## Facts

- Engelhard Corporation (predecessor to BASF Catalysts LLC) mined and sold talc products allegedly containing asbestos.
- Plaintiffs alleged Engelhard’s internal testing in the late 1960s and 1970s showed asbestos contamination and related health risks.
- Plaintiffs alleged Engelhard and its counsel, Cahill Gordon & Reindel LLP, implemented a long-term scheme to destroy, conceal, and falsify evidence about asbestos in the talc.
- In asbestos personal-injury suits, defendants allegedly represented that the talc was asbestos-free and that no tests indicated otherwise, while producing a fabricated record.
- Plaintiffs alleged they relied on those representations when settling, dismissing, or not filing asbestos-related claims, losing the chance to obtain full compensation.
- Later testimony in related state proceedings revealed allegedly suppressed test results and document destruction, prompting plaintiffs (representatives of decedents and a putative class) to file a federal action.

## Issues

1. Whether the complaint adequately pleaded New Jersey common-law fraud and fraudulent concealment.
2. Whether New Jersey’s litigation privilege barred fraud-based claims predicated on alleged evidence destruction and fabrication connected to prior litigation.
3. Whether plaintiffs stated a claim under New Jersey RICO, including the statutory requirement of injury to “business or property.”
4. Whether the requested declaratory and injunctive relief was justiciable and within federal limits, including ripeness concerns and constraints on injunctions affecting other proceedings.

## Decision

- The Third Circuit reversed the Rule 12(b)(6) dismissal of the fraud and fraudulent-concealment claims and remanded for further proceedings.
- The court held that, at the pleading stage, plaintiffs alleged material misrepresentations, knowledge/intent, reliance, and damages sufficient to proceed.
- The court rejected dismissal of the fraud-based claims on litigation-privilege grounds at the pleadings stage, concluding the privilege did not extend to the alleged systematic scheme to undermine adjudication through spoliation and fabricated evidence.
- The court affirmed dismissal of the New Jersey RICO claim because plaintiffs alleged harms tied to personal-injury recoveries and loss of fair adjudication, not injury to “business or property” as required by the statute.
- The court affirmed in part and vacated/clarified in part as to equitable relief: sweeping requests (e.g., preemptively barring res judicata defenses in future cases) were not ripe or exceeded permissible judicial relief, but narrower relief aimed at preventing ongoing spoliation or continued use of fabricated evidence was not categorically barred.

## Legal Principles

- A fraud or fraudulent-concealment claim under New Jersey law may be pleaded based on intentional misrepresentation or concealment of material facts, reliance in litigation decisions (including settlement or forgoing suit), and resulting economic harm.
- New Jersey’s litigation privilege protects certain litigation-related communications, but it does not necessarily immunize alleged long-running conduct involving destruction, concealment, or fabrication of evidence aimed at corrupting judicial proceedings.
- New Jersey RICO requires a concrete injury to “business or property”; alleged impairment of personal-injury tort recoveries and loss of a fair adjudicatory process does not satisfy that element.
- Federal courts may deny declaratory or injunctive relief that is overbroad, advisory, or unripe, particularly where it would pre-decide defenses or interfere with future, unspecified litigation; more targeted equitable relief tied to ongoing wrongful conduct may remain available if supported by the merits and jurisdictional constraints.

## Conclusion

The Third Circuit permitted asbestos claimants’ fraud-based claims to proceed where defendants allegedly concealed and fabricated evidence over decades, while holding that New Jersey RICO did not apply absent business-or-property injury and limiting equitable relief to forms that present a concrete, justiciable controversy and do not preemptively control future litigation defenses.


Williams v. BASF Catalysts LLC, 765 F.3d 306 (3d Cir. 2014)