James Copland, director of the Center for Legal Policy at the Manhattan Institute
In 1965, the first modern asbestos lawsuit was filed right here in Southeast Texas by Orange attorney Ward Stephenson on behalf of asbestos insulation worker Claude Tomplait.
Over the next 40 years, asbestos litigation exploded into the longest running mass tort in U.S. history and is threatening the very integrity of the legal system, a report released Wednesday claims.
"Trial Lawyers Inc.: Asbestos, A Report on the Asbestos Litigation Industry 2008," released on May 7, delves into the business model trial lawyers have been using to generate cases. Prepared by the Center for Legal Policy at the Manhattan Institute, the report discusses the litigation that originally sought redress for the truly injured but has "metastasized into a big business."
"The report brings out some new points and some newly surfaced frauds," James Copland, director of the CLP said via media teleconference on May 6. "It updates where we stand on federal and state trends, jury awards and some new evidence on the return of mass screenings in late 2007 and as recently as last month."
The trial lawyers operate under a very sophisticated business model, Copland said, which involves strategic marketing and advertising – from radio and television ads to posters in the New York City subways – as a way to grab plaintiffs. From there, the law firms hold mass screenings, from which nearly 100 percent of those screened are diagnosed with an asbestos-related disease, he said.
"It's like a high volume sales process," Copland said.
The study claims that the plaintiffs are "bundled" into massive cases that defendants find too costly to investigate individually and therefore defendants feel forced into settlements.
"The overall cost of asbestos litigation is staggering, totaling over $70 billion in direct losses and bankrupting 80 companies," Copland wrote in the report. "Of that $70 billion, fully $40 billion has gone to lawyers."
Copland said the trial lawyers also forum shop to find courts and juries where they could win "millions more." For many years, Texas was among those plaintiff-friendly forums, he said.
Copland quotes Chief Judge Dennis Jacobs of the Second Circuit U.S. Court of Appeals, who said judges in asbestos litigation have all too often processed massive caseloads "without regard to whether the claims themselves are based on fraud, corrupt experts, perjury and other things that would be deplored and persecuted by the legal profession if done within other commercial fields."
However, in 2005, U.S. District Court Judge Janis Jack of Texas "proved a striking exception to this historical trend," Copland wrote. Judge Jack uncovered massive fraud in the asbestos litigation industry, he said, including asbestos-silica "double dipping" and plaintiffs undergoing bogus medical exams geared toward finding injuries.
In addition to judges paying closer attention, tort reforms were passed in the Texas legislature and the trial lawyers began "shopping for new states," Copland said.
He pointed out that one of the state's largest asbestos litigation firms, Baron & Budd, is now filing cases in California instead of Texas.
But while the number of mass screenings declined after Congressional hearings were held on the screening techniques and Judge Jack released her findings, Copland said mass screenings may be making a comeback.
He said the Center for Legal Policy recently documented two screenings in Oklahoma.
And although states like Texas are making headway, reform on the national level will be an uphill battle with the current makeup of Congress, Copland said.
"The new Democratic Congress has shown little interest in addressing this issue," he said. "It is important to realize that the Democratic Party has a substantial contribution base from the trial bar. National reform will be nearly impossible with a Democratic Congress."
In the meantime, he said, reforms should continue on the state level in four key areas: stricter medical criteria, venue reforms, joint and several liability reform and transparency reforms to stop double dipping.
A copy of "Trial Lawyers Inc: Asbestos" is available at www.triallawyersinc.com/asbestos.
For more information on the Manhattan Institute and the Center for Legal Policy, visit www.manhattan-institute.org.