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NY Judge Rejects Delay in Implementation of New Asbestos Docket Rules

A state judge in Manhattan denied a motion on Tuesday by attorneys from the asbestos defense bar to block implementation of a new case management order for the New York City Asbestos Litigation docket set to take effect on Thursday.

"Who am I to decide if Justice Moulton's decision should be stayed?" said Acting Manhattan Supreme Court Justice Gerald Lebovits. He was referring to Manhattan Supreme Court Justice Peter Moulton, whose new case management order released last month after more than a year of negotiations with members of the defense and plaintiffs bars would allow plaintiffs to seek punitive damages.

Gerald Lebovits
Gerald Lebovits

"Really it's up to the Appellate Division," Lebovits said. "Who am I to affect litigation that's been going on nationally for years?"

Moulton served as coordinating judge for the asbestos docket until June, when he was elevated to the Appellate Division, First Department. Lebovits serves as interim coordination judge until Manhattan Supreme Court Justice Lucy Billings takes the reins of the docket next month.

E. Leo Milonas, a partner at Pillsbury Winthrop Shaw Pittman who appeared on behalf of the defense bar, said that attorneys will apply on Wednesday to the First Department for a stay of implementation.

Punitive damages were taken off the table for plaintiffs in 1996 when then-Manhattan Supreme Court Justice Helen Freedman, the first coordinating justice of the NYCAL docket, indefinitely deferred all punitive claims by plaintiffs, describing it as "tantamount to dismissal."

But in 2014, Manhattan Supreme Court Justice Sherry Klein Heitler found and ruled that plaintiffs could seek punitive damages.

In 2015, the First Department stayed punitive damage claims until the management order for the asbestos docket could be modified to establish a procedure for plaintiffs to apply to charge juries with instructions on punitive claims.

But the appeals court also held that Heitler had the authority to amend the management order to allow claims for punitive damages.

Moulton's new management order also caps the number of trials that can be joined at two, though three trials can be joined if plaintiffs meet certain criteria.

While Moulton engaged with teams of lawyers from both the plaintiff and defense bars to develop the new management order, made drafts available online for public comment and held town hall meetings, he did not hold a vote to gauge consent; he did not believe that a majority of the stakeholders involved would consent to a management order that is "close to a middle ground."

Milonas and Peter Dinunzio, senior counsel to Clyde & Co who also appeared before Lebovits, argued that granting a stay on implementing the new management order would maintain the status quo for the docket.

In court papers supporting a stay of implementation, the defense bar argues that the new management order deprives them of due process rights and that without procedural safeguards, defendants will get "bombarded" with damages claims.

Alani Golanski, the director of Weitz & Luxenberg's appellate litigation unit who appeared before Lebovits on behalf of the plaintiffs bar, argued that the First Department has already found that punitive damages could be allowed.

"The Appellate Division has made it crystal clear that the only concern that they had was a procedural due process issue," he said.

Jordan Fox of Belluck & Fox also appeared on behalf of the plaintiffs bar.