You may have seen this article in The American Lawyer:
Simpson Thacher & Bartlett partner Barry Ostrager isn’t exactly mincing words in his assessment of the counsel that guided Chubb Insurance to the U.S. Supreme Court, where on Monday it will square off against Ostrager’s insurance company client, Travelers Indemnity. "Whoever has been advising Chubb," he told the Litigation Daily on Friday, on a train en route to Washington, "gave them the worst advice any lawyer ever gave a client." …
Way back in 1986, Manhattan federal bankruptcy court judge Burton Lifland confirmed the Chapter 11 reorganization plan of the granddaddy of all asbestos companies, Johns-Manville Corp. The plan was groundbreaking. It created a trust, to be funded by Johns-Manville and its insurers, through which all asbestos claims against the company would be processed. …
Fast-forward to 2001, when asbestos plaintiffs lawyers began testing new theories of liability against insurance companies. They filed tortious interference suits — which have become known as "direct action" claims — asserting that insurers had an independent duty to warn potential victims of the dangers of asbestos. In 2002, Travelers asked Judge Lifland — the Manville bankruptcy judge — to enjoin the "direct action" cases. …
At this point, Chubb became involved. Chubb hadn’t been part of the Manville deal but it was worried that if Judge Lifland approved the Travelers settlement, it would be precluded from suing Travelers in cases in which they shared liability. Chubb aligned with the asbestos plaintiffs lawyers to challenge the bankruptcy court’s power to enjoin suits against parties other than the debtor. (That’s the decision that Ostrager has scorned.)
The irresistible part is that this feud involves none other than the In re Johns Manville Corp. constellation of cases, including 06-2320 (2nd Cir., Jan. 17, 2007), in which Mr. Ostrager’s cross-appeal was rejected because:
Travelers had 14 days to file its notice of cross-appeal. However, the firm calculated the 14 days from the date it received the notice, not from the date the notice was actually filed. The district court denied Traveler’s motion to extend the deadline by one day, explaining that this was a case of “garden variety attorney inattention” and not excusable neglect. The Second Circuit affirms.
Doh! But let’s focus on the supposed worst advice ever.
The Travelers / Simpson argument is that Chubb / Cozen should have kept their mouths shut and not attempted to intervene, because the arguments they made (or the precedent created) in support of intervention could be used by plaintiffs attempting to sue Chubb in a later "direct action" case involving an asbestos trust.
There is something to be said for not putting forth your best argument in a particular case as part of a broader strategy involving other cases. That something is: you should not sandbag your own arguments in one case unless there is clear and convincing evidence that it will help you in other cases.
The law of unintended consequences applies to the practice of law just as it applies to everything else. What, exactly, did Travelers / Simpson believe would happen in the absence of the Chubb / Cozen intervention? That the billion-dollar asbestos plaintiffs lawyers industry would not realize a bankruptcy court’s injunction protecting a non-debtor raised serious statutory and constitutional concerns?
We already know exactly the opposite is true, and that the asbestos plaintiffs lawyers were already challenging the power of the court to enjoin the "direct action" cases against insurance companies. These issues were already destined for the Circuit Courts and the Supreme Court. The difference was the names on the briefs.
Where then would that have left Chubb if Cozen had told them to sit on their rights and not intervene? Had the Supreme Court denied certiorari for the appeal, or if the Supreme Court agrees with the Second Circuit in prohibiting the bankruptcy court from enjoining these suits, then Chubb would have been left out in the cold, potentially precluded from raising issues relating to hundreds of millions of dollars in insurance coverage and tort liability.
Could that be in the running for the worst advice a lawyer ever gave a client?