Corporate Client Panel

Transcription

1 Corporate Client Panel Tanya D. Holcomb Honeywell International Inc. 101 Columbia Rd. Morristown, NJ Paul F. Slater General Electric Company Fairfield, CT Robert G. Ventura Metso Automation USA Inc. Shrewsbury, MA Jennifer A. Creedon Verrill Dana, LLP One Boston Place, Suite 1600 Boston, MA (617)

2 Tanya D. Holcomb, chief corporate litigation counsel for Honeywell International Inc. in Morristown, New Jersey, manages a variety of domestic and international litigation, including corporate, commercial, and product liability matters. Her docket includes all of the company s asbestos liabilities and related insurance coverage actions. Ms. Holcomb is also responsible for managing the company s outside legal spend, its litigation prevention, and cost control initiatives. She seeks to bring efficiency, innovation, and strategic leadership to Honeywell s internal and external litigation management efforts. Paul F. Slater is senior counsel for corporate environmental programs for General Electric Company in Fairfield, Connecticut. Mr. Slater has presided over GE s strategy in a number of the company s most complex toxic tort litigations. He has played a leading role in designing and implementing GE s strategy in its asbestos litigation, including overseeing GE trials in various jurisdictions, including Madison and Cook County, Illinois, and San Francisco, California. Mr. Slater is also involved in internal health and safety policy and provides counsel to GE regarding general environmental liability and risk issues. Robert G. Ventura was appointed general counsel of Metso Automation USA Inc. in June Metso provides industrial automation systems and flow control products to the oil and gas, power generation, petrochemical, pulp, and paper industries. Mr. Ventura is responsible for managing the legal affairs of Metso s North American business operations, including commercial contracts, litigation management, corporate governance, ethics, and regulatory compliance. Prior to joining Metso, he served as director of mergers and acquisitions for Raytheon s Integrated Defense Systems division. Jennifer A. Creedon is a trial attorney with Verrill Dana LLP in Boston. She represents large and small companies in asbestos, product liability, and business litigation. Ms. Creedon has defended toxic tort and product liability actions for the past 15 years in Massachusetts and Rhode Island. She has served as local, regional, and national counsel for companies with toxic tort and asbestos litigation. Ms. Creedon has handled federal multidistrict litigation, including cases consolidated in MDL 875 (In Re: Asbestos Products Liability Litigation (No. VI)) and the Maritime Docket (MARDOC).

3 Corporate Client Panel Table of Contents I. Outline of Topics for Panel Discussion Attachment A Attachment B Corporate Client Panel Holcomb et al. 265

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5 Corporate Client Panel I. Outline of Topics for Panel Discussion 1. Global Settlements: Do They Still Have a Place in Litigation? 2. Corporate Depositions: Tips for Working with General Counsel 3. Lung Cancer Cases: Trends and Strategies 4. Asbestos Still Making Headlines: Commentary on Recent Wall Street Journal Articles 5. Corporate Perspective: Medicare Secondary Payer Act 6. Mediation: Does It Have a Place in Asbestos Litigation? 7. Discovery: Tips from the Inside; Cost-effective, Strategic Goals for Improving Client Relationships 8. Corporate Perspective: Did I Really Want that Article? How to Make Client Communications Effective and Meaningful 9. Future of Litigation: Predictions Regarding the Effect of Bankruptcy, Trusts & Likelihood of Increased Trial 10. Client Relationships: How to Strengthen Relationships & Build New Ones 11. Communication: What Do You Want to Know? What Do You Need to Know? Effective Communication in the Age of 12. The Role of National Coordinating Counsel: How Do Serial Asbestos Defendants Structure Their Defense Teams? How to Prevent the Duplication of Efforts and Costs Between National Coordinating Counsel and Jurisdictional Counsel 13. Business View on Asbestos Litigation: How to Effectively Convey Successes, Challenges and the Future of Asbestos Litigation to Corporate Representatives and Insurers Alike Corporate Client Panel Holcomb et al. 267

6 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com Attachment A News, Quotes, Companies, Videos SEARCH KELLY FLORENTINO My Journal U.S. EDITION Monday, March 11, 2013 As of 5:55 AM EDT Home World U.S. New York Business Tech Markets Market Data Opinion Life & Culture Real Estate Management Earnings Economy Health Law Autos Management Media & Marketing Energy Small Business Startups More Industries TOP STORIES IN BUSINESS 3 of 12 4 of 12 5 of 12 6 of 12 More U.S. Profits Parked Abroad Drooping Ratings Pressure NBCU's Cash Cow Amazon's Quest for Web Names Draws Foes Refiners Squeezed by Ethanol Law BUSINESS Updated March 11, 2013, 5:55 a.m. ET As Asbestos Claims Rise, So Do Worries About Fraud Article Graphics Stock Quotes Comments (21) MORE IN BUSINESS» Print By DIONNE SEARCEY and ROB BARRY Three decades after Manville Corp. collapsed under an avalanche of asbestos litigation, personal-injury claims continue to pile up at a rate of 85 per day. They find their way to a small office building in suburban Virginia, where processors evaluate the paperwork of pipe fitters and welders and shipbuilders who say they contracted debilitating lung diseases from the company's insulation products. By last March, a Manville bankruptcy trust had already paid out nearly $4.3 billion. So when a beneficiary of one David E. Knight came to the trust saying the former seaman had succumbed to the deadly cancer mesothelioma, the administrators didn't blink. Within five weeks, the claimant received a check for $26,250. Enlarge Image Dave Ryan/The Beaumont Enterprise A client of Brent Coon, above, who runs a Texas law firm, got a higher payout by claiming mesothelioma when in fact he died from lung cancer. California prosecutors are investigating. A Matter of Trust Highlight the connections between law firms and bankruptcy trusts. The only problem: There was no such Mr. Knight. Police say the claim was phony, filed by an employee of a law office specializing in extracting payouts from asbestos bankruptcy trusts. The apparently bogus claim is a footnote in the history of the multibillion-dollar asbestos-litigation industry, but it illustrates a troubling underside of the nation's longestrunning tort. With dozens of asbestosrelated manufacturers forced into bankruptcy, a burgeoning swath of the legal action has shifted out of the Don't Miss Unsold iphones Pile Up at Leap Wireless Most Popular in US 'Selfish' Singles Design Fantasy Homes Titanic II in the Works Suspect in India Rape Case Found Dead Bjorn Lomborg: Green Cars Have a Dirty Little Secret A New Obama? Preparing for Day When Rates Rise [?] 9:33:56 AM] 268 Asbestos Medicine November 2013

7 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com View Interactive Asbestos Through the Years Asbestos was used for decades in the U.S. starting in the mid-1800s before regulators took action to rein in the mineral that produces cancer-causing fibers. View Interactive courtroom and into a nebulous world of trusts that evaluate claims and authorize payouts with little outside scrutiny. By design, many are guided by teams of plaintiffs' lawyers the very group that seeks money for clients and has earned billions of dollars in fees on payouts through the years. Fraud allegations have periodically dogged the trusts. And, even though the worst asbestos-related diseases are finally starting to taper off, there is growing concern that the trusts will run out of money before America runs out of asbestos victims. Opening Budget Bids Set Parties' Battle Lines More in Business A Toy Maker Comes Home to the U.S.A. As Asbestos Claims Rise, So Do Worries About Fraud More U.S. Profits Parked Abroad Drooping Ratings Pressure NBCU's Cash Cow Singapore Group Buys L.A.'s Tallest Tower Sign Up For Business News By The latest news and analysis delivered to your in-box. Check the boxes below to sign up. Media Journal Markets Alert Deals Alert In Today's Paper Heard on the Street Energy Journal More photos and interactive graphics "Right now there are a lot of suggestions that fraud and abuse are present," says House Judiciary Chairman Bob Goodlatte, a Republican from Virginia, who has scheduled a hearing Wednesday on a bill requiring trusts to publish detailed claims reports to help ensure money goes only to legitimate victims. In recent months, judges across the country who handle asbestos cases involving still-viable companies have granted defense requests to subpoena bankruptcy trusts to sniff out potentially false and conflicting evidence. Many defendants believe such data could help expose fraudulent or inflated claims that could potentially save them hundreds of millions of dollars in jury verdicts. As part of an investigation into the state of asbestos litigation, The Wall Street Journal reviewed trust claims and court cases of roughly 850,000 people filed since the late 1980s until as recently as The analysis found numerous apparent anomalies: More than 2,000 applicants to the Manville trust said they were exposed to asbestos working in industrial jobs before they were 12 years old. Hundreds of others claimed to have the most-severe form of asbestos-related cancer in paperwork filed to Manville but said they had lesser cancers to other trusts or in court cases. The Manville trust declined to comment on individual cases, citing privacy concerns. The trust's general counsel, David Austern, said the trust tightened its oversight after a 2005 claims scandal, adding: "We audit periodically and haven't found any fraud." Joseph Rice, of the South Carolina-based Motley Rice law firm that has handled asbestos cases for 30 years, argues that thorough fraud prevention systems would be too costly and would leave less money to pay claims. Mr. Rice, whose firm holds advisory positions on a dozen trusts, including Manville, adds that because SIGN UP New! To sign up for Keyword or Symbol Alerts click here. Most Popular Read ed Video Commented To view or change all of your settings, visit the Setup Center. 1. Suspect in India Rape Case Found Dead 2. Opinion: Bjorn Lomborg: Green Cars Have a Dirty Little Secret 3. Opinion: A New Obama? 4. Preparing for Day When Rates Rise 5. Opening Budget Bids Set Parties' Battle Lines STREAM Corporate Intelligence: Live Coverage CORPORATE INTELLIGENCE 1 HR Media Journal: At NBCU, Ratings Weakness Spreads to Cable At a time when the middling performance of NBC s namesake broadcast business continues to attract lots of CORPORATE INTELLIGENCE 2 DAYS McDonald s Flat Sales A Snapshot of a Sluggish Real Economy McDonald s lackluster February sales report is a fresh sign that the real economy -- where people eat fast food and earn TWITTER 2 DAYS WSJ Corporate Intel WSJCorpIntel A private-sector approach to dealing with the massive amount of sexual misconduct on U.S. college campuses: 9:33:56 AM] Corporate Client Panel Holcomb et al. 269

8 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com the trusts process such a huge volume of claims, "there are going to be errors, and errors are not fraud." GO TO FULL CORPORATE INTELLIGENCE STREAM» Now numbering more than 40, the trusts represent the assets set aside by insulation makers, cement manufacturers and mining companies. As a group, the trusts set up by the bankrupt firms had at the end of 2010 paid about 3.3 million claims valued at $17.5 billion, according to a 2011 U.S. Government Accountability Office report. Roughly $18 billion was left to pay claims as of the end of 2011, trust filings show. FOLLOW CORPORATE INTEL ON THE GO WSJ.com/corporateintelligence on your smartphone or tablet Yet even those huge numbers may not be enough to satisfy the growing throng of people alleging asbestos injury. The number of claims paid by Manville, one of the biggest trusts and generally considered a bellwether, has tripled since So fast are assets being depleted that nearly half of the trusts have reduced payments to new victims at least once since The median payout percentage has dipped to 15% of what the trusts initially determined would be full value, as trusts attempt to preserve assets for future victims. That is the lowest level since 2003, according to economic consultant Bates White, which has defense firms and insurers among its clients for asbestos-related work. One puzzling complication: Asbestos-related claims continue to rise even though mesothelioma, the most severe asbestos-related disease and one that can take years to emerge in a patient, is waning. According to the National Cancer Institute, the incidence of mesothelioma in the U.S. fell 22% between 1992 and 2009, to 0.96 new cases per 100,000 from Before the U.S. government began regulating asbestos in the late 1980s, it was widely used as a fire retardant and insulator. Manville Corp., North America's largest producer of asbestos-containing products, advertised its materials as "a barrier against weather, time and fire." In fact, when asbestos dust is released in the air, tiny, jagged fibers can lodge in lungs. Cancer and other diseases from breathing in the harmful fibers sometimes don't show up for as long as 20 years or more. During Manville's bankruptcy proceedings, federal judge Jack Weinstein noted, "There is compelling evidence that asbestos manufacturers and distributors who were aware of the growing knowledge of the dangers of asbestos sought to conceal this information from workers and the general public." In 2001, the company's successor, now called Johns Manville, was purchased by Warren Buffett's Berkshire Hathaway Inc. BRKB +0.16% According to its website, it makes "formaldehyde-free" insulation that creates a "healthier living environment." Content from our Sponsors [?] BUSINESS INSIDER If You Have Gmail... You Must Have This CENTER FOR CONSUMER INQUIRER.NET FREEDOM US singer Anastacia It s Official: The Sea cancels Europe tour Shepherds Are due to cancer Pirates In the wake of Manville's collapse, federal bankruptcy laws were amended to allow the companies to shed asbestos liabilities and keep operating after they set up trusts to pay eligible victims who can prove exposure to their asbestos products. Top authorities at the trusts, called trustees, are typically appointed by the federal judge overseeing the bankruptcy. Many are retired judges or lawyers with bankruptcy experience. Most are paid an annual salary. Daily operations are usually handled by professional staff. In most trusts a handful of plaintiffs' attorneys, selected because they 9:33:56 AM] 270 Asbestos Medicine November 2013

9 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com Everett Collection A 1920s ad from Manville Corp., which has varied its name over the years. represented numerous clients suing the bankrupt company, sit on advisory committees. Most receive no salary, just reimbursements for expenses. But they hold considerable sway, according to trust documents, helping to design general payment policies and, in some cases, signing off on auditing procedures. Unlike court, where plaintiffs can be cross-examined and evidence Read More scrutinized by a judge, trusts generally Q&A: What's the Asbestos Risk Today? require victims or their attorneys to supply basic medical records, work histories and sign forms declaring their truthfulness. The payout is far quicker than a court proceeding and the process is less expensive for attorneys. Solvent companies are still being sued in court, and a single asbestos verdict or settlement can still net millions of dollars for asbestos victims and their attorneys, who collect fees of up to 40%. A California jury in June awarded $48 million to the family of a mesothelioma patient who said he inhaled asbestos fibers working as a contractor. Meanwhile, the bankrupt companies' trusts pay liquidated claims for pennies on the dollar of what they would be worth in court, so a single claim against a single trust isn't especially valuable. But there is no limit to how many trusts a person can tap. That is because it is impossible to trace asbestos fibers in lungs to a particular company. Numerous trusts offer on their websites lists of job site locations that will qualify claims if victims can offer credible evidence they worked there and were injured from asbestos exposure there. Some legal offices have mastered the various eligibility rules for each trust. John Lynch, an employee of the California-based Asbestos Legal Center who police allege filed the phony mesothelioma claim to Manville, had worked in the past at a company that processed claims for several other trusts. In this previous job, he ensured that attorneys provided proper proof their clients spent time toiling on qualifying Naval ships or in shipyards during periods when the trusts' asbestos products were in use. The Legal Center's founder, Michael Mandelbrot, said he hired Mr. Lynch in 2010 to join his small office so he could tap into that expertise. Mr. Mandelbrot called police when he learned about the allegedly false claim, which he said Mr. Lynch filed on his own. Mr. Lynch is no longer employed at the law office. 9:33:56 AM] Corporate Client Panel Holcomb et al. 271

10 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com Petaluma, Calif., police and Sonoma County prosecutors are investigating. Mr. Lynch hasn't been charged. He and his public defender didn't respond to requests for comment. Several trusts have raised broader questions about Mr. Mandelbrot's operation. In federal bankruptcy court filings, lawyers for three trusts Western Asbestos Settlement Trust, the J.T. Thorpe Settlement Trust and the Thorpe Insulation Settlement Trust say they suspect Mr. Mandelbrot's law office has submitted unreliable information about numerous clients' asbestos exposure and has withheld evidence that could scuttle or reduce the value of their claims. According to court filings, the claims include those from nurses who say they were exposed to asbestos on the job when they chipped paint from boilers which the trusts allege is incongruous work for that occupation. They also say Mr. Mandelbrot's office has filed claims from distant relatives of dead people who are able to assemble meticulous, decades-old lists of job sites where the victims worked that qualify them for a payout. Mr. Mandelbrot denies his law office engaged in any misconduct. "For an office that has built itself up on helping these victims and always having checks and balances in place, to be accused of these things it really is a tragedy, what's happening," Mr. Mandelbrot said. Mr. Mandelbrot, whose office has filed more than 3,000 claims to dozens of trusts, said the Manville trust offers the simplest route to getting his clients' claims paid. "They admit their products were everywhere," he said. "It's very easy. You don't have to really produce much." Manville and most other trusts consider claims to be legal settlements that contain personal health information and refuse to provide detailed information about them. The opportunity for abuse flourishes as a result, say some politicians, judges and defense lawyers. William Warfield's estate sued Union Carbide and several other solvent companies in Circuit Court for Baltimore City blaming them for the mesothelioma that eventually killed him in In a deposition, Mr. Warfield said he had been exposed to asbestos products only between 1965 and 1985 when he worked in a federal government job as a carpenter. But his claims to nine bankruptcy trusts, including Manville, said he was exposed between 1947 and 1991, according to court records. Circuit Judge John M. Glynn noted the differences and in a 2010 hearing called them "dramatically inconsistent exposure allegations," and suggested the dates may have been changed to skirt a state law that would have hurt the value of his case. Had Mr. Warfield claimed in his court case he was exposed to asbestos after 1985, he would have been subject to certain Maryland laws that cap damage awards. According to court records, the judge later described the case by saying, "the truth was jettisoned on a wholesale basis in pursuit of money." The attorney for Mr. Warfield's beneficiaries, Edward Monaghan from the Law Offices of Peter G. Angelos, declined to comment on the case, which is still pending. The Angelos firm later noted in a written statement that Mr. Monaghan had told the judge evidence standards for trust claims are different than those for trial. 9:33:56 AM] 272 Asbestos Medicine November 2013

11 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com In an interview, Judge Glynn, who presides over one of the largest asbestos dockets in the nation with about 500 active cases a year involving solvent defendants, said trust claimants "make these rather thin allegations, and they don't require any real proof." He added: "It comes across as the plaintiffs' lawyers see this as free money." In its analysis, the Journal found 2,689 Manville applicants through 2005 who claimed to be working in various labor-intensive occupations while under the age of 12. Among them were 753 people who claimed their exposure to asbestos began while working in construction before turning 12; 356 people who said they were metal workers; and 184 chemical workers. It is possible that some claim dates were recorded erroneously or the occupation listed on the claim may actually be that of an adult family member who tracked the asbestos dust home on their clothing, according to people familiar with Manville's claims processing. Meanwhile, at least 312 people submitted mesothelioma claims to Manville while describing the disease as lung cancer in filings to public court dockets or other bankruptcy trusts. Manville assigns the highest value of payment to mesothelioma, a cancer of the lining of the lungs or other organs, because it is fatal, generally progresses rapidly and causes much suffering. One law firm that made disparate filings was Brent Coon and Associates of Beaumont, Texas. Mr. Coon, who plays guitar in a rock band and is known for Christmas parties featuring performers such as Foreigner, represented Richard Baker, a Nevada electrician and smoker whose death certificate and pathology reports say he died of lung cancer in His claim forms to at least seven trusts say he died of lung cancer, as did his sweeping lawsuit against 42 solvent companies filed in state court in Harris County, Texas. The suit, stuck in a gummed up asbestos docket, is still pending. But to the Manville trust, Mr. Coon's firm said that its client had mesothelioma despite pathology reports submitted to the trust that listed Mr. Baker's disease as lung cancer, a distinctly different diagnosis. In Enlarge Image December 2004, the trust accepted Mr. Baker's mesothelioma claim and offered him the standard value it assigns to that disease, a payout of about $17,500. Had his disease been listed as lung cancer the value would have been $4,750. When contacted for comment, Mr. Baker's beneficiary, Carol Bellman, referred calls to Mr. Coon's firm. Mr. Coon said his files for the case were likely tucked away in storage. "What we try to do with our clients is get them what we can, where we can," said Mr. Coon, who sits on the advisory committee overseeing the roughly $1 billion in the trust set up by Combusting Engineering Inc. "Since we have thousands and thousands of these cases, we get work histories and their medical histories, and I'm sure there are errors made from time to time." Mr. Coon said his clients "are victims of the worst corporate mass genocide in history, one that has taken the lives of millions of industrial workers and their 9:33:56 AM] Corporate Client Panel Holcomb et al. 273

12 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com innocent families and they get off making token payments for what they have done to these people." The trust has faced problems before. In 2005, a federal judge's ruling in Texas led to the determination that doctors were fraudulently diagnosing numerous plaintiffs with asbestos-related diseases. The judge, Janis Graham Jack of Houston, discovered that in mass screenings a handful of doctors were diagnosing silica dust-related diseases in the same patients already diagnosed with asbestosrelated diseases at improbably high rates. Concerned some claims could be fraudulent, Manville and others banned payments to people who included reports from several doctors and X-ray screening companies. Tens of thousands of claims to Manville had relied on them. Immediately following the scandal, payouts by the Manville trust dropped dramatically. They began to rise again in 2007 and have since climbed at a steady annual pace. Manville's longtime managing trustee, Robert Falise, a former executive vice president of Irving Bank Corp., said: "We're paying out over $100 million in claims [annually] so it doesn't take much mathematics to figure out that won't go on forever." Draining the fund are claims such as one from Gail Garner, who in 2000 filed a claim on behalf of her father, Angelo Palermo. Ms. Garner obtained a diagnosis of a type of mesothelioma for him 37 years after he died. Mr. Palermo's April 1966 death certificate lists his cause of death at age 51 as "acute liver failure due to metastasis cancer due to primary stomach (place of origin)." Ms. Garner said he once worked for Manville. Armed with the death certificate, a blurry torso X-ray and brief medical notations, Ms. Garner asked pulmonologist William Beckett to offer a second opinion. Dr. Beckett, who was working in Rochester, N.Y., at the time, concluded that given Mr. Palermo's job history at asbestos work sites it was "quite possible" he suffered from mesothelioma of the stomach, a condition that medical experts believe is caused by asbestos exposure. In an interview, Dr. Beckett, who now practices in Massachusetts, stood by his diagnosis. He said he came to his conclusion "given [Mr. Palermo's] exposure history and everything I could find out from his daughter and his medical records, which were pretty sparse." The Manville trust reviewed Dr. Beckett's conclusion and eventually awarded her father's estate the highest possible payout. Ms. Garner, in an interview, wouldn't confirm the award but given Manville's payout percentages during the time frame her claim was processed she received as little as $37,500 or as much as $75,000. "The panel finds this decision to be a particularly difficult one," Manville counsel Mr. Austern wrote on June 6, 2003, explaining the award to Ms. Garner. "On the one hand, the deceased claimant has been able to produce very little by way of medical evidence to challenge the diagnosis/death decision that was made 34 years ago. On the other hand, there was extensive pain and suffering in this case, and early death, and abundant and apparent exposure to asbestos. In the totality of the 9:33:56 AM] 274 Asbestos Medicine November 2013

13 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com circumstances, the Panel believes this claim deserves extraordinary consideration." At least three other trusts paid Ms. Garner's claim, but she sued two others, including the DII Industries LLC Asbestos PI Trust, in federal court when they did not. "From the trust perspective there really was never any diagnosis," said Beth Petronio, a K&L Gates attorney for the DII trust. The trust eventually settled the case after Ms. Garner lost and then appealed, because "at some point, litigation is costly," Ms. Petronio said. Ms. Garner said in an interview she pursued the claims "because of the love of my father and how he died in a horrible and tragic, suffering death, how we had to grow up with my father not in my life." Ms. Garner said she plans to write a how-to book on successfully filing claims to asbestos trusts. James Oberman contributed to this article. A version of this article appeared March 11, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: As Asbestos Claims Rise, So Do Worries About Fraud. JOIN THE DISCUSSION 21 Comments, add yours MORE IN Business» Print Order Reprints Don't Miss Barron's Buzz: Why Is Gold Slumping 9:33:56 AM] Corporate Client Panel Holcomb et al. 275

14 Asbestos Claims Rise, So Do Worries About Fraud - WSJ.com Gulfstream's New $65M Best Seller Again? Meg Whitman Changes Stance on Gay Marriage Why Your Boss is Dumping Your Wife You Might Like Yes, You Still Can Have a Love Life Study: Less Than 10% of Indian MBA Graduates Are Employable Argentina Approves Deal With Iran Manhattan fare-beater gets 7 years in prison Q&A: What's the Asbestos Risk Today? Content from our Sponsors What's this? If You're Using Gmail, you Should try This! (Time & Space) The World s 10 Biggest Industrial R&D Spenders (The Financialist) SC junks bid to stop political ads on TV before the campaign period (Inquirer.net) New York s Anti-Prohibitionists Get Day in Court (Center for Consumer Freedom) David Gregory Is a Law-Breaking Monster (Tablet Magazine) Add a Comment View All Comments (21) JOURNAL COMMUNITY Community rules All comments will display your real name. Start typing your comments here... Track replies to my comment CLEAR POST Login with Facebook Editors' Picks What Would Jesus Brew? Estonia's Sauna 'Scavenger Hunt' A Toy Maker Comes Home to the U.S.A. Coney Island's Favorite Fundraisers Buyout Mogul Shops for U.S. Back to Top Customer Service Policy Ads Tools & Features More Customer Center Privacy Policy Your Ad Choices Apps Reprints New! Live Help Data Policy Advertise Newsletters and Alerts E-books Contact Us Copyright Policy Advertise Locally Graphics & Photos Content Partnerships 9:33:56 AM] 276 Asbestos Medicine November 2013

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16 Attachment B Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases - WSJ.com Page 1 of 7 Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit See a sample reprint in PDF format. Order a reprint of this article now U.S. NEWS May 5, 2013, 11:01 p.m. ET Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases By DIONNE SEARCEY On the asbestos law firm website of Roger G. Worthington is a photo of him and Dr. Robert Cameron in an operating room, both in scrubs, hovering above the splayed chest of a gravely ill person who is the legal client of one and patient of the other. "The hardest working man in America. Easily," Mr. Worthington, a plaintiffs' attorney, says of Dr. Cameron on his legal blog. "An American hero." Dr. Cameron says of Mr. Worthington's devotion to clients: "He's more than their lawyer; he's almost their friend." Related Video Hospitals throughout the U.S. charge widely varied fees for services, a new study by the Department of Health and Human Services shows. MarketWatch's Jim Jelter reports. (Photo: Getty Images) Together the men have helped start two nonprofits dedicated to assisting patients of mesothelioma, an asbestos-related cancer. Dr. Cameron relied on funding from Mr. Worthington to build two research laboratories. When mesothelioma patients ask Dr. Cameron to recommend an attorney, he tells them to pick one who has donated toward finding a cure for the disease, and that includes Mr. Worthington. The two have forged what has become an increasingly common relationship between a subset of cancer doctors and plaintiffs' attorneys, sharing what for each is an increasingly scarce but valuable resource: victims of mesothelioma. It is an unusual alliance in the world of medicine that some ethics experts say blurs ethical lines. This is particularly true when doctors refer patients to attorneys who provide financial support for their medical research. It "has the taste of a kickback," said Dr. Jerome Kassirer, author of a book about financial conflicts of interest in 7/15/ Asbestos Medicine November 2013

17 Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases - WSJ.com Page 2 of 7 medicine and a former editor in chief of the New England Journal of Medicine. "This is a disgrace to both professions," he said. Mr. Worthington rejected any notion he was seeking to profit from his donations or that there is any quid pro quo. He sees himself filling a void to support research that should be paid for by the asbestos industry. The Law Office of Roger G. Worthington P.C. Dr. Robert Cameron, left, performs surgery on a legal client of Roger Worthington, facing camera, in a photo on the attorney's website. "I've given back. If that's a crime, I'm guilty as hell," Mr. Worthington said. "The fact that I've found a doctor who cares, that is just serendipity." Dr. Cameron likewise said donations to his research are made with the explicit understanding that there are no strings attached. "I don't get kickbacks; I get money for research," he said. "If you see someone at the end of a freeway exit, that is me asking for money for research." Mesothelioma is a cancer of the lining on the lungs and chest cavity believed to be caused exclusively by asbestos fibers. Depending on their course of treatment, victims essentially suffocate to death, typically within months of diagnosis. There is no cure. Earlier As Asbestos Claims Rise, So Do Worries About Fraud (March 11, 2013) Asbestos Through the Years Asbestos was used for decades in the U.S. starting in the mid-1800s before regulators took action to rein in the mineral that produces cancer-causing fibers. Only a handful of doctors in the U.S. specialize in treating mesothelioma patients and studying the disease. Nearly all have benefited from money from plaintiffs' attorneys or plaintiffs' attorney-backed organizations that goes toward their research or the institution where they practice, according to a Wall Street Journal review of nonprofit tax filings and interviews with dozens of doctors, attorneys and patients. Some doctors argue that there is little choice. Research dollars for mesothelioma, which afflicts fewer than 3,000 people a year, are scarce. In 2011, the National Cancer Institute spent $6.06 million directly on mesothelioma, just 0.1% of its overall budget for cancer research that year, though it says treatments could emerge from other grants targeting cancer more generally. A Matter of Trust Highlight the connections between law firms and bankruptcy trusts. Drug companies aren't inclined to spend money on the disease because it affects so few people and because it likely will continue to decline along with the use of asbestos, medical experts say. Merck & Co., one of the few drug companies to embark on a widespread study, of 662 patients, of a drug to treat the disease ended it in 2011 when it didn't show promise of helping patients survive. "If you want to do mesothelioma research, you need the lawyers," Dr. Cameron says. 7/15/2013 Corporate Client Panel Holcomb et al. 279

18 Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases - WSJ.com Page 3 of 7 More photos and interactive graphics Mesothelioma patients are in high demand by plaintiffs' attorneys. A single successful mesothelioma case against companies that made asbestos products can be worth an average of $1.5 million to $2 million, according to legal consultants. The plaintiffs' lawyers get anywhere from 30% to 40% in fees. More With Billions at Stake, the Search For Clients Intensifies on TV, Web Earlier: Q&A: What's the Asbestos Risk Today? As competition mounts for clients, some asbestos lawyers send elaborate gift baskets to doctors at holidays, offer free tickets to professional sports events or offer paid work as expert witnesses. Attorneys who donate to mesothelioma research can use doctor testimonials as a marketing tool. Dr. David Sugarbaker, chief of the division of thoracic surgery at Brigham and Women's Hospital in Boston, appears in a video on a legal website of a major asbestos firm, Texas-based Baron & Budd P.C. Baron & Budd pledged $3 million to Dr. Sugarbaker's program in 2002, according to Russell Budd, the law firm's president. In the 2005 video interview with Mr. Budd, Dr. Sugarbaker exhorts other law firms to donate as well. "The cure for polio, the vaccine, was completely financed with private funds," he says in the video. "That answer was found with private money." In 2007, Boston plaintiffs' firm Thornton & Naumes LLP spent $1 million to refurbish a house that offers low-cost lodging to financially needy families of Dr. Sugarbaker's patients in Boston. The firm's name is displayed prominently in materials distributed to patients. Michael Thornton, the firm's co-founder, said he was proud to support the institution. Dr. Sugarbaker says he doesn't refer patients to any law firms and adds that donations for his program come from more than 2,000 individuals, corporations and foundations. A spokeswoman for Brigham and Women's said law firm donations make up about 30% of the hospital's mesothelioma research program's budget. Harvey Pass, professor and director of the division of thoracic surgery at NYU Langone Medical Center, said he recommends three asbestos plaintiffs' firms to mesothelioma patients. The firms, Belluck & Fox LLP, Levy Phillips & Konigsberg LLP and Simmons Browder Gianaris Angelides & Barnerd LLC, through its foundation, have donated money to his research. Belluck & Fox didn't comment. Michael Angelides, managing shareholder of the Simmons firm, said the firm cares about its clients and supports research because it is "the right thing to do." Jerome H. Block, a partner at Levy Phillips & Konigsberg, said the firm donates money without any promise of referrals. But he doesn't see anything wrong with doctors recommending attorneys with good reputations. "The specialized world of mesothelioma oncologists and surgeons knows the difference," said Mr. Block. "I don't think there needs to be this wall." Dr. Pass wouldn't specify the donation amounts but he did note in disclosures in a paper on his mesothelioma research findings published in the New England Journal of Medicine last year that those three firms had funded his research. He said he always discloses law firm donations. According to tax filings from the Simmons firm's mesothelioma charity, it donated a total of $205,000 to NYU in 2010 and The website of Belluck & Fox notes it has donated to NYU but doesn't state an amount. 7/15/ Asbestos Medicine November 2013

19 Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases - WSJ.com Page 4 of 7 "Do I think that patients should inquire about their legal rights with this disease? Absolutely," said Dr. Pass. "This is a disease of elderly people. They've worked all their lives and are going to lose everything." A few doctors say they refuse to take money from plaintiffs' law firms, citing unease with ethical issues, real or perceived. Raja Flores, chief of thoracic surgery at Mount Sinai Medical Center, said he believes receiving lawfirm donations for research could influence his treatment of a patient. For instance, he says, lawyers want tissue samples to use as evidence in their legal cases, but cutting into a patient isn't always in their best interest. He also cites the case of a mesothelioma patient who, acting on the advice of an attorney, requested a surgery Dr. Flores had deemed medically unnecessary. The reason? Complicated surgery could make for a more compelling court case. "My policy is not to take money from lawyers, period," said Dr. Flores. "When you add financial incentive it muddies the waters. We did not take the Hippocratic oath for that." Dr. Cameron, a medieval studies undergraduate major who drives a 19-year old Toyota Camry, says he decided to became a surgeon after watching his father suffer through colon cancer. He is currently a professor of cardiothoracic surgery and surgical oncology at the David Geffen School of Medicine at UCLA. He says he first met Mr. Worthington about 15 years ago when the doctor came across the lawyer's website, which contained medical information about mesothelioma. "I sent him a nasty and said, 'You don't know what you're talking about,' " said Dr. Cameron, who also is chief of thoracic surgery at West Los Angeles Veterans Administration Medical Center. "He actually called me and I decided to talk to him about it." Mr. Worthington, a fit, avid cyclist, explained he also wanted to help mesothelioma patients and was hoping to create a foundation to raise awareness and research dollars. The two men, along with Dr. Pass, eventually established the Mesothelioma Applied Research Foundation. The organization, known as MARF, created a website with medical information about the disease and sought donations from patients' estates and law firms. The funds were used to award grants toward research. Dr. Cameron's research program and the institution he was affiliated with, UCLA, were among the recipients of those grants in , receiving a total of just over $190,000. Dr. Cameron was listed in tax filings as an unpaid board member at the time; Mr. Worthington was the unpaid president and treasurer. They said the grants were peer-reviewed, and Dr. Cameron emphasized that the money was given to UCLA in support of research he participated in but that he didn't personally profit from this money. Mr. Worthington got into asbestos litigation as a cub lawyer at Baron & Budd, the Texas firm, in the late 1980s. He branched out on his own, starting his firm in first Dallas and then San Pedro, Calif. 7/15/2013 Corporate Client Panel Holcomb et al. 281

20 Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases - WSJ.com Page 5 of 7 He signs mesothelioma patients as clients, participates in depositions, is the attorney of record on many pleadings and also partners with other firms to litigate the cases. Mr. Worthington, who says he handles fewer than two dozen mesothelioma cases a year, owns a bluff-side compound in Dana Point, Calif., and kicked in more than $5 million to start a brewing company, Worthy Brewing, in Oregon. Mr. Worthington sent his own father to be treated by Dr. Cameron when he was diagnosed with what he said was asbestos-related lung cancer. In 2006, after his father had died, Mr. Worthington donated $500,000 to establish the "Punch" Worthington Thoracic Surgery Research Laboratory at UCLA in honor of his father. Dr. Cameron carries out research there on mesothelioma, lung cancer and other occupational cancers. Around the same time, Mr. Worthington and Dr. Cameron left MARF, which says it gets nearly half its financing from asbestos plaintiffs' attorneys. MARF often refers newly diagnosed victims to doctors and makes research grants. Officials at the organization say that in its early years it did refer patients to attorneys but that it no longer does. Its website, visited by many newly diagnosed patients, includes videos of plaintiffs' attorneys speaking at the group's annual conference where the top lawyer donors are permitted to talk to a roomful of patients about litigating cases. "We're not a marketing arm for the law firms," said Mary Hesdorffer, a nurse practitioner and MARF executive director. Dr. Cameron and Mr. Worthington helped start another nonprofit, the Pacific Heart, Lung & Blood Institute's Pacific Meso Center, that operates out of a small office attached to Dr. Cameron's Los Angeles clinic, complete with a laboratory where scientists work on immunology and molecular research. The PHLBI has received $1.7 million in donations from Mr. Worthington in the past seven or eight years, Mr. Worthington says. The lawyer's donations made up about 30% of the organization's budget for 2011 and 2012, an official there said. Dr. Cameron says the group "is not a front for Roger Worthington. It's just that he's been the biggest supporter so far." The PHLBI's Meso Center holds several fundraisers throughout the year and also offers a patients' support network. It hosts an annual medical symposium for doctors and patients in a Santa Monica, Calif., hotel, which some attorneys from Mr. Worthington's firm and other plaintiffs' firms also attend. Several other law firms donate money to the nonprofit, where Dr. Cameron is scientific adviser, but his relationship with Mr. Worthington is the most enduring. A "Patient's Roadmap" brochure on a table in Dr. Cameron's waiting room includes an ad for Mr. Worthington's firm. Dr. Cameron, respected by peers as a skilled surgeon, said he cares deeply for his patients and is passionate about finding a cure for mesothelioma. But the quest has come up short so far. 7/15/ Asbestos Medicine November 2013