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Get Asbestos Mess Out of Court Editorial
Pacheco's role in this tort-lawyers' bonanza came to light last week in a Daily News story that described how she had invited attorneys to Tucson for settlement conferences at a gated community where they could enjoy swimming, spa treatments and discount shopping. The invitation was plainly inappropriate because smart lawyers would never snub the person deciding their clients' fates. Pacheco belongs here in New York, working day and night in dim and dusty Manhattan Supreme Court to resolve the asbestos cases fairly and economically. Justice Helen Freedman, who appointed Pacheco special master over said cases, must so order. That Freedman felt she needed a special master to help process asbestos claims is yet more evidence of how toxic this litigation has become for claimants, for U.S. industry and for the courts. For everyone, that is, except the class-action bar. Once viewed as a miracle mineral, asbestos had myriad routine uses for decades. But in the 1970s, it was found to cause aggressive lung cancers and other respiratory diseases, touching off an explosion of lawsuits. To date, some 730,000 people have filed claims - 100,000 in 2003 alone. Payouts totaling $70 billion have driven 70 companies into bankruptcy and crimped the businesses and share prices of hundreds of others - even as suits dragged on seemingly forever and legal bills skyrocketed. And, because asbestos-related illnesses can take 40 years to show symptoms, up to 2 million more claimants may yet come forward. Last year, concerned about high costs and never-ending litigation, Congress sought to create a trust fund to settle all current and future claims. Companies that manufactured and used asbestos and their insurers would foot the bill in exchange for immunity from further litigation. Senate Majority Leader Bill Frist, a Republican, and then-Minority Leader Tom Daschle agreed on a $140 billion pool, but the deal blew up when trial lawyers and unions demanded a bigger fund. Now, Sen. Arlen Specter, new chairman of the Judiciary Committee, is trying again, using the same $140 billion figure. He's on the right track. A trust fund that gets the most money to the most deserving people quickly, gives certainty to businesses and eliminates the need for huge legal fees would be a marked step forward. NYC
Asbestos Mediator's Unusual Approach: By Tom Perrotta Laraine Pacheco, the special master who oversees asbestos litigation in New York City, is known to go to great lengths to persuade opposing attorneys to settle their differences on contentious and often emotional claims. Since 1999, she has helped settle hundreds of asbestos claims with a mediation style that pushes lawyers to get to know each other as people, rather than as enemies who will not give an inch in the courtroom. And it has worked, as evidenced by the fact that other states look to New York as a model in dealing with asbestos lawsuits. In April, though, Ms. Pacheco is planning an unusual gathering in Arizona that has raised eyebrows among some litigants and legal observers. She has invited all the lawyers involved in the asbestos litigation 覧 attorneys for defendants, plaintiffs and the City of New York 覧 to join her in Tucson, Ariz., where she lives. There, they can enjoy warm weather, a few rounds of golf, tennis, hiking and a party at her home with food, drink, a pool, a spa and music. In one e-mail sent to the attorneys last year, under the subject line "You asked for it!! Settlement Conferences in Arizona 覧 Really," Ms. Pacheco said she and her husband would help the attorneys plan their visits. She offered tips on hotels, airlines, day trips and sights to see. "On Saturday, April 9, we will have a big party at our home (settlement conferences in the pool and spa)," she wrote. She closed the e-mail with, "Tax deductible? Maybe. Check with your accountant." In a subsequent e-mail, Ms. Pacheco said events might include a visit to McGuire's jewelers, a wholesale jewelry store owned by her husband's daughter. She said the store "offers wholesale prices to the public and even bigger discounts to my friends." Ms. Pacheco said in interviews this week that the e-mails were tongue-in-cheek exchanges among attorneys who have come to know each other well over years of strenuous litigation. She said no settlement conferences 覧 in fact, no business of any kind 覧 will take place at the party. She also said she expects attorneys who attend to pay for it out of their own pockets. She did not consider this trip to be a deductible business expense, she said. After Ms. Pacheco received inquiries about the event this week, she sent another e-mail to attorneys stressing that this was strictly a social event and that there was no obligation to attend. "I'm a unique individual," she said in an interview. "My approach to working with these people is to be much less formal." New York's asbestos litigation has had a special master since 1996. Ms. Pacheco's role is to coordinate all claims, oversee discovery and foster settlements. If litigants cannot reach an agreement, their cases are sent out to one of several Supreme Court justices with expertise in the area. Thousands of unresolved claims remain, attorneys say. David Bookstaver, a spokesman for the Office of Court Administration, said that Justice Helen E. Freedman, who appointed Ms. Pacheco and oversees the litigation, knew about the Arizona trip but did not think any work would be conducted there. "The judge was unaware of this e-mail," Mr. Bookstaver said. "She is now aware of it and will direct that no settlement conferences will be held in Arizona." Unusual Move Stephen Gillers, a professor at New York University School of Law and an expert in legal ethics, said that since Ms. Pacheco was acting as a mediator and not recommending resolutions to a judge, having a party for attorneys did not pose any problems, even it was out of town and lavish. "It is unusual, but I don't have any problem with creating that kind of informal space," he said. "Inviting people out, even if it is to discuss the case, is OK." The invitation to the family jewelry store, Mr. Gillers said, was a concern. "She's putting her own interests via her child on the table and she should not have done that," he said. "She is creating an opportunity. People will not feel entirely free." The Corporation Counsel's Office last week sent a letter to Ms. Pacheco objecting to the idea that settlement conferences might be held outside of New York City, and that business might be conducted at a social event. The city is currently a party in two asbestos cases and said it would not send its attorneys to Arizona at taxpayer expense. "The commingling of serious court business with a social visit to a Judicial Officer's home creates, at the very least, an appearance of impropriety, both for the court and the attorney participants," assistant corporation counsel Thomas Merrill wrote. The letter was copied to Justice Freedman and Justice Jacqueline Silberman, the administrative judge for Civil Supreme Court. Among the dozens of attorneys involved in New York City asbestos litigation, those who agreed to talk about the trip said it was unusual but positive and not a cause for concern. They said they had the utmost respect for Ms. Pacheco, and said she was always accessible despite living across the country. "I've had my differences with Laraine in the past, as I'm sure a lot of people have, but she is a very unique kind of person," said Charles M. Ferguson, an attorney at Weitz & Luxenberg, the chief plaintiffs' firm in the asbestos litigation in New York. He said he did not plan to attend. Ms. Pacheco developed a reputation as a first-rate special master when she helped resolve about 2,000 breast-implant suits in New York state and federal courts. She was appointed to that position by Justice Freedman and Eastern District Judge Jack B. Weinstein, for whom she once clerked. Ms. Pacheco finished first in her class at Brooklyn Law School and now concentrates exclusively on mediation. Before she became an attorney, she was a high school principal in New York City and spent 20 years in the school system. As a special master, she is paid $368,000 a year 覧 60 percent by defendants and 40 percent by plaintiffs, with shares pro rated based on the number of claims for each. She said she pays all her expenses out of her salary. Still the Principal Mr. Ferguson said that he can understand why people who are not familiar with the litigation "might raise an eyebrow" over the invitation, but he does not know how anyone involved in the case could interpret the invitation as anything other than a "casual" one. "She is matronly," he said of Ms. Pacheco. "She still thinks that she's the principal." He and other attorneys said the Ms. Pacheco's references to settlement conferences and tax deductions were clearly tongue-in-cheek. "I don't think there is any pressure to go, I don't think there is any penalty for not going," said another attorney, who asked not to be identified. "It is a little unusual, but then again I haven't seen any litigation like this one." The attorney added: "I certainly wouldn't consider charging a client for this trip. I don't think that is an appropriate business expense." Ms. Pacheco has had a party for the attorneys before, when many of them visited a conference in Arizona. At the time she lived in Scottsdale and invited everyone to her home there for food, drinks and a live band. "I make a good party," she said in an interview. She and the litigants surprised Justice Freedman last month with a birthday party in her courtroom; the pictures are online at www.nycal.net, a site maintained for the litigants. The attorneys also post pictures of their children, many of which have been born and raised during litigation that precedes Ms. Pacheco's years on the case. Robert J. Cecala of Aaronson, Rappaport, Feinstein & Deutsch, which represents Ford Motor Co. and General Motors for its New York asbestos claims, said he is not going, but saw no problem with Ms. Pacheco's e-mails. "I wasn't planning on going, I don't think my client will pay for it," said Mr. Cecala. "From what I can tell, it is a very close-knit group. It's not like any litigation I've ever seen. But you know, this is the first mass tort we've been in." William E. Bell of Johnson Hirsch Connors & Bull, who represents Dunkirk Radiator Corp. and its successors, said Ms. Pacheco's invitation did not raise any red flags with him. "I give Laraine fairly high marks for trying to take some of the edge off of stuff and not making it a pitched battle all the time," he said. "You need something other than serious drudgery." Mr. Bell said he had no plans, however, of flying to Arizona. City Opts out of Asbestos Junket By Thomas Zambito The city is refusing to spend taxpayer money to send its attorneys to a springtime junket in Arizona, at which asbestos lawyers will meet poolside for chats. City attorneys sent a letter to Laraine Pacheco, the special master for asbestos litigation, objecting to feeling forced to attend a party at her Arizona home to settle cases filed in Manhattan. They asked Pacheco to reconsider and hold the conferences here. "The commingling of serious court business with a social visit to a judicial officer's home creates, at the very least, an appearance of impropriety, both for the court and the attorney participants," city attorney Thomas Merrill wrote Pacheco last week in a letter obtained by the Daily News under the state Freedom of Information Law. Pacheco is paid $368,000 a year to mediate the thousands of claims filed by victims of asbestos exposure pending before Manhattan Supreme Court Justice Helen Freedman. A Daily News investigation published yesterday revealed E-mails Pacheco sent attorneys on both sides inviting them to an April 9 party at her posh Arizona home where she promised "settlement conferences in the pool and spa." The trip includes an excursion to her stepdaughter's Tucson jewelry store, where attorneys can pick up a bauble at heavily discounted prices. Pacheco suggests attorneys check with their accountants to see if they can deduct the trip from their taxes. Freedman said she was never told that asbestos litigation would be discussed at the party. Pacheco told attorneys in an E-mail sent after The News' questions that the party would go on but there would be no settlement conferences. The city is a defendant in two pending cases filed by victims who allege their health problems were caused by exposure to the fibrous material used in fireproofing and insulation. "It will cause great inconvenience and expense to conference cases in a venue which bears no relation to any of the lawsuits," Merrill wrote. "The cost for city attorneys to attend the conferences would of course be borne by the taxpayers."
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A Feast
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