Baron & Budd asbestos memo
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The Baron & Budd asbestos memo is a memo in asbestos litigation where it is alleged a prominent plaintiffs' firm engaged in subornation of perjury and a cover-up. The Texas State Bar Association grievance committee dismissed complaints regarding the memo. It is cited by United States civil justice reformers and politicians as an example of ethical problems in the plaintiffs' bar. Accusations about the memo have also arisen in the context of Fred Baron's relationship with former presidential candidate John Edwards.
In 1997, a junior associate at Baron & Budd, P.C., a law firm founded in part by Fred Baron accidentally produced to the defense counsel a twenty-page memo titled "Preparing for Your Deposition." Republican Senator Jon Kyl, a tort reform advocate, called the memo "a startling insight into how asbestos claims are created"; in a Senate Report, Kyl writes that the memo:
- gives clients detailed instructions how to credibly testify that they worked with particular asbestos products. The memo also instructs clients to assert particular things that will increase the value of their claim, without regard to whether those things are true. The memo even informs clients that a defense attorney will have no way of knowing whether they are lying about their exposure to particular asbestos products.
Clients were also instructed by the memo to deny that they ever saw warning labels on product packages. The memo was so detailed and comprehensive that Eugene Cook, a former Texas Supreme Court Justice, said at the time, "With this document, you could almost go down the street, get a homeless person, spend a couple of hours with him, and he would be prepared to testify."
Baron & Budd has admitted that the memo was produced by its employees, but denies that the memo instructs its clients to lie and has argued that statements from the memo have been taken out of context by the press. The firm retained a University of Texas Law School professor, Charles Silver, who wrote an opinion that the firm should not face criminal liability for using the memo, based partly on the affidavit of paralegal Lynnell Terrell who said that she was solely responsible for the authorship of the comprehensive memo and that the memo was rarely used.
Dallas Observer investigation
However, the Dallas Observer conducted an investigation into the memo and found that "a number of former Baron & Budd employees say that the information and techniques contained in the memo are widely used, even taught to employees" and that the "memo was not truly an aberration, but a written example of how the product-identification staff works at Baron & Budd."
Dismissal of charges
Judge John McClellan Marshall, who first learned of the memo from defense counsel in the case where it was produced, called the memo "scandalous to the community as well as to the profession," and "an affront to the integrity of the judicial system," and referred it to a grand jury for possible prosecution and to a state bar grievance committee. In response to the affidavits from Baron & Budd's experts, the state bar grievance committee dismissed the charges. The Dallas Observer reports that because of "politics", the local DA dropped it, requiring the prosecution to be transferred to the Clinton Administration in 1998. Baron & Budd and Association of Trial Lawyers of America made political contributions to the Congressional campaign of the U.S. Attorney's wife, Regina Montoya, and Paul Coggins recused himself from the case as a result; the Dallas Observer quotes critics who say that the Democratic administration soft-pedaled the case, which was never investigated. Judge Marshall had been re-elected twice without opposition in 1992 and 1996, but in 2000, Baron & Budd successfully targeted Judge Marshall for defeat; the Dallas Observer reports a lawyer close to the case saying that "No judge in Dallas will cross Baron & Budd after what happened in that election. They are scared to death." Local Texas judges blocked civil discovery into the production and use of the memo. Attorneys for private clients who attempted to investigate the memo found that both they and their clients were targeted heavily by Baron & Budd. The defendants agreed to replace the attorneys who had investigated Baron & Budd with new attorneys who would not pursue the matter further. And the Dallas Observer reported that the firm responded to its reporting with "a pattern of intimidation and paranoia such as the Observer has never seen before."
No member of Baron & Budd "has been convicted of wrongdoing, disciplined, or sanctioned" for the use of the memo. But no one ever deposed the paralegal who wrote the memo, her immediate supervisors, or the clients who supposedly were prepared with the memo to testify. Baron does not take the position that these court decisions in his favor "absolutely vindicate that the memo was proper," but he does insist that "the document cannot be evaluated properly without ‘context,’ and points to [Lynnell] Terrell’s sworn statement that she always orally instructed clients to tell the truth and that she never gave the memo to clients without also handing them a copy of a second article that admonishe[d] them to testify truthfully." 
- Walter Olson, "Thanks for the Memories", Reason (June 1998)
- Ramesh Ponnuru, Robber Baron?, National Review Online (15 July 2004)
- Lester Brickman, "On the Theory Class’s Theories of Asbestos Litigation: The Disconnect Between Scholarship and Reality", 31 Pepperdine L. Rev. 33 (2004).
- Additional View of Senator Kyl, Senate Report No. 108-118 at pp. 81-184 (21 Jul. 2003) (reprinting memo in full).
- Lester Brickman, Asbestos Litigation: Malignancy in the Courts, Civil Justice Forum of the Manhattan Institute no. 40 (Aug. 2002)
- W. William Hodes, The Professional Duty To Horseshed Witnesses—Zealously, Within The Bounds Of the Law, 30 TEX. TECH L. REV. 1343 (1999). See also Charles Silver, Preliminary Thoughts on the Economics of Witness Preparation, 30 TEX. TECH L. REV. 1383, 1398-1401 (1999) (discussing forces bearing on the preparation of witnesses in civil litigation, including mass tort cases).
- Julie Lyons, Patrick Williams, Thomas Korosec, and Christine Biederman, "Toxic Justice", Dallas Observer, 13 Aug. 1998
- Thomas Korosec, "Homefryin' with Fred Baron", Dallas Observer, 29 March 2001
- Thomas Korosec, "Bench press", Dallas Observer, 9 Mar 2000
- Julie Lyons, The Control Freak, Dallas Observer, 13 Aug. 1998.