Tronox Judge Clarifies Tort Claims Processes

In his recent article, “The New York Times Should Have A Tronox Judge Review The Tort Claims Processes,” plaintiff’s attorney, David Gamache, makes several good points. Unfortunately, some of these suggestions are similar to arguments made by attorneys throughout the nation, including my office. Worse, they are not unique to this case. Unfortunately, many of the mistakes the New York bankruptcy judge made in his ruling can be easily corrected under current law. Thus, the plaintiffs’ attorney is recommending that his client sue not only Mr. Gamache but also the New York State Bar Association and its regulatory agency, the Office of the Superintendent of Insurance, which handles all matters concerning New York State insurers.

Tronox Judge Clarifies Tort Claims Processes

The New York State Attorneys General and the New York State Bar Association, along with many other self-agreed class-action attorneys, believe that the New York State bankruptcy court, in a recent opinion, incorrectly applied the statute of limitations law in allowing Tronox Pharmaceuticals to file its initial claim. Specifically, they argue that the trial court erred in allowing discovery of prior litigation documents that did not exist before the date of the filing of the complaint. Although there is no discussion of whether discovery of such documents was proper, the fact that discovery was allowed was before the date of the filing of the complaint, not after. This raises an interesting issue. If discovery of pre-settlement information was allowed, why did the bankruptcy court to deny it in the first place?

In answering this question, we note that the New York State Attorneys General, including the New York Attorney General’s Office, did not participate in the filing of briefs in support of Tronox.

In fact, none of the New York Attorneys General filed any briefs in this litigation. Now, many of the briefs submitted to the Court of Chancery expressed concern that the Court of Chancery’s rejection of the claims process would allow “a greater chilling effect on litigation.” However, it is not at all uncommon for Attorneys General to file briefs in other federal litigation, including those brought by private litigants. (As we will see below, however, the New York Attorneys General apparently did participate in the filing of a brief in this case.)

The Court of Chancery essentially concluded that it was irrelevant whether or not the discovery was allowed.

It is also irrelevant whether or not the Court of Chancery abused its discretion in permitting Tronox Pharmaceuticals to move forward with this litigation over an alleged safety defect. The fact that the New York Attorneys General failed to file a brief in support of Tronox is irrelevant, according to the Majority Opinion of the Court of Appeals. Because there is no reason to doubt the fact that the New York Attorneys General could have filed a brief in support of the claims process, we need not analyze that decision here. Accordingly, we conclude that the majority opinion rightly concludes that the New York State Attorney General abused its discretion in permitting Tronox Pharmaceuticals to proceed with this litigation.

Based on its holding in this case, however, the majority opinion goes further in limiting the ability of the New York State Attorneys General to prevent future claims from being filed.

Specifically, the New York Attorneys General is barred from joining a case that involves the same party as a party involved in the prior litigation. Additionally, the New York Attorneys General is required to identify any facts that establish that the prior case was driven by “a ‘lack of knowledge or inability to obtain information relevant to the present case.’ ” (emphasis added). This includes requiring the New York Attorney General to review the records of the prior case in order to determine whether any facts were withheld from the new litigation. Specifically, if the New York Attorney General believes that there was an improper disclosure or failure to disclose any material facts during the prior litigation, he or she must forward that information to the party who is subject to the discovery.

The Court further finds that the claims process in this case did not violate the New York Attorneys General violates the First and Fifth Amendments to the Constitution.

Specifically, the majority concludes that the trial court erred in allowing the defendants to introduce a hearsay evidence rule. According to the majority, “the rule was not intended to apply to a case where the plaintiff has failed to disclose a significant fact likely to be discovered through an independent search of the records.” Specifically, the record was submitted to the attorneys for purposes of reviewing the admissions and depositions of witnesses, and these facts were properly preserved when reviewed by the trial court.

Finally, the majority concludes that the damages recovery limit of the multi-cuss rule should apply to all cases.

According to the majority, the defendant’s complaint failed to meet the requirement for a valid triable claim for conversion because there were no facts supporting a reasonable likelihood of settlement. Specifically, the claim failed to show that the loss was a result of defendant’s deliberate misconduct or neglect. Accordingly, the trial court did not have jurisdiction to impose a limit on recoverable damages for those cases. Further, the claims process fails to meet the statutory requirements of due process and equal protection under the law, particularly as there are currently two cases pending in this Circuit that involve a very limited form of professional liability.

The District Judge in this case therefore correctly concluded that the claim failed to state a viable claim. We affirm the granting of summary judgment in this case, and the judgment is hereby entered. Therefore, the parties are urged to resolve their disputes amicably, rather than through the use of a court of law. If that fails, there are several other dispute resolution techniques available including mediation, arbitration, and simple arbitration without a court of law.

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