Judge Reduces Total Amount of Damages Owed by Defendant in Asbestos Lawsuits

Asbestos-warning.jpgA federal bankruptcy judge entered an order approving the total damage amount requested by the debtor, a company named as a defendant in multiple asbestos exposure lawsuits. In re Garlock Sealing Techs., No. 10-31607, order (Bankr. W.D.N.C., Jan. 10, 2014). The total amount available to claimants, who are acting as creditors in the bankruptcy proceeding, is $125 million, considerably less than the claimants’ estimate of more than $1 billion. In over thirty years, asbestos litigation in the U.S. has involved claims by hundreds of thousands of individuals against thousands of companies for injuries ranging from breathing difficulties to terminal cancer. The judge’s order in Garlock expressed concern in harsh terms over seeming inconsistencies in some plaintiffs’ exposure claims. The outcome of this proceeding should not impact litigation over other dangerous products, but this decision may already influencing other asbestos cases.

“Asbestos” refers to several minerals composed of long fibers, formerly used widely in construction for sound absorption, fire-proofing, and heat and electrical insulation. It was also used to insulate electrical wires in some consumer products. Inhalation of asbestos fibers over a sustained period of time has been linked to numerous adverse health effects. “Asbestosis” is the name given to respiratory complications associated with asbestos exposure, but it has also been linked to mesothelioma, a malignant type of lung cancer.

Litigation over asbestos exposure began in the early 1980’s and has involved an estimated 730,000 plaintiffs and 8,400 defendants. Insurance payouts for asbestos-related litigation totaled $70 billion as of 2002, according to one study. Defendants have included companies that mined asbestos, sold or distributed asbestos, produced building materials or consumer products containing asbestos, or owned property in which asbestos was present. Lawsuits have relied on both products liability and premises liability theories.

Garlock Sealing Technologies manufactured and sold industrial products containing asbestos used in thermal insulation of pipes and valves. The products allegedly only released asbestos when scraped or cut, which, according to the court, resulted in low levels of exposure compared to other companies. It began facing lawsuits over asbestos exposure in the early 1980’s. It filed for bankruptcy in 2010. Most other thermal insulation manufacturers have done the same, and have set up settlement funds to pay claimants.

The recent bankruptcy court order addressed more than 4,000 claims filed against Garlock before its bankruptcy filing. The court created a committee to represent the interests of current asbestos claimants and a representative for any possible future claimants. Garlock proposed a plan that would provide $125 million for present and future claims. The claimants’ representatives estimated damages of $1-1.3 billion.

In approving Garlock’s proposal, the court noted multiple past lawsuits that, it found, had verdicts far higher than the amount of damages proven. A Navy machinist, for example, obtained a $9 million verdict against Garlock despite producing no evidence of exposure to insulation-based asbestos. Garlock, order at 31. The court overtly accused many plaintiffs of “misrepresentation” in producing evidence of asbestos exposure. Id. at 35. Defendants in other asbestos proceedings, unfortunately, may try to use this decision to challenge plaintiffs’ claims. See Sweredoski v. Alfa Laval, C.A. No. PC-2011-1544, decision (R.I. Super. Ct., Jan. 30, 2014).

At Lebowitz & Mzhen, we help people in the Washington, DC area recover their just compensation when they have suffered injuries due to defective or dangerous products. For a free and confidential consultation, contact us today online or at (800) 654-1949.

More Blog Posts:

DC Appellate Court Affirms that OSHA’s Hazardous Material Regulations Do Not Preempt Personal Injury Claims Under State Law, Washington DC Injury Lawyer Blog, January 28, 2014
Supreme Court Rules that Federal Law Preempts State Wrongful Death Lawsuit Over Asbestos Exposure: Kurns v. Railroad Friction Products Corp., Washington DC Injury Lawyer Blog, October 12, 2012
Washington D.C. Cracks Down On 23 Landlords with Lawsuit for Code Violations Due To Poor Conditions on the Premises, Washington DC Injury Lawyer Blog, April 8, 2008
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