Standing up to the hoodlums...

Heartening news in the WSJ about the biggest scam in the world, the asbestos litigation quagmire. A judge and a defendant are actually standing up to those vile thieves! Charlene was involved in the litigation when I first met her, so I've learned a lot about that criminal enterprise.

....A building materials company, W.R. Grace was among the firms swept up in a second round of asbestos litigation in the late 1990s. Having chewed their way through asbestos manufacturers, trial lawyers went after companies that had only a marginal asbestos link. By blanketing these firms with an avalanche of claims they recruited, the tort bar pushed at least 30 of these second-tier players into bankruptcy.

Most companies then followed the usual asbestos bankruptcy script. They cut a deal with the plaintiffs attorneys, handing over a big sum to pay current and future claims. Federal bankruptcy judges happily went along, because most view their jobs as getting companies out of bankruptcy quickly and few want the hassle of investigating tens of thousands of individual asbestos claims.

Enter W.R. Grace, and its lead attorney, David Bernick, a veteran of the tobacco and breast-implant wars. Mr. Bernick has taken the unheard-of position that federal rules of evidence apply even in bankruptcy court. He has argued that the only way Judge Judith Fitzgerald can make a legitimate ruling on Grace's liability is for her to decide first how many claims have scientific merit. This is revolutionary stuff.

To her credit, Judge Fitzgerald has allowed Grace to investigate those claims, and present her with its results. The stakes are enormous. At the end of this process, Judge Fitzgerald will make a finding on W.R. Grace's ultimate liability. The plaintiffs claim it is as much as $6 billion, a figure that would make Grace insolvent. The company claims the money necessary to cover legitimate claims is closer to $500 million, a number that would allow it to rejoin the land of the living...