September 5, 2014 / 10:46 AM / 3 years ago

U.S. court revives asbestos fraud case against BASF

3 Min Read

FRANKFURT, Sept 5 (Reuters) - BASF, the world's largest chemicals maker by sales, said it was considering appealing the revival of a U.S. fraud case against it by representatives of alleged asbestos victims.

A U.S. appeals court ruled this week that BASF and its former law firm had a case to answer in a class action alleging they conspired to prevent thousands of asbestos-injury victims from obtaining justice by destroying or hiding evidence.

The New Jersey District Court had dismissed the case but the U.S. Court of Appeals for the Third Circuit rejected parts of that ruling and remanded the case for further proceedings.

BASF said in a statement emailed to Reuters on Friday: "The remaining claims concern asbestos injury suits brought decades ago against Engelhard, a company BASF acquired in 2006, relating to Engelhard's talc mining operations that ended in 1983."

"BASF is evaluating its options to obtain further review of the Court of Appeals' decision on this point."

The plaintiffs allege that BASF and Engelhard Corp concealed evidence that its talc products contained disease-causing asbestos and fabricated other evidence used in court by its law firm, Cahill Gordon and Reindel LLP.

The products were used in wall boards, dusting agents and children's balloons.

The alleged scheme to conceal the evidence and dismiss or settle court cases collapsed a few years ago when a former research chemist for Engelhard testified in a New Jersey case that he had discovered asbestos in Engelhard's talc and been instructed by the company to turn over all related records.

The district court had ruled that BASF and Cahill were not liable for any false statements they may have made because of New Jersey's litigation privilege, which is designed to protect lawyers from defamation actions and further openness in court.

The appeal court rejected that argument. "New Jersey's Supreme Court has never recognised the litigation privilege to immunize systematic fraud, let alone fraud calculated to thwart the judicial process," it said in its ruling. (Reporting by Georgina Prodhan and Frank Siebelt; editing by Susan Thomas)

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