ASBESTOS LITIGATION REMAINS A MAJOR PROBLEM
SILVER’S RETRIAL DEMONSTRATES PERVASIVE PROBLEMS
The retrial of former New York State Assembly Speaker Sheldon Silver in federal district court in Manhattan, based on allegations that he collected improper payments from Weitz & Luxenburg, a prominent asbestos law firm, ended with a conviction in May. Silver was originally convicted in 2015 of illegally accepting millions of dollars in “kickbacks” from the law firm for referring clients with mesothelioma to a doctor whom he gave $500,000 in state grants.
The information that came out during trial showed the litany of problems and fraudulent activity permeating through New York City’s asbestos litigation. Prosecutors alleged that Silver received illicit payments from Weitz & Luxenburg in exchange for taking steps in his official capacity to benefit Colombia University cancer research and two New York real estate developers. Mr. Silver was convicted on seven counts and was sentenced to seven years in prison. His legal team filed a notice of appeal in the U.S. Court of Appeals for the Second Circuit in mid-August.
PAYOUTS ARE AMONG HIGHEST IN NATION
New York judges presiding over asbestos litigation have allowed plaintiffs’ lawyers to act outside the bounds of the law and manipulate the legal system for their own gain.
After a massive asbestos settlement earlier this year, even Manhattan residents are starting to call for tort reform. In April, a jury awarded $60 million to the family of Pietro Macaluso, a construction worker who performed renovations on single-family homes in Brooklyn during the 1970’s and 1980’s. Prior to his death in 2017, Macaluso sued three companies that manufactured boilers he alleged were “laden with cancer-causing asbestos” and caused him to develop pleural mesothelioma. During trial, Justice Manuel Mendez allowed the plaintiff ‘s lawyer to show the jury a video of him lying on his deathbed in the hospital. The jury also was allowed to watch Plaintiff “say goodbye to his kids … knowing that they would grow up without a father.” These videos and statements enflamed the jury and impacted their ability to fairly evaluate whether the boiler companies were responsible for Mr. Macaluso’s death.
The high payout—eight times the national average for mesothelioma cases—demonstrates not only the prejudice resulting from the video, but also the plaintiff-friendly nature of NYCAL. New York City is notorious for paying out “more than any other major city to settle legal claims.” This number— $84 per New York City resident— exceeds what city taxpayers spend on both Parks and Buildings departments, according to a survey by Governing magazine.
The Macaluso case was not the only instance where a judge allowed inflammatory evidence to be presented to a jury. New York Supreme Court Justice Lucy Billings, who previously held the position of NYCAL Coordinating Judge, allowed plaintiff ‘s lawyer Daniel Blouin, a shareholder for Simmons Hanly Conroy, to resort to a “steady stream of insults” and “incurable character assassinations” against defendant Goodyear Tire, its experts, and its lawyers during a trial in August. Among some of the more ridiculous things Blouin said, he accused defense counsel, James Lynch, of trying to “assassinate” his client, called experts “juke box witnesses,” and accused the defense of paying off the experts. This was all part of Blouin’s attempt to leave the jury with an “unfairly negative impression of Goodyear Tire.”
To no one’s surprise, the New York City jury, after about two hours of deliberation following a three-week trial, awarded $40.1 million to plaintiff, J. Walter Twidwell. Twidwell, a veteran with mesothelioma, alleged Goodyear Tires was to blame for his exposure to asbestos while working on gaskets and boilers in the U.S. Navy.
Justice Lucy Billings denied a request for a mistrial based on Blouin’s unprofessional behavior, but “warned Blouin to be more careful about his conduct,” stating that she was “equally frustrated.” The court gave Blouin several “warnings” during the trial, but took no other action. As a result, Goodyear Tire was deprived of an opportunity to receive a fair and impartial trial.
APPELLATE COURT KEEPS PLAINTIFF-FRIENDLY PROCESS
For many years, New York courts recognized that awarding punitive damages in asbestos cases, bankrupting companies today for conduct that occurred decades ago, serves no purpose. It does not help future victims who will need money for medical expenses to push companies into bankruptcy. It does not punish those responsible when the asbestos exposure occurred. The only purpose served by punitive damages in asbestos cases is to give windfalls to lawyers.
In April 2014, however, Justice Sherry Klein Heitler lifted a long-standing ban on punitive damages in asbestos litigation and an appellate court upheld her authority to do so. But the appellate court left to her successor, Justice Peter Moulton, to determine whether punitive damages should be allowed. The new Case Management Order (CMO) allowed punitive damages and, naively or otherwise, trusted plaintiffs’ lawyers to pursue punitive damages only on a “good faith basis.” It also retained plaintiff-friendly procedures from prior CMOs.
A New York appellate court issued a disappointing ruling when it refused to modify this burdensome CMO. The First Judicial Department’s short opinion discussed several different provisions of the CMO and how they “differ from” the New York’s Civil Practice Laws and Rules. Yet, the court ruled that the new CMO did not deprive defendants of due process and that while the procedures did not “strictly conform” to New York law, the judge overseeing NYCAL could impose them without the defendants’ consent.
NYCAL COORDINATING JUDGE QUICKLY REMOVED, INDICATING CHAOS
Justice Lucy Billings, who was appointed as NYCAL’s coordinating judge in August of 2017, was reassigned after only six months on the job. She was replaced in April by Justice Manuel Mendez, but will continue as a judge for complex litigation. Critics say Justice Billings was unable to effectively address the asbestos backlog that plagues the NYCAL system. At the start of 2018, there were an estimated 500 active asbestos cases and 1,000 dormant cases. It remains to be seen whether this change will improve the status of the court.
“Sacking Justice Billings after only a few months certainly looks suspicious. This court is historically corrupt and chaotic.” said Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York. “Reassigning a key judge after just six months only adds to the appearance of chaos and corruption.”