U.S. Supreme Court
WASHINGTON - A U.K. company at the center of an international fight over jurisdiction for asbestos lawsuits has asked the U.S. Supreme Court to reverse a ruling by South Carolina’s highest court allowing a personal injury lawyer to serve as court-appointed receiver over one of its subsidiaries.
Having lost repeatedly in South Carolina courts, Altrad Group is asking the Supreme Court to decide whether the receiver has the power to sue the owners of Cape International Holdings to recover money he wants to pay out to asbestos plaintiffs and their lawyers. South Carolina Judge Jean H. Toal is preparing to issue an order finding Altrad subsidiaries liable for millions of dollars in damages over asbestos that a subsidiary mined in South Africa decades ago.
The petition for certiorari before the Supreme Court argues Judge Toal has no jurisdiction over Cape or Altrad, which are owned by French billionaire Mohed Altrad and never sold asbestos in South Carolina. Judge Toal has connected them to the South African mining concern through an “alter ego” theory that tied Cape, diamond-mining giant De Beers and Oppenheimer family interests in a conspiracy to shield themselves from U.S. asbestos liability.
Cape ceased mining asbestos in the early 1980s and Altrad bought a successor firm in 2017. Judge Toal’s appointed receiver, Peter Protopapas, has argued in court filings that Altrad inherited Cape’s asbestos liabilities even though it never did business in South Carolina.
The Supreme Court filing represents a last-ditch effort to try to halt Judge Toal’s march toward a ruling finding various Altrad entities liable for asbestos claims in her court. Protopapas has taken in more than $100 million so far – a third of which he keeps as his own fee – by using his power as receiver over long-defunct companies to negotiate settlements with insurance companies that issued policies decades before, placing the money in secretive Delaware trusts that he disburses as he sees fit.
In a hearing last week, Judge Toal made it clear she will rule against Altrad, giving the company until Oct. 16 to file a response to the order she is prepared to issue.
“I think it’s time to get this thing out to the appellate authorities,” she said at the Sept. 14 hearing marking the end of a bench trial in which the Altrad entities declined to participate. They have only presented evidence to support their claim Judge Toal doesn’t have jurisdiction over them, which she has rejected.
The judge seemed testy at times about the tactics of defense lawyers and even news coverage of her rulings in the case. Charter Consolidated, an Altrad subsidiary, included a citation to a Legal Newsline article in its certiorari petition. The judge called Legal Newsline’s reporting inaccurate and said “frankly some of the tactics that are engaged in are unsatisfactory and to the extreme.”
“You submit things to the United States Supreme Court and other places, that whether intended or not, paints this court and this receiver in a negative light,” she said. “And I don’t think that’s fair to people who are trying to do nothing but adjudicate these matters.”
Courts in the U.K. and France have rejected Protopapas’ authority to act as receiver over Cape and the U.K. High Court of Justice issued a $3 million fine and global injunction – including potential criminal penalties-- against him for meddling in Cape’s business affairs.
“This has been a very painful case, and it continues to be, and particularly for those more directly affected than I, which is the receiver and receiver’s attorneys and those who suffer what they feel is some pretty unjustified intrusions into their personal lives,” the judge said.
