I want to share with you a recent development in California asbestos litigation concerning bankruptcy trust disclosures. More specifically, Judge Elias, the Los Angeles Asbestos Supervising Judge, recently issued an order relating to disclosures of bankruptcy trust information. The order is very favorable to defendants, as Judge Elias found that specific facts supporting plaintiffs’ bankruptcy trust claims and exposures are not privileged and are discoverable.
Pursuant to the order, plaintiffs and their counsel are required to comply with the following disclosure requirements at the time of serving responses to Defendants’ Standard Interrogatories. They shall:
- Respond to six new interrogatories as part of the LAOSD Standard Bankruptcy Interrogatories (73 to 78). These require plaintiffs to state all facts in support of and in the custody or control of plaintiffs or plaintiffs’ counsel regarding plaintiffs’ exposure to asbestos from each bankrupt entity’s product. Plaintiffs must identify all persons and documents related to the exposure and any existing claim by plaintiffs against asbestos bankrupt entities.
- Respond to a revised Interrogatory 68 which asks plaintiffs to: identify any claims filed against asbestos trusts, identify documents submitted to and received from such trusts, and describe the status of submitted claims, including any receipt of payments.
- Execute and provide a Bankruptcy Trust Authorization form.
- Produce all documents disclosed to any established or pending trust funds for any purpose, including, but not limited to, supporting a claim for an asbestos-related injury, or providing notice of, or reserving a place for, a future claim for compensation for an asbestos-related injury. This production shall include:
- voting ballots
- submitted forms
- claims and “placeholder” claims
- requests for extensions and/or deferrals
- all supporting documentation
- related communications; and
- all documents filed on or after January 1, 2015 pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure.
- Disclose signed declarations and/or affidavits stating facts regarding plaintiffs’ exposure to asbestos that are shared with someone other than plaintiffs’ counsel.
- Supplement the production of bankruptcy claim related documents and declarations no later than 5 days before trial.
The order is limited to cases filed or amended after May 27, 2015 for a six month trial period (and will continue after this period unless vacated or modified).
I also took the liberty of attaching the recent RAND study: Bankruptcy’s Effect on Product Identification in Asbestos Personal Injury Cases. The purpose of the study was to determine whether plaintiffs are more likely to identify asbestos-containing products of bankrupt firms in tort cases before or after declaring bankruptcy. Unsurprisingly, the findings indicate that plaintiffs’ identification of products of bankrupt firms during discovery is less likely after the firm enters bankruptcy.