Certain Bankruptcy Trust Information Ruled Discoverable in Louisiana

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The plaintiff alleged he developed lung cancer due to his asbestos exposure while working on the premises of Freeport’s Port Sulphur facility, other facilities, and various drilling rigs. The defendants removed to federal court on the bases of original jurisdiction under the Outer Continental Shelf Lands Act. The plaintiff filed a motion to quash subpoena and notice of records deposition, and a motion for protective order. The court analyzed both at the same time, as both contained substantially the same arguments.

Defendant McCarty Corporation issued a notice of records deposition and subpoena to Timothy Young of The Young Firm, seeking information provided to any bankruptcy trusts and any settlement documents and checks reflecting payment made to plaintiff. The Young Firm represented the plaintiff in an earlier asbestosis suit that was dismissed. The plaintiff argued these documents were not discoverable. McCarty noted that the plaintiff did not sue it in his earlier litigation, and argued this information was necessary to demonstrate fault of other parties.

Defendant GE issued a notice of records deposition and subpoena to Malissa Antonucci, Manville Personal Injury Settlement Trust, seeking production of claims and related documents referencing the plaintiff.

Several states — but not Louisiana — have enacted litigation to reduce the suppression of evidence in analyzing causation. McCarty argued the plaintiff’s claims were subject to Louisiana’s pre-comparative fault law, which allowed credit for non-settling defendants if settled entities were proven to be at fault. McCarty also argued that the settlement agreements were discoverable to establish whether the plaintiff reserved or waived rights to potential recoveries from released parties.

The court noted: “Federal and state courts have routinely held that claims submitted to asbestos bankruptcy trusts are discoverable.” However, documents provided from the trusts to the plaintiffs regarding offers of compromise or settlement amounts were not discoverable. The court agreed with the reasoning by other jurisdictions, and held that all documents plaintiff submitted to the bankruptcy trusts, including claim forms, supporting documentation, and supplemental information were discoverable. Settlement information requested in both subpoenas was not discoverable.

Read the full decision here.