Railroad giant CSX is again trying to uncover instances of whit is believes is fraud perpetrated by asbestos lawyers who have filed large numbers of claims.

CSX Corp. wants to file its Second Amended Complaint in federal court as part of its case against Pittsburgh law firm Peirce, Raimond & Coulter.

The case is connected to that against Bridgeport doctor Ray Harron, who was accused of falsely diagnosing asbestos-related diseases in people who did not have them.

CSX alleges that the falsely diagnosed people were then packaged with others in class action lawsuits with thousands of plaintiffs. CSX says that this method of filing meant the company was unable to properly investigate individual plaintiffs.

The complaint says, “CSXT’s proposed Second Amended Complaint is based on the same fraudulent scheme described in the Amended Complaint and reasserts claims based on the same legal theories.”

“Specifically, the proposed Second Amended Complaint alleges that Harron and the lawyer defendants fabricated and prosecuted objectively baseless asbestos claims against CSXT and seeks damages for injuries caused by 11 such claims.”

One of those eleven claims was a case of ‘mistaken identity’ that occurred after CSX employee Ricky May learned that the Peirce, Raimond & Coulter was conducting an asbestos screening. May had tested negative for asbestosis in a previous screening.

CSX alleges that a former employer, Robert Gilkison, had been hired by the law firm as a ‘runner,’ a person who was hired to convince former colleagues to initiate law suits against CSX. The company also alleged that Gilkison had suggested to May that he find someone who tested positive for asbestosis to impersonate him for the screening.

CSX’s complaint on the case says, “Defendant Gilkison suggested to Mr. May that he should get someone who had previously tested positive for asbestosis to set for his exam and thus be eligible to file a claim against CSXT.”

The railroad company then alleges that May enlisted CSX worker Danny Jayne, who had already been diagnosed with asbestosis, to pretend to be him for the exam. The suit also claims that Gilkison smoothed the process over, allowing May to complete the paperwork while Jayne completed the exam.

The x-rays were then sent to Ray Harron, who diagnosed asbestosis. May received a settlement of $8,000 from CSX.

CSX investigated the case and filed suit after a doctor verified that the x-rays taken of May and Jayne were in fact of the same person. After the company filed suit both men confessed to having taken part in the fraud.

Upper Bucks County, Pennsylvania – A man has been accused of operating an illegal garbage dump, after authorities allegedly found several different types of hazardous contaminants, including damaged lead batteries and asbestos, at the site.

The accused is Upper Bucks County resident Herman J. Moyer, who faces a court trial after waiving a preliminary hearing. Ellis B. Klein, the man’s attorney, hopes to negotiate a plea bargain in May, so that Moyer, 86, doesn’t have to spend time in jail.

Brian Coffey, Deputy Attorney General for the Attorney General’s Environmental Crimes Section, said that Moyer’s waiver shows he’s willing to cooperate, and the state will take that into consideration.

Moyer apparently ran the illegal dump for several decades, and may be liable for fines of up to $1,000 per day of operation. Ellis B. Klein hopes to be able to negotiate a reduced fine.

The site is located at 394 North Mine Road in the townships of Richland and Springfield. Moyer began operating the dump at a time when the current permit requirements and environmental laws didn’t exist. Moyer burned and buried waste for decades without permits, but Moyer’s attorney says the dump operator wasn’t aware that he was breaking any laws.

The site was first inspected on July 13 2005. During this inspection, a representative of the Pennsylvania Department of Environmental Protection found waste tires, construction waste, trash buried up to thirty feet deep, and a walk-in burn barrel. A further inspection on September 19 revealed more evidence of burning of solid waste.

Among the waste seized was partially-buried asbestos-containing pipe.

Herman J. Moyer has owned the 47-acre property for more than 50 years, and turned the site into a dump-yard before the state began regulating these types of waste disposal sites.

The first regulations came into effect in 1980, and Moyer began receiving violation noticed shortly after. In 1990 and 1998 Moyer was ordered to stop receiving waste and to clean up the property. In 1991, a massive fire at the site saw an estimated 300 firefighters work around 18 hours to quell the blaze.

Moyer continued to operate the site despite the warnings, but it was not until 2005 that the first inspections were initiated. Further inspections in 2007 revealed the presence of even more waste, including lead-acid batteries, old tires, waste buried thirty feet deep, and asbestos-containing waste.

A Department of Environmental Protection spokesperson said that Moyer would slow down activity following violation notices, but that the department would begin receiving more reports of activity eventually.

PHILADELPHIA, Pennsylvania – In a case before the Philadelphia Common Pleas Court, jurors handed up a liability verdict that awards $25.2 million in compensatory and punitive damages in three combined asbestos suits last week.

The three cases were combined in a reverse-bifurcated trial and heard by a jury under Judge James Murray Lynn. In two of the cases, the jury established that the potential damages are $12.6 million. Those cases were settled before the liability phase. If they had proceeded to the liability phase, the award amount could have approached $40 million for the combined cases.
In the third case, the jury awarded $18.2 million in punitive damages. The defendants in that case requested that Kentucky law be applied. That request would have reduced their liability. The judge agreed to the request.

Because the settlements in the other two cases are confidential, it’s not publicly known how much the plaintiffs will receive. Mesothelioma cases often rest on determining whether or not the asbestos containing products to which the plaintiffs were exposed were manufactured or distributed by the defendants, or whether the defendants could have prevented the exposure.
The estate of James Baccus, the one plaintiff whose case proceeded beyond the damages phase, will receive $7 million in compensatory damages and $18.2 million in punitive damages. In addition, there were several defendants in each case who settled prior to the damages phase of the trial. Those amounts are also not known publicly.

Baccus died of malignant mesothelioma. He worked around asbestos during his tenure in the U.S. Navy, which was served in Philadelphia. The suit alleges that the majority of his injuries were received in Kentucky, where he worked for American Synthetic Rubber. The defendants asked that Kentucky law be applied to the case, and the judge agreed. The jury awarded $7 million in compensatory damages, and apportioned the damages among three separate companies. The punitive damages were also apportioned among the companies, with Crane company being assessed $11.9 million of the shared verdict, and $6.3 million to be paid by Yarway company.

An attorney for the plaintiffs stated that it’s the first case in more than 20 years where he has seen a jury award punitive damages in an asbestos case. He said that the standard for applying punitive damages in Pennsylvania is much much higher than in Kentucky.

The defendants wanted Kentucky law applied because of the method by which liability is apportioned. It assigns an individual portion of liability to all defendants, including those who have settled before the liability phase. Under Pennsylvania law, all defendants share the damages equally.

The strategy, meant to reduce the liability carried by the three remaining defendants, backfired when the jury held all of the settled defendants zero percent responsible.

The defendants that settled before the compensatory damages phase of the trial were Ingersoll Rand, THAN, IMO/DeLaval, Westinghouse, Owens Illinois and Goulds Pumps.

Yarway and Crane Co. will most likely appeal the awards, and their attorneys believe they have a strong case on appeal.

PHILADELPHIA, Pennsylvania – A Philadelphia jury which awarded over $25 million to one plaintiff in a three part trial also awarded a total of $12.4 million to two other plaintiffs in the case. The three cases were combined in a reverse bifurcation case.

All three cases involved plaintiffs who diead of mesothelioma, and were brought by the estates of the deceased men. James Baccus, whose estate pursued the case through the liability phase, was awarded $7 million in compensatory damages and $18.6 million in punitive damages. The other two cases were settled before the liability phase, but after determination of compensatory damages.

Richard Scherr died at age 71 of mesothelioma. He was survived by his wife and nine children. His asbestos suit alleged that he was exposed to asbestos while working for PFK-Mark III Inc., which used asbestos material to build water and sewer treatment facilities.
Scherr’s wife and estate were awarded $8.6 million against Garlock, Fairbanks Morse and Durahbla. All three companies settled with the plaintiffs after the damages phase for an undisclosed amount.Scherr also settled before the trial with A.W. Chesterton, Certainteed, Goulds Pumps, Greene Tweed, Hajoca, Lincoln Supply and Melrath Gasket.

In the remaining case, William Wheeler was a union painter. Wheeler was exposed to asbestos at several work sites during his work in Pennsylvania and New Jersey from 1954 to 2001. He was diagnosed with mesothelioma at age 67, and died of the cancer just 12 months after his diagnosis.

Wheeler’s estate was awarded $4 million in compensatory damages against Garlock Sealing Technologies. Garlock settled with Wheeler after the damages phase of the trial. Eleven other companies settled for undisclosed amounts with the Wheeler estate before the trial. Those companies were A.W. Chesterton, General Electric, Westinghouse, SPS Technologies, Allied Signal, Pep Boys, Arco, MA Bruder, Georgia Pacific, Bondex and Kaiser Gypsum.

In the single case that went to the liability phase of the trial, the plaintiffs asked the judge to instruct the jury to follow Kentucky law in apportioning the punitive damages. Under Kentucky law, juries assign a percentage of the fault to each defendant in a case, including those that settled before the case comes to trial. Under Pennsylvania law, all defendants split the damages equally. The strategy, which was meant to reduce the liability held by each of the defendants, backfired when the jury chose to assign no liability to the defendants that had already settled with the plaintiff.

March 21, 2008, Philadelphia - A bankruptcy judge has ruled that Federal-Mogul Corp. insurers may have to pay more than $500 million for asbestos damages under the Chapter 11 plan that allowed the company to emerge from bankruptcy in 2007.

Federal-Mogul Corp. is just one in a long list of companies-that includes industry giants such as W.R. Grace-that were forced to file for bankruptcy to manage vast numbers of asbestos liability lawsuits.

Judge Judith Fitzgerald of the US Bankruptcy Court in Pittsburgh ruled against more than two dozen insurance companies that had been fighting to avoid paying damages claims laid in connection with Federal-Mogul Corp.’s asbestos-containing products.

The insurance companies argued that they shouldn’t be forced to pay into a trust the company had set up while in Chapter 11, as they had bargained to cover damage claims that had been laid against the company.

There are five insurance companies involved in the dispute, including Ace Property & Casualty Insurance Co., AIG Casualty Co., Allianze Global Corporate & Specialty AG, Firstman’s Fund Insurance Co. and Hartford Accident and Indemnity Co.

Plaintiff attorney Peter Van N. Lockwood said that more than $500 million worth of insurance policies is at stake.

Judge Fitzgerald’s decision resolves an issue that was left wide open when Federal-Mogul Corp. exited from Chapter 11 bankruptcy in December 2007. The company was allowed to emerge even while asbestos claimants and insurers were waiting for the judge to make a ruling on the issue of insurance coverage.

The new ruling was made public on Thursday, when Judge Fitzgerald told insurance companies they would have to pay the claims that the Federal-Mogul asbestos trust was currently handling. Judge Fitzgerald pointed out that the insurance companies would have had to pay Federal-Mogul if the company had not filed for bankruptcy.

However, the insurance companies had made the challenge on the grounds that paying into the trust and paying Federal-Mogul isn’t the same thing. They believe the trust is not motivated to defend itself against claims that might be worthless, whereas the company itself had motivation to do so.

Fitzgerald’s ruling has preserved a strategy that is favored by corporations that have massive problems with tort liabilities. A company in this situation can divert damage claims away from itself by using their insurers to partially fund the trusts they create.

If the judge had ruled in favor of the insurance companies, it would have set a precedent that would deny other companies the ability to use insurance policies to fund Chapter 11 trusts.

Such a ruling would also have been an enormous blow to people with asbestos-related diseases hoping to claim compensation from the companies they believed to be responsible, as it may have become more difficult to do so-particularly in the current Federal-Mogul case.

March 20, 2008 – A Philadelphia jury awarded $25.2 million in compensatory and punitive damages in an asbestos-related lawsuit. Two other cases that had been consolidated with the first were settled before liability was established. In those cases the jury established potential damages of $12.6 million.

All three of the cases involved death from malignant mesothelioma, an aggressive and almost invariably fatal cancer that occurs only as a result of exposure to asbestos.

The jury in the six week trial arrived at damages verdicts for all three cases on February 14. Between then and the liability verdict on March 14, two of the three cases were settled. In each of the three cases, several defendants settled prior to the damages phase.

The case that continued to the liability phase was settled in the estate of James Baccus, who died of malignant mesothelioma after beginning legal action. In this case $7 million in compensatory damages and $18.2 million in punitive damages were awarded.

James Baccus had served in the US Navy in Philadelphia, allegedly coming into contact with asbestos in the course of his service. However, he had also allegedly been exposed in Kentucky, and had also once worked for American Synthetic Rubber.

The case was brought against Crane Co., John Crane and Yarway. In addition to the $7 million in compensatory damages, the $18.2 million punitive damages was apportioned with 45% against John Crane, 35% against Crane Co., and 20% against Yarway.

In addition, the jury found both Crane Co. and Yarway “grossly negligent for failure to warn of the dangers of asbestos in reckless disregard of the safety of others,” assessing $11.9 million and $6.3 million in punitive damages respectively.

Several other defendants settled before even the compensatory damages phase of the trial. These included Ingersoll Rand, THAN, IMO/DeLaval, Westinghouse, Owens Illinois and Goulds Pumps.

An attorney for the defendents admitted to being “highly confident” that Crane Co. and Yarway would appeal the awards, saying that the verdict was considered “very unusual.”

The other cases, which were both settled before the liability phase of the trial, also involved men who had died from mesothelioma.

Richard Scherr died from mesothelioma at 71, after allegedly being exposed to asbestos while working for construction company PFK-Mark III Inc. The compensatory portion of the trial awarded Scheerr’s family and estate $8.6 million.

William Wheeler died twelve months after diagnosis of malignant mesothelioma, at the age of 67. Wheeler was a union painter who was allegedly exposed to asbestos at several different sites. The jury awarded Wheeler’s estate $4 million in compensatory damages.

March 18, 2008, Pittsburg, Pennsylvania – The family of an Indiana County, Pennsylvania man who died in 2005 was awarded a total of $226,000 last week. The jury in the case ruled that the man’s death was a result of asbestos exposure.

George Baroni, who died from mesothelioma at the age of 73, had worked for Fisher Scientific from 1959 to 1994. Baroni was later diagnosed with pleural mesothelioma.

Malignant mesothelioma is a cancer that develops in the lining of the lungs, and is known to develop only in people who have been exposed to inhalable asbestos fibers. Mesothelioma is difficult to diagnose early, is highly aggressive, and is very treatment-resistant. The disease is incurable, and has an almost 100% mortality rate.

Fisher Scientific was one of five companies sued by the family of George Baroni. Each of the five companies manufactured products that allegedly contained asbestos fibers. The other companies involved in the case were F.B. Wright Co., George Hamilton Inc, Pittsburgh Gage Co., and Taylored Industries of Harmarville in Allegheny County.

Of the five, F.B. Wright Co., George Hamilton Inc, and Pittsburgh Gage Co. settled out of court. Taylored Industries has not settled.

Since 2000, Fisher Scientific has been involved in several lawsuits filed in Indiana County. All of the lawsuits involved plaintiffs who were former company employees that had developed asbestos-related diseases.

In the past several decades, an increasing number of lawsuits have been brought against companies that were once involved in the production of asbestos or the use of the substance in manufacturing.

Once highly prized for its high tensile strength, fire resistance, and insulating properties, asbestos is now publicly known to be a serious health hazard that causes chronic lung conditions as well as cancer.

Following in the wake of the knowledge that many companies involved in the production or use of asbestos had full understanding of the dangers the substance posed to employees, asbestos-related lawsuits have become almost commonplace.

A group of companies and trade associations known collectively as the Asbestos Alliance estimates that there are at least 200,000 asbestos-related lawsuits pending, out of a total of more than 730,000 that have already been filed. Collectively, asbestos lawsuits have already cost approximately $70 billion in claims and fees.

In the wake of that $70 billion figure, and of more highly publicized asbestos verdicts worth up to tens of millions of dollars for individuals with asbestos-related diseases, $226,000 may seem like a drop in the bucket. For the family of George Baroni, however the legal victory of having named those responsible for Baroni’s death is surely worth much more.

March 18, 2008, Philadelphia - W.R. Grace, the company that contaminated an entire town with asbestos, is in more financial trouble following the news that some lenders have refused to continue its bankruptcy loans.

W.R. Grace, the company that once mined asbestos-contaminated Vermiculite in the town of Libby, Montana has been forced to reduce its Chapter 11 finance package from $250 million to $200 million. The company’s existing bankruptcy package expires on April 1. Throughout most of the bankruptcy case W.R. Grace has had around $250 million in loans available; now that figure will be reduced by around 20%.

Janet Baer, a W.R. Grace attorney, told Judge Judith Fitzgerald, overseer of the company’s long-running bankruptcy restructuring efforts, that the company’s existing lenders had been asked to sign on for another two years, but some had declined to do so.

According to Baer, “the tightening of the credit industry” is to blame for the fact that some lenders have declined to renew their credit after having offered Chapter 11 loans to the company for several years.

The lender syndicate is headed by Bank of America Corp. Baer did not name the lenders that had declined to renew their credit to W.R. Grace.
Judge Fitzgerald has signed off on an order that allows the former Vermiculite-mining company to extend its Chapter 11 loans until 2010. W.R. Grace is still awaiting a ruling that will determine how much money it needs to set aside in a trust that will cover asbestos damages. The ruling is needed before the company can emerge from bankruptcy.

W.R. Grace is not the only bankrupt company that has had trouble retaining lenders throughout its Chapter 11 period. Many other bankrupt companies that were once sought-after lending clients are having similar problems.

Solutia Inc. emerged from bankruptcy in February, but only after the company had sued banks that had declined to offer $2 billion in exit loans. The lawsuit was settled before a decision was made. Delphi Corp. is another company having trouble with investors and lenders, as it struggles to emerge from bankruptcy.

W.R. Grace is not in immediate need of loans to fund its exit from bankruptcy. The company will face another two months or more of trial proceedings that will attempt to estimate how much money the company owes to people who have been affected by asbestos problems attributed to it.

The trouble is, a ruling isn’t expected until the middle of 2008, and both sides have already stated that they expect to appeal the decision.

According to documents filed with the Securities and Exchange Commission, W.R. Grace had $484.4 million in cash, and over $100 million in investments at the end of last year.
A week ago, the company finally agreed to pay $250 million to the federal government to help cover the cost of the Libby, Montana clean-up.

March 12, 2008, Montgomery, Pennsylvania - The EPA responded this week to concerns and comments from a Community Action Group about the BoRit asbestos site in Ambler.

Larry Johnson, an EPA Community Involvement Coordinator working with the action group, emphasized the importance of working with the community to remediate at the site, but the EPA has still given no details about when the project will begin, or how the remediation work will be carried out. However, Johnson does say that the EPA Region 3 group plans to incorporate the action group’s requests in their remediation plans.

The community group’s main concerns are asbestos removal, site monitoring, and stream bank stabilization. The EPA gave few details about how it plans to accomplish these requests.

A “responsive summary” issued by the EPA included only vague references to the federal environmental group’s plans for the site. EPA personnel, including on-scene coordinator Eduardo Rovira, say that the language used to describe the action plan is vague so that the EPA’s plans can be easily adapted according to the needs of the site, without having to get approval from headquarters for any changes made.

In addition, Larry Johnson has told the community that they will be kept informed of how the remediation project is proceeding, with regular online updates and an EPA representative on-site at weekly intervals to answer questions and talk about concerns the community may have.

The action group is already concerned about the EPA’s plans to remediate the site and carry out monitoring for one year to ensure the site’s safety. The action group strongly recommends a minimum monitoring period of five years, with testing of the site conducted at least annually.

According to Larry Johnson, that kind of monitoring is outside the bounds of remediation projects such as this one, which aren’t designed to carry out long-term monitoring of a site once it has been cleaned up.

Another action group concern is that the current remediation plan that is proposed for the site could hinder any future remediation attempts. On-scene coordinator Eduardo Rovira has responded to the concern by saying that the proposed plan is a permanent solution, and that future remediation work should not be needed.

The project cannot proceed, however, until headquarters signs on the paperwork. Jack Kelly, another on-scene coordinator for the BoRit site, says there should be no issue with getting approval for the project. Kelly further explained that the hold-up is mainly due to the fact that an asbestos site is involved, for which planning requires some extra care.

Once EPA approval has been granted, a public hearing will be scheduled to inform the public about what will happen. Work on the site can begin after the meeting has been held. The project is expected to take around one year to complete.

AMBLER, Pennsylvania - The Environmental Protection Agency met with the BoRit Community Advisory Group last week to discuss their final cleanup plans for the asbestos and other toxic chemicals at the old BoRit site.

Larry Johnson, Community Involvement Coordinator for the EPA, stated that the plan is still being drafted and there is no date set for its release. Johnson says that he has received 320 emails from citizens concerned with exposed asbestos at the site, erosion of the stream banks and the ongoing site monitoring being conducted by the EPA.

Removal action is being designed to address those specific issues, Johnson said. The final plan will be revealed and discussed at a public meeting which has been delayed because health agencies have requested the opportunity to present an environmental review at the same time. A state and local epidemiologist will be on hand to discuss the review and answer questions about the air monitoring and possible health effects. One of the reviews will deal specifically with cancer.

Asbestos, one of the main contaminants at the site, is a known carcinogen. Airborne asbestos is known to cause mesothelioma, a rare cancer that is only found in those who have been exposed to asbestos, and to increase the risk of developing lung cancer,  asbestos cancer, and a number of other deadly cancers. Asbestos also causes an invariably fatal condition where lung scarring progressively debilitates and cripples the lungs.

Removal work will begin at the site after the meeting. A representative of the EPA will be available at the site at least once a week so that concerned citizens can discuss the removal process and other concerns. In addition, there will be public meetings at the end of the removal process to address the effectiveness of the removal.

Meanwhile, BoRit is also going through the Site Assessment Program to deciced which of five main cleanup options best addresses the needs of the community and the problems of the site. That process will determine whether or not BoRit will be proposed to the National Priorities List, which is a last resort reserved for the most badly contaminated sites where there are no other alternatives. NPL is only called upon when hazardous sites meet specific criteria, including that the site must be subject to regulations under the Comprehensive Environmental Response Compensation and Liability Act of 1980 - better known as Superfund.

In addition, sites considered for Superfund may be issued a health advisory by the Agency of Toxic Substances and Disease Registry. Various factors are weighed into a final ‘threshold number’. Factors taken into account include the amount of waste at the site and the effect of the waste on community health and the environment.

A score has not yet been determined for BoRit. In order to be considered for the Superfund designation, a site must score at least 28.5 on the scale.

There should be an indication by summer as to whether BoRit will proceed as an NPL proposal. Even if it is not, EPA will remain involved in assisting the community with cleanup plans and efforts.