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U.S. judge strikes sealing order over Garlock asbestos liability

By Jessica Dye

July 24 (Reuters) - A North Carolina federal judge has struck down a bankruptcy court ruling that sealed evidence and testimony about gasket maker Garlock Sealing Technologies' liability for asbestos injuries, saying no compelling reason was stated to close the proceedings.

The "public and press have a co-extensive right to view and consider documents tendered" in court, wrote U.S. District Judge Max Cogburn in the Western District of North Carolina in Wednesday's ruling.

Cogburn reversed the sealing order and sent it back to the bankruptcy court for further consideration.

Garlock, a subsidiary of EnPro Industries Inc, filed for Chapter 11 bankruptcy in June 2010 as it faced personal injury claims related to its asbestos-lined gaskets used in pipes, valves and other industrial applications.

Last year, U.S. Judge George Hodges in the Western District of North Carolina bankruptcy court presided over a trial to determine how much Garlock should set aside to cover claims for mesothelioma, a cancer caused by asbestos exposure.

Lawyers for plaintiffs, who say they were exposed to asbestos from Garlock products, argued the figure should be over $1 billion. But Garlock said its liability was much lower and that that estimate was based on past settlements that were inflated by manipulated evidence and fraud, according to court filings.

Legal Newsline, an online publication owned by the U.S. Chamber Institute for Legal Reform, filed a motion to make all the bankruptcy proceedings public, but Hodges denied it, saying certain matters discussed were confidential.

In January, Hodges ruled that Garlock should only have to pay $125 million for asbestos claims. He also slammed plaintiffs' lawyers for withholding evidence in previous cases, "infect(ing) fatally the settlement process and historic data."

After the trial, several companies, including Ford Motor Co and Honeywell International Inc, joined an appeal by Legal Newsline to the North Carolina district court to get the evidence unsealed.

Ford and Honeywell have also been sued over asbestos exposure and were co-defendants in some cases against Garlock.

"We're optimistic that the evidence will ultimately be disclosed and that people can form their own opinions," said Steven Pflaum, a lawyer for Legal Newsline.

Harold Kim, executive vice president of the U.S. Chamber Institute for Legal Reform, called the decision an important step toward bringing greater transparency to asbestos litigation.

EnPro spokesman Dan Grgurich said the company was "pleased that the judge agrees that the public has a right to access evidence developed in our case."

Lawyers for Garlock asbestos claimants did not immediately return requests for comment.

The case is Legal Newsline v. Garlock Sealing Technologies, U.S. District Court for the Western District of North Carolina, No. 13-464.

(Reporting by Jessica Dye; Editing by Ted Botha and Richard Chang)