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Clients in the News


Trial Lawyer Daniel Mulholland of Forman Perry Watkins Krutz & Tardy quoted in Corporate Counsel magazine
They Weren't Going to Be Railroaded: Plaintiffs' Lawyers Put Down
March 18, 2010 6:00 am

Corporate Counsel:

When a federal jury returned a verdict against two Mississippi plaintiffs' lawyers on March 8, finding that they had committed fraud against Illinois Central Railroad, it was the culmination of the railroad's seven-year battle to fight back against abusive asbestos claims. It also may have been the first civil trial in which attorneys were nailed for fraud in bringing these claims.

The jury found that attorneys William Guy and Thomas Brock of McComb, Miss., lied when they denied knowing that their clients had previously settled asbestos claims that should have barred them from filing against the railroad. The clients were also defendants in the case, but the jurors held them blameless for settling with Illinois Central for a total of $210,000.

Also See: Actual Damages Verdict | Punitive Damages Verdict (pdfs)

Instead, the jury deemed the lawyers responsible and directed them to pay the company $210,000 in compensatory damages, and an equal sum in punitives. Guy and Brock were represented by John Corlew, of Corlew Munford & Smith, who declined to comment on the verdict.

In recent years target companies "have become more sensitive to litigation abuse, and more willing to ferret it out," said the railroad's lead lawyer, Daniel Mulholland, a partner in the Jackson, Miss., office of Forman Perry Watkins Krutz & Tardy. For a long time that wasn't true in asbestos litigation, he added. "I think this new attitude is a healthy change."

Mulholland believes this is the first case in which plaintiffs' lawyers under these circumstances were held accountable at trial. Mark Behrens, who follows asbestos litigation closely, agrees.

"This is the first case that I'm aware of where a jury has found fraud" in the filing of an asbestos claim, said Behrens, a partner at Shook Hardy & Bacon.
The lawyer who had the broadest perspective on the events in the federal courtroom in Natchez, Miss., was Janet Gilbert, who is Illinois Central's national coordinating counsel for asbestos. Gilbert was an in-house lawyer for Wisconsin Central System for 14 years before it was bought in 2001 by the Canadian National Railway (CN), which also owns Illinois Central. She's now a partner at Fletcher & Sippel, a Chicago firm that claims on its Web site it's the only law firm "that caters specifically to rail clients." So she brought the perspective of an inside and outside counsel.

Gilbert remembers the dark days of 2003, when the company was routinely settling asbestos claims, feeling it had little choice. That was the year she met with Hunter Harrison, CN's chief executive, and proposed a tough new approach. She told him it would take patience and money, and it could take five years to see a return on investment. They would take hits in courtrooms, she warned him - particularly in plaintiff-friendly venues like Jefferson County, Miss. But she felt it was important to let plaintiffs know that "the candy store" was no longer open for business.

Harrison, who retired last year, gave her the go-ahead. He was originally from Memphis, Gilbert said, "and he smelled a rat in Mississippi."

The railroad's message has apparently been received. After plaintiffs realized cases were going to be reviewed and investigated and put to the test, hundreds were dismissed without payment. A full third of Illinois Central's cases disappeared rather quickly, she said. And the new cases dried up even more dramatically. In 2003, 1,200 new cases were filed. In 2009, just 29 were.

Gilbert and Mulholland emphasized that Illinois Central's success is part of a larger story. Both give a lot of credit to Janis Jack, the federal judge in Corpus Christi, Texas, who handled the silica multidistrict litigation. Judge Jack held hearings in 2005 during which defense lawyers were able to show that some of the doctors who diagnosed silicosis in many of the claimants had also diagnosed asbestos-related diseases in thousands more - sometimes in the same plaintiffs (despite the astronomical odds of such an occurrence).

In her ruling, the judge minced few words. The diagnoses that were exposed in her courtroom "were manufactured for money," she wrote.

Mulholland was one of the defense lawyers who questioned doctors in Judge Jack's court. "The effect of the hearings was felt far and wide," he said. It helped push tort reform in Mississippi, where many of the silica claims had first been filed. Ultimately, it changed the landscape of both silica and asbestos litigation, he added.
Gilbert acknowledged that there are, indeed, legitimate claims.

"I'm not saying that all plaintiffs' claims are fraudulent." To railroad employees injured on the job as a result of asbestos exposure, she said: "We're willing to talk to you. Those are the cases that should be filed."

But to plaintiffs' lawyers looking to apply pressure through mass screenings, she took a different tack. "Our message is: Don't take advantage. Don't lie to us. We're going to take you to task if you do."

Copyright 2010. ALM Media Properties, LLC.

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