Insurer won’t back Gori defense vs asbestos lawsuit fraud claims

By Jonathan Bilyk | Legal Newsline
The Center Square

The Gori Law Firm, America’s most prolific filer of asbestos lawsuits, is facing a lawsuit accusing it of racketeering and fraud, and now one of the firm’s most important insurers is telling a court it should have no obligation to defend or cover the firm in the case.

On March 6, insurer ISBA Mutual Insurance Company filed suit in Sangamon County Circuit Court in Springfield, seeking a court order declaring the company has no obligation to indemnify or defend the Edwardsville-based Gori Firm against the racketeering lawsuit lodged by J-M Manufacturing.

ISBA Mutual is the largest provider of professional liability insurance for lawyers in Illinois.

In the filing, the insurer asserts exclusions in its policy exempt them from providing any coverage to help Gori and its principals defend against the J-M lawsuit.

J-M, a Los Angeles-based maker of plastic pipes, filed its action against Gori in Southern Illinois federal court on Jan. 28.

The lawsuit accused the Gori firm of a long-running fraud and racketeering scheme to create a system of “bounties,” deception and other tactics to back up the filing of hundreds of “baseless” asbestos-related injury claims to ultimately secure billions of dollars in fees from settlements allegedly based on fraud.

J-M asserted its claims are based on information supplied by a “whistleblower” attorney who formerly worked for the Gori firm.

According to court documents, J-M has been targeted more than 6,000 times in asbestos-related lawsuits, with most of the lawsuits filed in Madison and St. Clair counties, America’s top two destinations for such lawsuits.

However, J-M asserts it was identified as a defendant in those cases solely to drive up the number of defendants to improve the chances of securing settlements from companies that are either unwitting, confused or otherwise unwilling to fight the claims.

They note accusations of fraudulent behavior are nothing new in asbestos litigation, as evidenced by other cases in which plaintiffs’ firms have been caught double-dipping ­— using litigation delay tactics to improperly collect from both asbestos lawsuits and later claims filed against bankrupt companies — or filing fraudulent claims altogether. These included famous cases that generated headlines in asbestos litigation involving CSX and Garlock Sealing Techs.

In the new complaint, J-M claims a lawyer who formerly worked at the Gori firm has provided evidence that Gori allegedly engaged in similar patterns of fraud, but allegedly took the alleged scheme to new levels.

In the new complaint, J-M accuses the Gori firm of establishing a so-called “bounty” system under which it incentivized the lawyers it used to conduct depositions of clients – so-called “depo attorneys” – to coax and coach clients into agreeing to level false asbestos exposure claims against J-M and other companies, even when the client had never been exposed to products made by those companies.

According to the complaint, the Gori firm had used that bounty system since at least 2018.

Under the alleged system, attorneys “who successfully coached their clients to provide deposition testimony that they were exposed to products belonging to (J-M and certain other companies)” could secure “up to 2% of total settlement proceeds.”

This could allegedly allow an attorney earning as little as $65,000 a year the chance to bring in “up to $800,000 or $900,000” more in earnings per year, the complaint alleges.

According to the complaint, the alleged “bounty list” included J-M and at least 19 other companies, allegedly including 3M, Caterpillar and Honeywell, among others.

According to the complaint, companies allegedly landed on Gori’s “bounty list” because they were seen as “easy targets who were willing to pay substantial settlements” or were companies that had “‘pissed off’ Gori attorneys” in prior proceedings.

According to the complaint, this alleged strategy of tacking on dozens of potential additional defendants — allegedly whether or not they were based on factual claims — allowed Gori to maximize its returns using a so-called “batch settlement” scheme.

According to the complaint, the Gori firm has named J-M as a defendant in its asbestos lawsuits at least 400 times.

However, the complaint notes that about 96% of those cases were ultimately dismissed.

In its release, J-M said those dismissals were “an outcome (that) reflects not weak litigation strategy, but a deliberate business model designed to force settlement of objectively frivolous cases.”

In the complaint, J-M asserts it is not the only alleged victim of the alleged Gori scheme. They assert such allegedly fraudulent claims have driven more than 100 companies into bankruptcy and cost the U.S. economy hundreds of billions of dollars.

J-M said it is seeking to highlight the alleged abusive practices to draw “a distinction between legitimate accountability for asbestos exposure and what it alleges is systemic abuse of the litigation process.”

In response, Gori has called J-M’s lawsuit “ridiculous claims from an asbestos company.”

However, J-M’s lawsuit is its second legal fight waged against a top asbestos lawsuit firm.

In 2024, J-M also sued Alton-based Simmons Hanly Conroy, accusing America’s second largest filer of asbestos-related lawsuits of falsifying or suppressing evidence in asbestos cases and coaching witnesses to allegedly lie under oath about exposure to asbestos from cement pipes J-M produced.

A federal judge in Chicago is expected to rule in coming weeks on a motion from the Simmons firm to dismiss J-M’s claims against that firm.

Gori has not yet responded to J-M’s lawsuit against it.

However, according to the new legal action filed by ISBA Mutual, Gori has filed a claim with it insurer for coverage and indemnification in the J-M matter.

And the insurer said policy exclusions exempt the insurer from covering any claims related to lawsuits accusing the law firm of racketeering, specifically, or any of the other claims lodged by J-M, as each as “each is based on the same core of operative fact as” the racketeering claims.

Gori has also not yet responded to the ISBA Mutual action.

ISBA Mutual is represented by attorney Robert Marc Chemers, of the firm of Pretzel & Stouffer, of Chicago.

The Gori Firm is being represented in the J-M case by attorneys with the firm of Milbank LLP, of New York.

J-M is represented by attorneys with the firm of Buchalter LLP, of Chicago and Los Angeles.