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Cahill Can't Dodge Asbestos Victims' Spoliation Claims

New York (April 6, 2016, 2:58 PM ET) -- A New Jersey federal judge on Wednesday shut down Cahill Gordon & Reindel LLP’s efforts to escape a proposed fraud class action accusing it of conspiring with former client BASF to destroy evidence and conceal the fact that the company’s products contained asbestos.

U.S. District Judge Jose L. Linares rejected Cahill’s and BASF Catalysts LLC’s motions to dismiss fraud and fraudulent concealment claims brought against them over the alleged plot to suppress future asbestos lawsuits against the multinational chemical manufacturing corporation by destroying and manipulating evidence, rejecting their contention that asbestos victims had failed to properly plead their case.

“Defendants had a clear duty to preserve that ran to a specific civil plaintiff, and then allegedly destroyed the evidence that would be required by similar individuals in the numerous lawsuits that were reasonably foreseeable,” Judge Linares said.

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The matter of whether the plaintiffs’ allegations are true or not is yet to be seen, but, according to the court, discovery should proceed in order to determine the factual aspects of the case.

The Third Circuit ruled in September 2014 that a New Jersey federal judge had improperly dismissed the claims of fraud and fraudulent concealment against BASF and Cahill, after finding allegations surrounding the mid-1980s destruction of testing records showing asbestos in talc mined in Virginia were well-pled.

After the plaintiffs in the case filed their amended complaint in the district court litigation, the defendants renewed their motions for dismissal, arguing that the claims should be dismissed outright for lack of support.

But Judge Linares found that the named plaintiffs have each properly alleged that they were a victim to Cahill and BASF’s alleged scheme and that they did not receive adequate compensation as a result.

“In essence, the second amended complaint states that plaintiffs either dismissed a BASF predecessor or were unsuccessful in their claims against it after reasonably relying and acting upon the misrepresentations and material omissions by defendants, including the failure to disclose evidence indicating [a BASF unit’s] talc contained asbestos fibers.”

The judge said the complaint alleges a systemic plot by BASF and its law firm to mislead actual and potential asbestos-exposure plaintiffs into believing that the talc products did not contain asbestos when, in fact, they did. And they knew they had a duty to preserve the evidence, the judge said.

“Here, not only were defendants ‘sensitized’ to a need to preserve, the second amended complaint alleges that they fully understood that preserving evidence would subject them to significant liability, yet they entered into a scheme to intentionally destroy evidence in order to frustrate reasonably foreseeable litigation involving substantially the same subject matter and issues,” Judge Linares said.

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Counsel for the plaintiffs, Christopher Placitella of Cohen Placitella & Roth PC, told Law360 Wednesday that his team is very pleased with the decision and that they are anxious to move forward with the merits of the case.

"It’s been in the works since 2011 and we’re finally getting an opportunity to move the case forward,” Placitella said.

Placitella’s co-counsel, Jeffrey Pollack of Fox Rothschild LLP, added “The sooner we can be in front of a jury the happier we’ll be.”

Counsel for Cahill declined to comment Wednesday.

The plaintiffs are represented by Christopher Placitella, Michael Coren, Jared Placitella, Stewart Cohen, Harry Roth and Robert Pratter of Cohen Placitella & Roth PC, and Jeffrey Pollock of Fox Rothschild LLP.

BASF is represented by Eugene Assaf, Michael Williams, Daniel Bress and Peter Farrell of Kirkland & Ellis LLP, and Stephen Orlofsky and David Kistler of Blank Rome LLP.

Cahill Gordon is represented John Villa, David Blatt and Grant Geyerman of Williams & Connolly LLP, and Robert Ryan, Marc Haefner and Craig Demareski of Connell Foley LLP.

The case is Kimberlee Williams et al. v. BASF Catalysts LLC et al., case number 2:11-cv-01754, in the U.S. District Court for the District of New Jersey.

--Additional reporting by Matt Fair, Kat Greene and Kali Hays. Editing by Emily Kokoll.

Source: LAW360
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