Judge triples fraud verdict against asbestos attorneys, radiologist

WHEELING – A federal judge has tripled the damages awarded against two former members of a Pittsburgh law firm and the radiologist they were found to have conspired with to fabricate asbestos claims in West Virginia.

U.S. District Judge Frederick Stamp, of the Northern District of West Virginia, issued a series of rulings on Sept. 25 in CSX Transportation’s fraud lawsuit against former law partners Robert Peirce and Louis Raimond and radiologist Ray Harron.

Stamp denied the defendants’ motions for judgment as a matter of law or in the alternative for a new trial and granted CSX’s motion to triple a nearly $430,000 jury award pursuant to the Racketeer Influenced and Corrupt Organizations Act.

“The defendants’ arguments that this Court should deny this motion as it would be premature to amend the judgment prior to this Court ruling on the issues contained in their post-judgment motions are moot,” Stamp wrote.

“This Court has since denied the defendants’ motions as to those issues and thus, it would not be premature to now amend the judgment.

“Further, the defendants’ argument concerning CSX’s statements during trial that this case was not about the money have no bearing on the fact that based on the above-cited law, CSX is entitled to treble damages.”

The resulting amount is $1,287.721.41, plus post-judgment interest at a rate of 0.15 percent per year since the December jury verdict.

Stamp did not make a ruling on the most expensive motion – CSX’s request that the defendants pay its more than $10 million legal bill.

Stamp decided to postpone any decision on the motion until exhaustion of any appeal.

“An examination of all the supporting documentation that the parties provided in relation to the motion and bill of costs, together with an examination of the legal issues involved in the briefing of the motion and bill of costs, will require a great amount of time and an analysis of numerous factual and legal issues,” Stamp wrote.

“If any appeal of the jury verdict and amended judgment is successful, such time and effort expended ruling on these matters will be a misuse of this Court’s resources as at the very least such rulings will need altered.”

On Dec. 20, an eight-person jury found Peirce, Raimond and Harron committed racketeering, conspiracy and fraud and ordered them jointly and severally liable for a penalty of $429,240.27.

CSX’s original complaint, filed in 2005, said Peirce’s firm hid nine fraudulent claims among other lawsuits filed by the law firm in West Virginia.

The nine lawsuits were filed and settled from 2000-2006. Stamp granted summary judgment to the Peirce firm in 2009, ruling a four-year statute of limitations began when the Peirce firm began targeting CSX.

However, the U.S. Court of Appeals for the Fourth Circuit overturned that decision and gave new life to the lawsuit. The U.S. Supreme Court declined to hear the defendants’ appeal of the decision.

CSX amended its complaint to include two additional claims it said were fraudulent. The Peirce firm filed counterclaims against the company that said it was engaging in fraud by bringing and conducting the lawsuit, though the jury ruled for CSX on them.

In 2005, federal court judge Janis Graham Jack made national headlines when she uncovered duplicate and fraudulent silica diagnoses in her Texas courtroom. Many of those diagnoses were made by Harron and were made on plaintiffs who had already brought asbestos claims.

In Jack’s opinion dismissing the claims, she said “These diagnoses were driven by neither health nor justice – they were manufactured for money.”

Following Harron’s admission that he did not even make the diagnoses of the patients whose X-rays he read, Jack noted that most of “these diagnoses are more the creation of lawyers than doctors.”

The defendants had also requested that if the verdict was allowed to stand, then the amount should be reduced to $95,368.98 because CSX should not be able to recover any damages on RICO claims that post-dated July 5, 2007. Stamp also denied that request.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.