John D. Aldock Fifth Interview: May 16, 2010

144 ORAL HISTORY OF JOHN ALDOCK Fifth Interview May 16, 2010 This interview is being conducted on behalf of the Oral History Project of the Historical Society of the District of Columbia Circuit. The interviewee is John Aldock, and the interviewer is Judy Feigin. The interview is taking place in John’s office in Washington, DC, on May 16, 2010. This is the fifth interview Ms. Feigin: We left you in the mid-1980s amidst a series of interesting cases and swinging from topic to topic, including antitrust. You said that was your only antitrust case, so now I expect a new learning curve. Where did you go next? Mr. Aldock: I had a couple of oddball cases. I’m focusing this oral history primarily on the cases that either had some national import or are the kind of cases you could do only because you’re in Washington, DC. Our practice as Washington lawyers, I continue to believe, still is unique as compared to elsewhere, notwithstanding the so-called globalization of law practice. An example of a small Washington-type matter is as follows: I was asked by the World Bank to negotiate with the airlines to see if I could get them greatly reduced rates given that their people regularly travel all over the world. In exchange, the Bank would give up the frequent flier programs for the business travel of their employees, which the officers of the Bank thought was being abused. For example, they believed trips to Timbuktu often had stops to see Aunt Nelly and Uncle Harry in European capitals along the way. The Bank thought there would be real savings to be gained if they took control of the business travel programs. I had some preliminary discussions with some of the 145 major international airlines, mostly non-US carriers. The savings were remarkable. I don’t remember the percentage, but it was staggering how much money could be saved. When the Bank officials unveiled its proposed new travel program and its savings, there was a total mutiny of the staff. The Bank officials retreated immediately, and I assume that frequent flier miles remain a significant perk in the international organizations. Another very different kind of matter came in the late 1980s. I think it was 1989 when I got a call on a Thursday from Judge Penfield Jackson of the US District Court for DC. It went something like this: “John, I’ve been talking to the judges here, and I have a particular problem that we think you can help us with.” I asked, “What’s that, Judge?” Judge Jackson said, “You’ll recall that I’m in the middle of a criminal trial of Mayor Barry of the District of Columbia, who was charged in a sting operation in connection with a call girl and was indicted on drug charges. As you know, the trial has attracted quite a bit of notoriety, and there are big lines outside my courtroom every day. There are only so many seats, so we’ve had to give out tickets. Recently, Reverend Stallings and Reverend Farrakhan, who are quite well known personalities, moved to the front of the line with their bodyguards. Farrakhan and Stallings insisted on getting tickets and sitting in the front row. I denied them tickets, because the government has said that the complaining witness will not take the stand if these individuals are seated in the front row. She is quite scared and considers their presence intimidating. In any event, I am not going to allow it. Having denied them the tickets, the American Civil Liberties Union (ACLU) has taken an appeal which 146 the Washington Post has joined, and the matter is now on emergency appeal to the DC Circuit. The Department of Justice has declined to defend my conduct, so I need a lawyer and the court needs a lawyer. Would you represent us?” I said, “Judge, I’d be delighted to represent you but I have one problem. I’m leaving Saturday morning for a business trip abroad and I can’t get out of it. It’s a board meeting, and it’s important that I attend.” Judge Jackson said, “That will not be a problem. The brief is due tomorrow morning.” [Laughter] Ms. Feigin: [Laughter] Good news! Mr. Aldock: “You can then go on your trip.” I said, “Oh, good.” [Laughter] I put together a team of lawyers. It was obviously an all-night affair. The brief largely was written by my partner Rick Wyner and others. My job was to convince the USG not to file a brief confessing error, which would be fatal to the case and embarrassing to the District Court. I entered into negotiations with the US Attorney’s Office that were successful to this extent: They agreed with me that generally the conduct in a courtroom is within the discretion and under the control of the district judge. They did not agree with me that there was any precedent for the proposition that the mere presence of someone in a courtroom can be so intimidating as to justify denial of admission to a public courtroom. So we agreed that we would have two sections to our brief. One, on the right of the judge to control his courtroom and the fact that the appellants, the ACLU, and The Washington Post had filed no motion in the District Court, nor had Farrakhan or Stallings; they just had filed an appeal. Therefore, procedurally, they had not made a record before the district judge of the facts: how did they get to the front 147 of the line; did they butt, which we believed they did; why had they insisted on sitting in the front row, etc. The discretion of the judge to decide on the facts whether he should give them a ticket or not was not properly invoked by an appropriate motion. The USG said they would support our position on that procedural section of our brief. And they agreed they would not take any position either way on the substance of whether the mere presence of a person in the courtroom, without more evidence, can constitute intimidation justifying removal of that individual from the courtroom. The fact that the USG would take no position on the merits and indeed would support us on the procedure was good enough as far as I was concerned. To be sure, on the substantive issue what we had was thin, only a couple of state cases from Utah and elsewhere usually in a juvenile context. We had little useful precedent and no affidavit of the complaining witness as to the basis of her fears. Nevertheless, we made the case very strongly on the procedure. We filed on Friday morning. The Court of Appeals in its wisdom sat on the matter for most of the following week by which time the complaining witness was off the stand. The case was decided on the papers without argument. The court remanded the case with an opinion, saying that Farrakhan and Stallings needed to apply for a ticket and properly invoke the discretion of the court. They therefore did not reach the merits issue, but the complaining witness now was off the stand. As a result, Farrakhan and Stallings never applied for a ticket, because they no longer had any interest in attending the trial. We had achieved the relief that we wanted, which was to allow the witness to testify. The Mayor was 148 convicted and ultimately left office. Judge Jackson and several other judges from the District Court called to express their gratitude for our efforts and the result. There were two interesting sidelines to the case. The first involved the press around the case. Ms. Feigin: Your case itself was getting press? Mr. Aldock: Yes. The fact that Judge Jackson had excluded Farrakhan and Stallings was, of course, newsworthy. The fact that the judge had retained a lawyer also was in the news. When I went down to the courthouse to meet with Judge Jackson on the day that I was retained, the press somehow got wind of the meeting. I was told that when I came out of the courthouse Farrakhan would be holding a press conference on the front steps of the courthouse, and I was going to be asked for comment. I wasn’t going to be able to slip out the back door because that was being watched, too. I consulted with the judge, and we agreed that I should defend the position and not just say, “No comment.” I went out and said that we were filing a brief and thought procedurally that the court had the right to run its courtroom. There was a lot of heckling, and it was a little scary. There were people yelling in the background, “Get the honky!” Farrakhan had a lot of brawny bodyguards. It was not the most comfortable press conference that I’ve held. After the Court of Appeals ruled, I was asked by the media whether I would be willing to hold a press conference to comment on the final decision. I consulted with Judge Jackson, and he wanted me to do so. I was not eager to 149 return to the courthouse again, so I consulted with my friend Steve Handelsman, who covered the matter for NBC TV. Steve said that I now held all the cards and should call a press conference at the law firm, and the media would come. So I did, the media came, and I gave some brief comments on the decision. Then, some weeks later, the ACLU filed a motion saying that the opinion of the DC Circuit in its per curiam decision, which was unpublished, should be published. The Court of Appeals declined to publish the decision, and the ACLU litigated that issue for several years, always without success. Ms. Feigin: Did you weigh in on that? Mr. Aldock: No. I had no view on that. Having won my case, it was fine with me if they wanted to publish it. But I suspect that the court felt that it was a unique case and did not want it cited as precedent in the future. Ms. Feigin: When the Justice Department refuses to defend the judge is the judge responsible financially for hiring his own attorney? Mr. Aldock: He is not. The court has an ability to go to the Administrative Office of the United States Courts, which has the power to authorize funds – I think that it is $100 per hour – for the judge to hire a lawyer. I didn’t request any funds. This would have been a pro bono case regardless, but the judge has that authority. Ms. Feigin: Were you involved with the Iran-Contra issues in the 1980s? 150 Mr. Aldock: Yes. Even though we won the matter for which we were retained, it was a not very satisfying representation. I was retained to represent Adolfo Calero, who was based in Miami and was the representative of the Contras in the United States. Calero was the political head of the group, and he made many of their public statements in the US and world media. There was a lawsuit filed in Miami by a group called the Christic Institute, which purported to be a liberal Catholic law firm. They filed a RICO lawsuit alleging that Calero and a group of high US Government officials, including the National Security Advisor and various CIA officials, were engaged in a conspiracy that involved using drug money to buy guns to finance the revolutions. At the time, it seemed totally bizarre. We got a retainer for this matter, because this was not the kind of regular corporate representation where we could take on faith that somebody was going to pay us. I asked my now deceased partner, Tony Lapham, who had been the general counsel to the CIA in the Bush One administration, to take the lead on the matter. We met with Calero several times. He held things pretty close to the vest but gave us what we thought we needed to defend the lawsuit. We moved to dismiss the complaint and, given the allegations, moved for sanctions. The court dismissed the case and granted the sanctions, including a money award against the Christic Institute. It all seemed fine until the revelations of Iran-Contra began to come out in the newspapers. There were Congressional investigations, and there was the whole issue with Oliver North and, indeed, President Reagan and CIA Director William Casey. At some point, it came out that North was funding all kinds of things from a White House slush fund and Swiss accounts. There was 151 a Congressional investigation, and I got a subpoena that asked to see the check we received from Calero in the Miami lawsuit. The check was drawn on a Swiss bank and turned out to have come from one of those secret North funds. Ms. Feigin: A slush fund? Mr. Aldock: Somebody’s slush fund. Ms. Feigin: The White House slush fund? Mr. Aldock: I don’t think so. I think it was a private one. Nevertheless, a slush fund. I had to be interviewed by the staffs of the interested Senate and House committees. We had not done anything illegal or improper, but it was not the kind of publicity we would hope to get. [Laughter] Indeed, we didn’t but we could have. Ms. Feigin: Didn’t get publicity? Mr. Aldock: No, fortunately. Ms. Feigin: Was there any effort to get the money returned? That wasn’t an issue was it? Mr. Aldock: We returned it. Ms. Feigin: So that was another pro bono case in the end? [Laughter] Mr. Aldock: In the end, it turned out to be a pro bono case. [Laughter] Ms. Feigin: That should take us to the end of the 1980s, I think. That was the very end? 152 Mr. Aldock: I think so. I spent a large part of the 1990s in three or four areas, but one of the main areas in the 1990s was to reinvent myself as a products liability lawyer, which was not a conscious decision but merely happenstance as I think most things have been throughout my legal career. I got a call from Scott Gilbert, a lawyer at Covington & Burling whom I knew. He told me that the insurance industry and the asbestos companies had been negotiating for years to find a way to defend the asbestos cases as a group. It was considered inefficient for all of the companies to defend themselves individually. In order to save money, the insurers particularly wanted to fund a joint defense organization that ultimately came to be called the Wellington Group, named after Dean Wellington of Yale Law School. (Best as I could tell, Dean Wellington had little to do with creating the group.) It was a good name. If the companies created such an organization, the insurers agreed to fund it and to settle their outstanding coverage litigation with the companies. The sticking point was that the companies, if they were going to defend the litigation together, had to come up with a sharing formula. They had to decide which company’s insurance would be charged for payments to settle a given case and also which company was going to pay the judgments for cases that were tried to verdict. The companies had been working on this sharing formula for years and had gotten nowhere. Gilbert said, “We just solved the insurance coverage piece, how much the insurers are going to pay the companies and for what. The contingency is that the insurers won’t pay a dime unless the companies create an asbestos claims facility, and we can’t create the claims facility until we have a 153 sharing agreement among the companies. You are the facilitator, and you have 90 days to get 30 or so companies to reach an agreement that has eluded them for years. Here are the names of the representatives of the thirty companies. Please call a meeting and solve this problem. Otherwise, our agreement with the insurers will go down the tubes.” I had had very limited involvement prior to this call in the asbestos litigation except that the firm was representing a Canadian asbestos mining company in the litigation and I had done some work in connection with that representation. I had only a basic understanding of the issues. I convened this group of about thirty people. I don’t think that I was acquainted with many of them, but I got to know them pretty well because we then met regularly. I came to an early conclusion that the only way we were going to be able to reach agreement was if each company would pass on whether its share was fair without knowing the shares of others. If each company knew what the other companies’ shares were, they would say, “My share is fair, but not if that other company only is paying X.” On such matters, companies act no differently than people do. The relativity of what companies were paying was blocking any agreement. Unfortunately, the world runs on the basis of envy. The breakthrough came when I got the companies to agree that they would not know what anybody else’s share was. We would have a consultant to crunch the data and distribute the numbers to the company representatives. We then presented the group with principled issues, such as should attorney fees be 154 considered and should the number of years the product was on the market be considered? We voted on dozens of variables. I tried to get the group to vote as matters of principle before they knew how resolution of the issue affected their own companies. They could guess how it affected them, but they weren’t sure. We would vote on the abstract propositions. The votes were not binding. Each company representative would get a slip of paper that would indicate how that change, if it was passed, would affect its share, and then we’d vote again on another principle, and so on. On this basis, we began to make good progress. The group was starting to vote on principle. I interviewed for consultants and settled on Jim Beedie of Peterson & Company, who then became a major consultant in the asbestos litigation for the insurers and for the defendants. It was probably Peterson’s best commercial venture. Jim and his colleagues turned out to be indispensible to the effort. I remain friends with Jim Beedie to this day; we ski together. Eventually, we reached a sharing agreement that all thirty companies were prepared to endorse. There is nothing like having a deadline with a big carrot at the end to inspire a solution that probably couldn’t have been reached without it. The Wellington facility came into effect in 1985. There was a signing ceremony. I didn’t attend and had nothing to do with the Wellington facility because I did not have a client who was involved. Three years later in 1988, I again received a call from Scott Gilbert who said, “The Wellington facility is breaking up; they can’t stay together anymore. There are too many conflicts 155 among the companies. Would you mediate the dissolution? You did well the first time. Let’s do it again.” I said, “Sure.” I invited the company representatives to a meeting. Some of them were the same people and others were different, but they represented the same companies. To my surprise, I discovered that they had continued to keep the shares secret. It never had been my intent that the shares would be kept secret after they were accepted, but they did not know what all the shares were. I said, “If that’s a problem, we can distribute the numbers.” We did but that did not solve the basic conflicts. There were irreconcilable conflicts, because some big companies were running out of insurance and, when they ran out of insurance, they wanted to litigate every case. The strategy was to slow down the litigation even though, in the long run, that likely would be the more expensive route. There were others who thought that they had more than enough insurance. The last thing they wanted was to try cases and risk a punitive damage award or a blowout verdict that would make them a bigger target than they otherwise would be. It was clear to me that these two strategies were irreconcilable. There was, however, a large group of about 22 companies that were compatible enough to stay together. I recommended that the 22 companies form a new organization and let the other companies withdraw in an orderly manner. Everybody agreed. Then I was asked to help put together the new organization. Interestingly, Steve Hadley, my partner who worked with me on this project, subsequently became the National Security Advisor for George W. Bush. From producer shares to national 156 security seems like a funny combination of projects, but that is what lawyers do. [Laughter] And, again, only in Washington. We formed the Center for Claims Resolution in 1988, and I and the firm effectively became general counsel. We were called Special Counsel, but we were the outside general counsel. We had two main roles. One was to deal with the shares, which had the potential to again cause problems if they were static. As a result, we adopted a sharing formula that could change as the litigation changed. We agreed on a procedure by which the Special Counsel or any company could say, “This group of cases is different and really doesn’t work on the agreed formula, so it should be shared on a different basis.” We, as Special Counsel, would analyze the basis for the change and make a presentation and a recommendation to the group which then would vote. In order for a proposal to pass, it had to win a certain number of the members and a certain percentage of the total shares. This protected the small share members but also gave weight to the views of the large share members. You would have thought that the votes would be based on self-interest, because there always were some companies which benefitted and some companies that didn’t. But people became invested in the process and voted against their interests on numerous matters, because they wanted the process to be principled. I would estimate that we had about 50 special recommendations and that 40 of them were unanimous, with the company which proposed it abstaining. We had one or two votes where the decision was 20 to 2 or something similar. No Special Counsel recommendation ever was voted down. It was an interesting 157 dynamic in getting people to vote against their short-term interest because of their long-term interest in the legitimacy of the process, a dynamic we, as a society, seem to have lost. During the CCR years, my partner Bill Hanlon took on an increasingly significant portion of this aspect of the Special Counsel’s role. Bill is a first-rate lawyer and continues to represent many of the companies that we represented in those days. The other role of our firm was to advise with regard to the litigation, including with respect to the thousands of cases that were being settled annually and the hundreds of cases that were being litigated each year. We also met with the co-defendants outside the CCR, many of which were the large companies like Owens Illinois and Pittsburgh Corning who had left the prior group and were on their own, to coordinate overall defense to the extent that we could find common interests. In this regard, one of the first big things that happened was an effort by Judge Parker of the E.D. of Texas to consolidate all the cases in Texas before him. Judge Parker was then a district court judge. He subsequently became a judge on the Fifth Circuit Court of Appeals. Texas was a most unfavorable forum at that time for asbestos defendants, and Judge Parker was a most unfavorable judge. Judge Parker had in mind trying a few cases and then extrapolating the results to all the other Texas cases in the queue. We thought that was a relatively 158 lawless process and ultimately got the Fifth Circuit to agree that extrapolation would be a denial of due process. Judge Parker then decided that he would organize the judges around the country, and he called several meetings that were attended by numerous federal asbestos judges. The judge called one meeting at the Dolly Madison House, a little mansion on Lafayette Square across from the White House in the District of Columbia. He also summoned the lawyers for the major defendants and plaintiffs’ lawyers to meet with him there. Judge Parker then entertained a discussion of proposals for aggregating the litigation, all of which seemed to the corporate defendants to be an effort to clear the court dockets by denying the defendants due process. One particular proposal that I thought was extremely naive was made by Judge Schwarzer, former Chief Judge of the N.D. of California and the head of the Judicial Conference of the United States. Judge Schwarzer suggested that we have “Asbestos Day” and set for trial on that day every case in the nation. The judge predicted that most of the cases would settle. Judge Parker’s views were more sophisticated but not any more useful from our standpoint. Many of his ideas were variations on his extrapolation concept. The judge then made the mistake – and I don’t know how it happened that all the judges who were present went along with this mistake – of issuing an order out of that meeting. It was styled at the top as emanating from the Dolly Madison House. The order was signed by a dozen federal judges; only one judge declined to sign it. Judge Charlie Weiner of Philadelphia walked out of the meeting. We filed a mandamus to this order from this noncourt. [Laughter] 159 Ms. Feigin: And to whom was this mandamus? Mr. Aldock: We went to the Fifth Circuit, because Judge Parker was there. We had no problem winning that one. [Laughter] It was bizarre. As a result of that episode, many of the judges who had been present at the Dolly Madison meeting and others as well filed a petition with the Multidistrict Litigation Panel (MDL panel) to consolidate all of the nation’s federal asbestos cases in one court. There had been at least three or four attempts on multidistrict asbestos litigation prior to this time, and all had been denied by the MDL panel. This was an unusual request filed by judges, something I never had seen then and since. Judge Parker obviously hoped to get the cases consolidated before him. The defendants concluded at this point that, if we could get the cases consolidated in a neutral forum, it probably would be useful to us in terms of transactional costs. Also, we thought it might facilitate some consensual settlement of the cases. Although the consolidation would not cover the state court cases, a large portion of the cases at that time were in federal court. There was a petition filed by the federal judges of the Dolly Madison House [laughter] seeking multidistrict consideration. Since it came from all these judges, it got a lot of consideration. There was a hearing held before the MDL panel. The MDL panel held their hearing in a packed courtroom. There were hundreds of defendants in the asbestos litigation and many plaintiffs’ firms. Several people were scheduled to argue. The argument was interesting. The plaintiffs’ bar had hired Professor Miller of Harvard University, which turned out to be a mistake. Professor Miller was the first attorney who spoke, and he called 160 for consolidation of all the cases in the N.D. of Texas. Miller left as soon as he finished speaking, which was perceived as both disrespectful and unwise. The Professor walked down the center aisle of the packed courtroom, so no one missed seeing him leave. The next speaker was Gene Locks, of Geitzer & Locks in Philadelphia, who was one of the lead plaintiffs’ lawyers at that time. Locks said, “I disavow everything Professor Miller just said. He doesn’t know what he is talking about.” It became clear during the argument that the MDL panel would consolidate the cases; the question was where. It was between Judge Parker in Texas and Judge Weiner in Philadelphia. That was not a close question for us. Not that we knew Charlie Weiner, but he had walked out of the Dolly Madison meeting, and Philadelphia was Philadelphia. We knew Judge Parker and we knew Texas. So the question was how best to address the issue. I recall that I got up as the primary speaker for the defendants, and the Chair baited me and asked, “What have you got against Judge Parker?” I said, “Absolutely nothing. Judge Parker is a wonderful judge.” Then he asked, “What have you got against Texas?” I said, “Texas is a wonderful state.” [Laughter] “Then why is it that you don’t want to be there?” I went into some long, convoluted argument about the state law and the Texas court having decided too many cases and the Texas jurisprudence not reflecting the national consensus. It was all code, and nobody had any doubt what I really meant but could not say. At the end, the chairman of the MDL panel said, “You have nothing against Judge Parker?” I again 161 responded, “No.” The chairman then said, “Good answer.” [Laughter] It was clear that, if I had said otherwise, I was dead. The panel sent the cases to Philadelphia which was very helpful to the defendants. The plaintiffs hated Philadelphia which they called the “Black Hole” because, if the cases went to Philadelphia, they would settle or remain in Philadelphia. Few cases were remanded to the transferee courts. It is only now that the second judge to succeed Judge Weiner, who is deceased, is deciding what to do with the cases that still are there. Ms. Feigin: Twenty years later? Mr. Aldock: Yes, although I believe that most of the cases that are there either got double filed in state court or settled against most of the viable defendants. In any event, nearly all of these cases involved non-sick people; during that time, we were getting 50,000-100,000 cases a year of which less than 10% were cancer cases. Of the 10%, most were cancers caused by smoking. In the defendants’ view, the only legitimate cases were mesothelioma cases which comprised 2-3% of the filings in those days and still are around 2,000 to 2,500 cases a year. Many of the cases in the 1980s were pleural plaques cases. Pleural plaques were markers on a person’s lungs that indicated exposure to asbestos but by themselves were not a present injury. The courts, mistakenly in my view, allowed these cases to go to trial. The result was 50,000 cases a year involving people with no real impairment in their breathing. In effect, these were people 162 with no present injury. I think that the courts learned from asbestos and will be reluctant again to allow cases without present injury. Ms. Feigin: Are you involved in asbestos litigation in any way at this date? Mr. Aldock: No, although I had involvements well past the MDL. Today, the firm still represents a couple of the prior CCR members as national coordinating counsel for the mesothelioma cases, but I no longer work on them. We also represent a group of prior CCR members still seeking to collect money owed to the CCR. Once the federal cases were consolidated by the MDL panel in Philadelphia, the defendants tried to find a way to settle the litigation. There were more than 100 large corporations and hundreds of thousands of cases, but there were only about 20 major plaintiffs’ firms that had all the cases in those days. More than half of the core defendant group of corporations have since been forced into bankruptcy as a result of the asbestos litigation. Nothing came of these mega meetings, and I reached the conclusion that the group was too big. In a group that size somebody always was posturing. No plaintiffs’ lawyer could give on any point for fear of looking soft; each lawyer wanted to be seen as tougher than the next. Rather than bringing the groups together, the meetings were polarizing, just like today’s Congress. We decided that a group settlement with a few major plaintiffs’ lawyers should be negotiated as a prototype. Once we had a settlement, it would lead to others. But such an agreement could have been negotiated only in secret, because, if pressures were brought to bear on either side, it wouldn’t work. My partners, David Beers and Betsy Geise, negotiated some of the difficult medical issues. 1 163 We decided that we couldn’t settle these cases without Ron Motley and Joe Rice of the Ness Motley firm in South Carolina. They controlled a huge number of the cases and were the trial counsel for many others. We had good relations with them in the sense that we settled with them on a regular basis. They already had made a lot of money; not that they weren’t and still are happy to make more. We thought we could make a deal with them that was based on the proposition that the defendants would pay the sick and defer the non-sick until they did get sick; if they didn’t get sick, we didn’t pay them. Because the MDL was in Philadelphia, we needed a plaintiffs’ lawyer in Philadelphia, too, and Gene Locks seemed to be the best candidate. We also didn’t want Ness Motley to have a monopoly. We wanted to be able to play the two plaintiffs’ firms against each other if one wanted the deal more than the other at some point in time. So we (chiefly my partner Bill Hanlon and I) conferred in secret for more than a year which, in itself, was astounding. The asbestos plaintiffs’ bar customarily talk 1 and drink together. That the negotiation didn’t leak out was surprising to me. Finally, we negotiated a deal. It took some statesmanship on the part of all three of these plaintiffs’ lawyers and, at times, it took playing one firm against the other. To my mind the lawyers did the right thing. The proposition was that a claimant’s case was deferred unless and until he or she actually got sick, and then the claimant would get quick guaranteed money without having to sue. We argued that these plaintiffs were buying “peace of mind.” Ms. Feigin: The money to be resolved at a later date? 164 Mr. Aldock: No, the money resolved ahead of time. Ms. Feigin: The amount of money? Mr. Aldock: Yes. The schedule of payments by disease was decided ahead of time, but there were arbitration panels and other procedures for extraordinary relief over and above that in particular cases. The claimant could get more but never less than the guaranteed amount. He /she would receive the check right away. The attorneys’ fees were capped. We basically tried to sell it as Rawlsian justice in the sense that the political philosopher John Rawls said to look at things through a “veil of ignorance,” deciding the principle before knowing on which side of the line you’re going to fall. If a person doesn’t know if he is going to get sick, what amount of money would he take? Obviously those who already are sick know that they want “X” amount of money. If they know that they’re never going to get sick, they will take a lot less. What is the right amount of money? It was done in the abstract and, therefore, we believe arrived at a more “just” result. We also agreed to settle the pending backlog of cases with the plaintiffs’ bar as a price of their agreement to the settlement of the future cases. While this was the only way the settlement could be reached, it was our undoing. The public saw it as a payoff when, in reality, the plaintiffs’ lawyers would have made more money by continuing the litigation than through the settlement. We felt that we only could sell this if we had public relations help beyond the plaintiffs’ lawyers we were settling with, so we entered into negotiations with the AFL-CIO. The union never had endorsed anything like this, although most of 165 the asbestos victims were their members. By and large, these were all craft union members who were getting sick from working with asbestos, and they were bringing the cases. Ms. Feigin: Like the United Mine Workers? Mr. Aldock: No, the shop crafts: The carpenters, steel workers, boilermakers, sheetmetal workers, everybody who works in the construction industry. In the post-WWII days, asbestos was the only good way to fireproof things. It was required by the US Navy for ships. Asbestos was what everybody used, but it so happened that it had health effects that nobody realized until later. The argument the plaintiffs made was that the companies knew about the health effects and hid them. While there were some instances of that, particularly in the case of the Johns Manville Corporation, by and large the defendants had no more knowledge than the government. That dispute and the failure to timely warn about the health effects of asbestos was the core of the litigation. In time, we persuaded the AFL-CIO to endorse the settlement. I negotiated monthly with Larry Gold, who was then the general counsel of the AFL-CIO. Lane Kirkland, an effective president of the AFL-CIO, also approved it. The AFL-CIO was a far stronger and more monolithic organization representing a much larger percentage of American working people than it does today. We filed the settlement before Judge Weiner, who was the MDL judge in Philadelphia. We concluded that Judge Weiner was a wonderful judge, but that he would have trouble presiding over a very long trial on issues where he had 166 strong views. He was perceived as pro-defendant and never would have been acceptable to Motley, Rice or Locks or any asbestos plaintiffs’ lawyer. We told the judge that he should not try the fairness of the settlement, and he agreed. Judge Weiner then appointed Judge Lowell Reed who had had no prior involvement with asbestos. None of us knew Judge Reed, but his reputation as a smart, nonideological, and sound trial judge was excellent. Ms. Feigin: Who opposed your settlement class action? Mr. Aldock: The main protagonist was Baron & Budd, and Fred Baron, now deceased, in particular. They were a Texas plaintiffs’ firm with a significant number of asbestos cases. Baron retained Larry Tribe of Harvard to help him. I met with Baron whom I knew well, and personally tried to get him on board. Baron became a major player in the American Trial Lawyers Association as a result of his opposition to the settlement. I argued to Fred Baron, “We will settle all your present cases on a fair basis, the future cases will be taken care of, and it is the right choice for the public interest.” Fred Baron said, “John, you have a point. There is something to be said for your position. Ideologically, however, I believe everybody has a right to a day in court, and these kinds of settlements shouldn’t happen. Even beyond that, this is going to be no fun for me if I agree to your settlement. This case could go to the US Supreme Court.” Baron continued, “Why in the world would I want to miss that?” Thus, we didn’t get Baron & Budd’s support. We were on the same side as Ness Motley and Greitzer & Locks, because they represented the settling class. Although we respected each other, we had litigated against each other for 20 years and had different views 167 about how to try cases. There were interlocutory appeals during the trial to the Third Circuit on various issues. We even had a purported opt out of the state of West Virginia. All of this was uncharted territory, and many of the issues were ones of first impression. After a four-week trial in Philadelphia before Judge Reed, we ultimately prevailed, and the settlement was approved. See Georgine v. Amchem Products, 157 F.R.D. 246, rev’d 83 F.2d 610 (3d Circuit 1996). In addition to Fred Baron, another major person who opposed the settlement was Steve Kazan, mostly on the grounds that California claimants were paid more in the tort system and were not treated fairly by the settlement matrices. Ms. Feigin: Who is Steve Kazan? Mr. Aldock: Based in Oakland, California, he is certainly the major plaintiffs’ asbestos lawyer on the West Coast. A good friend these days, I co-chaired asbestos conferences with him for many years. Steve and I were both active Democrats. While the asbestos plaintiffs’ bar were mostly Democrats, I was a rarity among lawyers representing corporations and still am in the minority of corporate defense lawyers. We have previously discussed the appeal of the settlement to the Third Circuit and its ultimate rejection by the US Supreme Court in the 1997 decision in Amchem v. Windsor, 521 U.S. 591 (1997). Since the US Supreme Court expressly said the “remedy” to the asbestos litigation was through legislation, our clients felt compelled to give it a try. 168 We formed a coalition through the National Association of Manufacturers. On the legislation, at least at the outset, Steve Kazan and some other plaintiffs’ lawyers were with us, but as the legislation changed during the process all the plaintiffs’ bar ultimately opposed it. We tried for federal legislation for over four years with two Congresses. Chief Judge Becker came down to mediate at the request of his law school classmate, Senator Patrick Leahy. Becker, as you recall, had decided in the Georgine case that the courts could not solve the problem. Becker told me at the time that his decision in Georgine, while good law, was bad public policy, but since Congress did have the power to address the issue, he was coming down “to make amends.” Ultimately something as controversial as the asbestos litigation was not a good issue for the legislative process. Also, as a result of our unsuccessful settlement, the litigation was moving in the direction of deferral for the non-sick claimants and, by the year 2000, was becoming almost a cancer-only litigation. Therefore, many of the problems, including the filings of hundreds of thousands of cases that the settlement sought to solve, were going away. The pressure on the courts was not what it had been. Also, the remaining cases had moved to the state courts which suited the federal judges just fine. The legislative approach was laborious. In the judicial process more flexibility can be retained for dealing with special and unusual cases. This was difficult to do in the legislative arena. The legislation had too many players and too many settlement interests, and it was too much of a moving target. Although we got a bill out of the Senate Judiciary Committee at one point, it ended up 169 being opposed by virtually all of the plaintiffs’ bar and a significant number of insurance companies and well-insured defendants. It wasn’t clear how the insurance would work to fund the settlement. The insurance provisions of the bill were very complicated. At that point, a legislative solution to the asbestos problem was impossible. It is very hard to get legislation passed in this country on any controversial subject, and it does not take that many stakeholders to block it. Ms. Feigin: Had you helped draft that legislation? Mr. Aldock: We drafted it all in our offices. I was involved in the policy decisions that were made. The major draftsman of the legislation was Pat Hanlon, who was then a partner at Shea & Gardner and is now a professor at Boalt Law School in California. There were many other draftsmen, but he was the primary one. We represented the National Association of Manufacturers (NAM) as the umbrella client for the legislative effort. I went to all the NAM meetings on this legislation to try to keep the process moving. I also tried unsuccessfully to keep the unions on board although, by this time, that was not possible. The unions didn’t oppose the legislation but they didn’t want to play anymore. Politically, it was too difficult. After the Supreme Court’s Amchem decision, I decided that, as a result of having lost in the biggest class-action case to date, I should become a defendant’s class action lawyer since, by this time, I had become an expert in the case law. I lectured on class actions and was asked by the US Judicial Conference Federal 170 Rules Committee to advise them on various alterations to the rules to deal with the issue of settlement class actions. Most rule and legislative changes address yesterday’s problems, and we did that well. [Laughter] As a result of this history, settlement class actions are harder to get approved these days than they should be. The rhetoric of the Supreme Court’s opinion had a chilling effect that probably was not intended, and that wasn’t necessary to the decision. The Court was concerned with due process notice issues and the impact of the settlement on future cases for people not before the court. These were issues unique to the asbestos-type litigation and generally are not involved in today’s class action settlements. Ms. Feigin: Have you been involved since as an attorney in other class actions? Mr. Aldock: That’s primarily what I do. My practice is class actions and mass torts which is another way to maintain my ability to be a generalist. The class action is just a procedural vehicle. Moreover, it usually guarantees that the case has a lot of money at stake. To be a class action expert is to be a substantive generalist for big cases. I often wondered why I hadn’t discovered this earlier. Ms. Feigin: So you still can maintain that every two years you’ll have a different — Mr. Aldock: Even now. Most of my cases involve a different area of the law. To that extent it defies substantive specialty. Let’s move to the SGS matter. A very large public company based in Geneva, Switzerland, SGS, Societe Generale de Surveillance, was an interesting 171 and major undertaking. It was another case I would be unlikely to get if I weren’t a Washington lawyer. The client came to me in the mid-1990s. I didn’t have any prior relationship with this company, but I had done some work in Switzerland on behalf of a company called Katadyn. Katadyn manufactured water purification equipment, particularly hand filtration devices that filtered stream water for drinking and could be carried around in a backpack. There was a dispute between the FDA and the EPA as to who was supposed to regulate this device, whether this was a water purifier or a pesticide. As a result of this interagency dispute, neither agency would act, and Katadyn could not get its product on the market in the United States. I got the two agencies together, and they entered into a Memorandum of Understanding that exists today as to the jurisdiction of the two agencies. It was an enjoyable representation that took me many times to Switzerland. I already was going there for other matters and, as a result, I had met a number of Swiss business people. A colleague on the board of KatadynUSA recommended me to SGS and, when they had a significant problem with the USG in the 1990s, SGS asked me to represent them. SGS was mostly in the worldwide letter of credit and physical and technical inspection business with a special division that provided preshipment inspection services to governments, mostly developing countries. Among their clients were Indonesia, Ghana, Venezuela, Peru, Bolivia, and the Philippines. The preshipment inspection program was in significant part addressing the then problem of capital flight, i.e., money getting out of the developing country by 172 over- and under-invoicing of imports and exports. Several of these countries had currency restrictions. For example, if an Indonesian wanted to get money out of his country, he could arrange to get invoiced at well above the true price. The extra money would go into a secret bank account in the over-invoicing country. To combat this and related problems, the countries retained SGS to inspect and opine on the value of these transactions. In Indonesia the program covered virtually every import and export in the country. In South America they were covering almost everything. Some of the programs exempted specific product sectors; commodities such as oil were often exempted because the commodities had a publicly traded price. The US export community, particularly in Florida, filed a document, called a 301 petition, which ultimately goes to the president. If the president agrees that the trade practice is unfair, the petition allows the US Trade Representative to cause the president to cut off trade with a particular country as a sanction. The countries who received this petition asked SGS to defend their preinspection programs. These procedures move very quickly and, by the time we were retained, the publicity around these programs was significant, both in the US and abroad. We started by convening a meeting at our offices to which the ambassadors of all of the preshipment inspection countries were invited. Every ambassador sent a representative. The countries agreed to send a joint letter to the US Secretary of State and the president explaining what preshipment inspection was, why the program was vital to the economies of the countries, and why the unfair trade 173 practice petition should be denied. The countries let us compose the letter, and they all signed the letter as written. This started a full political and legal process that continued for the next three to four years. The then US Trade Representative believed anything that came between a willing buyer and a willing seller, regardless of leverage and regardless of what these countries were trying to do, was improper, and that the White House should cut off trade with all countries using SGS to implement a preshipment inspection program. The Reagan White House, at least ideologically, agreed with the US Trade Representative. They also knew that none of these countries could afford to lose all US trade. Without waiting for the administrative process to take its course, Congressman Dante Fascell, a Democrat from Florida who chaired the House Foreign Affairs Committee, introduced legislation that would expressly outlaw preshipment inspection programs. We now were engaged in lobbying the US Congress on behalf of non-voting developing countries against the US Chamber of Commerce, the Pharmaceutical Manufacturers Association of the United States, the Chemical Manufacturers Association of the United States, and all the Florida export groups, among others. This did not look like a recipe for a lobbying success. [Laughter] The question was how best to address the problem. We tried to identify whom we considered the most principled congressmen and senators who had safe political seats and were on the committees to which this legislation likely would be referred. We approached Congressman Solarz from New York in the House and, of course, Senator Proxmire from Wisconsin. They were pleased to support the 174 view that the US Government should not be undermining practices that Third World countries feel they need to avoid fraud perpetuated in part by US companies. Both Solarz and Proxmire agreed to help us. It didn’t hurt that we facilitated a call to Congressman Solarz from Mrs. Aquino, the then president of the Philippines, as to the importance of this program to her country. Solarz, of course, had a lot of Filipino constituents. We hired some lobbyists, including my friend Stuart Eizenstat, to help us gain support for at least neutrality toward our position. The US State Department got nervous. Without taking a position, State told the Congress and the US Trade Representative to move cautiously as it was likely to be seen as the US bullying the developing world on behalf of unscrupulous corporations. We succeeded in getting the key House committee to table the legislation and send the issue to the International Trade Commission (ITC) to hold fact-finding hearings on preshipment inspection programs. The result was several weeks of hearings in Washington, DC, and in Miami, Florida, at which one exporter after another told horror stories about how preshipment inspection had delayed their shipments and cost them money. On the other side, we put on testimony from finance ministers and senior people from these Third World countries as to the problem of capital flight, why the countries needed these programs, and examples of the potential fraud they had uncovered. We also retained an MIT economist named Rudi Dornbusch to address and quantify the economic problem of capital flight for developing countries. Many of our witnesses testified through translators. In the end, the ITC issued a long, inconclusive report that summarized the hearings and gave the pros and cons of 175 the program. The ITC suggested that perhaps the issue should be addressed during the GATT (General Agreement on Tariffs and Trade) negotiations in Geneva, Switzerland. Congress was delighted to send the problem abroad [laughter] and issued a Congressional report that sent the dispute to the GATT. We were now at the GATT negotiations, which was something quite new for me. Indeed, private lawyers do not directly participate in GATT proceedings, because the GATT was for negotiations between countries. We therefore formed a committee of representatives from our client countries. It was headed by a published poet from Ghana. Our “poet” and his counterparts would go into meetings with the US Trade Representatives and, whenever the US made a proposal to our group, he would emerge in the hall and get our advice on their response. We previously had asked to observe the meetings, but the US Trade Representatives said, “Absolutely not. Private lawyers never are allowed in these proceedings.” After about two weeks, however, the US Trade Representatives figured out that this procedure was not efficient [laughter] and agreed to meet directly with us. We negotiated a preshipment inspection treaty that still exists today. The treaty provided that certain disputes involving preshipment inspection programs could be arbitrated under the procedures of the World Chamber of Commerce, and it also outlawed a host of practices in which nobody had engaged. The treaty was a “home run” as far as SGS and its client countries were concerned, achieving everything that we had wanted. It preserved the programs and shut off the objectors who knew this was the most they were going to get. 176 In time, however, capital flight programs became less necessary to the developing countries as they moved away from currency controls. Also, major competitors came into the field to compete against SGS for these programs. Some of these companies had no business in the US and thus were free of the restrictions imposed by the Foreign Corrupt Practices Act. The competition got rough. Then, somebody in SGS allegedly succumbed to the pressure and made a payment to the husband of the Prime Minister of Pakistan to facilitate getting a contract. The man who allegedly was paid the “bribe” is currently the president of Pakistan. I’m not sure anything was proven in court, but that was the end of the SGS preshipment program. One cannot be in the business of protection against fraud and be alleged to have been involved in it. [Laughter] All of those programs died. Ms. Feigin: It was a good run. Mr. Aldock: It was a good run. We won everything. It was something I never had done before. It was interesting and exciting, high pressure work that can make the practice of law in Washington a lot of fun. Ms. Feigin: We have time for one more interesting case from the 1990s. Mr. Aldock: I got a call in the mid-1990s from John Pickering of then Wilmer, Cutler and Pickering (now WilmerHale), a prestigious DC law firm which represented ABC in an alleged discrimination case. Judge Lamberth of the US District Court for DC had defaulted ABC for improper destruction of evidence. The judge also sent ethics complaints to the DC Bar with respect to several Wilmer lawyers for the 177 alleged spoliation of evidence. Pickering asked me to represent the firm and the Wilmer partners before the bar counsel, and the bar took the unusual position of acquitting them before the appeal of Lamberth’s decision had been decided. The usual position of the bar in an ethics complaint is to wait until the judicial process is finished and then address the complaint, but they were prepared, on the basis of our presentations, to acquit these lawyers of wrongdoing even though the appeal of Judge Lamberth’s ruling was in the DC Circuit and had not been decided. Judge Lamberth is an excellent judge, but somehow he was persuaded that, because some witness thought she saw a document which subsequently was not produced in discovery, somebody must have destroyed it willfully. It was a big leap from the known facts to the intentional destruction of evidence. The bar agreed with us. Then it went up on appeal, and ABC was represented by Bill Jeffress. We were involved on behalf of Wilmer, largely behind the scenes because the firm wasn’t a party to the appeal. I worked with Bill, a great lawyer and a good friend, on that brief, and the DC Circuit reversed. That was my first representation of a law firm, and I decided that representing law firms was interesting work. Law firms are smart clients; they don’t complain about the bills, and they understand what you’re doing and why you’re doing it. With respect to all the cases I’ve had representing law firms, I never have thought the law firm did anything egregious. Subsequently, I represented Wilmer again when they had problems with the Haft family litigation. 178 Ms. Feigin: Dart Drug? Mr. Aldock: Yes, the Haft family owned Dart Drug, Total Liquor, book stores, and other businesses. They were a rich but dysfunctional family which essentially imploded and sued each other. The wife was suing her husband, and each of the children was suing the mother or father. There were numerous lawsuits. At one point the Superior Court for the District of Columbia issued an order precluding further lawsuits on behalf of the Haft family or anybody associated with it. The court said it was not going to close down civil litigation in the District of Columbia for this one family. Ronald Haft, the younger son and former Wilmer client, sued Wilmer Cutler for $400 million, and it received lots of publicity as these cases do whenever a law firm is involved. We had proceedings before Judge Bailey in the Superior Court, where some members of the Haft family wanted a preliminary injunction to disqualify Wilmer Cutler from representing the Haft companies. We won. Then there were all kinds of other lawsuits in the District of Columbia, Maryland, and Delaware and they went on forever. Ultimately, Dart Drug also sued the law firm. There were stories in “The American Lawyer” and other publications. In the end we settled all the cases satisfactorily to the law firm and its insurance carrier. At one point in the litigation, Ron Haft had taped a phone call with his own mother and then used it against her in litigation. This was a dysfunctional group of relatives, and the law firm was caught in the middle trying to deal with the fact that it had represented several Haft family members before they fell out with each other. 179 Ms. Feigin: One question about representing law firms. Is it not difficult in the sense that they try to second-guess your legal judgment? Because, after all, they are lawyers. Mr. Aldock: They do second guess but not after the fact. They will tell you their views, and you will come to some consensus. Usually, they take your advice, because you’re effectively representing the firm’s Executive Committee. At least half of the Executive Committee of the firm is going to take their lawyer’s advice, not their partners’ advice. [Laughter] The one problem you do have in an alleged malpractice case is that, when a partner is being charged with misconduct that could result in a big payment by the law firm or its insurer, the other partners often are not as supportive of the partner involved as they might be. At the same time, the involved partner often feels isolated and put upon by his ungrateful partners who don’t appreciate the millions of dollars he or she brought to the firm in the past. One of my goals in these representations is to prevent those issues from getting out of hand and to keep everybody focused on the adversary. I also must get the insurer on board with the firm’s strategy and goals. In addition, I need to work with the Executive Committee on their communications to the partnership, so that the other partners feel that the problem is under control, notwithstanding the amount of money being sought against the firm in the lawsuit. Subsequently, I have represented many firms in this city. I only can talk about the public proceedings. One public proceeding involved a motion to 180 disqualify Sidley Austin LLP that I argued before an administrative law judge of the Federal Communications Commission. Motions to disqualify law firms because of alleged conflicts are a regular part of law firm practice, and I have had several such cases. Another case involved a contingency fee where the lawyer involved had switched firms, and the issue was who was going to get what. One case involved a former client trying to disqualify the law firm because it had been too effective on behalf of a present client. I have defended a law firm’s lawyers before the Ethics Committee of the DC Bar, where the complainant was the general counsel of a former corporate client of the law firm. In my view, that case was purely an attempt by the general counsel to intimidate his former law firm; bar counsel saw it the same way and dismissed it. Presently, I have a public case where Encyclopaedia Britannica has filed what they purport to be a $250 million malpractice case against Dickstein Shapiro in connection with something that happened before the Patent Office fourteen years ago. We have motions to dismiss due tomorrow about which I am hopeful. In the past I have not handled an intellectual property case for a law firm, so I’ve associated my IP partners, Tom Scott and Matt Hoffman, to assist me. I have represented numerous law firms over the past thirty years. I have enjoyed those representations and hope to do more. Legal malpractice tends to be a local practice; disqualification motions can be national, but generally malpractice cases are local. The suits are brought here against DC law firms, and the firms hire DC lawyers to represent them. 181 I also have advised law firms who are being threatened with suit by one of their partners over compensation or status issues. Generally it involves working out a “divorce” of the partner from the firm. Some of this work is not unlike work I do in the management of our firm. Ms. Feigin: This is probably a good place to stop. I look forward to our next meeting. Thank you. Mr. Aldock: Thank you.