The U.S. Supreme Court Thursday agreed to allow an insurance company to settle some asbestos lawsuits in exchange from blocking any future litigation resulting from Travelers Cos. long relationship with Johns Manville Corp., formerly the country’s largest producer of asbestos.

In Travelers Indemnity Co. v. Bailey, the justices, voting 7-2, overturned a lower court ruling that allowed litigation to be filed against units of Travelers by people harmed by asbestos exposure.

From the 1920s to the 1970s, Manville was the largest supplier of raw asbestos and manufacturer of asbestos-containing products in the U.S. For much of that time, Travelers was Manville’s primary liability insurer. In 1982, Manville’s overwhelming liabilities for asbestos-related illnesses forced the company into bankruptcy.

Travelers settled with several groups of plaintiffs in 2004 with the stipulation that federal courts make it clear that the insurance company would not have to face similar lawsuits.  Manville’s insurers paid $770 million to plaintiffs who had filed the asbestos litigation, including $80 million which came from Travelers.

The 2nd U.S. Circuit Court of Appeals overturned a lower-court approval of the settlement, saying the bankruptcy judge lacked the authority to impose such a broad order.

The Supreme Court reversed and remanded the decision back to the bankruptcy court.

Sandler, O’Neill & Partners analysts Paul Newsome told the Associated Press, “One of the big issues for asbestos liability has been that companies think they have maxed out their limit and they think they have paid all their claims and all of a sudden they have either new claims or old claims that somehow get bigger.”

Retiring Justice David Souter authored the opinion of the high court, which made it clear that the ruling only applied to the Travelers case.

However, Justices John Paul Stevens and Ruth Ginsburg dissented from the majority. Stevens said he believes that the 1986 Travelers settlement order does not prevent independent actions from those plaintiffs who were not part of the original settlement.

Asbestos was commonly used until the mid-1970s in insulation and fireproofing. Exposure can increase the risk of lung cancer, mesothelioma and other potentially deadly illnesses. 

Metatags: asbestos poisoning lawsuits, U.S. Supreme Court decision, John Manville bankruptcy, Travelers insurance companies, asbestos liability limits, Justice David Souter, Travelers Indemnity Co. v. Bailey, mining and metals, mining, asbestos mining. mesothelioma

 

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STRAP HEADLINE: MANVILLE WAS LARGEST U.S. ASBESTOS SUPPLIER

HEADLINE: Supreme Court upholds limits on Travelers’ settlement of Manville asbestos litigation

Dorothy Kosich

The U.S. Supreme Court has upheld a bankruptcy court decision limiting future litigation against the Travelers Group of insurance companies stemming from asbestos poisoning by products manufactured by Johns Manville Corp.

RENO, NV

The U.S. Supreme Court Thursday agreed to allow an insurance company to settle some asbestos lawsuits in exchange from blocking any future litigation resulting from Travelers Cos. long relationship with Johns Manville Corp., formerly the country’s largest producer of asbestos.

In Travelers Indemnity Co. v. Bailey, the justices, voting 7-2, overturned a lower court ruling that allowed litigation to be filed against units of Travelers by people harmed by asbestos exposure.

From the 1920s to the 1970s, Manville was the largest supplier of raw asbestos and manufacturer of asbestos-containing products in the U.S. For much of that time, Travelers was Manville’s primary liability insurer. In 1982, Manville’s overwhelming liabilities for asbestos-related illnesses forced the company into bankruptcy.

Travelers settled with several groups of plaintiffs in 2004 with the stipulation that federal courts make it clear that the insurance company would not have to face similar lawsuits.  Manville’s insurers paid $770 million to plaintiffs who had filed the asbestos litigation, including $80 million which came from Travelers.

The 2nd U.S. Circuit Court of Appeals overturned a lower-court approval of the settlement, saying the bankruptcy judge lacked the authority to impose such a broad order.

The Supreme Court reversed and remanded the decision back to the bankruptcy court.

Sandler, O’Neill & Partners analysts Paul Newsome told the Associated Press, “One of the big issues for asbestos liability has been that companies think they have maxed out their limit and they think they have paid all their claims and all of a sudden they have either new claims or old claims that somehow get bigger.”

Retiring Justice David Souter authored the opinion of the high court, which made it clear that the ruling only applied to the Travelers case.

However, Justices John Paul Stevens and Ruth Ginsburg dissented from the majority. Stevens said he believes that the 1986 Travelers settlement order does not prevent independent actions from those plaintiffs who were not part of the original settlement.

Asbestos was commonly used until the mid-1970s in insulation and fireproofing. Exposure can increase the risk of lung cancer, mesothelioma and other potentially deadly illnesses.