Despite already having a punitive class-action suit thrown out in lower court, New York-based law firm Cahill, Gordon & Reindel has had claims of fraud against it restored by the U.S. Third Circuit Court of Appeals. Also ensnared in the case is the law firm’s client, BASF Catalysts, which took over former Fortune 500 company Engelhard in 2006.
The alleged fraud stemmed from a 1979 lawsuit involving a deceased employee of Engelhard, who had apparently been exposed to asbestos through contact with the company’s toxin-containing talc. According to the suit, the company – conspiring with Cahill, Gordon & Reindel – had its employees hide evidence that would help the plaintiffs’ case. However, the claims of fraud were initially dismissed because of the New Jersey litigation privilege. Now, the appeals court has determined that the lower court was mistaken in its dismissal.
In their explanation of why the privilege was incorrectly applied to the case, Third Circuit Judges Julio Fuentes, Theodore McKee, and Thomas Ambro wrote that “New Jersey’s Supreme Court has never recognized the litigation privilege to immunize systematic fraud, let alone fraud calculated to thwart the judicial process.” The judges added that the privilege “often immunizes lawyers and parties from recrimination based on their statements in judicial proceedings, but [it] has never applied to shield systematic fraud directed at the integrity of the judicial process. Nor should it be.”
Exposure to asbestos, a toxin banned since the 1970s, can lead to numerous respiratory health problems, including the deadly disease mesothelioma. Despite the decades-long ban, there are approximately 3,000 mesothelioma diagnoses made each year.