How Appealing Extra

How Appealing Extra

Wednesday, May 19, 2004



May 18, 2004

A panel of the Third Circuit Court of Appeals has decided by a two-to-one vote that my joint administration of three major chapter 11 asbestos cases should be terminated. These cases were assigned to me by former Chief Judge of the Third Circuit Court of Appeals Edward Becker. My responsibility was to take an intractable litigation problem cloaked with a sense of urgency and to dispose of it with dispatch.

The Court of Appeals, after a full examination of the record has found that I did nothing wrong, unethical, or biased. Moreover, their review has not revealed the slightest hint of any actual bias or partisanship by me. On the contrary, they found that throughout my stewardship over these asbestos cases, I exhibited all of the judicial qualities, ethical conduct and characteristics emblematic of the most experienced, competent and distinguished Article III jurist.

These cases presented diverse issues from a management point of view and it was readily apparent that a single method of case management would be unworkable. Moreover, it was recognized by all concerned that in order to resolve these cases outside the tort system an innovative approach to case management would have to be adopted. The case management methodology implemented by me focused on the gathering of information from a myriad of sources in order to develop a plan of case management consistent with the needs of each individual case. In doing so I abandoned strict adherence to formulaic principles that the Court of Appeals now finds unacceptable, notwithstanding the fact that the abandonment of these well-known principles remained unchallenged for approximately twenty-two months. It is unnecessary to recount all the issues that were presented to the Third Circuit Court of Appeals over a protracted period of six months other than to remark that the litigation was spirited, costly, and the procedural path it traveled was unorthodox if not bizarre.

The Court of Appeals gave lip service approval to the concept of experts employed to advise a district judge, but held that such confidential advice necessarily crosses the line into extra-judicial or ex parte knowledge. It is unclear how expert advisors are to be used, if at all, following the Court of Appeals' opinion in this case. The dissenting opinion criticized the majority for excusing the delay of almost two years before an objection was filed to my management of these complex cases. The majority refused to recognize the significance of the fact that attorneys representing committees of creditors and indeed the entire asbestos bar knew long ago of the supposed conflicts of my advisors.

The Court of Appeals' focus on complete transparency and actual notice to the exclusion of other considerations is an unfortunate development in the jurisprudence of complex litigation. These principles were developed in simpler times and for cases with but a few parties. Here, where the parties number in the hundreds of thousands, the decision in this case was profoundly impractical. I am convinced that it will work to the detriment of legitimate creditors – injured persons, commercial creditors, and debtors – willing to play by the rules and avoid the scorched earth tactics of a few, distressed-debt traders. The trust the judiciary has earned over centuries of honorable service is not wasted by the case management techniques I put in place. On the contrary, that trust is put to its highest use to solve one of our society's most difficult and intractable problems.

Nevertheless, I accept the appellate court's decision, not because I agree with it, but because, from a pragmatic point of view, I recognize that this type of internecine and peripheral litigation is counter-productive in the resolution of these important chapter 11 cases. Each and every day approximately 15 claimants exposed to asbestos fibers die. Further delay in the processing of their claims is intolerable. The stark reality of this statistic requires this Court to stand aside and permit these cases to be reassigned to another judicial officer without delay, and without recrimination.