Asbestos Litigator Follows Complex Path of Coverages

Ohio Lawyers Weekly

Syndie Eardly

When Michael Kelley's law firm – Kelley & Ferraro in Cleveland – won an asbestos verdict of $1.6 million in February 2000 and followed it up a few weeks later with a second asbestos-related verdict of $4.45 million, it was inevitable that the landscape of the firm's work would change.

According to Kelley, who settled 50 cases against 60 manufacturers and distributors of asbestos products for $8.3 million in September, there is no doubt that the message of those large verdicts reached the defendants and made them much more amenable to coming to the table.

"The threat of trial is usually a very sobering experience, not only for the plaintiffs, but also the defendants," Kelley said. "There are great risks for each side."

But there is something more formidable and convincing at play in asbestos litigation in Ohio, and that is found in the persona of Kelley himself. Kelley has honed his talents as a litigator in the narrow world of asbestos litigation for 19 years. His firm has filed 20,000 of the 30,000 cases pending in Cuyahoga County.

Those 20,000 cases do not represent an overnight boon to Kelley's four-year old law firm. When he created the firm in 1997, he had already been involved in asbestos litigation for 18 years.

"I had a lot of contacts with lawyers not only in Ohio, but across the country. I also had a lot of contacts with attorneys and with unions and union folks and had some success with both settlements and trial verdicts so I had a fairly successful reputation," Kelley said. "Then I got really lucky, meaning I got a lot of business. You can be as good as good, but you have to have a lot of luck."

His experience and reputation have served him both on the marketing end and on the legal end. Kelley's reputation for successful resolution of asbestos cases has brought many asbestos victims to his door.

Likewise, he has earned a good reputation among defense attorneys. Kelley feels that defense attorneys have come to respect that what he brings to the table is legitimate. A tribute to Kelley's expertise is that the day the $8.3 million in settlements was agreed upon for the 50 cases due at trial in September, Kelley settled another $5 to $6 million in claims against the same defendants.

"Those settlements took place because they were at the table and decided to take that opportunity to sit down and try to work other things out," Kelley said. "There is always a benefit to getting things ready for trial, and everybody getting serious and getting the parties involved and getting good lawyers to work together to get it done."

Kelley has worked cases in other cities, particularly in Detroit and New York, and notes that the quality of lawyering in Ohio is particularly excellent and has made his job a lot easier.

"I'd rather have a real good professional on the other side of me than somebody that doesn't know anything," Kelley said. "A good lawyer will know how to observe the risk and prepare a case properly and get it done and make a determination that's in their client's best interest."

Tracing Insurance

Even with the best lawyers sitting across the table from him, Kelley noted that asbestos litigation has its challenges, and the biggest is finding the money for clients who may have been exposed to asbestos 20, 30 or 40 years ago.

Often, the critical challenge is to trace the insurance path to see what coverages are available to the client. In fact, Kelley insists, it is the main focus of asbestos litigation.

"I go after the companies, but I also try to find the money because getting verdicts is one thing. Being able to collect for a client is ultimately the job that I am there to do," Kelley said.

Kelley said sometimes he has to fight with companies to get them to turn over their insurance coverage history, but sometimes the companies really don't know what they have. He noted that one such company was close to bankruptcy 10 years ago, when all of a sudden there was a $2 billion insurance fund put together to cover the asbestos claims. "It's difficult litigation," Kelley said. "But people go after it and find it. Not only the companies find it, but the insurance components for the companies find it."

Kelley acknowledged that asbestos litigation has sent several companies into bankruptcy, but he is confident his clients will still see their claims settled.

Kelley himself sits on the creditors committees for eight of the 10 pending bankruptcies involving what he calls the "first-tier defendants." He noted that these defendants have either run out of insurance, were never able to figure out how to handle the claims in an expeditious manner, or have taken a scorched earth position where they would try every case and wouldn't settle anything.

"There have been a lot of failed policies," Kelley said. "But I believe there's probably $15 to $20 billion worth of some type of equity available to the victims. The bad news is you have to wait in line for it. The good news is there is probably going to be $15 to $20 billion available from different sources."

Kelley said he has also followed up on second-tier defendants, often going after distributors or products manufactured with asbestos, noting that Ohio is a jurisdiction that is pretty good on successor liability issues.

Evaluating Claims

One of the things that Kelley has gotten very good at, and an expertise he has passed onto members of his firm that has now grown to 22 lawyers, is the process of evaluating each individual case.

"There's no objective way to do it," Kelley admitted. "It's pretty subjective from the standpoint of looking at all factors and trying to come up with something that makes sense for the family and then you have to weigh the risk of trial and waiting for the trial and going to trial. It's much more of an art than a science."

Kelley said it's tough to work with families that have been torn apart by deaths from asbestos. Often what the family really wants is closure.

"It's not necessarily about all the money in the world that you can get for them at trial, but trying to put to rest that chapter of their lives," Kelley said. He explained that although the cases do indeed often bring a measure of financial support to families, the closure issue is often what is most meaningful to them.

Closure is often long in coming in an asbestos docket that numbers 30,000 claims filed, but Kelley credits the wisdom of Richard J. McMonagle, chief judge of the Cuyahoga Common Pleas Court, who urged the Ohio Supreme Court to set up a special asbestos docket to handle the flood of cases in Cuyahoga County.

And he has high praise for retired Common Pleas Judges Harry Hanna and Leo Spellacy, who were eventually assigned to that docket.

"Judges Hanna and Spellacy have done a magnificent job in handling this mass of torts through their diligent case management," Kelley said.

Mold: The New Asbestos?

Kelley is aware that mold litigation is being touted as the next major litigation wave, but he is doubtful that anything can ever compare to the widespread asbestos litigation.

"Asbestos was so widely used in the '40s, '50s and '60s that I'm not sure that anything is ever going to compare to it," Kelley opined. "You had 100,000 exposures to asbestos if not millions of people who were exposed in so many different settings."

The real irony with asbestos, like tobacco, according to Kelley, is that the people who were selling it knew it could kill people. And like tobacco, it was a silent killer that did not emerge for years, often for decades.

Although asbestos is no longer used in the United States, it has been predicted that asbestos claims will be around until the year 2050. Kelley said epidemiologists have said that even with efforts afoot to clear asbestos from the environment, hundreds of thousands more people could be affected over the next 30 to 40 years.

Long-Term Effects

Kelley believes that long-term benefits of asbestos litigation will reach far beyond comfort and security for families of the victims. To Kelley, the fundamental and long-term benefit is the awareness that has been raised, resulting in very good consumer protection laws in Ohio.

"We have some very good law in the areas of asbestos that has impacted all litigation in Ohio over the last 20 years," Kelley said. "We've made a large impact."

He noted that it has also raised awareness among citizens that when you are injured or hurt by a product, you have a right to a lawyer and some kind of compensation.

"That pendulum keeps swinging back and forth," Kelley admitted. "But at the end of the day, people are aware that they have rights, and people are aware of how they have to execute their rights in Ohio. That's a good thing for a free society."