JM Eagle, a Los Angeles maker of industrial piping, filed a RICO lawsuit Thursday accusing a law firm of fabricating asbestos lawsuits against it.
A Los Angeles pipe manufacturer that has been sued thousands of times for allegedly causing asbestos-related disease in workers handling its products is accusing a leading law firm of filing fraudulent cases.
J-M Manufacturing, which does business as JM Eagle, filed a federal RICO lawsuit Wednesday in Illinois alleging the Gori Law Firm in Edwardsville, Ill., brought sham lawsuits against it as part of a strategy to reach costly mass settlements. The lawsuit alleges the law firm's plaintiffs — who might suffer from lung cancer or mesothelioma, a rare aggressive organ cancer caused by asbestos — were coached by trained attorneys to identify the company's pipe as the source of their exposure, even when that was demonstrably false. It accuses the law firm of a 'systematic scheme of fraud operating beneath the surface of ostensibly ordinary asbestos litigation.' The company said it learned of the alleged fraud after a former firm attorney came forward. 'We are outraged by these ridiculous claims from an asbestos company. These scare tactics will not stop us from fighting for justice for our clients who are hurt by manufacturers like J-M Manufacturing Co.,' the firm said in response to the lawsuit. The firm's website says it has 'recovered' more than $4 billion for its clients. Asbestos is a mined fibrous silicate that was widely used in home insulation, automobiles and other applications through the 1970s until its use was slowly phased out as its health impacts became widely known. JM Eagle is a large producer of plastic and PVC pipe, a business it got into in 1982 after purchasing those operations from Johns-Manville Corp., which went bankrupt because of asbestos claims. It is privately held by Los Angeles billionaire Walter Wang, chairman and chief executive, and has about $2 billion in annual revenue. The company also manufactured asbestos-cement pipe from 1983 to 1988 used by municipal water systems, sewer systems and other customers. The company contends the pipe poses no health threat unless improperly handled, such as by cutting it with a power saw or drill. This is the second RICO, or Racketeer Influenced and Corrupt Organizations Act, lawsuit filed by JM Eagle against big plaintiff firms, which advertise widely for clients suffering from asbestos-related illnesses and then file cases against makers of products containing the mineral. The federal lawsuits, which originally targeted organized crime, are commonly filed in big civil disputes because they allow for triple damages. However, they are complex to litigate since a conspiracy must be proven among the defendants in addition to any wrongdoing. The first lawsuit was brought in May 2024 against Simmons Hanly Conroy, an Alton, Ill., firm JM Eagle says filed more than 430 cases against it since 2001. It similarly accused the law firm of coaching patients with asbestos diseases to incorrectly identify the company as the source of their exposure. The firm's website says it has recovered over $10.7 billion for its clients. JM Eagle said in its lawsuit that it became aware of the alleged fraud after a former Simmons attorney hired to handle asbestos cases was terminated and filed a lawsuit accusing the firm of unlawful and unethical conduct. The law firm and its former employee later reached a private settlement. JM Eagle alleges that it conducted reviews of past Simmons and Gori cases and found ones that were blatantly bogus, such as those involving plaintiffs who had stopped working before the company produced its asbestos pipe. It alleges the cases were filed in plaintiff-friendly jurisdictions and used as 'bargaining chips' by the firms, which would agree to dismiss them in negotiating a settlement. A judge dismissed the Simmons lawsuit last year, ruling JM Eagle had failed to prove a conspiracy as required under RICO law. However, the company amended the lawsuit in November by adding a second firm it said fed leads to Simmons. John Storino, an attorney representing Simmons and other defendants, called the amended lawsuit a 'recycled version of claims the court has already rejected.' It is estimated by ratings agency A.M. Best that insurers have spent more than $100 billion paying asbestos-related claims since the 1970s. The cases are ongoing, with plaintiffs also filing claims against the trusts of companies bankrupted by the litigation. Payouts to mesothelioma victims can top $1 million. Consulting firm KCIC found that the number of cases filed in the first half of last year rose 4% to more than 4,300. Robert Weissman, president of Public Citizen, a Washington, D.C.-based consumer group, characterized the JM Eagle litigation as dismissive of even legitimate asbestos claims, noting victims suffer a 'horrible, painful early death' by the tens of thousands even today. 'It is 100% true that law firms advertise for asbestos victims and help them identify who might have exposed them to asbestos and develop the cases. They're doing a public service by doing it and helping victims realize if they're sick, there's compensation available to them,' he said. Weissman, an attorney, said that if law firms are filing bogus cases, defendants can seek sanctions from judges, who take such allegations 'incredibly seriously' rather than filing a 'powerful' RICO case with triple damages. 'Even if this case is ultimately dismissed, it is intended to deter others from bringing these cases, and will for sure deter or prevent individuals who have legitimate asbestos exposure claims for bringing their cases forward,' he said. The company said it has tried to raise the fraud issue in individual cases but has not been successful. It also defended its use of the RICO statute as appropriate. In its Simmons litigation, JM Eagle alleges the fraud was shown through the comparison of multiple cases in which plaintiffs make specific claims about the source of their asbestos exposure — JM Eagle's pipes — while being unable to recall much else, making it hard to dispute the allegations.
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