CSX says Peirce firm violated discovery order, wants counterclaims dismissed

WHEELING – CSX Transportation is asking a federal court to impose sanctions against a former Pittsburgh law firm it is accusing of making false asbestos claims.

CSX filed its motion for sanctions Dec. 7 in the Wheeling federal court that is hearing the racketeering case it filed against Peirce, Raimond & Coulter. U.S. District Judge Frederick Stamp held a hearing Dec. 10.

Court records show the jury trial begin, as scheduled, on Dec. 11.

CSX’s lawsuit claims the firm conspired with radiologist Ray Harron to fabricate false asbestos claims against the company. Louis Raimond retired in 2003, and Mark Coulter left the firm in 2005.

The motion for sanctions concerns 8,417 pages of information that were to have been given to CSX by Oct. 5. The Peirce firm turned them over on Dec. 6-7 – less than a week before the trial was scheduled to begin.

“The bulk of the late-produced documents appear to relate to the Lawyer Defendants’ Counterclaims – in particular, their alleged practice of dismissing cases upon the receipt of prior releases,” the motion says.

“Based on CSXT’s initial review, the late produced documents appear to show… instances where the Lawyer Defendants refused to dismiss cases based on prior releases, which directly refutes the key premise of Count 1 of their counterclaims.”

CSX says the documents were non-privileged and should have been turned over, subject to orders entered on July 18 and Aug. 2, by Oct. 5.

An appropriate sanction, CSX says, would be the dismissal of the Peirce firm’s counterclaims against it. If the court is unwilling to do that, CSX says an alternative sanction would be prohibiting the Peirce firm from introducing evidence that it dismissed Federal Employers Liability Act claims upon the receipt of prior releases.

“Under no circumstance, however, should the court continue the trial on CSXT’s affirmative claims,” the motion says. “Such a course would unfairly deny CSXT its longstanding trial date while rewarding the Lawyer Defendants for their violation by giving them more time to prepare their defense of CSXT’s case.”

The Peirce firm was required to produce all non-privileged information from the FELA files for 167 clients identified by CSX. All but three of those clients were cases where the Peirce firm was presented with a prior release, CSX claims.

“CSX is attempting to turn a simple production mistake involving approximately 8,000 pages out of almost 1.1 million pages already produced – an innocent mistake remedied within hours of its discovery – into a free pass to avoid defending the counterclaims on the merits or, alternatively, into a basis for interrupting the court’s well-considered trial schedule,” a response filed by Peirce and Raimond says.

“This is blatant overreaching. Regrettably, CSX’s motion seeks to occupy the court’s time with a needless motion seeking an uncalled-for remedy when there are more important substantive issues related to trial to be addressed.”

CSX is accusing the firm of filing a massive amount of lawsuits in overburdened courts to prevent the company from any meaningful discovery, which concealed fraudulent claims and leveraged higher settlements.

Stamp granted summary judgment to the defendants in 2009, finding a statute of limitations had run out.

In late 2010, judges of the U.S. Court of Appeals for the Fourth Circuit in Richmond remanded the case to Stamp with instructions to let CSX amend the complaint.

At issue in CSX’s claims against the Peirce firm are 11 claims the company alleges were fraudulent. The Peirce firm says the missing pages are not related to any of the 11.

“In short, the documents at issue comprise a small fraction of a small fraction of an enormous document production, and CSX already has a wealth of documents that are of the same type and subject matter,” the response says.

“Simply, the documents do not contain any revelatory information but are a random sample of more of the same kinds of documents that CSX already had.”

The response also gives a detailed explanation of why the documents were not disclosed by Oct. 5. They were “inadvertently omitted” during a labeling and production phase.

The lawsuit has been pending for more than seven years. The trial is scheduled to begin Dec. 11.

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.”