May 28, 2015
On May 27, 2015, the Honorable Emilie H. Elias, the coordination judge who presides over all asbestos litigation in the counties of Los Angeles, Orange, and San Diego (LAOSD), issued a discovery order entitled “Case Management Order Requiring Disclosure of Bankruptcy Trust Claims, Claims-Related Materials, and Asbestos Exposure Facts.” It provides a standardized set of interrogatories designed to elicit all discoverable evidence supporting plaintiffs’ claims against bankrupt entities. This order comes in the wake of the Garlock bankruptcy, which exposed a widespread practice among some plaintiffs’ counsel of withholding such pertinent information in order to maximize recovery against solvent defendants, while depriving defendants of their right to apportion fault among all responsible entities under Proposition 51.

Even before this order, plaintiffs were required to produce in discovery any claim forms detailing their exposure to bankrupt entities’ products, if those forms had been submitted to a bankruptcy trust. See Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1497. Under the new case management order, if the completed claim form has been disclosed to any third party, it must be produced in discovery, along with all other claim-related documents, including communications with the bankruptcy trusts. In addition, plaintiffs’ attorneys are now explicitly required to respond to the new interrogatories with all bankrupt-entity exposure facts of which they are aware, even if research of their current but unrelated case files is required. This requirement is consistent with the attorney’s duty of disclosure set forth in a number of cases, including Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 782-784; Smith v. Superior Court (1961) 189 Cal.App.2d 6, 12; City & County of San Francisco v. Superior Court (1958) 161 Cal.App.2d 653, 656; Regency Health Services, Inc. v. Superior Court (1998) 64 Cal.App.4th 1496, 1504; and Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1325, fn. 5. This disclosure is required at the outset of the case and again before trial. Defendants are confident the new discovery order will go a long way toward lessening, if not completely eliminating, the tendency of some plaintiffs’ attorneys to withhold discoverable exposure information pertaining to bankrupt entities in violation of the Discovery Act.

For more information on the discovery order or how it may impact your business, please contact shareholders Stephen M. Nichols or Farah S. Nicol, J. Alan Warfield, Polsinelli Of Counsel and Appellate Specialist as Certified by the California State Bar Board of Legal Specialization, or your Polsinelli attorney.