Successfully Challenging Placeholder Claims in Asbestos Litigation

Ohio’s Asbestos Trust Transparency Act, H.B. 380 (“H.B. 380”), requires plaintiffs in asbestos cases to disclose all claims they have made to trusts established by now-bankrupt companies to pay such claimants outside the tort system. It also allows defendants to seek a stay of the case if they believe there are additional claims plaintiffs can make, but have not yet made. If the court agrees with the defendants, the case is stayed until plaintiffs’ claims are made. Because Ohio allows apportionment against bankrupt entities, these claims can provide critical apportionment evidence. H.B. 380 even provides for their admissibility at trial for this purpose.

Recently, a team of Ulmer attorneys led by Jim Kline received a ruling in the Robert Koran case that is highly favorable for defendants in asbestos litigation, and deals specifically with the filing of “placeholder claims” – a standard tactic for many plaintiffs’ firms in asbestos litigation. In the case, Plaintiffs had previously filed such “placeholder claims” with numerous bankruptcy trusts. These placeholders were devoid of any exposure information, denying defendants any evidence upon which a jury might be able to apportion fault, but while also tolling any limitation periods utilized by the trusts.

In Koran, Ulmer moved the Court to order Plaintiffs to re-file the claims with substantive exposure information. Ulmer’s attorneys argued that “placeholder claims” were not true claims, and that the defense could force the Plaintiffs to file substantive claims. The Judge ruled in favor of the defense’s argument after Ulmer attorneys presented exposure evidence that had been developed in prior litigation involving the same worksites where Plaintiff was employed. The evidence included affidavits and deposition testimony previously developed in these other cases. Plaintiffs were ultimately ordered by the Court to file/refile thirteen substantive claims.

Until now, it has been the “Standard Operating Procedure” of plaintiffs’ firms to file meaningless “placeholder claims” to deprive defendants of the use of these “claims” as apportionment evidence at trial. The ruling Ulmer obtained on behalf of the firm’s client provides a tremendous tool to the defense. Had the defense’s motion failed, plaintiffs would have continued undermining H.B. 380 by simply filing meaningless placeholder claims with all the trusts – thereby preventing defendants from using those claims as apportionment evidence at trial. Instead, defendants now have an effective means of forcing plaintiffs to file meaningful trust claims (which can then serve as potential apportionment evidence at trial), even where evidence in support of the claims has been ignored in the case by plaintiffs or may not even be available in the particular case at all.