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3d Circuit Revives Class Action for Alleged Fraudulent Defense Scheme

Earlier this month, the U.S. Court of Appeals for the Third Circuit reversed a lower court dismissal and revived a class action filed by Cohen, Placitella & Roth, P.C. on behalf of the families of asbestos victims whose rights were allegedly trampled by a fraudulent cover-up perpetrated by Engelhard Inc. and its national counsel Cahill, Gordon & Reindel, LLP (Cahill).

The families alleged in their class action complaint that Engelhard and Cahill systematically destroyed or concealed evidence that talc produced by Engelhard, was contaminated with asbestos for nearly three decades to skirt liability or force nominal settlements. This scheme stonewalled and deprived asbestos victims nationwide from having their day in court.

Reversing the decision of a lower court, the Third Circuit ruled that the defendant’s fraudulent actions, if true, are not immunized under the litigation privilege—a common law doctrine protecting parties to a lawsuit and their counsel from liability based on statements in judicial proceedings. As written by Judge Fuentes of the Third Circuit, “The privilege has never applied to shield systematic fraud directed at the integrity of the judicial process. Nor should it.” This landmark decision confirms that lawyers can be liable for fraudulent behavior that thwarts the pursuit of justice.

The Third Circuit’s decision in Williams, et al. v. BASF Catalysts, LLC, et al. may be found here.

Recognizing the decision’s considerable implications, national syndications, such as the New Jersey Law Journal, Wall Street Journal, Bloomberg BusinessWeek, and Reuters have reported on the decision.

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