Carmakers Lose Asbestos Appeal
The Supreme Court on Monday refused to hear a request by the nation’s automakers to transfer more than 10,000 asbestos injury and death claims into Bankruptcy Court in an effort to limit their exposure to liability.
The decision was one of several issued by the highest court Monday that affected businesses, including a ruling that let stand a lower court’s dismissal of nationwide class-action status for claims of Ford Explorer owners.
Plaintiffs suing Ford Motor Co. are seeking compensation for the reduced resale value of Explorers and for paying more than they should have for sport utility vehicles that could roll over and have tires that could lose tread, putting owners at risk of death or injury. The ruling applies to more than 3 million owners of Explorers made between 1991 and 2001.
Another ruling left intact a $1-billion jury verdict against UST Inc., the largest smokeless tobacco maker, for vandalizing a competitor’s store displays.
In the asbestos cases, the automakers had sought to have all the claims heard as a part of auto parts maker Federal-Mogul Global Inc.’s bankruptcy proceedings. The goal of the automakers was to win a single forum in a federal court in which to decide whether asbestos in brakes and other friction products poses a hazard to workers, said David Bernick, a Chicago-based lawyer who represents the auto companies.
“We wanted to have all the cases consolidated for purposes of getting a clear ... ruling that we were right on the science,” Bernick said.
The suits allege that workers have been injured and killed from their exposure to asbestos in automotive friction products and that the automakers should have known that putting asbestos parts in their vehicles would hurt people.
If such a hearing were held in Bankruptcy Court, it would have been governed by the federal standards for the admissibility of scientific evidence, which are considered more favorable to defendant corporations than those in many state courts.
Legal observers on all sides of asbestos litigation did not expect the cutting-edge use of bankruptcy laws to succeed.
“People thought it was such a Hail Mary,” said Mark Behrens, counsel to the Coalition for Asbestos Justice, a group of insurers lobbying for asbestos litigation reform. Behrens said it was one of several efforts by corporations to escape the mass trials in states including Mississippi and West Virginia, venues in which defendants believe it is impossible to get a fair trial.
Lower courts are split on whether and under what circumstances solvent companies should be allowed to join the Bankruptcy Court proceedings of others to resolve outstanding litigation and put a halt to future claims, said Marcus Cole, a Stanford University bankruptcy law professor. Cole says such efforts are a misuse of bankruptcy protections.
“There’s really never a legitimate circumstance under which a third party, non-debtor ought to be able to receive bankruptcy protection” from future claims, he said. “If they can live to fight another day, they ought to be able to stand up and fight the future claims that might come against them.”
Also Monday, the Supreme Court signaled it may use a dispute between computer-chip makers Intel Corp. and Advanced Micro Devices Inc. to spell out the rights of companies to demand documents from rivals that face overseas probes.
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Times wire services were used in compiling this report.
