The Lawsuit from Hell
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Nix and his associates sued without discrimination. They sued a firm that had provided metal folding tables to Lone Star, one that had sent the plant some felt-tip markers, and even one that had been hired to remove waste material from the plant. They sued a Houston contracting company, Fish Engineering and Construction, whose executives had once flown to the plant in their company plane to make a bid on a future project. The executives landed on the Lone Star Steel airstrip, made their pitch, and flew off.
Nix said he sued those companies because he didn’t want to leave out anybody who might possibly have contributed to the toxic cloud, but he was rarely cooperative in dismissing his claims against the wrongly sued companies. “Harold’s sole purpose was to tie up as many defendants into the lawsuit as he could so that he could have the largest lawsuit in the world,” said Jim Cowles, a prominent Dallas attorney who would become one of Nix’s greatest adversaries. Fish Engineering, which didn’t even win its contracting bid, was forced to hire an attorney and pay $11,746 in legal fees to get itself out of the lawsuit. It would take U.S. Pollution Control, the company that removed Lone Star Steel’s waste, nearly seven years and $45,274 in legal fees before it was finally non-suited.
Some of the defendants who had supplied Lone Star Steel with dozens of products over the years wanted Nix to tell them which of their products he believed had contributed to the workers’ illnesses. And the companies that did provide potentially toxic chemicals wanted to know if Nix had evidence that those workers had been exposed to the chemicals at high enough levels to cause illness. Nix, of course, had no idea.
Yet as crazy as it appeared, Nix’s strategy—sue first and ask questions later—was ingenious. He was forcing hundreds of companies to defend a case they couldn’t exactly disprove any more than he could absolutely prove. In a toxic torts case, jurors are forced to decide whether someone’s death or illness is a result of his exposure to a certain chemical—a diagnosis that doctors are loath to make. But according to plaintiff’s attorneys, too many guilty companies wriggle out of such lawsuits by arguing that no absolute medical evidence can be presented to show that their products cause a health problem. “You know that those Lone Star Steel workers didn’t spend their lives out at that plant without something pretty bad happening to them,” Nix said.
And even if Nix couldn’t say who was to blame, the legal system at least gave him the chance to blame someone—or in this case, everyone. “When a lawsuit gets filed in Texas, a company has little choice except to pay thousands of dollars to defend itself, regardless of whether the allegations are true,” said P. Michael Jung, a partner at the Dallas firm of Strasburger and Price and an expert in the rules of civil procedure. “In federal courts, it’s much easier for a defendant to get a lawsuit against him dismissed if the plaintiff hasn’t shown proof of his case within a certain amount of time. But state law jealously guards a citizen’s right to have his complaints heard by a jury.”
From the beginning, Nix wanted the defendants to know they were in for a costly battle. He did not file the standard class-action suit, in which all the alleged victims are combined as a “class” and their case is tried together before a single jury. In Fowler, no two plaintiffs were claiming to have been injured in exactly the same way by the toxic cloud. One ex-worker, for instance, said he had developed pulmonary disease from the dust billowing from a coke oven, and another said he suffered a liver disorder because of the fumes from solvents that he had once breathed years ago. A jury would have to hear each plaintiff’s case separately to determine the severity of his injuries and the amount of compensation he should receive, if any.
In effect, Nix had created 3,026 personal-injury and wrongful-death cases under one umbrella lawsuit: a plaintiff’s lawyer’s vision of heaven. If he lost one case, so what? There would be another one tomorrow. Defense lawyers called the lawsuit the legal equivalent of a black hole. According to their calculations, jurors in each case would be subjected to weeks of scientific testimony concerning the hundreds of chemicals and substances sent to the plant. At that rate, the trials would not be complete for at least a thousand and possibly two thousand years.
Some of the nation’s richest corporations (Union Carbide, Atlantic Richfield, Dow Corning, and Monsanto) and some companies you have never heard of (Ark-La-Tex Custom Coatings, Big Sandy Sand, David’s Gloves) hired Texas attorneys for their defense. All told, the defense team—senior partners at firms, their associates, paralegals, court reporters, and legal secretaries—easily numbered more than one thousand people. A steering committee was formed to supervise the defense’s strategy. A warehouse in Dallas was rented to store the defense team’s legal documents. When it was discovered that there was only one modest thirty-room motel in Daingerfield, a lawyer suggested that the defense buy mobile homes for overnight lodging.
The wheels of justice ground forward, but excruciatingly slowly. The defense lawyers took depositions of the plaintiffs at the steelworkers union hall. The old ex-employees, many of them wearing overalls, arrived to find a horde of defense attorneys in dark suits ready to spend hours probing every detail of their lives. After 84-year-old Clay Taylor, who was in the lawsuit because of a ruptured eye vessel, said he had been gardening since his retirement, one attorney grilled him about the size of his garden, what kind of peas he grew, whether he shelled them himself, and where he sold them.
The truth was that many of the defense lawyers were happy to let the depositions drag on and on. As long as it looked like some work was getting done, they would continue to be paid by their clients. “Those lawyers who were cussing me during the day were the same ones toasting me at night with champagne,” Nix told me. “My lawsuit was making them rich.” A couple of lawyers were so excited by the possible length of the litigation that they left the firms they worked for, taking their Lone Star Steel clients with them, to form their own firms, where they wouldn’t have to share their fees. Just to add more hours to their bills, some attorneys came to the depositions knowing they weren’t going to contribute a thing. A few sat in the back of the union hall and read newspapers. One played video games on his laptop computer. Another arrived at each deposition with two associates: Not once did any of the three ask a question. “There were a core of twenty to thirty attorneys who were actively involved in the case,” a leader of the defense team said. “The rest we called potted plants.”
Jim Cowles was one of the early leaders in the fight against Nix. After the lawsuit was filed, he gathered many of the top defense lawyers at his law firm, Cowles and Thompson, located on the fortieth floor of a downtown Dallas skyscraper, and begged them not to settle out of court with Nix. “The big issue for a lot of us was that if we bowed down to Harold over Lone Star Steel, then we’d basically be inviting plaintiff’s lawyers from all over the country to inundate the courts with these kinds of lawsuits,” Cowles said.
But what few people know is that in a civil lawsuit involving great amounts of money, it is not the defense lawyer who makes the biggest decisions about the case. Nor are the decisions made by the chief executive officer of the company being sued. They’re often made by a little-known claims adjuster for that company’s insurance firm.
It was a lone adjuster, in fact, who was instrumental in turning Fowler into the monster that it is today. In the summer of 1988, Joe Wilkerson, the corporate claims manager for the Employers Casualty Company of Texas, called Harold Nix and asked if they could meet.
DALLAS-BASED EMPLOYERS CASUALTY was insuring two large construction firms that were being sued by Nix—H. B. Zachry of San Antonio and Brown and Root of Houston. Brown and Root had helped build the plant nearly half a century before, and along with H. B. Zachry had contracted later to erect other buildings. “As soon as I read the lawsuit,” said Wilkerson, who is now an independent consultant for the insurance business, “I knew that Harold was attempting legal extortion. He was trying to tell us that when those companies built the buildings, they used chemicals like paint—paint!—that caused workers to get sick.”
But to Wilkerson, the issue was not about liability. His goal was to get Employers Casualty out of the lawsuit as cheaply as possible. In a standard corporate insurance policy, an insurer agrees to pay not only the legal fees of the company if it is sued but also some or all of the jury damages if the company loses the lawsuit. As a result, insurers are far more willing to settle than to fight. If they sense the case is going to drag out, they also like to settle early. As the saying goes in the world of lawsuits, “He who settles first settles for least.”
