Kimberlee Williams v. BASF Catalysts LLC
2014 U.S. App. LEXIS 16999
| 3rd Cir. | 2014Background
- Plaintiffs (survivors/successors of asbestos victims) allege Engelhard (now BASF) and its former counsel Cahill hid and destroyed tests and records showing Engelhard talc contained asbestos, then made false statements in litigation leading plaintiffs to settle, dismiss, or obtain diminished recoveries.
- Key events: 1979 Westfall litigation disclosed internal test results and depositions showing asbestos; Engelhard/Cahill settled with confidentiality; a 1984 company memo directed collection/discard of documents relating to Emtal talc.
- Allegedly manufactured defense materials (template pleadings, false affidavits, expert reports) were used in multiple asbestos suits nationwide to deny talc contained asbestos.
- A later New Jersey case (Paduano) revealed previously concealed documents and assays from the 1970s demonstrating asbestos in Engelhard talc; those documents spurred the present class-action complaint.
- District Court dismissed the amended complaint with prejudice (claims: fraud, fraudulent concealment/spoliation, N.J. RICO, others); Plaintiffs appealed as to fraud, fraudulent concealment, N.J. RICO, and sought certain declaratory/injunctive relief.
- Third Circuit: affirmed jurisdiction (Rooker-Feldman not applicable); reversed dismissal of fraud and fraudulent concealment claims; affirmed dismissal of N.J. RICO; limited prospective relief as non-justiciable but left open injunctive/declaratory relief related to proven misconduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal jurisdiction / Rooker-Feldman | Williams: federal court can hear independent tort claims (fraud, spoliation) arising from defendants' conduct in prior state suits. | Defendants: claims amount to impermissible federal review of state-court judgments. | Rooker-Feldman does not apply; case alleges independent torts, not an appeal of state judgments. |
| Fraud & litigation privilege | Williams: defendants knowingly misrepresented asbestos absence and intended reliance, causing plaintiffs to dismiss/settle. | BASF/Cahill: New Jersey litigation privilege bars tort claims based on statements made in litigation. | Fraud claim plausibly pleaded and privilege does not shield systematic fraud designed to thwart judicial truth-seeking. |
| Fraudulent concealment / spoliation (damage element) | Williams: defendants had duty to preserve/disclose evidence; destruction concealed material evidence causing diminished recoveries and litigation costs. | Defendants: plaintiff must show she would have prevailed but-for destroyed evidence; otherwise no cognizable injury. | Complaint sufficiently alleges the five elements of spoliation-based fraudulent concealment, including plausible damage (impaired suits, reduced recoveries, litigation costs); heightened causation showing of actual victory not required. |
| N.J. RICO (injury to "business or property") | Williams: defendants operated an enterprise that injured plaintiffs by interfering with their litigation. | Defendants: plaintiffs suffered personal injury litigation interference, not injury to business or property as required by statute. | Affirmed dismissal: under New Jersey law interference with inchoate personal injury claims is not "business or property" injury for RICO standing. |
Key Cases Cited
- Lance v. Dennis, 546 U.S. 459 (U.S. 2006) (limits Rooker-Feldman to appeals of state-court judgments)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (Twombly plausibility framework)
- Rosenblit v. Zimmerman, 766 A.2d 749 (N.J. 2001) (New Jersey recognizes tort recovery for intentional spoliation/fraudulent concealment)
- Loigman v. Township Committee of Middletown, 889 A.2d 426 (N.J. 2006) (describing New Jersey litigation privilege scope)
- Hawkins v. Harris, 661 A.2d 284 (N.J. 1995) (purposes and limits of litigation privilege)
- Tartaglia v. UBS PaineWebber Inc., 961 A.2d 1167 (N.J. 2008) (spoliation damages may include diminished recovery or litigation expenses)
- Maio v. Aetna, Inc., 221 F.3d 472 (3d Cir. 2000) (federal RICO: personal injuries do not qualify as injury to business or property)