New England Biz Law Update
It’s every lawyer’s dream: Uncovering the smoking gun, nailing a witness on the stand – and saving your client millions, possibly billions of dollars in the process.
For Daniel J. Mulholland, that dream came true in the most unlikely of settings – defending silica companies against thousands of claims of deadly silicosis.
“It’s not a pretty story,” said the Jackson, Miss. attorney.
Silicosis is caused by exposure to silica dust, a by-product most often found in the construction, sandblasting and mining industries. In its most severe form, silicosis literally chokes a victim to death by filling the lungs, but lower levels of dust inhalation can also cause chronic respiratory problems.
It can be a gruesome death. But Mulholland’s research cast serious doubt on whether the majority of plaintiffs actually suffered from the disease. Instead, using sophisticated case management software, the defense uncovered thousands of potentially fraudulent diagnoses – and may have changed the future of mass torts forever.
High-Tech Sleuth
Mulholland’s work began in spring 2003 when his clients, several silica companies, were suddenly faced with more than 20,000 claims of silicosis.
The number of claims was startling since regulations had been implemented earlier in the 20th century to dramatically decreased silica exposure. In fact, silica deaths have declined 93 percent over the last 34 years, from 1,157 in 1968 to 148 in 2002, according to the National Institute for Occupational Safety and Health.
But the truly disturbing numbers came out when Mulholland began analyzing the plaintiffs’ diagnoses. Using case management software, the defense ran various hypotheses to work backwards, and by the end of April 2004 they had uncovered some truly startling numbers.
Just nine doctors diagnosed 99 percent of the nearly 10,000 plaintiffs whose claims were consolidated in a multi-district litigation. Of those nine, one doctor had diagnosed more than a third (3,600) of the plaintiffs. Furthermore, approximately 60 percent of the silica plaintiffs were “retreads” – plaintiffs who had previously filed asbestosis claims.
The plaintiffs have not challenged the accuracy of Mulholland’s findings.
The fallout was quick.
Remanding the cases back to state court, U.S. District Court Judge Janis Graham Jack wrote in a 249-page opinion, “These diagnoses were driven by neither health nor justice; they were manufactured for money.” She recommended that the state court throw out all but one of the diagnoses. (In Re Silica Products Liability Litigation, 398 F.Supp.2d 563 (S.D.Tex. 2005).)
As a result, thousands of claims have been dismissed, the federal government has launched an investigation and plaintiffs’ firms are being sanctioned. But Mulholland is still determined to finish the job.
“For many years, we had intermittent glimpses of what was going on, but in MDL 1553, we were able to piece together the panoramic perspective of the plaintiffs, a for-profit screening system and doctors making hundreds of diagnoses a day,” he said. “Then we could prove it.”
By September 2005, about half of the original 10,000 claims had been dismissed.
“We predict that number will continue to rise at a fairly rapid rate. I would be surprised if more than 1,000 survive,” said Mulholland, who is a partner at Forman, Perry, Watkins, Krutz & Tardy.
Getting the Ball Rolling
An initial ruling by Judge Jack was instrumental in the defense’s success.
Approximately 10,000 silica cases were consolidated and sent to multi-district litigation (MDL) in Corpus Christi, Texas in September 2003.
In a typical mass tort, five or six plaintiffs will serve as the test cases, and the parties will conduct full discovery on only those few individuals. This routine, designed to decrease the chaos of discovery on thousands of individuals, also benefited what Mulholland described as the plaintiffs’ “business plan.”
By trying their best cases first, plaintiffs’ counsel would then use the leverage of a few good cases to settle all of the cases, including the weaker ones, he contended.
Because of the limited discovery, the plaintiffs have “immense leverage and oftentimes the defense is sort of pushed into a corner and can’t do the type of analysis on all the plaintiffs that would help it decrease the settlements,” Mulholland explained.
In this case, the plaintiffs sent a letter after the cases were consolidated in Texas suggesting that it would cost the defendants $1.5 billion to battle all 10,000 cases.
“So the plaintiffs suggested $1 billion as a reasonable settlement offer,” Mulholland noted dryly.
Instead, Judge Jack granted the defense request for full discovery, including the plaintiffs’ screening and diagnosing information.
“Historically, that’s a lot more than people would get, and it was pivotal because when that happened, we had the opportunity to do something that, to my knowledge, had never been done before: we could take information about an individual plaintiff and combine it with the information about the other 9,999 plaintiffs and start looking for trends and global characteristics,” Mulholland said.
The plaintiffs produced their information on April 5, 2004, and by the end of the month, the defense knew they had uncovered something momentous.
Each plaintiff had a file of screening information, known as a fact sheet, which could be up to 25 pages. The defense split the sheets into individual pages, and coded them to look for similarities, such as date of diagnosis and diagnosing doctor, and fed the information to its software, CaseLogistix. Each page of information was a tiny piece of the mosaic, Mulholland said.
“We were able to figure out what the story was when we put together all the little pieces and could see the entire mosaic,” he said.
Mulholland first requested a report listing the describing doctors. The first report revealed that one doctor, Dr. George Martindale, had diagnosed more than 3,600 of the plaintiffs.
“Then we really knew we were on to something,” Mulholland said. At Dr. Martindale’s deposition, he withdrew his diagnoses, claiming that he thought he was only confirming prior diagnoses.
Mulholland remembered driving home from the deposition, realizing the rollercoaster ride had begun.
“I knew we had gotten the ball was rolling and wondered where it was going to stop,” he recalled.
Assembly Line Diagnosing
That ball continued to roll as two other doctors recanted their diagnoses, leading to hearings in February 2005 in which the defense deposed the remaining doctors in the presence of Judge Jack.
It rolled on as the judge issued a scathing order, dismissing approximately 100 cases she felt she had jurisdiction over, and remanding the remainder to state court with the suggestion that they be dismissed as well.
“This is assembly line diagnosing. And it is an ingenious method of grossly inflating the number of positive diagnoses,” Judge Jack wrote.
And the ball continues to roll, bowling over plaintiffs far beyond the Corpus Christi courtroom.
Recently, one of the largest asbestos trust funds refused to pay out claims based on diagnoses of nine of the doctors cited in Judge Jack’s order. A federal investigation is allegedly underway in New York, and the U.S. House of Representatives Committee on Energy and Commerce sent a letter to all 12 doctors involved in the case, asking for their records.
Some of the doctors are also reportedly facing their state medical review boards, and the defense is seeking sanctions against some of the plaintiffs’ lawyers.
There is also the potential for lawsuits to be filed by the former silicosis plaintiffs against their lawyers, Mulholland noted.
“In silica MDL 1553 there were almost 10,000 plaintiffs, all of whom were led to some extent to believe that they had an incurable, sometimes fatal illness, and given the expectation that they were going to be given some money,” he said. “As it turns out, not only are they not going to get any money, or as much as they thought they might have gotten, there is no reason to believe that they are sick. It wouldn’t surprise me if some fraction of them decided to sue their former lawyers.”
And Mulholland didn’t rule out the possibility of legal action by the defense against their former adversaries.
“First things first – we want to win these cases. But it is quite conceivable that at some point we will file a case against either the doctors, the screening companies, the plaintiffs’ lawyers or some combination,” he acknowledged.
Several factors came together in Corpus Christ to make the defense’s success possible. Judge Jack’s ruling allowing full discovery wouldn’t have been as meaningful without a powerful software program, complete with enough memory for the defense to run various hypothesis to uncover the scandal – a “perfect storm” for the defense, Mulholland said.
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Technology Makes It Possible: ‘A System Of Accountability’
A self-described Type A personality, Daniel J. Mulholland appreciated the “everything in its place” structure of CaseLogistix, the litigation support software the defense relied upon.
But even more beneficial for the case was the ability to be creative once the data was organized.
“Once we have all these documents archived and characterized, I can use my imagination and start asking questions about the documents, forming hypotheses and proving or disproving them,” he explained.
For example, the defense took one diagnosing doctor, Dr. Ray Harron, and culled all the plaintiffs he diagnosed, grouping them by the date of diagnosis.
“From that, we were able to infer how many people he diagnosed per day,” Mulholland said.
Simple enough: On Feb. 15, 2004, Dr. Harron screened 111 people. And every single one tested positive for silicosis.
“From any rational epidemiological perspective, that can’t happen,” Mulholland said. “And we were able to show that happened the next day and the next and so forth – there were 60 different screening days just for Dr. Harron where 75 or more people tested positively.”
And that much practice with the technology came in handy at the February 2005 hearing, where Judge Jack asked for documents at random.
“We knew as much about the plaintiffs’ cases – or more – than they knew and we could find it in a matter of seconds,” Mulholland said.
But the impact of the defense’s work will also be felt by plaintiffs in other states, and in future cases.
Silica litigation is still pending in other states, such as Florida and Ohio, and Mulholland’s firm is working with local attorneys to look for similar patterns of abuse in those cases.
But beyond silica MDL 1553, the combination of plaintiff information and technology that can effectively collate it could change the future of mass torts forever.
Defense attorneys have long suspected that plaintiffs ‘recycle’ themselves by signing up for the latest mass tort, hoping to receive another windfall settlement. But proving such suspicions hasn’t been possible.
“The trick is being able to put all of the information together, which is hard to do given the way the system is structured,” Mulholland explained. “One set of lawyers does this type of case, another set does another type of case, and the communication between the two is slim to none. But now, there is great value to putting together all of that history.”
For example, nearly 60 percent of the Corpus Christi silica plaintiffs were asbestos “retreads” – plaintiffs who had filed claims with the asbestos companies, often having relied upon the same doctors and screening companies.
And as Judge Jack noted in her opinion, “a golfer is more likely to hit a hole-in-one than an occupational medical specialist is to find a single case of both silicosis and asbestosis.”
But being able to track thousands of plaintiffs across a variety of tort claims is unprecedented, and a potential goldmine for defense lawyers.
“There is no doubt in my mind that hundreds or thousands of plaintiffs have filed lawsuits based on the tort of the day,” said Mulholland. “Now, there is a system of accountability.”
Questions or comments can be directed to the writer at: [email protected]
