BASF Leaves Trail of Fraud, Corruption, and Asbestos in its Wake

by Sokolove Law

It’s one thing to recklessly produce and distribute asbestos to an unsuspecting public — it’s something else to destroy evidence showing that you’ve done so. But such are the allegations against a massive chemical company and the law firm that represented it.

Last week, a Newark federal judge denied a motion by BASF, the world’s largest chemical manufacturer, to be dismissed from a class action lawsuit that claims the company conspired with lawyers to fabricate or destroy evidence. According to plaintiffs, the evidence in question showed how, for years, the company produced and distributed asbestos-containing talc. Asbestos is a toxic mineral known to cause lung cancer, mesothelioma, and other life-threatening diseases.

The ongoing suit alleges that BASF Catalysts, a New Jersey subsidiary of the German chemical corporation BASF, hid or destroyed documents to preempt lawsuits from the victims of the company’s careless handling and distribution of asbestos. If true, the charges represent a particularly nasty feat of criminality on the part of BASF and its constituents. But, to understand exactly what’s going on, we have to rewind a few decades.

What Evidence?

From 1967 to 1983, a company called Engelhard Corp is said to have sourced asbestos-containing talc from a mine in Vermont. The company claimed in 1972 that test results revealed the talc did not contain the naturally occurring mineral. But in 1979, at least 3 employees testified in a suit against the company that Engelhard knew the talc mine actually did contain asbestos, and had merely hidden this fact from the public. According to Bloomberg, that lawsuit ended in a settlement, and the testimonies were then sealed and hidden from public view.

A year after the talc mine closed in 1984, Engelhard executive Glenn Hemstock distributed a memo directing employees to collect internal documents related to the mining operation, with the intent being to discard them. According to plaintiffs in the ongoing case, “All documentary evidence relating to Engelhard’s asbestos-containing talc was thereafter gathered up, collected by the BASF Perpetrators or their agents, and subsequently was either destroyed or secreted away.”

Next, Engelhard allegedly conspired with the New York-based law firm Cahill, Gordon & Reindel to manufacture evidence showing negative results for asbestos testing in the Vermont mine. Some of that “evidence” included, “false unsworn and sworn representations, including false affidavits, false and incorrect expert reports and discovery response verifications.”

Now, with this wealth of falsified evidence — not to mention, the absence of real, incriminating evidence — Engelhard and its lawyers were free to complicate and dissuade future asbestos injury cases, which it did, very successfully. Without a doubt, this constitutes fraud.

The Thread Unravels

Engelhard was acquired by BASF in 2006. Three years later, a former researcher for the company testified that he knew that the company’s Vermont talc contained asbestos, and that the mine was shut down for that very reason. Nonetheless, in the preceding decades, BASF and its lawyers at Cahill, Gordon & Reindel had misrepresented findings to thousands of asbestos injury claimants around the country, according to the New Jersey Law Journal.

Asbestos exposure lawsuits are distressingly common in the United States, but what makes this case unique is the lengths the defendants were willing to go to skirt accountability for their actions. The plaintiffs in the new case represent the estates of several employees who worked for Engelhard and have since died from asbestos-related diseases. They claim that, as a result of the falsified documents put forth by BASF and Cahill Gordon, they opted not to pursue claims or to seek compensation for their losses. They simply believed the evidence was lacking. Little did they know, the evidence was actually false.

But justice may still be had.

Last week, U.S. District Judge Jose Linares of New Jersey found the defendants — in this case, BASF Catalysts and various lawyers from Cahill, Gordon & Reindel — had a legal obligation to disclose evidence — the real evidence, which was destroyed decades ago. Specifically, he said that in 1984, [Engelhard] had a duty to preserve evidence when it was relevant in a prior lawsuit,” referring to the 1979 suit that ended in a settlement.

While the judge’s decision does not result in compensation for the many victims of Engelhard’s asbestos operations, it does leave open the possibility. The case is still in the discovery, or pre-trial phase, but the plaintiffs’ lawyers expressed hope Judge Linares will set a trial date in the near future.

The Big Picture

Justice may be on the horizon for the victims of Engelhard and BASF, but there’s a dark cloud looming over the entire field of asbestos litigation.

In 2013, Congress introduced a bill called the FACT (Furthering Asbestos Claim Transparency) Act, which would require stricter requirements for individuals seeking compensation for asbestos exposure or injury. Specifically, the law would require victims to publicly disclose their work and asbestos exposure history, as well as the basis for their compensation claims. Were it to become law, such an act would burden those who have already been unfairly victimized by the actions of reckless, negligent, and dishonest corporations like Engelhard and BASF. Why aren’t those companies held to the same standard when it comes to polluting the environment and poisoning hard-working Americans? (That answer, unfortunately, is a complicated one.)

Not surprisingly, the FACT Act has endured significant opposition from veteran’s groups, teachers, firefighters, and public employees alike. Earlier this year, a modified version of the bill managed to pass the House of Representatives. It now faces Senate approval. President Obama has promised to veto the measure, but given the uncertainty over the forthcoming presidential election, it’s far from safe to say the bill is dead in the water.