The question, on its face, would seem to offer an obvious answer. But a United States district court decided they could, and it was left to the Third Circuit to say otherwise in Williams v. BASF Catalysts, No 13-1089 (Sept. 3, 2014). It is a long way to the truth and an interesting story.
In 1979 a wrongful death suit was filed claiming that talc sold by a BASF corporate predecessor contained asbestos. Indeed, the suit turned up numerous test and assay results confirming the presence of asbestos, a fact also acknowledged in extensive deposition testimony by the company's scientists and executives. Defense counsel was the law firm of Cahill Gordon and Reindel.
The case settled, the terms including "a confidentiality clause that prohibited the parties from discussing the case or sharing the evidence." As the Third Circuit observed, '[m]uch of the ... evidence has yet to be seen again."
It appears that the company sold this initial as best the suit as the iceberg's tip. And so, according to the complaint, all documentary evidence regarding asbestos containing talc "was thereafter gathered up, collected ... and subsequently ... destroyed or secreted away."
BASF's efforts to evade responsibility did not end with destruction of evidence, according to the complaint. Aided by its law firm, Cahill Gordon & Reindel, it "manufactured favorable evidence" including false affidavits, false and incorrect expert reports and discovery verifications.
The one-two of destroying or concealing inculpatory evidence and manufacturing exculpatory evidence proved effective. The plaintiffs all "discontinued, dismissed or settled" there as best as-injury lawsuits based on the "false representations" of the company and its lawyers, according to the complaint. And the hammer was swung wide: the lawyers threatened plaintiffs and plaintiff's lawyers with sanctions and penalties if they did not accept the false representations and dismiss their lawsuits, according to the complaint.
The scheme began to unravel a few years ago. A former research chemist testified in a case in New Jersey state court that the company's talc contained asbestos, that the company had closed its talc mine because of asbestos and that a company executive had required him to hand over all his asbestos-related documents. This led to the following the Third Circuit recited:
The chemist's testimony triggered discovery into what documents BASF had destroyed or concealed in the litigation. Many of these documents had been secretly in a Cahill storage facility. The case settled and the incriminating documents were placed in escrow pursuant to the terms of the settlement agreement.among the documents are test from 1972, 1977, 1978, and 1979 that establish the presence of asbestos fibers in [the company's] talc. None had ever been produced or disclosed in earlier litigation. (emphasis added).
The plaintiffs claimed that these wrongful and fraudulent actions -- destroying and concealing inculpatory evidence while fabricating exculpatory evidence -- deprived them of fair resolutions of their asbestos injury claims. The district court dismissed the plaintiff's claims, ruling that they were barred by the "litigation privilege."
The "litigation privilege" serves as a form of civil immunity and "generally protects an attorney from civil liability arising from words he has uttered in the course of judicial proceedings." The idea, of course, is to encourage and protect "unfettered expression" in adversary proceedings. The ultimate idea and purpose being that such "unfettered expression" will promote and serve the truth-finding function of the adversary process and its lawsuit. So, in the way that the law can sometimes stand on its head, the question presented was whether the "litigation privilege," a tenet based on protecting the truth-seeking function, can also bear any liability or responsibility for wrongful actions actions that have frustrated and precluded the truth-seeking function by destruction and/or manufacturing of false evidence.
The Third Circuit ruled it could not, finding the proposition a step quite too far. Quite simply, the court concluded that the "litigation privilege" has "never immunized systematic fraud designed to prevent a fair proceeding." So the case was remanded back to the district court for further proceedings.
There has been a number of other interesting discussions of the Williams case: Alison Frankel, How to (allegedly) hide evidence, lie to opponents – and get away with it, Reuters (October 3, 2014); Jef Feeley and Sophia Pearson, BASF Must Face Asbestos Coverup Fraud Claims, Court Says, Bloomberg (Sep 4, 2014); Peg Brickley, Appeals Court Breathes New Life Into Fraud Case Involving BASF, Cahill Gordon, WSJ Law Blog (September 4, 2014); Suit Alleging Cahill Gordon Hid Asbestos Evidence Revived, New Jersey Law Journal.
Robert L. Abell
www.RobertAbellLaw.com
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