Bankruptcy Court Decision Unwittingly Supports the Pro-Asbestos Movement

The conclusion of a suit brought by mesothelioma victims against Garlock Sealing Technologies ended up being a tiny victory for the pro-asbestos movement. Though Garlock, one of the world’s biggest manufacturers of asbestos gaskets, has been found guilty of occupational asbestos exposure, the company’s financial obligation to its current and future victims was greatly reduced by a bankruptcy judge. Garlock’s triumph could represent a shift in the treatment of defendants in occupational asbestos exposure cases.

The Case Against Garlock

Garlock is an asbestos industry heavyweight. The company is responsible for making gaskets used on both submarines and navy ships. All of these gaskets contain asbestos, in order to move hot fluids through gasket valves and pipes. It has become common knowledge that Garlock employees who worked on these gaskets were likely exposed to asbestos. Since the 1980s, Garlock has been subject to numerous occupational asbestos exposure suits from past employees. These cases have either ended in million dollar verdicts for the plaintiff or were settled out of court for substantial and undisclosed amounts of money.

However, in a January 2014 Bankruptcy Court ruling, Garlock caught a break. Over 4,000 Navy veterans and numerous other mesothelioma sufferers had brought a successful suit against Garlock for their illnesses. The fact that Garlock was responsible for the occupational asbestos exposure was not the dispute in this matter. However, a Bankruptcy judge made a bold move and reduced the damages that Garlock owed to these victims by around 90 percent.

The Decision By the Bankruptcy Court

The United State’s Western District Bankruptcy Court for North Carolina was required to make a financial estimate about the degree of Garlock’s financial obligations in both the mesothelioma claims in the current case, and also for future claims. The company, which is currently going through bankruptcy proceedings, was required to have this determination made, as a means to consolidate funds owed to debtors. While the plaintiff’s attorneys were able to prove that the Garlock’s liability was around $1 billion, the bankruptcy judge differed in opinion. As a result the Bankruptcy Court ruled that Garlock was liable for only $125 million, an amount 9 times less than then the $ 1 billion amount presented by the plaintiff’s attorneys. The reasoning for this decision was not based on Garlock’s liability for asbestos exposure, but instead upon the court’s belief that in past occupational asbestos exposure cases, Garlock had been taken advantage of and singled out by the opportunistic plaintiffs.

In support of the decision to greatly decrease Garlock’s financial obligation the judge highlighted how for decades Garlock had been the victim of a savage smear campaign by asbestos victims looking to target Garlock specifically to receive ample sums of money through settlements, and court decisions. While it is true that Garlock has been involved in a large amount of occupational asbestos exposure cases, this fact does not mean that Garlock was not indeed liable for every exposure case they were found liable for.

Many question the decision to lower the damage award for Garlock. They question the judge’s experience with personal injury cases, especially since this was his first and only asbestos case. However, it is true that many employer defendants in asbestos cases have complained about how they were recklessly named in occupational asbestos exposure suits upon the advice of feckless lawyers looking to stick it to the asbestos industry. A more balanced take on the decision is probably that the Bankruptcy Court recognized that Garlock, though responsible for occupational asbestos exposure, had both already fulfilled at significant portion of its obligations through the settlements and damages paid in past cases. Furthermore, it is important to note that it was the past payments that ultimately led to Garlock being in bankruptcy court, while its debtors fought for any remaining money. Ultimately, a reduced award of $125 million could simply represent a feasible amount that Garlock actually had the resources to pay.

You should contact an asbestos exposure attorney if you believe you may have a occupational asbestos exposure claim.


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