Attorneys facing fraud verdict say CSX's expenses are padded

WHEELING – Pittsburgh asbestos attorneys found to have committed fraud are accusing CSX Transportation of the same type of behavior.

Robert Peirce and Louis Raimond, formerly of the firm Peirce Raimond & Coulter, alleged Feb. 20 that the company is requesting reimbursement for several illegitimate expenses that are hidden among legitimate expenses.

The company sued the Peirce firm in 2005, alleging the firm conspired with a Bridgeport radiologist to fabricate asbestos claims that were filed among legitimate claims.

A federal jury in December found the attorneys committed fraud and racketeering and awarded CSX $429,240.27, a figure that could be tripled because of the racketeering verdict. CSX is asking for more than $10 million in attorneys fees and expenses.

“CSX has supported its $578,297.31 bill of costs with numerous expenses that are improper, seemingly content to force the court and opposing parties to sift through the data to separate legitimate from illegitimate costs,” Peirce and Raimond’s objections to CSX’s bill of costs says.

“This is not appropriate and CSX’s bill of costs should be disallowed in total. At a minimum, as discussed below, $524,199.24 should be deducted from CSX’s bill of costs.”

Peirce and Raimond first argue that CSX should not be able to recover transcript-related costs exceeding transcripts necessarily obtained for use in the case. The company paid extra to expedite production of transcripts of pre-trial hearings without explaining why, they claim.

The attorneys also object to $480,518.14 in copying expenses.

“These expenses should be disallowed because CSX has failed to properly support its request for these costs and made no effort to segregate taxable from non-taxable costs,” the brief says.

“A prevailing party is not entitled to fund its litigation support system or the costs of convenience-related copying expenses on the backs of opposing parties.”

The brief notes that more than $300,000 in copying costs was incurred during a three-month span in 2011 when discovery was stayed.

Peirce and Raimond further argue that:

-CSX should not be able to recover pro hac vice fees;

-CSX should not be able to recover fees charged by private process servers; and

-CSX should not be able to recover travel and subsistence costs sought for an expert witness.

At most, CSX should be awarded $54,000 in costs, less than 10 percent of what it is requesting, the brief says.

Other post-trial issues include the possible tripling of the damages and attorneys fees.

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.

If the verdict is allowed to stand, the asbestos 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.”

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 radiologist Ray 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.”

CSX’s lawsuit was filed later that year against the Peirce firm and Harron.

From the West Virginia Record: Reach John O’Brien at

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