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Full title: Response / Reply in Support of its Motion in Limine Regarding Expert Discovery Hearing scheduled for 08/31/2021 at 9:30 AM at 3-LTB-Charlotte Courthouse (RE: related document(s)1926 Motion (Other) filed by Creditor Committee The Official Committee of Asbestos Claimants of Bestwall, LLC) Filed by Glenn C. Thompson on behalf of The Official Committee of Asbestos Claimants of Bestwall, LLC. (Thompson, Glenn) (Entered: 08/26/2021)
Document posted on Aug 25, 2021 in the bankruptcy, 10 pages and 0 tables.
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These topics have little relevance to the hearing, are inappropriate topics for expert testimony, or address topics that the Debtor promised were not at issue. As the Committee explained in its Motion, however, the Debtor intends to introduce expert testimony on geological history of talc, smoking, OSHA requirements, ordering of construction projects, government regulations, labeling standards, and many other topics.In its expert subject disclosures, the Debtors included several topics addressing talc (topics 11-14, 22, 27, 34, 40, and 63), which the Committee reasonably understood would not be the subject of an estimation hearing.For example, it is hard to fathom why there needs to be testimony about “why construction projects are sequenced and scheduled the way they are” (topic 8), “the health consequences of smoking” (topic 72), or the studies or risk assessments that were the basis for “government regulations” (topics 27 and 28).The Committee therefore asks that the Court (i) clarify that it will not hear any of the topics in the Debtor’s expert disclosure or, in the alternative, will not hear expert evidence on: (1) the chrysotile defense (topics 13-16, 55, and 62-67); (2) talc (topics 11-14, 22, 27, 34, 40, and 63); (3) litigation history (topic 102 and its 25 subtopics); and (4) the other topics listed above (topics 6, 8, 11, 27, 28, 72, 81, 102(e), and 102(v)); and (ii) grant such other relief as is equitable and proper.
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Document ContentsUNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION In re Chapter 11 BESTWALL LLC,1 Case No. 17-31795 (LTB) Debtor. THE OFFICIAL COMMITTEE OF ASBESTOS CLAIMANTS’ REPLY IN SUPPORT OF ITS MOTION IN LIMINE REGARDING EXPERT DISCOVERY The Official Committee of Asbestos Claimants (the “Committee”), by and through its undersigned counsel, hereby submits this reply in support of The Official Committee of Asbestos Claimants’ Motion to Limine Regarding Expert Discovery [Dkt. No. 1926] (the “Motion in Limine”). In support thereof, the Committee states as follows: PRELIMINARY STATEMENT The Committee moved to limit the scope of expert discovery after the Debtor2 disclosed 122 proposed expert topics, with 25 additional subparts. The Committee explained that the proposed expert topics—which ranged from memory issues, to OSHA requirements, to smoking, to talc—went well beyond what the Court and the parties contemplated for the estimation hearing. This is a case about establishing the value of claims arising from the sale of pre-1978 joint compound. While the Debtor should be allowed to put on its case at estimation, it should not be allowed to re-litigate the Debtor’s substantive liability on asbestos claims, which has been clearly established through countless cases, and years of litigation, before this Bankruptcy Case was filed. 1 The last four digits of the Debtor’s taxpayer identification number are 5815. The Debtor’s address is 133 Peachtree Street, N.E., Atlanta, Georgia 30303. 2 Capitalized terms not defined herein shall have the meaning ascribed to them in the Motion in Limine.
1The Court recognized this when, in granting the estimation and permitting medical science evidence—over the Committee’s objection—it admonished the parties that it expected a streamlined process. The Court was clear it would not hear four or five days of evidence about medical science. Hr’g Tr. 18:20-19:2 (Mar. 4, 2021) (“In response to that, I would suggest to the parties that we won’t have sufficient time in this estimation hearing for one party to spend four or five days on the medical science issue alone. So while I won’t grant the medical science motion, I would urge you to take that into consideration when conducting any discovery related to the medical science issues and preparing for the estimation hearing.” (the Court)). In issuing its expert subjects, the Debtor has ignored the Court’s admonishment. The Debtor’s proposed series of broad expert topics threaten to make the discovery and hearing not only expansive, but expensive. These topics have little relevance to the hearing, are inappropriate topics for expert testimony, or address topics that the Debtor promised were not at issue. The Court thus should preclude all the topics offered by the Debtor. Alternatively, the Court should prohibit the Debtor from seeking or proffering expert evidence on (1) the chrysotile defense (topics 13-16, 55, and 62-67); (2) talc (topics 11-14, 22, 27. 34, 40, and 63); (3) litigation history (topic 102 and its 25 subparts); and (4) several other superfluous topics (topics 6, 8, 11, 27, 28, 72, 81, 102(e), and 102(v)). The Debtor disagrees, but its arguments have no merit. REPLY I. THE MOTION IN LIMINE IS TIMELY To begin with, the Debtor asserts that the Motion in Limine is premature and asks the parties to “wait for expert reports” before filing these types of motions. See Bestwall’s Opposition to the ACC’s Motion in Limine Regarding Expert Discovery [Dkt. No. 2016] at 12-13
2(“Debtor’s Obj.”). Such an argument makes little sense as the Debtor’s proposal would be inefficient and defeat the purpose of the CMO. This Court entered a CMO that bifurcated the disclosure of expert topics and the disclosure of expert reports. [Doc. No. 1685.] The bifurcation was necessary because the parties have only 44 days to produce rebuttal reports. Since the parties already disclosed the expert topics, there is no reason to wait until the experts submit reports on all 122 topics before the Court decides whether those topics are admissible. Instead, the Court should allow the Motion and decide now whether the proposed topics are appropriate for estimation. II. ALLOWING THE DEBTOR’S SUBJECTS WILL UNNECESSARILY PROLONG DISCOVERY AND THE ESTIMATION HEARING The Debtor next argues that its proposed list of expert topics will not prolong discovery or the estimation hearing, but that argument has no merit. See Debtor’s Obj. at 12-13. When this Court granted the Estimation Motion, it told the parties to adhere to the streamlined schedule and limited scope proposed by the Debtor to “ensure that estimation itself does not cause undue delay.” Hr’g Tr. 12:24-13:10 (Oct. 22, 2020). During the subsequent hearing on the Medical Science Motion [Dkt. No. 1451], the Court admonished the parties that it did not “have sufficient time in this estimation hearing for one party to spend four or five days on the medical science issue alone.” Hr’g Tr. 18:22-23 (Mar. 4, 2021). Accordingly, the Court “urge[d] [the parties] to take that into consideration when conduct[ing] any discovery related to the medical science issues and preparation for the estimation hearing.” Id. at 18:24-19:2. The Debtor’s proposed preliminary expert disclosures of 122 topics (and 25 additional subtopics) is inconsistent with this Court’s clear direction and will greatly expand the scope of discovery and the hearing. Again, this is a case about estimating claim values based on past asbestos litigation. As the Committee explained in its Motion, however, the Debtor intends to
3introduce expert testimony on geological history of talc, smoking, OSHA requirements, ordering of construction projects, government regulations, labeling standards, and many other topics. There is no doubt that discovery associated with such wide-ranging expert disclosures, and the related discovery, will be far from streamlined and efficient. The Debtor disagrees, arguing that its topics are similar to those disclosed in Garlock. If the Debtor is permitted to pursue all of its proposed expert topics, this Court will have to extend the discovery deadlines, the expert deadlines, and the time it has allocated for the estimation hearing. If the Debtor’s proposed expert topics are permitted, the parties will be required to draft expert reports on all 122 topics and dozens of subtopics, file rebuttal reports, and elicit testimony from each respective expert at the estimation hearing. The Debtor’s effort is wasteful: it will waste time by delaying an estimation proceeding—time that the asbestos claimants do not have. Pursuing the Debtor’s expert subjects will waste millions of dollars in additional discovery and hearing preparation. And, most importantly, it will waste this Court’s limited resources by significantly increasing the number of pleadings that this Court will need to consider, and the number of hearing days required to reach an estimation. III. THE DEBTOR’S TOPICS ABOUT CHRYSOTILE CONTRADICT THE DEBTOR’S EARLIER REPRESENTATIONS TO THIS COURT As the Committee explained in its Motion, the Debtor represented to the Court that it will not litigate whether chrysotile caused mesothelioma (the “Chrysotile Defense”). See Motion in Limine, at ¶¶ 18-19. The Debtor represented that the Court was “correct” to assume that the Debtor “will not seek to have this Court determine whether or not chrysotile-containing joint compound causes mesothelioma.” Hr’g Tr. 18:1-6 (Mar. 4, 2021). Yet, despite this, the Debtor now presents eleven topics about chrysotile—topics 13-16, 55, and 62-67—that do exactly that. See Motion in Limine, ¶¶ 18-19. The Debtor goes so far as to propose an expert on “whether low-dose exposure
4to chrysotile causes mesothelioma.” Id. That is not the purpose of an estimation hearing—the Debtor’s substantive liability should not be at issue. That is particularly true when the Court granted estimation and permitted medical science evidence based on the Debtor’s representation that chrysotile’s carcinogenic properties would not be at issue. In its objection, the Debtor tries to walk back on its words. It argues that it has a right to present “background” on the Chrysotile Defense but will not “seek a global finding that chrysotile is never a cause of mesothelioma.” See Debtor’s Obj. at 6-9. There is a subtle but important distinction between what the Debtor said before and what it says now (it will not “seek a global finding that chrysotile is never a cause of mesothelioma”). Before, the Debtor represented that it “will not seek to have this Court determine whether or not chrysotile-containing joint compound causes mesothelioma . . . .” Hr’g Tr. 18:2-6 (Mar. 4, 2021). Now, the Debtor only promises not to “seek a global finding that chrysotile is never a cause of mesothelioma.” See id. (emphasis added). This subtle shift is an attempt to get some evidence about causation on the record, and just refrain from asking for a global determination on that evidence. It then said that it has always asked “for the opportunity to present our evidence”—suggesting that this general statement somehow eliminates its more specific, earlier representations. Id. The Debtor’s position is nothing more than sophistry. The Debtor says it will not ask the Court to decide whether chrysotile causes mesothelioma but, nonetheless, intends to present evidence on that precise issue. If it does not want the Court to decide whether chrysotile causes mesothelioma, it would make no sense to present “background” evidence on that topic. It is instead trying to slip in the Chrysotile Defense under the guise of educating the Court. If the Debtor is not asserting the Chrysotile Defense, the expert testimony about chrysotile is irrelevant. The Debtor
5cannot be allowed to present this evidence at a hearing it was awarded, in part, by promising not to present such evidence. The Debtor also misconstrues this Court’s order on the medical science evidence. It contends that the Court somehow allowed the Debtor to present the Chrysotile Defense when the Court generally stated that “the [D]ebtor should have the opportunity to present its medical science evidence.” Debtor’s Obj. at 8 (quoting Hr’g Tr. at 18:12-16 (March 4, 2021)). Of course, the Debtor conveniently omits that the Court offered that opportunity in the context of making the Debtor promise that it “will not seek to have this Court determine whether or not chrysotile-containing joint compound causes mesothelioma.” Hr’g Tr. 18:1-6 (Mar. 4, 2021). The Debtor’s expert topics are not consistent with that promise. IV. THE INCLUSION OF TALC-RELATED TOPICS ARE INCONSISTENT WITH THE DEBTOR’S PRIOR STATEMENTS IN SUPPORT OF ESTIMATION In its expert subject disclosures, the Debtors included several topics addressing talc (topics 11-14, 22, 27, 34, 40, and 63), which the Committee reasonably understood would not be the subject of an estimation hearing. In its Reply of Debtor in Support of Motion of the Debtor for Estimation of Current and Future Mesothelioma Claims [Dkt. No. 988] (the “Estimation Reply”), the Debtor challenged the Committee’s argument that estimation should not be pursued because joint compound was only a small component of the Debtor’s potential liability in light of recent talc-specific litigation verdicts. The Debtor argued that estimation should not be delayed because “potential claims against Bestwall relating to industrial talc remain inconsequential.” See Estimation Reply at 19. The Debtor argued that “expanding estimation to products with little or no litigation history . . . would be costly, time-consuming (further extending the time needed for estimation), and of little utility.” Id.
6Now, it seems, the winds have shifted. The Debtor now seeks expert testimony on these inconsequential topics. In doing so, the Debtor must be conceding that talc is not as inconsequential as it previously disclosed and that its talc must have contained asbestos. At no point, however, has the Debtor admitted that its talc contained asbestos. Instead, its own disclosures regarding talc, submitted late in its litigation history and apparently in only a few cases, are vague at best. See Estimation Reply, at Ex. A (Defendant Georgia-Pacific Corporation’s First Supplemental Objections and Responses to Master Interrogatories and Request for Production of Documents (dated October 14, 2005) (vaguely stating that “[t]alc was a constituent ingredient in certain formulas of All Purpose Joint Compound at varying times” while noting that All Purpose Joint Compound was first marketed in 1967); see also Objection of the Official Committee of Asbestos Claimants to Debtor’s Motion for Order Pursuant to Bankruptcy Rule 2004 Directing Submission of Personal Injury Questionnaires by Pending Mesothelioma Claimants [Dkt. No. 1326], Ex. 1 (“The Product Information identifies the products manufactured by the gypsum division in which talc was an ingredient but this should not be interpreted to mean that the talc used in those products was contaminated with asbestos. Bestwall notes that the Product Information identifies various types or categories of products that used talc . . . without identifying the different brand names that may have been used for those products over time.”) (emphasis added). Including talc in the estimation or permitting expert testimony regarding talc, which the Committee believed would not be part of an estimation based on prior dialogue, dramatically expands and alters the nature of this estimation hearing. Even the Debtor admits this point. Had the Debtor been forthcoming that talc would be a subject of this estimation hearing, the estimation could not have been completed in a year as represented by the Debtor, and the Committee never
7would have agreed to the timeline originally established in the CMO. Permitting the Debtor to engage in talc-related expert discovery will now significantly impact the estimation timeline. V. THE DEBTOR’S TOPICS ABOUT ITS CLAIMED “FRAUD IN THE TORT SYSTEM,” AMONG OTHERS, ARE NOT A PROPER SUBJECT FOR EXPERT TESTIMONY The Debtor also proposes expert testimony on “the history of asbestos litigation against Old GP, Bestwall and other asbestos defendants,” which covers 25 subtopics that are as broad as “the nature of asbestos litigation since the 1970s” to “the organization and history of the asbestos plaintiffs’ bar.” See Motion in Limine, Ex. A, at Topics 102 & 102(a)-102(y). As the Committee explained in the Motion in Limine, all of these claims target the purported “fraud” in the tort system that supposedly undermines Old GP’s settlements. The Debtor’s assertion of fraud is a red herring—especially for those settlements that occurred after issuance of the Garlock estimation decision. See Findings of Fact and Conclusions of Law Regarding Confirmation of the Joint Plan of Reorganization of Kaiser Gypsum Company, Inc. and Hanson Permanente Cement, Inc., as Modified, In re Kaiser Gypsum Company, Inc., Case No. 16-31602 (JCW) [Dkt. No. 2745] (Jul.29, 2021) (“. . . this Court does not read Garlock as an indictment of the tort system or a ruling that a party cannot get a fair trial in state and federal courts. . . . This Court is not inclined to indict its colleagues on the state benches, nor does the Court believe that a bankruptcy court in North Carolina is necessary to protect state courts from fraud. The findings in Garlock have been widely debated, and indeed some state legislatures have taken steps to address these issues. State courts and litigants will obviously be alert to what has been proposed in this case and can take their own actions.”). There are several other topics that are ill-suited for expert discovery. For example, it is hard to fathom why there needs to be testimony about “why construction projects are sequenced
8and scheduled the way they are” (topic 8), “the health consequences of smoking” (topic 72), or the studies or risk assessments that were the basis for “government regulations” (topics 27 and 28). The Debtor offers a weak explanation for some of these topics but never explains how these topics will help the Court estimate the amount the Debtor will need to pay asbestos claimants to compensate them for their exposure to Old GP’s pre-1978 joint compound. CONCLUSION For these reasons, the Committee asks the Court to limit the expert evidence that it will hear to what was granted in the Estimation Order. The Committee therefore asks that the Court (i) clarify that it will not hear any of the topics in the Debtor’s expert disclosure or, in the alternative, will not hear expert evidence on: (1) the chrysotile defense (topics 13-16, 55, and 62-67); (2) talc (topics 11-14, 22, 27, 34, 40, and 63); (3) litigation history (topic 102 and its 25 subtopics); and (4) the other topics listed above (topics 6, 8, 11, 27, 28, 72, 81, 102(e), and 102(v)); and (ii) grant such other relief as is equitable and proper. Dated: Charlotte, North Carolina August 26, 2021 HAMILTON STEPHENS STEELE + MARTIN, PLLC /s/ Glenn C. Thompson Glenn C. Thompson (Bar No. 37221) 525 North Tryon Street, Suite 1400 Charlotte, North Carolina 28202 Telephone: (704) 344-1117 Facsimile: (704) 344-1483 firstname.lastname@example.org Linda W. Simpson (Bar No. 12596) JD THOMPSON LAW Post Office Box 33127 Charlotte, North Carolina 28233 Telephone: (828) 489-6578 email@example.com
9Natalie D. Ramsey (admitted pro hac vice) Davis Lee Wright (admitted pro hac vice) ROBINSON & COLE LLP 1201 N. Market Street, Suite 1406 Wilmington, Delaware 19801 Telephone: (302) 516-1703 Facsimile: (302) 351-8618 firstname.lastname@example.org email@example.com Counsel to the Official Committee of Asbestos Claimants