The Lawsuit from Hell
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Which is exactly what Wilkerson planned to do. “I knew how sympathetic a Morris County jury would be to Nix if the lawsuit ever came to trial, and I knew that Nix was the kind of lawyer who would pursue this for at least another ten or twelve years,” he said. “I then heard about the defense lawyers setting up committees and subcommittees, and I said, ‘Do I want to be part of this war?’” After a series of meetings between Nix and Wilkerson, Employers Casualty agreed to pay $6.5 million to have Brown and Root and H. B. Zachry dropped from the lawsuit.
Cowles and his group were livid. Wilkerson had played right into Nix’s hands. Nix told me that the Employers Casualty settlement, of which he kept $2.2 million, kept his lawsuit alive, giving him the money to pay future court costs as well as the salaries of his own staff of attorneys and legal assistants who were working full time on the case. Moreover, because the settlement was so high for two companies that were considered minor players, Nix was able to demand even higher settlements from anyone else who wanted out of the case. “I wasn’t particularly well liked by the claims managers at other big insurance companies,” Wilkerson said with a chuckle. “But they lived in places like Boston. They had never been to East Texas. They were under the illusion that they could keep Nix from getting his money.”
In December 1988 Nix rented a suite at the Crescent Hotel in Dallas and invited all members of the defense team and insurance executives to come listen to what he had to say. “It was like The Godfather,” recalled Hollye Fisk, a Dallas attorney who was representing Vulcan Engineering. “There was this table in the middle of the room with a light over it. We sat down and talked to some of Harold’s associates while he remained over in a corner in the dark. The associates told us that Vulcan had provided all these chemicals to Lone Star Steel, and we kept saying no, Vulcan had only shipped a sand bin. Suddenly Harold stepped into the light and said, ‘You need to do the right thing and settle!’”
Fisk walked out, but eventually some settlements began to trickle in, including $7,850,000 from a group of asbestos manufacturers. While Nix focused on the settlement negotiations, the day-to-day management of Fowler was left to a bright, snuff-dipping young assistant named Nelson Roach, who, like Nix, was a Baylor Law School graduate. At his first major Fowler court hearing in 1988, Roach, then 28, found himself facing hundreds of attorneys, most of them twice his age. “They saw me as a country bumpkin straight out of Mayberry R.F.D.,” said Roach, who was nicknamed Barney Fife by some on the defense side.
Through a series of clever stalling tactics, however, Roach and four other Nix lawyers kept defense attorneys from doing any damage to the lawsuit. Roach was also helped by a series of favorable judicial rulings from the state district judge presiding over the case, B. D. Moye, an easygoing East Texan who had known Nix for a long time. When a motion was filed to remove Moye from the case because of bias, the hearing had to be held in a high school auditorium to accommodate all the lawyers who arrived to attack him.
Another judge presided over the recusal hearing and ruled that Moye should remain on the case. “I didn’t give any favors to anyone,” Moye told me. “But I did believe the plaintiffs should be given a fair amount of time to develop the evidence in the case.” He agreed to put off discovery (pretrial information gathering) for at least a year while the Nix firm had 14 million pages of Lone Star Steel records transferred onto a computer for easier access. He then agreed with Roach’s request that defense lawyers depose only six plaintiffs a month, meaning that depositions would not be finished for several decades.
To many defendants, the sight of Moye on the bench meant certain defeat. He even postponed what many figured would be a no-brainer ruling to move the trial to another county. (According to a study conducted by the defense, one out of every two prospective jurors was either a Fowler plaintiff or a relative of a plaintiff.) Moye would not comment on any of his decisions, but he did say that he had been completely unprepared for the enormity of a mass products-liability case. According to knowledgeable attorneys, the only judges who are ever prepared for such cases are federal jurists, highly experienced in corporate litigation. Moye was a rural judge who had spent his career presiding over local civil and criminal cases, divorces, and auto wreck lawsuits. At one point, he did sign an order establishing new rules to help move the case along. But a court clerk, overwhelmed by all the paperwork, forgot to mail the order to the attorneys.
Meanwhile, the defendants’ legal bills were mounting, and the pressure on the insurance companies was growing. Throughout the early nineties, more defendants began to break. Smaller companies agreed to six-figure settlements. Liberty Mutual Insurance paid Nix a staggering $17,791,000 to dismiss 89 defendants. Nix also received $7,825,000 from a conglomeration of major petrochemical companies, including the fiercely litigious Exxon, which sold chemicals and solvents to the plant. What made the settlement surprising was that the petrochemical companies had one of the best corporate lawyers in the state defending them—Walter Conrad, a senior partner at Houston’s Baker and Botts. The problem, according to other defense attorneys, was that Conrad charged more than $400 an hour for his time, and he had other associates on the case who were said to be charging more than $200 an hour. “Companies like Exxon realized that if they decided to fight Nix, they were still going to get their butts kicked by their own attorneys’ legal fees,” said a prominent defense attorney in the case.
By September 1994, 194 companies had made out-of-court settlements with Nix for $66.7 million. One of the few insurers refusing to settle was the San Francisco-based Fireman’s Fund, which was insuring some thirty companies being sued. The environmental claims specialist for Fireman’s Fund, who began flying to Texas so often for Lone Star Steel meetings that he joined the Dallas Museum of Art to relax, called the settlements “insanity.” Cowles and fellow Dallas defense attorney Robert Martin, also part of the last stand, filed rare mandamus motions with the Texas Supreme Court to force Nix to respond to an interrogatory (a written pretrial question that serves as sworn testimony) that the defense had been sending him since 1987, the year the lawsuit was filed.
The interrogatory asked for the names of any doctors who had attributed a plaintiff’s injury to a defendant’s product, and for the name of that product. Nix’s reply was always the same: “The answer to this Interrogatory has not been determined at this time, but will be supplemented at a later date.” In other words, Nix was conceding that he did not yet have a case to take to trial.
The delays in the case, however, had given Nelson Roach time to look for evidence supporting the plaintiffs’ contentions. He and the other Nix lawyers collected dozens of studies and documents showing the potential harm of various chemicals at steel plants. They found corporate records dating back to the thirties that showed that some of the defendants knew their products were dangerous or didn’t have warning labels on them. Most significant, former Lone Star Steel workers were sent to the occupational-disease division of the University of Texas at Tyler for a simple chest x-ray and pulmonary function tests. Of the first 898 former workers screened, 157 were found with the kinds of lung problems that could be linked to asbestos exposure. Roach would later contend that about 1,000 Fowler plaintiffs had lung disorders, possibly because of asbestos. Two of the plaintiffs had died from mesothelioma, a vicious asbestos-caused illness that suffocates its victims, and six plaintiffs had silicosis.
Did Nix have a case all along? Roach said it was curious that the majority of defendants were not answering his interrogatories, in which he asked for specific details about the products they had shipped to Lone Star Steel. “In any product-liability case, the most crucial evidence about what did or did not happen is exclusively within the control of the defendants themselves,” Roach said. “If these big-time defense lawyers really believe we are inventing a case out of thin air, then they should get their clients to send us their product records, tell us what chemicals and substances were in those products, and let’s go to trial. We’re waiting for them.”
“Sorry, but that isn’t the way the law in this country works,” snapped Jim Cowles. “A company doesn’t let a plaintiff’s lawyer go on a fishing expedition through all its records, hoping he can find information to determine if the lawsuit that he has already filed is actually true. By law, you’re supposed to know that before you file a case.”
