Like no doubt many other ideas, the "Asbestos Double-Victims Workgroup" grew out of an after-party conversation at "The Reliable Source," the National Press Club bar, in Washington, D.C. Maybe two dozen people gathered after watching a work-in-progress screening of the Paul Johnson Films documentary "UnSettled: Inside the Strange World of Asbestos Lawsuits."
Not surprisingly, like nearly everyone else in D.C. last December, we were discussing the pending Trump Era, and, more specifically, how personal injury litigation would be different, including the asbestos issues raised by the UnSettled movie. The consensus: All hell is about to break loose.
To understand just how hot things might get, you might begin with a North Carolina bankruptcy case called "Garlock" that figures prominently in the film. Forbes magazine explained Garlock: A federal judge "... allowed Garlock to conduct discovery on 15 settled cases, and discovered plaintiff lawyers had failed to disclose evidence in all 15."
Based in large part on that research, the judge reduced the potential liability for mesothelioma cases, an asbestos-caused cancer, by a billion – with a ‘B’ – dollars.
Information from Garlock has already rippled through the asbestos landscape, prompting several civil racketeering lawsuits. The Garlock company has already sued some victims' firms on civil racketeering grounds, and the plaintiffs' firms settled that case. There will be more.
Meanwhile last summer, The American Legion, the nation's largest veterans' advocacy organization, passed its first formal resolution supporting bankruptcy trust transparency. It recently doubled-down, passing the resolution a second time so it was valid for the new congressional session.
(At this writing, the federal transparency law, called the FACT Act for “furthering asbestos claims transparency, is moving through the U.S. House of Representative and will likely pass.)
In a powerful scene from UnSettled, a former American Legion national commander emotionally accuses attorneys of fraud. His concern is that plaintiffs’ attorneys prompt asbestos victims to tell one story to some of the 100-or-so bankruptcy trust funds, then another in civil court cases – exactly the problem found in Garlock. That means the funds are depleted and veterans are shortchanged.
Garlock ripples have already hit the insurance industry. Several "subrogation" actions are under way, including such big-name groups as Humana, Aetna, Blue Cross and Blue Shield, and even hospital networks operated by Johns Hopkins and Tufts. Those groups contend they need the names of plaintiffs who have recovered money from the trusts so they (the medical groups) can be reimbursed for medical expenses they paid to cover the illnesses related to asbestos.
There are concerns that many families may not have made those payments. Perhaps worse, there are similar requirements to repay Medicaid that may have not been met.
I've long worried about the "Perjury Pawns" in all this. The idea is that most victims and their families, facing death, pretty much just go along with their lawyers. There's a famous "coaching memo" that illustrates how they get coached to remember companies that are still solvent, and to ignore companies that are protected by bankruptcy – although they might file claims against those companies as well.
Which brings us back to President Trump. In UnSettled, it is noted that President Obama played golf with one of the big-name partners involved in Garlock even after the controversy surfaced, although the asbestos scandal was hardly mainstream media news. It’s no secret that the plaintiff’s bar funds much of the Democratic party and that Republicans tend to back the business side of the asbestos equation.
There are questions: Are there opportunities for Medicaid repayment? What happens if families learn that some of their jury awards, trust payments or settlement monies should have been paid back to medical providers? Is that their fault, or their lawyer’s?
Of course, there are other, perhaps more straightforward, double-victims of the system. Some might even argue that insurance companies and American taxpayers are "victims" when required medical repayments are not met. And then there's California attorney Mike Lampe, himself a trial lawyer and the hero of UnSettled, who fought a case for about a decade that began with a relatively minor claim against his brother's auto dealership.
Eventually, Mr. Lampe wound up working with the very family that first sued him – and against their former asbestos-practice attorney. That led to discovery of what Lampe calls a corrupt business practice – he thinks it’s a corrupt business model and doubts it’s exclusive to this one case.
There is, of course, a tragic irony here. Mesothelioma, the asbestos cancer that’s always fatal, can take decades to develop. Veterans who thought they had survived their service learn one day that, instead, they just had a silent wound that would claim their life a bit later. Now, the families of those folks may very well join others to find out that asbestos has, once again, remained silent until it doesn't.
So to explore all this, we are forming the Asbestos Double-Victims Workgroup (AD-VWG). The National Courts Monitor, the civil litigation website where I’m publisher, will help organize initial efforts.
Frankly, we actually hope that we’re wrong about all this.
However, with all the Garlock revelations, the civil racketeering lawsuits and all those insurance issues – and growing interest in those Medicaid payments – it’s more likely we’re just noticing the tip of a very messy iceberg.