John O'Brien Jan. 5, 2015, 1:38pm


CHARLOTTE, N.C. (Legal Newsline) – An asbestos plaintiffs firm named in one of the racketeering cases filed by Garlock Sealing Technologies believes the debtor’s objections to a venue transfer improperly seek to attribute unrelated facts to each individual RICO case.

“Disregarding Garlock’s immaterial and improper arguments, and focusing instead on the factors relevant to the transfer of venue analysis, it is evident that the balance of interests here favors transfer,” the defendant argues.

Shein Law Center of Philadelphia filed the Dec. 11 reply in response to Garlock’s objection to the firm’s motion to transfer venue to the Eastern District of Pennsylvania.

Garlock’s oppositions to the motions to transfer in each of the RICO cases urge the U.S. District Court for the Western District of North Carolina to maintain jurisdiction. It argues that hearing the adversary proceedings and the underlying bankruptcy case in one district will be “consistent with both the interest of justice and the convenience of the parties.”

Furthermore, Judge Max O. Cogburn, who previously presided over the cases before they were transferred to Magistrate Judge David S. Cayer’s courtroom, said they should be litigated in one district court in order to avoid inconsistency, Garlock claims.

Garlock argues that “the strong presumption in favor of retaining venue here and a balancing of the relevant factors demonstrate that the court should deny the motion[s] to transfer.”

The RICO cases were filed days before Judge George Hodges’ Jan. 10 ruling in favor of Garlock in the United States Bankruptcy Court for the Western District of North Carolina, ordering the gasket manufacturer to put $125 million in an asbestos trust – roughly $1 billion less than what plaintiffs’ representatives felt was proper. In his decision, Hodges noted how attorneys had been withholding evidence while pursuing claims against Garlock, thus inflating settlements.

While evaluating Garlock’s proper liability, allegations surfaced that plaintiffs attorneys had engaged in “fraud, deceit and other activities prohibited by the Racketeer Influenced and Corrupt Organizations Act (RICO)” when settling asbestos plaintiffs’ claims with Garlock.

As a result, Garlock and Garrison Litigation Management Group filed four separate RICO lawsuits in the US District Court for the Western District of North Carolina against Belluck & Fox, LLP, Simon Greenstone, Waters & Kraus LLP and Shein Law Center Ltd.

Shein Law Center accuses Garlock of relying on the argument that there is a “strong presumption” that the cases should reside in North Carolina even though factors support transfer.

“When the court strips away Garlock’s improper attempts to attribute the arguments and activities of unrelated third parties to Shein Law Center, it is left with no factual support for Garlock’s assertion that the interest of justice and convenience of the parties support maintaining venue in North Carolina,” Shein Law stated.

In fact, Shein Law Center asserts that transfer would allow each individual RICO case to receive the specific assessment required to properly resolve the matters.

The firm further argues that it is not necessary for the same court to hear the four separate RICO cases, adding that Garlock is improperly trying to equate the firm with defendants and parties involved in the other RICO cases as well as the Garlock bankruptcy proceeding.

More specifically, Garlock argued that transfer would be not be appropriate because 13 of the 15 cases in which full discovery was conducted during the bankruptcy proceeding are subjects of the RICO cases.

Also, the Official Committee of Asbestos Personal Injury Claimants, which is party in the Garlock bankruptcy case, intervened in the RICO cases when it joined the defendants’ motions for judgment on the pleadings and summary judgment.

However, Shein Law Center argues that these connections are not sufficient to prevent transfer.

“Any assignment of the arguments or positions of these entities to Shein Law Center would be erroneous, as would be the attribution of the perceived positions of the ‘plaintiffs’ bar’, and amorphous and immaterial classification, in asserting the merits of any claims in this matter,” the firm claims.

The defendant recognizes that some similarities exist between the RICO case and the Garlock bankruptcy case because the debtor uses “overlapping factual averments as ostensible support for the assertion of distinct legal positions,” it argues that there is not a strong factual and legal nexus between the two cases.

“The Garlock bankruptcy is not ‘waiting on a result from this lawsuit,’ as evidenced by the fact that Garlock recently filed an amended plan of reorganization,” it stated.

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