This NY Times article reports that Dallas-based personal injury plaintiffs firm Baron & Budd is among three law firms that may be targets of a criminal investigation by the U.S. Attorney’s office of the Southern District of New York.
Documents that have surfaced in the chapter 11 bankruptcy case of G-1 Holdings (formerly known as the GAF Corporation), a manufacturer of roofing material, reflect that the debtor’s counsel has met with the U.S. Attorney in Manhattan during recent months and turned over records of interviews with former employees of three plaintiffs’ firms — including Baron & Budd — in which the employees admitted that they had coached potential asbestos claimants and witnessed efforts to influence doctors’ diagnosis of the claimants’ ailments.
As the article notes, the investigation is potentially troublesome for the plaintiffs bar because asbestos litigation has become a huge industry. A Rand Corporation study notes that almost three quarters of a million people have filed claims for asbestos-related injuries over the past 20 years, resulting in damages of over $70 billion as of 2002. Moreover, the huge unliquiated nature of future asbestos claims has been one of the primary causes of more than 75 companies, including large companies such as Bethlehem Steel, Owens Corning and W. R. Grace.