Travelers Companies Inc. was sued for hiding the dangerous effects of asbestos. Travelers argued that the trust created by Johns Manville Corporation in 1986 should pay for the asbestos claims.Travelers made the trust in 2004 and included a clause that said they would never have to deal with asbestos related lawsuits ever again. A court ruled in favor of the clause, but was later overruled by a federal appeals court, who felt that the lower court’s judge acted too broadly.
Then, the Supreme Court overruled the federal appeals court and said that Travelers can settle all the lawsuits filed over injuries caused by exposure to asbestos for a total of $500 million.
David Souter who is writing the court’s 7-2 opinion stated that, “So long as respondents or those in privity with them were parties to the … bankruptcy proceedings, and were given a fair chance to challenge the bankruptcy court’s subject matter jurisdiction, they cannot challenge it now by resisting enforcement of the 1986 orders.�
Justice John Paul Stevens disagreed with the ruling and said that the 1986 order, “bars only those claims against Manville’s insurers seeking to recover against the insurers for their own misconduct.�
The court did not decide if all of the people who want to challenge the settlement are bound by the Manville Trust agreement. The ruling only applies to the Travelers case. Asbestos exposure can lead to mesothelioma which is a form of cancer.
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