JM Eagle, the largest plastics pipe producer in North America, is suing the law firm Simmons Hanly Conroy LLP for alleged racketeering activity after being named in hundreds of personal injury lawsuits related to an asbestos-cement pipe (ACP) product it sold in the 1980s.
The Los Angeles-based extruder, which sells an estimated $3.9 billion of PVC and high density polyethylene pipes annually, says it sold a limited amount of ACP from 1983-88 to accommodate water districts transitioning to PVC pipes.
At that time, other pipe manufacturers including Johns-Manville, CAPCO, CertainTeed and Flintkote had produced ACP for decades.
And the pipe maker notes Occupational Safety and Health Administration regulations and union requirements had been in place to impose strict safety standards and limit workplace exposure to asbestos.
Despite the limited duration of what was then J-M Manufacturing's sale of ACP and the limited circumstances under which an individual could have been exposed to asbestos in ACP, the company says it has been the target of more than 6,000 asbestos lawsuits since 2000.
More than 430 of the cases since 2001 were filed by Simmons Hanly. JM Eagle says it settled more than 75 cases based on "facts" presented by the plaintiff's lawyers. However, those facts have since been called into question in a lawsuit filed by Scott Peebles, a former partner of the law firm.
Peebles' lawsuit exposed a pattern of fraud and misconduct in asbestos litigation at the firm, the JM Eagle lawsuit says.
The pipe producer filed its lawsuit May 10 in U.S. District Court in Chicago under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The company alleges that Simmons Hanly lawyers suppressed evidence, used perjured or falsified testimony and statements, and committed fraud in the course of recovering $9 billion from thousands of asbestos defendants in the last 20 years.
"J-M Manufacturing brings this lawsuit to redress the harm caused to it by Simmons Hanly and ensure that the firm's scheme does not continue," the lawsuit says. "The conduct at the center of this case 'goes well past . . . routine litigation activities.' It is not zealous advocacy. It is fraud, and Simmons Hanly and the professionals who participated in the fraud should be held accountable."
Laurence Nassif, Simmons Hanly's managing partner, responded to the lawsuit with a statement to Legal Newsline that gets into the history of JM Eagle and its former parent company, Formosa Plastics Corp. USA (FPC-USA).
In 1982, Formosa Plastics purchased eight plants comprising the plastics-pipe operations of Johns Manville to form J-M Manufacturing, which was headquartered in Livingston, N.J.
Then, in November 2005, J-M owner Walter Wang acquired 100 percent of the company from Formosa Plastics. He also acquired PW Eagle in 2007 and formed JM Eagle.
In his statement, Nassif says the JM Eagle lawsuit is a ploy to avoid accepting responsibility for having sold pipe containing asbestos.
"As we have alleged in court, the company was aware its product line was deadly when it purchased the pipe manufacturing operation from Johns-Manville in the early 1980s," Nassif said. "This is a baseless lawsuit and just the latest evidence that JM Eagle will spare no expense to avoid taking accountability for its dangerous practices and the harm it has caused innocent people.
"Simmons Hanly Conroy will continue to fight for our injured clients, and we trust the litigation process will prove these allegations to be false and lacking in any merit whatsoever."
JM Eagle is seeking a jury trial against the Simmons Hanly law firm and eight of its lawyers alleging two counts of RICO Act violations and one count each of common law fraud, unjust enrichment and civil conspiracy.