The NAM and other business and legal reform groups filed an amicus brief supporting the efforts by CSX Transportation, Inc. to counter the litigation industry for generating fraudulent asbestos lawsuits. The brief backed the railroad’s appeal of a judge's dismissal of its fraud and conspiracy complaint filed against a law firm and a radiologist who screened test results for evidence of asbestos-related diseases. The suit alleged that the defendants conspired to fake asbestos screenings in order to win cash settlements from the company.
Our amicus brief provided a history of rampant, coordinated asbestos fraud in arguing that CSX’s suit should be allowed to proceed. We argued that the entrepreneurial model developed by plaintiff's lawyers to pursue asbestos claims provides powerful incentives for fraud, and when suits are filed in so-called "magic jurisdictions" that favor plaintiffs, companies have very little option but to settle. Individuals with legitimate claims may be harmed most, as resources are depleted by a disproportionate amount of settlement dollars going to claimants with no discernible asbestos-related physical impairment whatsoever. It is important that courts step in to police the potential for fraud in these kinds of cases.
Fortunately, on 12/30/2010, the Fourth Circuit overturned the lower court's ruling and reinstated the CSX law suit. It found that the statute of limitations on the lawsuit did not begin running until the lawsuit alleged to be fraudulent was actually found to be meritless. It also ruled that there was sufficient evidence that a jury can find that the law firm fraudulently manufactured the claims.