The Garlock case: a $1.3 billion question
Garlock Sealing Technologies, a manufacturer of industrial gaskets, had been named as a defendant in thousands of asbestos personal injury lawsuits. When the company entered bankruptcy proceedings, the central question was the valuation of its aggregate asbestos liability. Plaintiffs' representatives argued that Garlock's total liability should be set at up to $1.3 billion. Garlock itself estimated $125 million.
Judge Hodges allowed Garlock to conduct full discovery into the claims of 15 individual plaintiffs and partial discovery into hundreds more. What emerged was a systematic pattern: plaintiffs' attorneys had introduced exposure theories in tort court that blamed Garlock's gaskets while suppressing evidence that their clients had also been exposed to asbestos products made by companies that had already gone bankrupt and established compensation trusts.
After securing verdicts or settlements from Garlock based on these incomplete exposure histories, the same attorneys would then file claims with the bankruptcy trusts for the very exposures they had denied in court. Judge Hodges found Garlock's $125 million estimate to be the reliable figure — roughly one-tenth of what plaintiffs had demanded.