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MICHELE NORRIS, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, Host:

And I'm Melissa Block. Now, a story about fraud, medical and legal fraud according to one federal judge. Over the last few years, a group of lawyers and doctors has been working to screen tens of thousands of potential victims of silicosis. Silicosis is a deadly lung disease that industrial workers get from inhaling crystalline silica in foundries, mines, quarries, and shipyards.

NORRIS: Courts were inundated with those silicosis claims, but the lawsuits hit a major roadblock in Corpus Christi last year. U.S. District Judge Janice Jack ruled that thousands of silicosis claims had been "manufactured for money." Her ruling is having an impact on hundreds of thousands of asbestos and silica claims across the country.

BLOCK: NPR has obtained exclusive tape of Judge Jack's proceedings. You'll hear the judge warn a testifying doctor that he might want to get a lawyer before he says anything further. In our story, you'll also hear that screening companies were only paid for positive diagnoses and that some doctors diagnosed nearly 90,000 people.

NPR's Wade Goodwyn has our report.

(SOUNDBITE OF MACHINERY)

WADE GOODWYN: In Morgan County, West Virginia, front loaders with shovels big enough to scoop a row of Chevy Suburbans pour small mountains of sandstone into dump trucks. These immense haulers crawl out of the mine and dump their loads of sandstone into a chute, the boulders tumbling into a 500-horsepower steel crusher.

Clean white sand, the nemesis of golfers, the delight of young children, it goes in paint and glass and a thousand other products you'd both guess and wouldn't. But it can also kill you. Microscopic bits lodge in the most delicate places in your lungs and cause a terrible disease called silicosis. Beginning in the 1930s Silicosis cut a nasty gouge out of America's working class.

(SOUNDBITE OF NEWSREEL)

Unidentified Man: 1935, a wave of fear was sweeping the country. Silicosis was taking its toll from the ranks of American workers. Cause of the disease, dust.

END SOUNDBITE

GOODWYN: It took half a century, but government regulations eventually began to reduce the incidence of silicosis in the 1970s. So it was quite a surprise to the CEO of U.S. Silica, John Ulizio, when FedEx began pulling up to their building everyday in the winter of 2002.

JOHN ULIZIO: That's exactly what happened. The FedEx man started to show up with all of these lawsuits. In November of 2002 and running for a couple months after that date, we were inundated with over 20,000 new claims, by new people, almost all of which were in Mississippi, claiming that they had silicosis.

GOODWYN: This was a disaster, maybe the end of U.S. Silica, the largest manufacturer of sand in the country. Were there going to be 20,000 more lawsuits in the next quarter? What in the world was happening in Mississippi?

ULIZIO: We kind of scratched our heads and figured, what the heck's going on down there? I mean, we kind of knew almost as a matter of course, that they weren't real cases because, I mean, if you look in the Federal Centers for Disease Control data on silicosis, I mean, there was no indication that there was all of a sudden an epidemic of silicosis.

GOODWYN: It was unprecedented. Suddenly more silicosis cases were filed on some days in Mississippi than had previously been filed in an entire year. If true, it was evidence of one of the worst industrial disasters in American history. Yet no Mississippi public health officials were ever alerted and no public health warnings ever issued. What was going on?

The reason for the sudden legal activity was new tort reform laws which were being drawn up in the U.S. Senate and which had already passed in Mississippi. Before the new laws kicked in, plaintiff lawyers rushed to file their cases. In the fertile ground of Mississippi's industrial gulf coast, they began advertising for potential silica plaintiffs.

(SOUNDBITE OF TV AD)

Unidentified Announcer: After years of testing people for asbestosis, we have also noticed that some people were exposed to silica. Silica exposure can cause a variety of diseases, such as silicosis, lung cancer --

GOODWYN: On the left side of the television screen, the words silica testing appear in large type, then a list of occupations begins to scroll. Sandblasters, industrial painters, shipyard workers, brick masons, plumbers: 19 different professions which qualified you as a potential silicosis victim.

Announcer: If you feel that you're exposed to silica at your job site, please feel free to call us at our toll-free number.

DELFORD ZARSE: I was talking to some guy that had done this and he said he collected quite a bit of money and I see these ads in the paper, so I just signed up.

GOODWYN: Delford Zarse is a plumber in the twilight of his career. Before there were mass screenings for silicosis, there were mass screenings for asbestosis, that's how it all started. At first, the screenings targeted professions where workers were likely to have been exposed, but then some plaintiff lawyers began going from town to town, advertising to and screening the general population.

Turnout was good and thousands of new claims were generated this way. People like Delford Zarse, for example. He went to an asbestos screening in Texas. Zarse says he's not sick, but he has been a plumber for 40 years. He went to a screening and was examined by a specially trained doctor hired by the lawyers and a few weeks later, Zarse got a letter. His X-ray had come back positive.

ZARSE: Yeah.

ZARSE: You know, you get a letter saying you've got a claim for $500.00 or $1,000.00 against this company, you know, that they're going to pay.

GOODWYN: Zarse had 12 claims. Checks sometimes showed up in the mail minus 40 percent for his lawyer. He got $11,000.00. Delford Zarse smokes two packs a day and he says he almost never gets sick. He has mixed emotions now about his lawsuit, on the one hand, Zarse likes the money he got --

ZARSE: Anybody gives you money for nothing, you're crazy if you don't take it.

GOODWYN: — but his conscience bothers him too.

ZARSE: I think it's a rip-off of companies myself.

GOODWYN: The mass screenings are the heart of the controversy.

FRED KRUTZ: Most of these people didn't go to their doctor first and get a diagnosis of silicosis and then go find a lawyer. Most of these people went to their screening and got a lawyer first.

GOODWYN: Fred Krutz is a Mississippi lawyer representing the defendants: sand producers, respirator and mask makers and equipment manufacturers. In response to the flood of lawsuits, these companies went to their Republican allies in Congress for relief.

Utah Senator Orrin Hatch began drafting new legislation which, if passed, would put plaintiff lawyers out of the asbestos business for good and that unhappy prospect inspired some plaintiff firms to switch horses midstream. Instead of asbestos litigation, they'd concentrate more on silica lawsuits. Defense lawyer Danny Mulholland says in Mississippi, the well-oiled screening machine never missed a beat.

DANNY MULHOLLAND: It was the same plaintiff's lawyers involved, the same doctors involved, the same screening companies involved. In many instances, the same plaintiffs involved. What you saw was a shift in the diagnosis from asbestosis to silicosis.

GOODWYN: All of a sudden, silicosis claims in Mississippi began going through the roof and the heart of these lawsuits is the diagnoses of the doctors hired by the lawyers. It is these so-called litigation doctors who are at the center of the controversy.

JAY SEGARRA: I'm a pulmonologist so I specialize in lung diseases and what I like about doing medical legal consultation is, for one thing, there's a great deal of independence.

GOODWYN: Dr. Jay Segarra spent the first 15 years of his medical career serving his country in the Air Force. He fell into X-ray reading in Biloxi in 1991 after his discharge. The work started slowly, but then really picked up steam in the mid '90s.

Doctors like Segarra are X-ray reading specialists called B-readers and there are just a few hundred across the country. But the most prolific are responsible for a stunning number of lawsuits. For example, Dr. Segarra has diagnosed and contributed medical reports on more than 38,000 claims of asbestosis. Defense lawyers say he's made thousands of silicosis diagnoses too.

SEGARRA: I mean, yes, I may have diagnosed that many cases, and I don't know if I have or not, but they don't know how many that I have looked at and haven't found any disease.

GOODWYN: Reading lung X-rays for evidence of asbestosis or silicosis is not a perfect science. In some cases, an X-ray one doctor might read as positive, a different doctor might read as negative. Dr. Segarra says that in spite of his prodigious numbers, his diagnoses have always been done in good faith.

SEGARRA: I'm certainly not a schemer at all, but, I mean, am I opportunistic? I suppose I am, I mean, but everybody is.

GOODWYN: Segarra estimates he has made about $10 million doing this work. When called to testify, he parries cross-examinations with skill. But the Mississippi lawsuits have brought an unusually intense scrutiny. That's because the silicosis defendants decided to fight.

The cases got assigned to a Federal Judge in Corpus Christi. She ordered that the medical and exposure history on every one of the 10,000 silicosis claims be turned over to the defense lawyers, that was unprecedented. Usually the court investigates only a sample of the claims. Armed with that information, the defense lawyers also did something surprising. Defense lawyer Danny Mulholland says they ran the silica plaintiffs' social security numbers through the nation's largest asbestos databank.

MULHOLLAND: If you only knew about John Doe, who was diagnosed on February 15th, you might know everything there is to know about John Doe, but the complexion of that information changes when you know there were 110 people who walked through the same door, on the same day, to the same doctor that John Doe did.

GOODWYN: It was a eureka moment. It turned out that 68 percent of the 10,000 claimants had previously filed asbestos claims. Pulmonary experts say the number of people known to have developed both silicosis and asbestosis is infinitesimally small. But here were thousands of victims with both diseases. When Dr. Segarra is presented with evidence that he has diagnosed the same person with asbestosis one time and then silicosis the next, he says he's not surprised.

SEGARRA: Here's what I have to say about that, I have looked at thousands of X-rays and made thousands of diagnoses. If I did not, if I did not have at least one person like this, then there's something wrong. Because there's an inherent, there is an, there is a level, the nature of the science itself is imprecise. You cannot get around that.

GOODWYN: Defense lawyers call these cases retreads: in other words, people with previous asbestos claims who are later reinvented as silicosis victims, or vice versa. We showed Segarra one of his retreads: two reports, nine months apart, on the same man. The first time, Segarra diagnosed the man as having silicosis. The second time, he said the man had asbestosis. And in his second report, he wrote that he found no evidence of silicosis. Now Segarra didn't realize he was diagnosing the same man twice. The lawyers send him thousands of X-rays a year.

But what did this plaintiff have: silicosis, asbestosis, both or neither?

SEGARRA: And I really can't, it's impossible for me to say, all the factors that went into these two diagnoses being different. You can certainly pick out single cases which don't look good, like this one. I've made a totally different X-ray diagnosis from one point to the other. But what you will not find is a systematic switch over a large number of cases. You will not find that in my files.

GOODWYN: Defense lawyers say they have evidence that Dr. Segarra made scores of mistakes like this. Other B-readers made these mistakes, too. One doctor has thousands of these so-called retreads. For 15 years, these mass screenings have provided plaintiff lawyers, defense lawyers, doctors and screening company executives a handsome living. But it all started to come to apart when a federal judge in Corpus Christi was randomly assigned thousands of the silicosis claims from Mississippi.

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