos filings. But he also said that some plaintiffs’ attorneys will try to get around Robreno’s system entirely.
“I think you’ll find that many plaintiffs will try to avoid him and see if they can get another MDL judge and beat this guy at his own game,” Epstein said.
“But even if they are able to do that, he’s sitting out there as a role model and the next judge will take a closer look at the case to see why Robreno is doing things the way he is.”
When it comes to Robreno and his impact on asbestos litigation, even an asbestos lawyer says the quick pace in which he is going through the docket will help weed out good cases from the bad.
“I think it forces plaintiffs to look at a case and say, ‘Well wait a minute. Is there anything left to this case? Or have I already settled this case in its entirety? Is it worth it? Is my client going to get a return on this $350 investment that I’m going to make in their case by re-filing,'” said John E. Herrick, a lawyer with Motley Rice, LLC of Mt. Pleasant, S.C., who is also on the plaintiff’s steering committee for the MDL.
But Herrick is not convinced that Robreno’s actions are to the advantage of defendants. The fact that some cases are finally moving forward can easily be seen as a victory for the plaintiffs, he said.
“You hear that the defendants think the plaintiffs were trying to extort money from them and now the court is preventing that,” Herrick said.
“But the argument could easily be made that with this mass of work going forward, one could ask, ‘How much do you think it’s going to cost each defendant to work up each of these cases and pay their attorneys for doing all of that work?’
“One might say that the court is forcing that to a head by entering the scheduling order like it is. But who does that benefit? Which side?” Herrick said.
Plaintiffs’ lawyers are not the only adversary of defendants in mass tort cases.
According to William Pillsbury, an attorney for New York-based Anderson, Kill & Olick, P.C., there is a problem with insurance when it comes to handling the cost of mass tort litigation, like asbestos.
He said there have been numerous instances when companies went bankrupt or simply couldn’t absorb the costs of mass tort litigation, “especially when, if for whatever reason, their insurance didn’t pan out.”
When it comes to the fiscal health of a company in mass tort litigation, Pillsbury puts a good deal of the responsibility on the corporation.
“The really big issue is that the risk managers of these companies really need to be aware that there can be legitimate problems,” he said.
He said that a lot of these companies have occurrence-based policies, which means in 2020, “You might be litigating a case that involves a policy from 2008,” Pillsbury said.
Companies should look at what their products are, do a good analysis of where their risks are and make sure they are insured; both presently and down the line, he said.
“Often in asbestos cases we’re talking about a policy from the 1970s or 1980s in a case you are litigating today,” Pillsbury said. “It’s hard to think that far in advance, but it’s certainly something that needs to be done.”