The Litigation Privilege: Offering Protection for 25 Years’ Worth of Lies?

January 09, 2012

In Williams v. BASF Catalyst, LLC, Case No. 2:11-cv-01754-SRC-MAS (D.N.J.) BASF Catalyst LLC (“BASF”) and its corporate law firm, Cahill Gordon Reindell, LLP (“CGR”) recently asked a New Jersey federal court to dismiss charges that they allegedly lied to asbestos disease victims, their families, and the courts about the presence (and evidence) of a carcinogenic substance in its talc.  The complaint, which was filed on behalf of victims of asbestos-related diseases and their families, claims that BASF and its lawyers conspired over the course of 25 years to hide the fact that BASF’s talc contained deadly asbestos.  As a result of the cover-up, the complaint alleges, members of the class who have been exposed to BASF’s hazardous talc either did not pursue injury claims against the company or had their claims dismissed by the courts.

More specifically, the Complaint summarizes the case as follows:

Sometime in 1984, having settled an asbestos injury case and recognizing its continued exposure to liability for damages caused by asbestos in its talc ore and talc products, Defendant BASF Catalyst, LLC, then known as Engelhard Corporation (collectively “BASF”), together with the law firm of Cahill Gordon & Reindel, LLP (“Cahill Gordon”), devised a strategy to defend itself against asbestos injury claims by gathering all of the evidence of asbestos in its talc, storing or destroying the evidence and thereafter withholding and lying about its existence to mesothelioma, cancer and other victims suffering asbestos induced diseases, their counsel, and those courts presiding over asbestos injury claims. In short, after first gathering up and concealing or destroying documents and evidence establishing BASF’s talc ore and products contained asbestos, BASF and Cahill Gordon repeatedly lied to claimants and courts by denying BASF’s talc contained asbestos and that there ever existed any proof to the contrary. Because the very foundation of our judicial system is violated and eroded when conspirators like BASF and Cahill Gordon lie, fraudulently withhold evidence, destroy incriminating records, and mislead courts and opposing parties regarding essential facts that are only within their knowledge and control, this class action is essentially one based upon fraud upon the court.

BASF and CGR did not initially deny these allegations.  Instead they filed motions to dismiss.  While a motion to dismiss in this sort of case is perfunctory, one of the primary arguments in their motions has rightfully garnered headlines.

BASF and CGR attempt to escape the consequences of their deception on the basis of the New Jersey “litigation privilege,” which protects against civil liability for communications designed to “achieve the objects of litigation.”  Indeed, BASF and CGR insist that, even if they did lie to asbestos victims and the courts (and destroy or withhold evidence), they are immune from civil liability due to the litigation privilege – simply because they were attempting to “obtain in the asbestos cases favorable results, which is the ultimate goal in any litigation.”

In their response brief, Plaintiffs accept that “the New Jersey Supreme Court has never before been confronted with circumstances of party and lawyer litigation fraud remotely like that presented here,” as such “the question remains open whether that court would extend the litigation privilege to such misconduct.”  However, Plaintiffs point out that New Jersey, along with the majority of other courts, have concluded that “the litigation privilege is inapplicable when an attorney exceeds the bounds of zealous advocacy and engages in conduct outside what is acceptable by law” and that the “litigation privilege does not immunize fraud.”  Moreover, as pointed out in the amicus brief filed by Public Justice, a public interest law firm, the New Jersey Supreme Court has cautioned courts in the application of the litigation privilege, reminding them that the litigation privilege requires conduct to “be intended to achieve the objects of litigation” – and that “[s]eeking truthful, accurate, and non-tainted testimony . . . is the objective of every litigated case,” Loigman v. Township Committee of Twp. Of Middletown, 889 A.2d 426, 437 (N.J. 2006).  As such, BASF’s “win-at-all-costs” justification for its deceitful conduct is tenuous.

On a common sense basis, it is galling to think that a litigation privilege applies to fraudulent and deceptive communications (to injured individuals and the court) in furtherance of a conspiracy to hide a public health hazard.  Indeed, the fact that BASF would even make this argument begs the question: if BASF and their attorneys believe it is okay to lie and destroy evidence, exactly how far do they believe they are entitled to go in order to win their case? In other words, what other fraudulent conduct or illegal activity would BASF claim is protected from civil liability under the litigation privilege?

Moreover, if successful, the practical effects of BASF’s arguments could be dire.  Corporations and their attorneys would arguably be given license to knowingly destroy or withhold documents, and lie to plaintiffs and the court, without the threat of civil liability for their fraudulent and deceptive acts.  To protect or sanction such conduct would be a black mark on the court system,  the legal profession, and any notion of humanity and justice that our system is to stand for.

The District court has not yet ruled on this issue.  Let’s hope that BASF’s incredible arguments are not given any credibility by the court.

 


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