Arizona-based mining company ASARCO alleges that its parent company, Grupo Mexico, systematically stripped its assets and left behind little more than a shell.

Grupo Mexico is a mining conglomerate headed by Chairman and Chief Executive German Larrea Mota-Velasco. The company is the world’s third largest producer of copper, and has mining interests in several South American locations.

ASARCO filed for bankruptcy in 2005, and during the process a bankruptcy judge removed Grupo Mexico’s control over the company due to allegations that the parent company was stripping ASARCO’s assets.

ASARCO’s legal battle begins on Monday May 12, with the beginning of a multi-billion dollar civil lawsuit it has brought against Grupo Mexico. German Larrea Mota-Velasco is expected to testify during the trial.

Among ASARCO’s claims are that Grupo Mexico knew it faced potential liabilities of more than $1 billion when it acquired the ASARCO company in 1999, as well as the responsibility of cleaning up to twenty Superfund sites. In addition, ASARCO claims that Grupo Mexico stripped the subsidiary of assets, including Peruvian copper mines that ASARCO once had a significant stake in and were the company’s most significant asset. ASARCO claims the parent company did this to prevent the mines being used to pay ASARCO’s creditors.

ASARCO also claims that Grupo Mexico used the fact that it controlled all the parties in the transaction to its own advantage, because it allowed the parent company to underpay ASARCO for the mines.

The US Department of Justice had initially blocked the asset transfer, but eventually negotiated an agreement with Grupo Mexico that required the company to set up a $100 million trust fund for environmental clean-up.

The outcome of this civil case will likely determine whether or not many of ASARCO’s creditors-including contaminated sites in many western states, as well as bond creditors and former employees and others suffering from asbestos-related diseases that the company is liable for-will see any money when the company emerges from bankruptcy.

Some estimates put the value of claims and other liabilities ASARCO is responsible for at tens of billions of dollars.

Among the total is several billion dollars worth of lawsuits relating to exposure to asbestos, lead, and other toxins. More than $165 million will be allotted to clean up environmental damage at eight different Montana sites.

ASARCO is seeking more than $10.5 million from Americas Mining Corp., a subsidiary of Grupo Mexico. The $10.5 billion would come from the return of the Peruvian Copper mine holdings and from dividends from those mines.

G. Irvin Terrell, lead attorney for ASARCO, said “We hope this fund can be used in great part to clean up many of the sites across the West.”

After the Manhattan Institute released its damning report on asbestosis lawsuit scams, a doctor who has been involved in testifying as an expert witness commented on the situation.

Dr. David Weill, who has testified twice as an asbestosis expert before Senate committees, is the director of the Lung and Heart-Lung Transplant at the Stanford University Medical Center.

Asbestosis, says Weill, is a “pretty serious thing, possibly fatal.” That makes it frustrating that thousands of fake asbestosis claims have made it difficult for the genuine asbestosis sufferers to obtain fair compensation for their injuries.

Weill says that the genuine claims “get diluted out by the false claims.” In the very large class action lawsuits, plaintiffs often receive only a few thousand dollars. A windfall for people who don’t actually have the disease, but for people who are genuinely affected by asbestosis, a few thousand dollars can’t begin to compensate them for the way their lives are changed by the disease.

In recent years, Weill helped uncover facts about a massive scam that was carried out in Texas. It was discovered that plaintiffs suing for compensation for silicosis had already received compensation for asbestosis, a disease with an entirely different cause. The scam involved both lawyers and doctors, and the manufacture of thousands of false silicosis claims.

In testifying to the Senate, Weill explained that on an x-ray asbestosis and silicosis look like entirely different diseases, and furthermore than it “would be extremely unusual for one person in a working lifetime to have sufficient exposure to both types of dust to cause both diseases.”

In addition, said Weill, “outside the litigation setting, confusion between silicosis and asbestosis does not occur.”

Weill says that the attempted fraud in the Texas case was so blatant that the same plaintiff was diagnosed with asbestosis by one screening firm in February, and the next month was diagnosed with silicosis by another screening firm. However, in both cases the screening firm didn’t pick up any symptoms of the other disease. According to Weill, a treating physician would have diagnosed both silicosis and asbestosis in the same x-ray if both diseases were present.

However, in these massive class action suits, the physicians who read the x-rays rarely had any contact with the patients who supposedly had the diseases.

Weill was later hired by W.R. Grace & Company to help design a clinical study of the asbestos claims that had been made against the company. The study demonstrated that more than 80% of the asbestosis claims that had been made against W.R. Grace & Company were actually false.

The American Bar Association has been supporting federal legislation that would establish specific medical criteria for asbestos-related litigation since 2003. However, the Manhattan Institute report says even that may not be enough, as unscrupulous attorneys might soon find ways around such legislation.

A new report from the Manhattan Institute’s Center for Legal Policy part of a series of reports called “Trial Lawyers, Inc.,” describes how some unscrupulous attorneys have turned to profiteering and “abusive litigation” involving asbestos.

The Manhattan Institute’s report centers on the practice of using class action lawsuits to generate thousands of false asbestos claims. This practice, says the report, not only allows people to claim compensation falsely; it also means that people who are genuinely affected by asbestos-related diseases don’t get the compensation they need or deserve.

The report proposes four law reforms that, it says, will “prevent the worst of [the] documented abuses.”

First, the report says, medical criteria laws should be established, to prevent the practice of mass screening. The report points to an example of a law passed in Texas in 2005 as a good example of such a reform: “Texas legislation outlaws mass screenings, requires a certified medical report, and places mesothelioma and other malignant cases at the front of court dockets.”

Second, states should prevent trial lawyers from “forum-shopping.” This refers to the practice of lawyers hunting down the states and court rooms that are most likely to look upon their cases favorably. A good example, says the report, are the laws established in Mississippi in 2004, where “a plaintiff could file a claim only in the county in which he resided, where the defendant corporation was headquartered, or where the injury actually occurred. In addition, Mississippi’s reform required that the rule apply to every plaintiff so that lawyers could not bundle claims together and ship them to a permissive county where only one of the plaintiffs resides.”

Third, says the Manhattan Institute, states could adopt “joint-and-several” liability reforms that would solve the “solvent defendant” problem. This problem occurs when lawyers sue companies that are more or less unrelated to the manufacture of asbestos products. The report suggests that such companies should not be held “severally liable.” meaning they shouldn’t be held 100% responsible for asbestos-related damages in cases where they are not 100% responsible for a plaintiff’s injuries.

Fourth, the practice of “double-dipping,” where plaintiffs can win compensation multiple times for related conditions, should be outlawed to prevent scams of the type that was uncovered in Texas in 2005. In that scam, plaintiffs were receiving compensation for both asbestosis and silicosis in separate lawsuits.

The Manhattan Institute report also points out, however, that “judges, prosecutors, and even corporate defendants must be involved in defeating the asbestos litigation morass.”

A new report from the Manhattan Institute’s Center for Legal Policy part of a series of reports called “Trial Lawyers, Inc.,” describes how some unscrupulous attorneys have turned to profiteering and “abusive litigation” involving asbestos.

The Manhattan Institute’s report centers on the practice of using class action lawsuits to generate thousands of false asbestos claims. This practice, says the report, not only allows people to claim compensation falsely; it also means that people who are genuinely affected by asbestos-related diseases don’t get the compensation they need or deserve.

The business of asbestos-related lawsuits began in the 1970s: since then, more than eighty companies have declared bankruptcy as a direct result of dealing with hundreds or thousands of lawsuits. Their insurers have paid more than $70 billion in asbestos-related claims. However, the report points out that of that $70 billion, attorneys received $19 billion and $21 billion went to pay court fees: only $30 billion actually reached the plaintiffs.

The report says that some attorneys have set up asbestos litigation as a business with “sophisticated marketing to attract thousands of claimants,” and that attorneys “package claims together to overwhelm defendants and courts.” It criticizes attorneys that bully plaintiffs into accepting settlements that are more profitable for the lawyer than their client.

In addition, says the Manhattan Institute report, “much of modern asbestos litigation has involved the filing of lawsuits by individuals who aren’t sick against companies that never made the product alleged to have caused their sickness.”

That’s not to say there are no real plaintiffs-there are plenty of those. And most lawyers involved in these cases aren’t resorting to these types of dirty tactics. But the problem definitely exists.

Asbestos litigation has gotten out of hand because plaintiff attorneys involved in class action lawsuits have begun advertising for people to join in those suits-but the attorneys aren’t always picky about whether or not all of the plaintiffs actually have asbestos-related diseases.

There have even been cases where attorneys have paid doctors to read diagnostic x-rays and falsely diagnose people with asbestosis.

Massive fraud was discovered in one case where U.S. District Judge Janis Graham Jack unearthed facts about plaintiffs suing for compensation for silicosis had already received compensation for asbestosis, a disease with an entirely different cause.

Since 2003 the American Bar Association has supported federal legislation that would establish specific medical criteria for asbestos-related litigation.
However, the Manhattan Institute report says even that may not be enough, as unscrupulous attorneys are always on the lookout for new ways to profit from asbestos-related claims.

On February 29, 2008, the Mining Safety and Health Administration published a final rule concerning protection for miners exposed to asbestos. The new rule reduced the permissible exposure limit to just five percent of its former level, down to 0.1 fibers per cubic centimeter. On April 25, just four days before the sixty day deadline for filing a legal challenge to the new rule, two mining groups have filed an appeal to request that the rule be reviewed.

One of the petitions is from the Georgia Construction Aggregate Association (GCAA) and the National Stone, Sand & Gravel Association (NSSGA). The petition says that a review of the MSHA rule is needed because “among other reasons, the methods used to measure asbestos under the Rule may indicate that asbestos is present in a mine when in fact it is not.”

The second petition is from the National Mining Association, the Industrial Minerals Association-North America Inc., and other groups. In this petition, the groups do not mention their reasons for filing the petition, but simply say the have an “interest in the outcome of this case.”

However, while the second petition does not mention any reasons, a letter from these groups to Albert Wynn, chairman of the House’s Subcommittee on Environment & Hazardous Materials, and John Shadegg, a member of the same subcommittee, may provide some clues.

In the letter, the NMA and other groups mention some of their concerns, saying that “We must…ensure asbestos is accurately defined so that natural materials, like common rock fragments, are not mistakenly included as asbestos containing products.”

The letter also notes that “Rock fragments have been extensively studied and have not been found in either the scientific literature or regulation to cause asbestos-related disease. Arbitrarily including these rock fragments will have a detrimental impact on each of our industries.”

Essentially, many mining companies are worried about the possibility that the new asbestos rule might force them to use testing methods that show the presence of asbestos where there is none.

The petition filed by the GCAA and NSSGA suggests an alternative method of testing, similar to tests already used by the OSHA, to prevent false positive test results under the new MSHA rule. In those tests a series of sequential tests are carried out to identify asbestos and asbestos-like minerals, and differentiate them from other mineral present in mines.

Kanawha County, West Virginia – A Huntington man has filed an asbestos-related lawsuit against a total of eighty defendants. He claims he developed an asbestos-related disease after being exposed to the substance for more than 35 years.

The man is Richard Hynus, who was diagnosed with malignant mesothelioma on February 4 2008. His eighty-defendant lawsuit was filed in Kanawha Circuit Court, West Virginia.

Among the defendants is Huntington Alloys, formerly known as INCO, where Hynus once worked. Huntington Alloys produces nickel alloys at facilities in Huntington and Burnaugh.

Richard Hynus worked at Huntington Alloys between 1952 and 1987, as an electrician. The lawsuit he filed on March 31 2008 says he was exposed to asbestos fibers while at work for Huntington Alloys.

Electricians are often vulnerable to asbestos exposure when working at industrial plants due to the widespread use of asbestos prior to the 1980s, particularly in industrial locations. Asbestos was commonly used as an insulator and fire retardant, and was often used as electrical insulation as well as thermal insulation.

Mesothelioma, the asbestos-related disease that Hynus contracted as a result of the asbestos exposure, is a deadly type of cancer that is currently incurable.

The disease has a long latency period of two to five decades, meaning that even though Hynus ceased work at Huntington Alloys in the late 1980s it was still possible for him to have been exposed to sufficient asbestos to develop mesothelioma. In fact, the cancer can develop after exposure to a relatively small amount of asbestos.

In the lawsuit Richard Hynus claims that he has suffered severe illness and injury as well as significant medical expenses as a result of the disease and the treatment it requires.

Richard’s wife Joann Hynus is also a plaintiff, and claims that because of her husband’s disease she has suffered a loss of companionship and society.

The suit has a total of twelve counts, and Richard and Joann Hynus are seeking both compensatory and punitive damages.

Kanawha County, West Virginia – A Charleston attorney has filed a total of twelve asbestos-related lawsuits that include a total of 131 defendants between them. In each case the plaintiff is a person who was diagnosed with an asbestos-related disease, or the executor of the estate of a person who died of an asbestos-related disease.

The twelve suits include up to nineteen counts each, and were filed by the following people.

Willard and Anna best, who live in Marietta, Ohio, have filed on behalf of Willard Best, who worked as a machine operator for Kaiser Aluminum. He claims that asbestos exposure at work caused him to develop asbestosis and lung cancer.

Oscar and Genevieve Farley of Prince, W.Va. filed after Oscar Farley, who worked as a pipefitter for Union Local 5960, subsequently developed lung cancer and asbestosis.

Harrison and Sherry Fisher of Pennsylvania allege that Harrison Fisher was exposed to asbestos during the course of his work at Weirton Steel as a bander, and developed asbestosis and lung cancer as a result.

George and Viola Gvoyich of Weirton claim that George Gvoyich developed lung cancer and asbestosis after being employed as a steelworker at Weirton Steel.

Cecil and Elma Lang allege that Cecil Lang developed lung cancer and asbestosis as a result of working for Union Local 639 as a laborer.

Roy and Patricia Meadows of LeSage claim that Roy Meadows developed lung cancer and asbestosis after working as a crane operator for Union Local USWA 40.

Julius and Helen Sabatino of Shadyside, Ohio filed after Julius Sabatino developed asbestosis and lung cancer.

Karl and Ruth Stanley of Reader filed on behalf of Karl Stanley, who was employed as a welder for Union Local USWA 5724 and developed asbestosis and lung cancer.

Phyllis Canterbury, the executor of the estate of Larry Canterbury, filed suit on behalf of the deceased, who worked as a steelworker for USWA as well as for Union Carbide and FMC. Canterbury had lung cancer and asbestosis.

Linda Hickel filed a lawsuit on behalf of Gary N. Dennewitz, who allegedly developed asbestosis and lung cancer after working as a machinist for Union Local IAM 1027.

Coraletta Henry filed on behalf of Earl. Henry, Jr., formerly of New Haven, who had asbestosis and lung cancer, allegedly as a result of working at the Philip Sporn Power Plant and other locations.

Martha Taylor filed suit on behalf of Leon Taylor, who died after developing lung cancer and asbestosis. Leon Taylor worked as a welder for Union Local USWA 1652.

Miami, Florida – In what is the largest jury verdict involving a single defendant in a Florida asbestos case, a doctor has been awarded a total of $24.2 million by a Miami-Dade Circuit Court jury.

The man is Dr. Stephen E. Guilder, who alleged that he developed mesothelioma as a result of exposure to asbestos from Honeywell asbestos-containing brakes in the 1970s and early 1980s.

Guilder, 50, was diagnosed with peritoneal mesothelioma in September 2007. Peritoneal mesothelioma is a relatively rare type of asbestos-related cancer. Around 20-25% of all cases of mesothelioma originate in the lining of the abdominal cavity, called the peritoneum.

Guilder, whose practice involved treating disorders of the head and neck, had to close his medical office in November.

Rob Ferris, a spokesperson for Honeywell, said that the company is disappointed by the jury’s verdict, and said an appeal would be imminent. Ferris said that there was no supportable evidence that Stephen Guilder’s mesothelioma cancer was caused by exposure to Honeywell brake products.

Stephen Guilder’s attorney, David A. Jagolinzer, said he was very pleased that Honeywell had been held accountable for the harm that it had caused to Stephen Guilder and his family. Guilder’s family includes his wife Sheila of more than twenty years, and three children aged 18, 16, and 14.

During the trial, which lasted for two weeks, the plaintiffs argued that Stephen Guilder had been exposed to asbestos from Honeywell’s brake products, and that this exposure caused Guilder to subsequently develop peritoneal mesothelioma.

Mesothelioma cancers tend to have long latency periods. Even though Guilder was allegedly exposed in the late 1970s and early 1980s, it is normal that the cancer did not develop and show noticeable symptoms until more than twenty years later.

These cancers are particularly devastating because they are difficult to diagnose early, and because mesothelioma tumors are often resistant to treatment.

The award of $24.2 million is the largest amount ever awarded in a Florida case involving a single defendant.

Galveston County, Texas – A Virginian couple, Larry Wilbur Hacker and wife Leslie Hacker, have filed a lawsuit in Galveston County, Texas, claiming that Larry Hacker developed mesothelioma as a result of asbestos exposure that occurred at work..

Larry Hacker was diagnosed with mesothelioma on January 17, 2008, and believes that the Minnesota Mining and Manufacturing Company (3M), and other companies, are responsible for the development of the cancer. Mesothelioma is a particularly devastating and aggressive type of cancer, caused only by exposure to asbestos.

In addition to the 3M Company, the lawsuit names the Union Carbide Corporation and the Phillips Electronics North America Corporation as defendants.

The lawsuit, filed April 16, claims that the defendants subjected Larry Hacker to exposure to asbestos as a result of his working with or around products manufactured and sold by the companies. Hacker claims that the exposure occurred during the course of his employment as a general maintenance worker and a boiler technician.

Machinery such as boilers and furnaces are in fact particularly vulnerable locations. Asbestos is virtually fireproof, and does not burn or conduct heat. For these reasons it was often used around boilers and furnaces, particularly in industrial locations. In older industrial plants the likelihood is very high that asbestos is present in these types of areas.

The suit filed by Larry and Leslie Hacker claims that “Larry Wilbur Hacker had been exposed, on numerous occasions, to asbestos-containing products and possibly machinery requiring or calling for the use of asbestos, thus he had inhaled great quantities of asbestos fibers.”

In addition, the suit alleges “Larry Wilbur Hacker was unaware of the hazards and defects in the asbestos-containing products of the Defendants, which made them unsafe for purposes of manipulation and installation…Similarly, Larry Wilbur Hacker was unaware of the hazards and defects in the machinery requiring or calling for the use of asbestos or asbestos-containing materials.”

The suit also claims that the defendants may have violated federal or state regulations relating to asbestos exposure. The lawsuit includes charges of gross negligence and conspiracy, as well as aiding and abetting. In short, that Larry Hacker was exposed to asbestos without being aware of or being told of the dangers, or being protected from the dangers by his employers.

The Hackers’ lawsuit claims reimbursement of medical expenses and lost income. In addition the Hackers are claiming punitive and exemplary damages.

Texas - A Houston area couple has filed a lawsuit against Union Carbide and other chemical and polymer companies, claiming that pulmonary cancer suffered by the man was caused by years of asbestos exposure.

The couple is Clyde and Robbie Dempsey, of Pasadena. Their lawsuit alleges that the defendants-including Union Carbide-committed acts of misrepresentation, negligence, and conspiracy.

The suit claims that Clyde Dempsey was exposed to asbestos and other hazardous products while working for twenty-five years as a commercial and industrial plumber and pipefitter in Texas.

Occupational asbestos exposure was tragically common in the twentieth century. Many companies that employed asbestos workers did not provide safety equipment to prevent exposure. Hundreds of thousands of people have died or will die from asbestos-relocated diseases such as mesothelioma cancers or asbestos. Billions of dollars worth of lawsuits have already been won or settled over the past several decades, with many more to come.

Clyde and Robbie Dempsey have named several defendants that they believe have contributed to the development of Clyde Dempsey’s mesothelioma. In addition to Union Carbide, the suit names Amaco, A.W. Chesterton, Avco, Bechtel, Bondex, Certainteed, Fluor, GE, Georgia Pacific, Kaiser Gypsum, Kelly-Moore Paint Co., Shell and Sun Oil and others. The companies are named variously as product, premises, equipment, or contractor defendants.

Clyde Dempsey spoke with the Texas Medical Occupation Institute in February, and said that he had breathed in clouds of asbestos dust that were created and dispersed not by him, but by people he worked adjacent to. He claims that he suffered occupational exposure to asbestos for at least twenty years.

Clyde Dempsey retired in 2004, and in 2007 told doctors he had been suffered from increased shortness of breath. He was subsequently diagnosed with mesothelioma.

The lawsuit filed by the Dempseys says that “As a result of Mr. Dempsey’s exposure to asbestos-containing products over his career, he contracted the serious and debilitating disease which will some day take his life. Each Defendant bears responsibility in causing Plaintiffs’ injuries in the individual capacities in which they have been sued.”

The suit also claims that “as a direct and proximate result of Defendants’ negligence, Mr. Dempsey has sustained a multitude of severe and incapacitating injuries.”

The Dempseys are seeking compensatory and punitive damages. The suit indicates that Robbie Dempsey will continue with litigation if Clyde Dempsey should die before the suit is resolved.