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Michael Phelan
Michael Phelan
Attorney • (866) 249-3164

Tort Reform Means Less Safety

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The naive among us who believe that limiting our Seventh Amendment right to trial by jury would benefit most citizens probably also supported Newt Gingrich’s plan in the 1990’s to privatize the Food and Drug Administration (FDA). Then Speaker Gingrich advocated disbanding the FDA and giving the pharmaceutical, medical device, and food industry oversight of their own industries. What a disaster that would have been!

Anyone who believes that products would not be less safe or the environment more toxic without the threat to manufacturers and polluters of lawsuits is similarly naive. One would have to believe that, left to their own devices, these manufacturers and polluters could be trusted to do the right thing, i.e., to fairly balance the risks of harm against the benefits of the product, and to always choose to adopt reasonable safety precautions. A pending case in the United States District Court for the Southern District of Indiana is a typical example of the dishonesty and abuse by manufactureres and polluters that has become far too common in toxic tort and product liability cases. In this case, the plaintiff property owner, 110 West, LLC allged that Red Spot Paint & Varnish Co. Inc.’s manufacturing operations contaminated plaintiff’s property with extremely dangerous chemicals, including benzene, a solvent known to cause leukemia and other blood disorders and cancers. One issue was whether Red Spot and its law firm, Bose, McKinney & Evans, LLC, "lied or misrepresented the truth about Red Spot’s use of …[chlorinated solvents]." Naturally, in discovery, Red Spot was asked to identify all chemicals used in its manufacturing process. Red Spot not only used the chlorinated solvents in its process, but it also possessed reports of soil samples showing that the solvents had contaminated the soil and groundwater.

So, of course, Red Spot and its lawyers turned this information over in discovery, right? No, what Red Spot and its lawyers did was to hide the crucial documents and state in writing, under oath, among other misrepresentations, that "Red Spot’s operations have not included the use of …chlorinated solvents." Fortunately for 100 West, LLC and anyone interested in truth and non-toxic drinking water and soil, the lawyers for 100 West were persistent. They obtained the truth from the EPA, which had documented, including with photos of leaking solvent waste drums, that Red Spot had dumped over 96 gallons of hazardous chemical waste into the environment. The EPA informed the plaintiff’s lawyers that Red Spot’s lawyers at Bose McKinney had received a copy of the Red Spot EPA file. Upon learning this, the court ordered Red Spot to turn over the file, however, the court later concluded that the Bose McKinney lawyers "’sanitized’ the EPA RCRA file by pulling out the most damaging documents."

The federal judge found that Red Spot committed fraud and made misrepresentations to the court. "Red Spot has made a mockery of the discovery process and has subjected the truth to ridicule." The court’s lengthy opinion is replete with examples of Red Spot witnesses lying under oath and of Red Spot’s lawyers being complicit in those lies, having possessed enough documentary evidence to know the testimony was untruthful. The court issued the most severe of sanctions under Fed. R. Civil P. 37 and found Red Spot liable for contaminating plaintiff’s property and responsible for remediating the contamination. The court also ordered Red Spot and Bose McKinney to split the cost of 100 West’s legal fees for the three years of discovery that preceeded the sanctions order.

Red Spot was not going to voluntarily clean up its toxic mess. And the EPA obviously had no success in forcing Red Spot to do so. Only through the litigation process was 100 West LLC able to receive justice, and it took years of litigation caused by Red Spot’s abusive discovery tactics to get justice. The tort reformers want to make it easier for defendants like Red Spot and harder for plaintiffs like 100 West. Does that seem right?