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He Fought the Tort Bar -- and Won

Thanks to a CEO's persistence, a federal judge discovers massive lawsuit fraud.

By KIMBERLEY A. STRASSEL

Berkeley Springs, W. Va.

Officially, John A. Ulizio is the CEO of U.S. Silica, one of the nation's largest producers of industrial sand. Unofficially, he's the man who fought the tort bar -- and won. It's a singular distinction in the world of runaway lawsuits.

Ismael Roldan

Clad in a hardhat and boots, standing in a quarry in which giant haul trucks carry Flintstone-sized boulders, the 53-year-old Mr. Ulizio seems an unlikely foe of today's slick plaintiffs' bar. The son of a Pennsylvania steel worker, he is blunt-spoken, works in a little-noticed industry, and likes to point out he's a Democrat ("probably the only one in the building.") What a cursory observation of Mr. Ulizio misses is his own law degree, and his steely sense of right and wrong.

In 2003 alone -- the year he took the company's top job -- U.S. Silica was served with nearly 20,000 lawsuits claiming it had caused silicosis -- a serious, if rare, lung disease. The tort bar saw silica as the "new asbestos," says Mr. Ulizio, and he had visions of his century-old concern going bankrupt, along with dozens of others.

Instead what ensued was a legal thriller, in which the defendants not only beat the suits, but exposed a mob of lawyers and doctors who were fabricating cases, and who are now under investigation. This year his company has been hit by only one silicosis claim. "We hoped the truth would prevail eventually," he says, back in the conference room of the company's modest headquarters. The realist adds: "It worked, but it didn't have to."

And that might be the most disturbing part of Mr. Ulizio's tale. "When you have an entire system that condones these lawsuits, that does nothing to police its own, where there are no consequences, right or wrong has nothing to do with it. It's a coin flip."

In June of 2005, Texas federal Judge Janice Graham Jack -- who was overseeing 9,000 silicosis lawsuits aggregated in her court -- issued an opinion that shook the tort bar to its core. During depositions, the handful of doctors who provided nearly all these diagnoses began to crack, admitting they'd never seen patients, that their secretaries had filled out forms, and that lawyers had told them what to write. It came out that two-thirds of those claiming to have silicosis had previously claimed to asbestosis -- a near medical impossibility.

Judge Jack's 249-page scathing opinion unraveled a scam of giant proportions. She accused the doctors and lawyers of "diagnoses that were manufactured for money," provided evidence of fraud, required a Houston plaintiff's firm to pay defense legal costs, and issued sanctions.

Within a few months, Congress and a federal grand jury were investigating. For U.S. Silica, named in nearly every suit, it was a fairy tale end to a nightmare. Even Mr. Ulizio was shocked. "It was like, 'Oh my God, finally, after all these years, somebody is seeing the truth.'"

Years being the operative word. Mr. Ulizio is a humble guy, and gruffly waves off suggestions that he or his company played any special role in this victory. He ascribes the Texas success to all the defendants equally, as well as the willingness of insurers to join the battle, and to enlist top-notch attorneys. But that is to ignore the knowledge and the backbone Mr. Ulizio and U.S. Silica brought to this fight.

Silicosis litigation isn't new. Silica is one of those products that has been around forever and is used in just about everything, though nobody knows it. The West Virginia factory is a grinding operation: The company mills sand into different sizes, which is then used in everything from glass, to Kevlar, to paint, to the molds used to create steel forms. With silica comes silica dust, which has been health concern since well before 1936, when Labor Secretary Frances Perkins first held a conference on silicosis.

U.S. Silica has always been a prime target of these suits. Within its own factory, safety is intense. Workers aren't allowed on the floor without respirators (nor me, for that matter). Much of the plant has been automated to minimize contact with dust, and vacuums suck up particles. Plastered on every door leading into the plant, and on every bag of silica going out, are giant, neon warnings about the dangers of dust.

The company has nonetheless been militant in defending against lawsuits. This is Mr. Ulizio's history and specialty, having represented silica defendants prior to joining the company in 1991, and then handling U.S. Silica's litigation as its counsel. Says Mr. Ulizio: "There was a decision made here early on, and it was the right decision, that as a sand seller we have no duty to warn, say, the people who work in a foundry. Why? Because foundries . . . know all about silicosis -- there are documents showing that going back to the teens and '20s -- and foundries are the ones who create silica dust or control silica dust, and we have no control over that operation."

Over decades of litigation, the company picked its suits carefully, with an eye to setting broad legal precedents in key jurisdictions. It fought off successive waves of litigati