South Carolina - 1, Canada - 0 in Supreme Court Asbestos Receivership Litigation Hearing

In the latest events of the South Carolina receivership litigation, the South Carolina Supreme Court heard arguments yesterday from Canadian companies Asbestos Corporation Limited (ACL) and Atlas Turner, Inc., as well as representatives of SC attorney Peter Protopapas, over whether SC receiverships have the authority to administer the mining companies’ insurance policies when companies hide assets and refuse to participate in court proceedings.

Receivership was first introduced in this case in 2017 after ACL and Atlas Turner failed to cooperate with discovery proceedings and Justice Jean H. Toal appointed Peter Protopapas as receiver for companies involved in the mining or sale of asbestos products.

In yesterday’s hearing, the defense was pinned with damning claims of moral fraud. Attorney Jon Robinson’s statements highlighted that the defense not only refused to participate in litigation in circuit court and withheld insurance assets, but beyond that, ACL and Atlas blatantly told the courts they don’t have insurance policies although Protopapas has surfaced them. The hearing set the precedent that moral fraud cannot become commonplace.

Unsurprisingly, there was no clear outcome from the hearing as the defense continued to avoid cooperation and transparency in providing insurance assets to the court when pressed by the Justices. The defense has been given until next Friday, February 21, to provide more information on insurance assets.

Until then, here’s what you missed in yesterday’s Supreme Court hearing on asbestos litigation in South Carolina:

• Even after multiple requests from the Receiver, the defense did not participate in discovery, forcing the Receiver to go in search of insurance assets on his own. Rightfully so, the defense ultimately owned up to mistakes during discovery, citing a Canadian law that prohibits them from sharing this information. A Justice inquired what procedure could go around that block, and the defence was unable to provide an adequate response.

• Chief Justice John Kittredge called mistakes from the defense “self-inflicted wound(s)” and a result of the indefensible actions.

• Attorneys for the Receiver indicated that the goal of the receivership is to try to appropriately administer insurance assets, not run a Canadian company, which the defense accused them of. In this case, where the defense would not produce the information requested, a receiver was appointed before an official judgment to help procure those assets.

• Though ACL and Atlas Turner knowingly distributed asbestos to businesses in South Carolina that harmed South Carolina citizens, the defense attorneys still claim that Justice Toal and Protopapas do not have the jurisdiction to be involved in the insurance assets. However, Justice John Cannon Few disagreed saying, "This idea that the South Carolina circuit court... has to stop at South of the Border on I-95 up toward Canada is wrong. The court in South Carolina has the authority to get involved in at least some way with the existence and availability of your client.”

• Theile McVey, managing partner at Kassel McVey, argued that the defense always files personal jurisdiction and refuses to produce discovery documents. McVey also accused ACL and Atlas Turner of liquidating and hiding its insurance assets, again evading any ounce of liability.

• Jon Robinson, managing member at Smith Robinson, called the defense’s avoidance of discovery “moral fraud” and argued that the Canadian mining companies have been misrepresenting whether or not they have insurance to the courts all along.

Yesterday’s South Carolina Supreme Court hearing was a positive step toward putting the people of South Carolina first, not insurance companies. The Justices are demanding transparency and compliance from the defense, making it clear that not even international mining giants and insurance companies are above the law in South Carolina.