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Corporate Cover-Ups

Josh and Aaron are joined by partner Mark Farris to discuss the nature of corporate cover-ups, and how FVF has succeeded in uncovering them!

Listen here or read the transcript below. FVF’s Summary Judgment podcast is available wherever you listen to podcasts including Apple Podcasts, Spotify, iHeart Radio, and more.


0:00:00.0 Aaron Von Flatern: Hey, Mark.

0:00:02.6 Mark Farris: Hey, Aaron.

0:00:02.7 AF: Hey, Josh.

0:00:03.4 Josh Fogelman: Oh, hey, Aaron. I didn’t know if you were gonna acknowledge me just sitting over here.

0:00:09.3 AF: We’ve got, Josh Fogelman, Aaron Von Flatern, and Mark Farris here today on our podcast, Mark is once again our special guest, but he’s also our law partner, so not so much of a guest. Welcome. And let me ask you, how do you start your day?

0:00:25.4 MF: I wake up, drink a pot of coffee.

0:00:31.4 AF: One?

0:00:33.6 MF: Maybe a little bit more, but a lot of coffee in the morning, workout, and then go into my office and start working.

0:00:41.8 AF: I’ll tell you how I picture you starting your day.

0:00:46.4 MF: Okay. All right. I’m curious.

0:00:48.9 AF: Well, I mean, you’re asleep at first. All right. But in your dream, you’re in a like a jungle compound. You’ve like punched one guard and then put out that guard’s cigarette in the other guard’s eye, done a front flip over some bullets while spotlights go all over the place. Hit the button, opening the cage to where all the puppies run out and thank you for not being experimented on anymore. You take the time to name each one of them and pet them all on the head. Do a back flip back into the jungle. Start running. Remember that you’re sleeping and decide to be awake. Hit the ground at a dead sprint. Go down like a fire pole to your kitchen. Grab a pot of coffee, and then get…

0:01:41.4 JF: In each hand, one pot in each hand.

0:01:43.0 AF: In each hand. Get those down, hit the laptop, start banging out a motion to compel against some evil corporation. Is that what you meant to say?

0:01:53.4 MF: Well, so no, no. Largely I dream of my teeth falling out and showing up to the court, with my underwear on, and that’s it. And not being prepared for court. Those are the dreams I have.

0:02:05.8 AF: At FVF Law we call that healthy anxiety.

0:02:10.2 MF: Okay. All right. Is that right?

0:02:11.9 AF: Yeah.

0:02:12.0 JF: We call showing up to court in only your underwear a rite of passage.

0:02:16.9 AF: That’s right. That’s right.

0:02:19.1 MF: My dreams aren’t nearly as heroic as the ones you have evidently.

0:02:21.0 AF: That’s just how I picture your… But you have done some heroic things. I mean, that’s kind of what I wanted to segue into. We wanna talk about all these corporate coverups and things that I believe you’ve kind of, you keep stumbling onto, and I don’t think it’s an accident that in your cases there tends to be some sort of misconduct, malfeasance or potentially just gross negligence, that you’re uncovering through discovery, through being tenacious with these corporate defendants. And that’s why I think of you as kind of like a legal ninja. But you might be able to give us a more granular example of like something from construction or… Tell me a story of what you’ve uncovered in working against some of these corporate defendants.

0:03:11.4 MF: Sure. Yeah. I’m gonna give a couple instances where there was pretty clearly a… I’m gonna… I think it was coverup. And certainly in one instance it was and the other one it was most likely a coverup as well. And it was very bad book.

0:03:24.2 AF: This is a conspiracy theory podcast, so we prefer the term coverup.

0:03:28.4 MF: Okay. All right. Well, I’ll stick with that then. But in one instance, you had an engineer who had completely dropped the ball, made a terrible egregious mistake, and the item that he engineered and sealed was just way under the required strength. And they didn’t appropriately evaluate it, test it before it was constructed. And as a result, there was a collapse that seriously injured a person. We were told by the defendant, in that case, the engineer, “We didn’t do anything wrong. Everything’s fine.” And then we get some of… We even had a third party, not the engineer, but some third party sent us a letter one time that said… And it was the postmortem on the accident. So the accident happens, our client was injured, the engineer says, “not our fault.” A third party sends us a letter, and it’s from the engineer.

0:04:26.6 MF: He’s like, it’s not gonna help you. It just says that the engineer wasn’t at fault and it was a bad weld. I’m like, okay. And that’s exactly what the letter said. An engineer who said it sealed it, which is saying that he is affirmatively done the requisite work to assess the integrity of what he’s saying. And he’s saying, we didn’t have a problem. This thing that he built met all applicable standards and strengths and requirements. When we got into the digging, we found some of their calculations in their postmortem. In other words, after the accident happened, they went back and checked their math. And when they checked their math, there’s just a bunch of numbers on a page handwritten, and then in a corner it said NG. And I kept seeing NG, NG, I really didn’t know what it meant, but I just knew that the numbers, I knew that there was a design flaw.

0:05:18.0 MF: I knew that the design threshold was not met. In other words, it was thousands of percent below what it should have been. And so in the first deposition of one of their engineers for this company, we asked them… Actually, we said, “that means no good, doesn’t it?” And they said, “yeah, that’s exactly what it meant. No good.”

0:05:38.6 AF: No good.

0:05:38.9 MF: Why don’t you spell it out? Well, it’s for obvious reasons. They don’t spell no good on their engineering design calculations postmortem ’cause their design was no good. And that was a clear instance of coverup.

0:05:51.7 AF: So it’s like they made this egregious mistake, but the more egregious thing was that they wrote it up and said, “oh yeah, we messed up.” And then they wrote another letter that said, “we didn’t mess up,” and certified it with a seal.

0:06:04.2 MF: Yes.

0:06:06.0 AF: That sounds like a coverup to me.

0:06:07.6 JF: Yeah. No, that’s definitely a coverup. And you know, there’s other instances. We had a recent case where a defendant, it was a construction site accident, and we represented one of the subcontractor’s employees for that site. And so whenever you get into a construction case, you need to understand kind of the who, what, where, when. Like, it’s who, it’s the who’s on the team. It’s the GC, the owner, the developer, the subcontractors, the safety people. You gotta figure out what that is, who that is. We had a case where a gentleman fell and injured himself, and it turned out that there was a wire rope railing that was not appropriately installed, or if it was appropriately installed, it was later, altered. And it didn’t have any strength at all. He relied on it and fell and had severe, severe injuries.

0:07:02.6 JF: So this instance of coverup was, really interesting because nobody was taking blame. Nobody was taking ownership of why this happened. It’s like, yeah, we understand that this safety railing that is designed to keep people within a stairway, we understand that it failed. We just don’t know why or whose fault it was. And it turns out, in that case, the general contractor somehow lost the wire rope post accident. Don’t know how, don’t know why. We also have some real interesting information by studying some of the photographs from immediately after the accident. And that’s the thing that I think is real important for any lawyers to do. And that is, don’t just look at the photographs, study the photographs of the accident scene. And by looking at the photographs, we could see that in some of the post-accident, immediately post-accident photographs, these wire rope banisters, safety banisters had only one clamp on them, They were required to have three.

0:08:16.6 JF: And you can see, okay, that’s a fundamental flaw. And then, so the accident happens. Photographs are taken. There’s only one clamp on these rails. Big problem, doesn’t look good for the company that installed them, or the general contractor that was above the company that installed them. Fast forward to the next day. We get in, you know, in discovery in cases, people send you their photographs. And the defendant sent us their photographs in the case. And in this particular case, we had photographs from the day of the accident showing one clamp. And then we have photographs from when after OSHA was notified. OSHA shows up on the scene. And of course, all experts are descending upon this place and taking thousands of pictures. And there’s one photograph of the area where we had the photograph from the day before showing one clamp, and then we show the, another photograph from the day after the accident when OSHA arrives, OSHA is photographing these clamps, and somehow three clamps got put onto these wire ropes. Nobody had even noticed those until the middle of a deposition. And it created quite a stir I think during that case, when you’re like, wow, how post accident did this evidence get altered? You know, and by the way, where is the wire rope?

0:09:35.1 AF: I so regret that I was not in the room during that moment. That just sounds so juicy.

0:09:40.8 JF: They just didn’t have an explanation for it. And even at the end of the case, nobody still wanted to take responsibility, but a few did.

0:09:49.5 AF: Well, they did.

0:09:50.5 JF: Yeah, they did.

0:09:52.2 AF: They took extreme responsibility for it.

0:09:54.1 JF: But only after they were forced.

0:09:57.1 AF: Yeah. You know, corporations are interesting because they are, for the viewers who are maybe not lawyers or the listeners who are not lawyers, corporations are legal fiction. We legally pretend that they’re a person, you know, they can be born when they file their articles of incorporation. They can die, when we’re wound down at the end, they can get married where they merge with another corporation. They can get divorced or they split into two. They can sue other people and they can get sued. And so they are illegal fiction of a person. That’s why the word corp is in there. I mean, from the word corpus in Latin, referring to the body. So it’s like we pretend this is a person, but they have a different operating system than a real human.

0:10:41.1 AF: Like the rest of us have competing interest and competing goals. We’ve got our family and loved ones, we’ve got our community. And that community binds us to a system of morals. And we kind of find equilibrium as humans that generally speaking is, within a narrow range of good behavior in society. And then you have corporations who I don’t think really have any intention of being evil. Like the individual humans inside of them are not like intending to be evil, but the way they’re set up, their operating system is geared towards making the most money. And that creates a situation where all the humans inside of the organization have to make a series of decisions to sort of optimize for money. As they do that, they fall prey to group think. So you’ve been in… You know, we’ve all worked for companies and you know how it is, you get into a room and people start saying stuff. And basically the idea that maybe we could get away with this becomes something that instead of being out of a like a legal fiction, you know, like out of a novel or a movie becomes a real thing that happens. And it’s just shocking when you actually step back from it like we just did. And look, someone actually made a decision to go put those clamps on there and try to fool the federal government about a catastrophic injury that damn near killed that man.

0:12:07.7 JF: But what was even more amazing is that if you don’t have a crusader that’s there to start peeling back the layers of the onion, they get away with it. I mean, in both of these examples, the likelihood that either of these bad actors would’ve gotten caught is virtually non-existent. I mean, in both of these examples, the cases were effectively closed from a government investigation standpoint. Saving except for the availability to us of our civil legal system, of our ability to go and ask difficult questions, and our ability to then report the answers of those questions to the regulatory and governing bodies, which is a testament to our legal system. And a testament to the hero who uncovers the coverup and fights the crusade to rectify the wrong. And that’s something that you’re really good at doing. And it’s amazing because you see these things happen in the movies and in most of the real practice of law, it’s not that complicated. It’s just a mistake was made and something happened. And I have had so many experiences with you, Mark, where you’ve been on the phone with me and you’re like, “guess what I just learned?” And I’m just like, this can’t possibly be true. This can’t possibly be true.

0:13:40.0 AF: Again.

0:13:44.1 JF: Again.

0:13:44.2 AF: Again. ‘Cause you called me last week with something else.

0:13:47.6 JF: Correct. And it is over and over and it brings a lot of life to the practice. But it also does something really meaningful for our clients. How does the discovery of a corporate concealment of bad conduct impact a case? Like, other than just the entertainment value of it and the justice that it brings to a client when they get to… Like in that engineering case where there was a failure and he was the one being, it wasn’t just like, oh, there was a bad weld. It was like, you, person who’s been catastrophically hurt, you failed to weld this appropriately. This is your fault. So you have this vindication, which is hugely important. But beyond that, how does it practically impact a case?

0:14:35.4 MF: Okay. Well, so yeah, let’s unbundle that. So I liked what you talked about the corporate defendant being a corporate fiction. Because a lot of times these corporations try to… Especially when you go to trial, they try to personalize themselves in front of the jury. And I tried several cases down in South Texas as a plaintiff’s lawyer even. And oftentimes the defense lawyer would stand up and talk about how he represents the fine people that work for Company X and every time I’ve had that happen, I stand up and I point out like, judge, that’s misleading. This lawyer does not represent any people. He represents a corporate fiction incorporated in Delaware. Absolutely does not represent anybody who works for this company. But to figure out what happened, you’ve gotta figure out what the people in the company did or didn’t do.

0:15:30.6 MF: And then the corporation owns their conduct. And so it is up to the corporation itself to have a system in place that ensures safe practices and the safety of its employees and the public. Now, going to what you said, question about how these coverups affect a case. Well, to first to uncover a coverup, I think this is my favorite part of a case, is like digging into a case and figuring out if there is a real significant coverup or a problem, or somebody’s just trying to conceal their bad conduct. And I think it’s just helpful as, a lawyer, as a human to be intellectually curious, but also a student of human nature. And I’m just saying human nature is not a great thing in our world right now. And people will do and say almost anything out of self preservation.

0:16:26.2 MF: And that starts at the top. If you don’t have an acknowledgement of responsibility at the top, don’t expect to see it with the low level worker who fails to put three clamps in versus one. So, you know, I love to explore human nature ’cause you obviously right. You have an accident happen, somebody did something wrong, usually. So figuring out what went wrong is probably the easiest part of it. What happened, you know, somebody fell. Now why did it happen? And then why did it… If everybody’s telling me, all the defense lawyers and the defendants and their experts are saying, not our fault. Why did it happen then? So you just start looking at things like documents, photographs. You start taking depositions of people. And that’s… It’s easy for a company to say, it’s not our fault, but you go take one of their depositions of their employees who’s low level, he’s got a healthy dose of self preservation oftentimes.

0:17:23.9 MF: And if he’s the person who committed the wrong act, oftentimes he’s unwilling to acknowledge that he caused it. Even in the face of irrefutable evidence. Like here, general contractor, you see where there is one clamp on day one, you understand that OSHA requires you to stop work, don’t change anything, so that they can do an investigation. Day two, all the scenes been altered. Why? Why would… What is the human… It’s self preservation. Companies don’t want to have a OSHA rep come in and see all of the mistakes they made. So they have an accident, they try to clean it up, try to act like nothing happened. And the thing about it is, photographs don’t lie. They really don’t. And engineering, I love engineering. I love the sciences because they’re hard. You can’t fudge engineering. And so yeah, looking at people’s conduct and evaluating why they’re saying what they’re saying post-accident is really helpful in understanding, you know, where they’re coming from and pushing some buttons with the defendants.

0:18:37.8 AF: Do you find that you can kind of tell from maybe one or two depositions that the company has a culture that uses, say, loyalty and sort of a soldier mentality to get the lower employees on board with the coverup that you haven’t even found yet? Have you ever had that situation where you just kind of could feel it?

0:19:06.6 MF: Yeah. You can. I mean, oftentimes you come into these cases and these defendants in these big cases, they send you all their policies first thing right out of the gate. Well, here’s our safety policies and it’s a stack of papers, you know, eight inches thick. And then you go talk to the employees who are actually charged with the responsibility of implementing those policies and procedures. And most of them haven’t even read it. You know, they don’t know it. And they don’t… And they certainly don’t employ those practices. So there’s a lot of lip service within corporations towards safety. The pragmatic employment and application of safe practices sometimes is just not there with companies. And they’re not just gonna tell you about it. You gotta find it and figure it out. And again, I think if you dig down into human nature, you’ll see why people did what they did. Oftentimes a mistake was done because crews are being pushed. So, why do these accidents happen? Companies are profit driven. They have workers who are being paid by the hour. They wanna get the most out of their workers as efficiently and effectively as possible. And oftentimes at the cost of safety. And so when you’re looking at the corporate motivations, their corporate human nature, profit oftentimes trumps safety.

0:20:29.3 JF: Profits over safety is such a common theme.

0:20:30.6 AF: Man, you know, it’s like when you know that at at least half the accidents that happen in America are due to putting profits over safety, you know that as you start to do the root cause analysis as a lawyer, that you’re the first one. ‘Cause the corporation’s not… That’s the one root cause they’re never gonna analyze. They don’t wanna analyze it. They don’t wanna know because it’s built into their operating system. And so as you start to go through it, you realize, I’m the first one who’s pointing out to them that they don’t let their employees sleep because they don’t wanna look that in the eye. And they’ve bent over backwards to cover up that fact now. And so you’ve got them in two ways. You know, the root cause is obviously against them, but then all their behavior after the accident is what really hangs them.

0:21:21.8 AF: And I’d like to say I’m shocked that we’ve seen this so many times because we’ve only talked about a few examples, and I can tell you what you said earlier is absolutely accurate that it just keeps happening. And it happens on small cases too. Sometimes there’s very small cases where it happens and it’s kind of a blip on the radar. You would think when someone was really catastrophically injured or dead, that finally we’re gonna get honesty. And unfortunately, it doesn’t seem to go that direction.

0:21:55.7 JF: Yeah. And part of our role as advocates for our clients our job is to maximize their recovery, for fairness. You’re supposed to make them whole. And one of the ways that this firm, mainly with cases that you’ve been in charge of is consistently now recovering eight figure settlements for our clients, and they’re growing, year over year is by developing a case such that it cannot be defended, and creating a risk profile for the insurance company that is so extraordinary that they have no choice but to open their checkbook and pay the client to fix or try to fix what they did. And Aaron and I have…

0:22:56.0 MF: Kind of goes back to human nature, doesn’t it?

0:23:00.6 AF: Yeah. They have to… The same kind of self-preservation that caused them to engage in the bad acts, you need to appeal to their human nature to resolve this case before it gets worse for their company than it already is.

0:23:16.0 JF: That’s right.

0:23:18.3 AF: And so their corporate leadership, human nature is what you need to appeal to in these cases by demonstrating how bad their safety is, how bad their conduct is, and how they’re not gonna be able to explain away some of these coverups or these malfeasance and problems that are existing in their work sites.

0:23:36.9 JF: But we have these cases where you have a catastrophic injury and the corporation immediately raises their hand and fesses up and they say, “You know what, it was our fault, our bad. We did it. Let’s go talk and try and get this case resolved.”

0:23:54.2 AF: That absolutely does happen.

0:23:58.3 JF: And we are fortunate in Texas that we don’t have to accept that as the end of the story for our ability to go and figure out what happened. It’s not enough, in other words, for them just to say, you know what? It was our mistake. We oftentimes wanna understand at a deeper level how the circumstances came to be that our client was put in a position to be catastrophically harmed. And only when you refuse to accept their acknowledgement at its face and do the digging and uncover what we call mud factors, you uncover the drug use of the truck driver behind the wheel of the car, you uncover the lies to a government body that propel… That digging, the uncovering of the coverup is what propels the case into a different stratosphere from a value perspective. Makes the case worth significantly more money. It makes the recovery to our clients significantly higher.

0:25:03.1 AF: And more meaningful.

0:25:07.5 JF: And more meaningful for sure than just accepting, their admission of fault and moving on. And that’s something that we’re committed to. That’s something that we routinely have done since the inception of this law firm. And there’s no one that I know in the practice of law that’s better at doing that and thereby delivering better results for their clients than you are.

0:25:31.6 MF: Well, thank you for saying that.

0:25:33.5 JF: Well, thanks for being here to talk about it.

0:25:34.4 MF: Of course.


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