The judge's decision affects current and future asbestos victims.

The judge’s decision affects current and future asbestos victims.

A federal judge in Charlotte has delivered a startling victory for industries that are part of the country’s long-running asbestos-liability fight, cutting more than $1 billion from what a company owes to current and future victims.

U.S. Bankruptcy Judge George Hodges accepted the $125 million figure proposed by Garlock Sealing Technologies, a Palmyra, N.Y., subsidiary of EnPro Industries of Charlotte.

The amount covers claims for mesothelioma, a rare and deadly cancer of the lining of the lungs and one of a host of diseases linked to asbestos. Attorneys representing current and future mesothelioma victims had asked the court to set liability at $1.3 billion.

But in his 65-page order Friday, Hodges said the attorneys’ dollar figure did not fairly reflect Garlock’s liability. He accused asbestos lawyers and clients of withholding or manipulating evidence, as well as relying on “pseudoscience” to pump up the size of asbestos settlements and jury awards.

In regards to Garlock, Hodges said plaintiff attorneys withheld evidence about their clients’ exposure to company products, “unfairly inflating the recoveries against Garlock” for the decade leading up to the company’s bankruptcy filing.

According to the U.S. Chamber Institute for Legal Reform, an industry advocacy group, Hodges’ ruling marked the first time in more than 80 asbestos bankruptcies stretching back for more than 30 years that a judge refused to accept the plaintiffs’ estimate for future claims.

In his ruling, Hodges said previous settlements were not an appropriate measurement because they had been inflated by what he called “the impropriety of some law firms.”

Garlock, which makes seals and gaskets for a host of industries, has been a target of asbestos related lawsuits for some 40 years. It filed for Chapter 11 protection in 2010, one of dozens of otherwise solvent businesses that turned to the courts for help in settling thousands of claims of asbestos poisoning.

Asbestos is at the center of the country’s longest running liability case. And Garlock was among the last industrial targets to seek bankruptcy protection. This summer, attorneys from across the country gathered in Hodges’ courtroom for a 17-day trial to argue Garlock’s liability.

Up until the mid-1980s, asbestos was widely used in insulation and as a fire retardant. But its tiny, jagged particles can lodge in the linings of the lungs and other organs, causing cells to mutate.

Companies have been accused of knowing the risks of asbestos for decades but concealing them from their employees. One well-known Texas anti-asbestos attorney told the Wall Street Journal last year that his clients are victims of the “worst corporate mass genocide in history.”

But in his ruling, Hodges accepted company arguments that Garlock’s liability is highly limited, concluding that the concentrations of asbestos in company products are small and mostly made up of a less dangerous form of the fibers.

Source: Charlotte Observer

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