Sitting there in the bankruptcy court, I felt like a spy in a house of collusion, an interloper in a band of thieves. Going into the place I had a gut feeling that what was going on in the courtroom would be considered by a lot of rank-and-file folks to be evil, and as I listened to the testimony, I had trouble fighting the notion. The recognition was so disturbing to me--maybe it was the bad cologne, sweat and malarkey of the lawyers in that hot room--that I began to think strangely. While fighting the urge to pass out, I remember thinking: We're on the 54th floor of the tallest building in Pittsburgh and a terrorist plane could hit us at any moment. I'll die, but so will all of these lawyers.
This is the kind of thinking that goes through the mind of a peace-loving, low-paid scribe when confronted with a scenario that seems at once evil and innocuous. In a strange turn of fate, on Thursday and Friday I had the opportunity to report on settlement negotiations for the Swiss engineering group ABB Ltd. I was called in by a news service to cover the proceedings, which could decide whether the large company survives. ABB wants to "pre-package" and limit asbestos victims compensation awards with its various insurance companies affected by what in recent years has become a deluge of asbestos claims. The settlement would limit the claims to $1.2 billion, depriving a lot of lawyers of some easy future cash.
The hearing was held in federal bankruptcy court, on the 54th floor of the U.S. Steel Building in downtown Pittsburgh. I was the only reporter who attended Thursday and Friday's testimony, perhaps because other reporters knew better than to go so near to Hades as to risk catching a glimpse. I was the only man, among 60 or so male lawyers, who was not wearing a coat and tie. No doubt I also was the most comfortable, since the temperature exceeded 80 degrees for most of the two days, what with the cheap building maintenance and the fat suits and all their hot air. At the end of testimony Friday night, Judge Judith Fitzgerald continued the hearing until May 12.
The hearing effectively would decide which people in the future would receive compensation for injuries that won't be their fault -- in effect, a trial deciding who will live or die in a bit more comfort than other victims of the same injuries. The $1.2 billion proposed settlement of ABB's asbestos claims is considered a linchpin to the company's return to prosperity. The proposed settlement involves ABB's Combustion Engineering (CE) unit, which made industrial boilers insulated with asbestos. CE filed for bankruptcy in February and CE's bankruptcy plan included a reorganization deal packaging millions of dollars in asbestos-related personal injury claims. ABB bought CE in 1990 during an acquisition spree that has left the Swiss company trying to cut its debt drastically.
Asbestos was used for insulation and fireproofing until about 30 years ago, when scientists found that inhaled asbestos fibers could be linked to lung scarring, cancer and other ailments.
ABB wants to complete the settlement quickly to calm its investors' fears. But the examination of witnesses during the two days of testimony was, well, litigious, with lawyers representing insurance carriers and cancer victims fighting over rules of order and whether or not certain witnesses should be considered "expert" witnesses.
Particularly enlightening testimony came in the interview of Charleston, South Carolina attorney and witness Joe Rice. Rice was able to get several groups of plaintiffs to agree to the $1.2 billion settlement agreement, and once he helps to get the whole deal sealed, he'll get $20 million as his fee. Rice was paid a $1 million retainer and has been paid a $6.3 million installment of his "success fee."
Under examination by attorney Mark Plevin, whose firm represents several insurance companies, Rice's fee was questioned. Plevin noted that Rice's law firm does not keep time records. "Do you think that you put 500 hours into this case?" he asked Rice.
"It'd be a guess," Rice said.
"Would you agree that 500 hours divided by $20 million would be $40,000 an hour?" Plevin asked.
Rice agreed, but through part of his testimony he had the unnerving habit of smiling a cat-that-ate-the-canary smile -- and in my direction, or to someone sitting near me. The thing is, I initially sat down next to him in the courtroom and asked him some questions about what was going on prior to him taking the stand. I wasn't sure if he was messing with me or what he was trying to prove.
This is the world of some of these attorneys, who waddle up to the trough as if it's their due and then smile cockily about it. During one recess in the trial, I went out into the hallway outside the courtroom and was chatting with a lawyer, who asked me early on: "How are they paying you?" Meaning was the news service paying me enough.
"They're paying me okay," I said, "but not enough."
He got a self-satisfied smile on his face and chuckled lightly."But I like to write," I added. "And I don't want to be a lawyer. No offense."
(This story originally was published in Pulp newsweekly.)