WHEELING - Asbestos attorneys found to have committed fraud are asking for a new trial, while CSX Transportation wants the more than $9 million in attorneys fees it incurred during its lawsuit paid by them.
Pittsburgh attorneys Robert Peirce and Louis Raimond, found in December by a federal court jury to have conspired with radiologist Ray Harron to have fabricated asbestos claims, filed their motions for judgment or a new trial on Jan. 18.
"Through the use of improper and prejudicial evidence, including repeated violations of several motion in limine rulings made by the Court, CSX conducted an effective smear campaign of the Peirce Firm’s asbestos-related litigation practice at trial, but the actual evidence of mail or common law fraud or conspiracy is woefully insufficient to support the jury’s verdict," an accompanying memorandum says.
"When the improperly admitted evidence and improper arguments of CSX are excluded, it becomes clear that rather than being based on the evidence, the jury’s verdict was based on 'passion and prejudice' and cannot be sustained."
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. U.S. District Judge Frederick 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, nearly two years ago, 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 Peirce firm’s appeal of the decision.
CSX amended its complaint to include 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.
Attorney Marc Williams, who represented CSX, said the jury’s award could be tripled because of the racketeering verdict.
The asbestos attorneys' memorandum says if a good faith basis existed for filing the 11 claims at issue, they cannot be liable under the RICO act or common law.
"Simply, while CSX put on evidence of Peirce Firm practices that clearly offended the jury and prejudicially influenced its verdict, those practices do not prove fraud or a fraud conspiracy," the memorandum says.
"When this 'evidence' is eliminated because it was improperly admitted and/or does not support a fraud/RICO fraud verdict, CSX’s verdict rests on nothing more than evidence that Dr. Harron was a liberal reader with a positive read rate of roughly 60-65 percent."
If the verdict is allowed to stand, the attorneys ask that the damages amount be reduced to $95.368.98. The attorneys had previously asked that CSX not be able to recover any damages on RICO claims that post-dated July 5, 2007.
If there were a racketeering scheme, CSX knew about it by then, they argued. The proposed reduction in the verdict amount represents a subtraction of damages for claims after the date, based on legal billings submitted by the company.
On Jan. 21, CSX asked the court to order the defendants to pay its attorneys fees and litigation costs -- $9,751,838 and $923,094, respectively.
"Two points bear mentioning at the outset," the motion says. "First, the fees and expenses that CSXT is seeking are directly attributable to the complexity and duration of the case and the manner in which the defendants litigated it.
"Indeed, fully one-third of the total fees CSXT is seeking were caused by the Lawyer Defendants' unnecessarily broad post-remand discovery demands.
"Second, the amount CSXT is seeking is substantially less than the total fees CSXT actually incurred and paid in connection with this case. In particular, CSXT has carefully reviewed its billing records and excluded from this motion more than $2.5 million in various fees and expenses."
CSX cited the state Supreme Court's ruling in a 1992 decision that says, "where it can be shown by clear and convincing evidence that a defendant has engaged in fraudulent conduct which has injured a plaintiff, recovery of reasonable attorneys fees may be obtained in addition to the damages sustained as a result of the fraudulent conduct.'"
CSX also claims that courts have rejected arguments that fees awarded should be proportional to the compensatory damages awarded.
"In fact, courts routinely grant RICO fee awards many times larger than the damages recovered," the motion says.
"This approach is consistent with -- indeed, mandated by -- RICO's objective of ensuring that the plaintiff's recovery will not be diminished by counsel fees."
One-third of the fees and expenses the company is seeking are attributable to the defendants' discovery demands, the motion says.
"All told, they propounded a whopping 140 interrogations, 157 requests for production and 78 requests for admission," it says.
"In response, CSXT physically produced approximately 406,000 pages of documents; made approximately 3.5 to 4 million hard copy pages available for inspection and copying; made 3 million pages of electronic documents available for inspection and copying; and logged as privileged an additional 156,000 documents."
The jury reached its verdict two days shy of the lawsuit's seventh birthday. On its online docket are 1,566 filings.
From the West Virginia Record: Reach John O'Brien at email@example.com.