April 3, 2000 - Shepard Hoffman once donned a Darth Vader costume
at one of the annual seminars he organizes for asbestos plaintiffs lawyers
in a quirky demonstration of what he calls the evil ways of asbestos
So why did Hoffman and Houston plaintiff's lawyer W. Mark Lanier, who in
1998 won what Lanier says is this country's largest asbestos verdict --
$115.7 million -- defend a member of what Hoffman calls the "evil
Hoffman and Lanier say they had to help former asbestos manufacturing giant
T & N Ltd. set aside a $1.6 billion default judgment won by
Owens-Illinois Inc. to protect a huge source of settlements for victims.
Lanier and Hoffman say T & N will pay their expenses for their work on
the default judgment, but they will be paid fees if they are retained for
the rest of the litigation, which is likely.
But both lawyers say their involvement in the case isn't about money -- it's
about their clients.
"If I had been successful, I would have walked away from asbestos
litigation without having paid one red dime or suffered one red cent of
damages," says Lanier, of Lanier, Parker & Sullivan, who represents
some 1,600 plaintiffs who have settled claims against T & N.
"Meanwhile all of the victims out there in line to get T & N's
money would have been deprived."
U.S. District Judge David Folsom of Texarkana, Texas, on Feb. 28 vacated the
judgment, which Lanier says is one of the largest default judgments ever
entered in the United States. Folsom unsealed the order March 16.
Folsom ruled that although a legal assistant at T & N's headquarters in
Manchester, England, was served with the complaint, the company's failure to
answer the suit filed in June by Owens-Illinois was the result of an
isolated human error.
T & N national trial counsel Paul Hanly says the company did not find
out about the suit until Dec. 13, four months after the judgment had been
entered and a week after Owens-Illinois obtained an ex parte order
authorizing the company to collect.
The litigation between the two companies is being closely watched by the
plaintiffs bar, particularly in Texas, where lawyers say T & N, formerly
known as Turner & Newall, is a major defendant.
Lawyers say the move by one major asbestos manufacturer against another is
unprecedented in the annals of asbestos litigation, although defendant
companies often bring in other companies as third-party defendants or fight
Citing the Racketeer Influenced and Corrupt Organizations Act,
Owens-Illinois alleges T & N conspired with Johns Manville Corp. and
CAPE Asbestos, two other major asbestos manufacturers, from the 1920s
through the 1960s to create a worldwide cartel for the sale of raw asbestos
T & N, which years ago got out of the asbestos business and is now an
automotive parts company, allegedly sold the fiber to companies like
Owens-Illinois, which used it in pipe insulation products.
Owens-Illinois, which sold asbestos-containing products from 1948 until
1958, alleges that T & N knew in the 1940s of the health risks that the
fiber posed to end-users who handled asbestos insulation, but withheld that
information from the British government, unions and customers.
Owens-Illinois alleges it never would have gotten into the asbestos business
if it had known those risks, and did not discover the danger to end-users
until 1964 or 1965, when an epidemiological study was published, says
Richard Josephson, of Houston's Baker Botts, who represents Owens-Illinois.
"Who would have bought raw asbestos from any of them if they knew that
the people who were going to be exposed to that product would have been at
risk of developing disease?" Josephson says.
Josephson says Owens-Illinois has filed a similar suit in Texarkana against
CAPE Asbestos, now known as CAPE P.L.C. He says the British company's policy
is not to answer suits filed in the United States.
Josephson says Owens-Illinois did not discover the alleged conspiracy until
1998, after T & N was purchased by Federal-Mogul Corp., a Michigan
automotive parts company. Owens-Illinois alleges that as part of a corporate
restructuring, T & N was divesting itself of U.S. assets. Folsom
rejected the argument and Hanly denies the allegation.
Josephson declines to elaborate because the entire case file except Folsom's
order vacating the default judgment is sealed. The case, originally filed in
Marshall, Texas, has been transferred to U.S. District Judge T. John Ward.
Josephson maintains T & N owes Owens-Illinois more than $1 billion in
damages for claims paid to asbestos victims and other losses the company
suffered because of its involvement in the asbestos business.