Alternative exposure evidence is, of course, crucial for defendants in toxic exposure cases. In asbestos cases, it is more important than ever because most companies that made the products that caused the greatest exposures have filed for bankruptcy protection. Exposures from work with or around friable asbestos insulation sold by these companies were orders of magnitude greater than exposures associated with most current defendants’ products.
Evidence of exposures to insulation products is so important because it typically explains plaintiffs’ asbestos-related diseases. Mesothelioma is a rare disease, afflicting perhaps one to two people per million annually. But, it was not rare among insulators in the 1940s, 1950s, and 1960s. Nearly 10% of the insulators in North America died of mesothelioma.
When even some information about a claimant’s insulation exposures is available, defendants sued for “low dose” products, like Garlock was, are far better able to defend cases. In Moeller v. Garlock, the Sixth Circuit reversed and rendered judgment for Garlock in a case where a pipefitter had testified to extensive use of Garlock’s gaskets when there was some evidence of insulation exposure. The court held that saying that Garlock gasket exposure “was a substantial cause of [his] mesothelioma would be akin to saying that one who pours a bucket of water into the ocean has substantially contributed to the ocean’s volume.”[i]
More than seventy companies responsible for asbestos products have filed for bankruptcy protection. Many made or sold friable asbestos insulation products. Additional companies in bankruptcy made or sold other asbestos products that may have caused or contributed to claimants’ illnesses or they may have engaged in conduct that caused significant exposure to claimants.
During and after the bankruptcy proceedings of these companies, claimants file certain documents that evidence their claim against the bankrupt. Most lawyers are aware of claims filed with a trust created to pay the claims of persons injured by the companies’ products or conduct. If a trust has been created, those claim forms are sometimes available. But, as the Court in the Garlock bankruptcy observed, the claimants do not always make the trust claims while their lawsuit against other companies is pending, even if the trust is set up: “[S]ome plaintiffs and their lawyers . . . delay[ed] filing claims against bankrupt defendants’ asbestos trusts until after obtaining recoveries from Garlock (and other viable defendants).”[ii]
Long before a trust is created, however, claimants may also file other documents in the bankruptcy evidencing a claim against the bankrupt. These include statements filed pursuant to Rule 2019, ballots cast for or against a plan of reorganization, and proofs of claim.
Bankruptcy Rule 2019 requires certain disclosures about the economic interests of creditors and others in bankruptcy cases. In many of the asbestos bankruptcies, the court ordered that creditors comply with the rule and file verified statements identifying the names of asbestos creditors that the law firms appearing in the case represented. Being a creditor supports an inference that the law firm’s clients had exposure to the debtor’s products. If not sufficient to prove exposure by itself, the Rule 2019 Statement at least raises questions for further discovery and should be disclosed when requested.
Also, during the course of the bankruptcy, a plan of reorganization may be proposed, and the creditors are asked to cast a ballot approving or rejecting the plan. To cast a ballot, claimants must certify that they have claims against the bankrupt. And, as the Court in the Garlock bankruptcy explained, “it is a fair inference that a claimant who casts a ballot to vote on a reorganization Plan will ultimately make a claim against the Trust that results from that Plan.”[iii]
Proofs of Claims
During a bankruptcy, the court may set a bar date requiring all those with claims to file a proof of claim. Proofs of claim typically require that the claimant verify under oath that he has a claim against the bankrupt for causing his illness.
The 2019 statements, ballots, and proofs of claims are important admissions by the claimants that they believe the bankrupt is responsible for their disease. Historically, defendants in the tort system have not specifically requested these documents, though they may have been responsive – but not produced in response – to requests for witness statements or other admissions by the plaintiffs. Defense attorneys should consider tracking pending bankruptcies of former asbestos defendants, noting when these documents may be filed, and specifically requesting them.
To read about the Garlock bankruptcy decision, its importance, and proof offered at trial, follow these links:
[i] Moeller v. Garlock Sealing Techs. LLC, 660 F.3d 950, 954-55 (6th Cir. 2011).
[ii] Garlock Estimation Decision, p. 30.
[iii] Garlock Estimation Decision, p. 61.