Appeals Court Upholds Verdict in Mississippi Fraud Suit

A federal appeals court panel on Tuesday upheld a $420,000 verdict against two Mississippi lawyers accused by a railroad company of committing fraud during an asbestos lawsuit they filed in 2001.

McComb attorneys William Guy and Thomas Brock sued Illinois Central Railroad Co., an operating subsidiary of Montreal-based Canadian National Railway Co., or CN, on behalf of nearly 170 former employees who claimed asbestos made them sick. The railroad company later sued Guy and Brock, claiming the lawyers knew that at least two of their clients lied about being involved in an earlier asbestos case.

A federal jury ruled in 2010 for the railroad, which has offices in Homewood, Ill. The lawyers appealed.

The 5th U.S. Circuit Court of Appeals in New Orleans sided Tuesday with the railroad in a 2-1 vote. Judge Jennifer Walker Elrod was the dissenting vote. She said Illinois Central waited beyond the three-year statute of limitation to take action after it suspected that Guy and Brock were involved in fraud.

Guy is a well-known attorney who served two terms as a state representative in the late 1960s and in the 1970s before moving to the Senate for one term. He ran unsuccessfully for lieutenant governor as a Democrat in 1995.

Guy and Brock claimed during trial that they didn’t know their clients had been plaintiffs in the earlier asbestos litigation – Cosey v. E.D. Bullard – one of several lawsuits with huge verdicts in the 1990s that led to calls for tort reform in Mississippi.

Illinois Central said it would not have settled with two former employees – Warren Turner Jr. for $120,000 in 2002 and Willie Harried for $90,000 in 2003 – if the company had known they had already been involved in the other asbestos lawsuit.

The case was a mass litigation filed in 1995 in Jefferson County that grew to represent hundreds of people from around the country who claimed asbestos made them sick. Twelve of the plaintiffs went to trial and were awarded $48.5 million. Companies soon agreed to settlements with other plaintiffs out of fear of being hit with another big verdict.

The railroad argued that Harried and Turner had both testified that they each received several hundred thousand dollars in the Cosey case.