Asbestos Trust Claims in Court in Asbestos Cases

Decisions in our library in which the court ruled on asbestos bankruptcy trusts: 123 cases, by state. Each line gives what the court held, in our words; the law differs from state to state and changes, so read the opinion and talk to a lawyer before relying on any of them.

About this issue

More than 60 asbestos bankruptcy trusts pay claims for the companies that set them up. A person with mesothelioma often files claims with several trusts and also sues companies that are still solvent. Courts have had to decide how the two fit together.

Issues in this section include:

• Disclosure: whether plaintiffs must disclose trust claims and the exposure evidence they submitted. A number of states have passed trust transparency laws that require disclosure, set deadlines for filing trust claims, or allow a trial to be delayed until they are filed.
• Consistency: defendants argue that exposure described in trust claims contradicts testimony in the lawsuit.
• Credits: whether, and how, trust payments reduce a judgment against the remaining defendants.
• Allocation: in some states a jury may assign a share of fault to a bankrupt company, reducing what the remaining defendants pay, whether or not a trust claim was filed or paid.
• Discovery of trust materials and the trusts' own records.

Read more about how asbestos trust claims work.

California

• Darden v. Western Asbestos Settlement Trust (In re Western Asbestos Settlement Trust) (2022). Under California law, a third party not named in a release may enforce it if a reasonable person in the releasor's position would understand it was intended to cover that party, and claim preclusion under the primary rights theory bars a second asbestos claim against a predecessor in privity with the released defendant. A trust that compensates asbestos exposure claims need not pay heirs' wrongful death claims when no underlying compensable claim exists.
• Darden v. Western Asbestos Settlement Trust (In re Western Asbestos Co.) (2021). A California wrongful death claim belongs to the heirs, so a decedent's release does not bind them. A confirmed plan and trust documents are a contract, and where they unambiguously compensate only claimants who were exposed to asbestos and have a covered disease, the trust need not pay heirs' independent wrongful death claims.
• Darden v. Western Asbestos Settlement Trust (In re Western Asbestos Co.) (2021). Under California law a third party may enforce a general release if the contracting parties intended to benefit it, and a release of a successor's 'predecessor entity' covered the predecessor's negligence liability. A dismissal with prejudice of the same primary right in the earlier suit also barred the later claim by claim preclusion.
• Stewart v. Union Carbide Corporation (2nd Appellate District, 4th Division, 2017). A spouse who could have sought postdeath loss of consortium damages in the injured spouse's earlier personal injury trial is barred by res judicata from claiming them in a later wrongful death action. Unallocated settlements may be credited against a wrongful death economic damages award, and an overbroad allocation is not reversible where a smaller allocation would still offset the whole award.
• Flintkote Co. v. Aviva Plc (2016). Under California law and Fuller-Austin, an excess insurer's obligation to pay amounts the insured is 'obligated to pay' to a section 524(g) asbestos trust is limited to the trust's payment percentage, not the liquidated value. California Insurance Code section 1616 mandates a bond from a nonadmitted alien insurer that files a pleading.
• Flintkote Company v. Aviva Plc (2016). Under California law, following Fuller-Austin, an insurer whose policies cover sums the insured is 'obligated to pay' owes only the payment percentage the insured's § 524(g) asbestos trust actually pays claimants, not the claims' full liquidated value. Cal. Ins. Code § 1616 makes a bond mandatory for a nonadmitted alien insurer filing pleadings.
• In re Cfb Liquidating Corporation (2016). A chapter 11 plan is a contract interpreted under general contract rules (here Illinois law). The plan's term "allocated percentage" has its ordinary meaning, so an allocation of 100% is an allocation and no equitable contribution analysis was required.
• Hellam v. Crane Co. (1st Appellate District, 4th Division, 2015). Preverdict settlements are credited against economic damages by the Espinoza method regardless of the settling defendants' fault, while postverdict settlements are credited under the Torres method, and a settlement executed after the verdict is a postverdict settlement. A court need not reduce a judgment for uncertain future asbestos bankruptcy trust recoveries that have not been received.
• Hernandezcueva v. EF Brady Company, Inc. (2nd Appellate District, 4th Division, 2015). A subcontractor that both supplies and installs a defective product can be held strictly liable if it took part in the product's stream of commerce and the product sale was not merely incidental to its services; this is a fact-sensitive question. A claim of judicial misconduct is forfeited if no timely objection was made and no showing of futility is made.
• Paulus v. Crane Co. (2nd Appellate District, 3rd Division, 2014). Expert testimony read in context, together with other evidence of frequent and repeated exposure, can support a finding that a defendant's own asbestos products were a substantial factor in increasing the risk of mesothelioma. A defendant gets no setoff for speculative future bankruptcy trust recoveries, because the statutory setoff applies only to settlements made before verdict or judgment.

Colorado

• Fibreboard Corp. v. Fenton (1993). State-of-the-art evidence is admissible in strict liability failure-to-warn claims to show a product was not defective and unreasonably dangerous because the risk was not known or knowable. Under the pre-1986 set-off statute, settlement amounts must actually be collected before they can be set off against a joint judgment.
• Fenton v. Fibreboard Corp. (5th Division, 1991). In a strict liability case the focus is on the product, not the manufacturer's knowledge, so evidence of what the manufacturer knew bears only on punitive damages. A set-off for a settlement not yet paid may be handled by ordering any later payment applied to the judgment, with the defendants remaining liable if it is never collected.

Delaware

• Burhenn v. Celotex Asbestos Settlement Trust (2024). A claim against an asbestos settlement trust is governed by the trust plan's own filing deadline (three years from first diagnosis), and tolling under the plan applies only if the trust claim was timely filed. Even under ordinary limitations law, via Delaware's borrowing statute, the claim was time-barred, and cross-jurisdictional tolling does not apply where the original foreign filing was untimely.
• Braxton v. J-M Mfg. Co. (In re Asbestos Litigation) (2024). Under Texas Civil Practice and Remedies Code § 33.004, a defendant need only plead a factual basis showing a third party's potential responsibility to designate it. A bankruptcy proof of claim can support that pleading, and a designation after limitations has run is not barred where the defendant timely disclosed the third parties.
• In re Paddock Enterprises, LLC (2022). A bankruptcy court has post-confirmation subject matter jurisdiction over a subpoena dispute that has a close nexus to implementing and administering the confirmed plan and trust agreement, and although compliance burden was significant it did not outweigh relevance, so the subpoenas were not quashed but the responding party is entitled to reasonable expenses.
• In re Energy Future Holdings Corp. (2020). A Chapter 11 plan may discharge latent asbestos claims not filed by the bar date if claimants have an adequate chance to seek reinstatement under Rule 3003(c)(3). Section 363(m) bars relief that would alter the sale's terms, and there is no due process exception to it.
• Aiu Insurance Company v. Philips Electronics North America Corporation (2018). A contract clause giving insurers the right to "audit" payments made by an asbestos trust is ambiguous where both parties' readings are reasonable, so extrinsic evidence is needed. A non-party trust cannot be bound to the settlement agreement, and offset claims fail without pleaded conditions precedent.
• In re Motions for Access OF Garlock Sealing Technologies LLC (2013). Rule 2019 exhibits filed with the bankruptcy court are judicial records carrying a presumptive common-law right of public access, which the objecting parties did not rebut. Alternatively, there was good cause to modify the 2019 Orders to allow access.
• Motions for Access OF Garlock Sealing Technologies LLC (2013). Rule 2019 exhibits filed with the bankruptcy court are judicial records carrying a presumptive common law right of public access, and the party opposing access must show that secrecy outweighs it. Alternatively, the court found good cause to modify the confidentiality-type orders under the Pansy balancing test.
• In re WR Grace & Co. (2012). A § 524(g) asbestos trust and channeling injunction may be confirmed where they are fair and equitable in light of the contributions made to the trust, they cover only derivative third-party liability, and the plan treats similar claims in substantially the same manner. Bankruptcy Code § 1123(a)(5)(B) preempts anti-assignment clauses in insurance policies so that the policy rights can be transferred to the trust.
• In re WR Grace & Co. (2012). A Chapter 11 asbestos plan satisfies Section 524(g) and the Bankruptcy Code if its trusts, channeling injunction, claim classifications and payment procedures treat similar claims alike. Liability insurance policies and their proceeds are property of the debtor's estate, and Bankruptcy Code Section 1123(a)(5)(B) preempts anti-assignment clauses in insurance policies.
• In re ACandS, Inc. (2011). A non-party with no claim in the bankruptcy cases, alleging only speculative injury from its own past tort settlements, lacks Article III and prudential standing to intervene, and Rule 2019 statements are not a discovery tool to be opened to it for a private purpose.
• In re Federal-Mogul Global Inc. (2008). A Section 524(g)(4)(A)(ii) channeling injunction cannot cover non-debtor third parties whose asbestos liability arises from their own conduct and products rather than derivatively from the debtor, and an unincorporated division is not a "predecessor in interest." The court also treated the injunction's lack of necessity to reorganization as a significant factor against issuing it.
• In re Armstrong World Industries, Inc. (2006). Under the Markell rebuttable-presumption test, a plan does not discriminate against a dissenting unsecured class if the plan proponents show by a preponderance of the evidence that the asbestos personal injury liability estimate is reasonable, so the class's percentage recovery is not materially lower than the asbestos claimants'. Estimation must be based on state tort law and the debtor's historical experience, adjusted for probable changes.
• In re Federal-Mogul Global, Inc. (2005). In estimating aggregate asbestos liability under 11 U.S.C. § 502(c) to fund a personal injury trust, the court may choose the estimation methodology it finds more reliable. The estimate rests on the debtor's own claims history, a disease-incidence model, and adjusted discount and inflation rates, rather than on mathematical precision.
• In re ACandS, Inc. (2004). A § 524(g) channeling injunction requires a trust that will value and pay similar present and future claims in substantially the same manner, and a plan that gives secured preference to some claimants and was driven by a plaintiffs' lawyers committee cannot be confirmed under § 1129(a)(1) or (a)(3).
• In re Usg Corp. (2003). Bankruptcy jurisdiction does not displace state law governing the substance of claims, so the court has discretion over claims administration but none over substantive law. It may therefore sequence estimation to address the cancer claimants first.

Florida

• Union Carbide Corporation v. Font (3rd District, 2020). A defendant may present evidence of alternative causes, such as a decedent's own sworn asbestos claims against non-parties, without proving those non-parties' fault by expert testimony; and a learned intermediary instruction must let the jury understand that reasonable reliance on an intermediary fulfills or discharges the duty to warn.

Indiana

• Casper v. LE Isley & Sons, Inc. (2007). Under Ind. Code § 22-3-7-36(b), an employer is released from liability for compensation once the employee has settled with third parties and received no compensation from the employer, so dismissal is not premature even if further bankruptcy trust claims may be filed.

Iowa

• Beverage v. Alcoa, Inc. (2022). Iowa Code section 686B.7(5) codifies a broad component-parts (bare-metal) defense that applies only to products liability claims, shielding manufacturers or sellers from liability for products or parts made or sold by third parties. It does not bar premises liability claims or claims against a seller of the offending product.
• Kinseth v. WEIL-McLAIN Company (2017). A trial court abuses its discretion by denying a mistrial when counsel persistently violates in limine rulings in closing argument, such as references to defense spending, corporate wealth, sending a message and other lawsuits, so that a different result was probable. Fault may be allocated only to released parties against whom the plaintiff has a viable claim, which excludes exposures barred by the statute of repose.
• Spaur v. Owens-Corning Fiberglas Corp. (1994). Asbestos plaintiffs may prove causation under a flexible substantial-factor test, with circumstantial evidence of exposure to the defendant's product, without proving how much that product contributed to the disease. Punitive damages in asbestos cases are not per se unconstitutional, and the defendant bears the burden of showing a due process violation.

Kansas

• Little v. Budd Co. (2018). The Safety Appliance Act preempts only state claims about devices listed in the statute, and pipe insulation is not listed. Whether the Locomotive Inspection Act preempts the claims turns on a disputed fact: whether the insulated pipes were locomotive appurtenances.

Kentucky

• Bruszewski v. Motley Rice, LLC (2012). Under Kentucky law, a malpractice claim for failing to file suit before the limitations period ran accrues when that period expires, even if the client could still recover from bankruptcy trusts. Kentucky law does not allow recovery of "lost" punitive damages in a legal malpractice action.

Louisiana

• Marsh v. Continental Insurance Company (2023). In maritime asbestos cases, the liability of non-settling defendants is calculated in proportion to the jury's allocation of responsibility rather than by a pro tanto credit, which applies only when fault cannot be fairly apportioned. Maritime asbestos litigation is not 'non-ordinary' so as to justify a departure from this rule.
• Robichaux v. Huntington Ingalls Inc. (2023). A corporate representative may testify to matters within the corporation's knowledge regardless of personal knowledge. A request for information a party will not provide is a motion to compel, not a motion in limine, and the court will not reopen closed discovery through an evidentiary motion.
• Gomez v. Aardvark Contractors, Inc. (2020). Under Louisiana's pre-comparative-fault solidary liability law, a defendant gets a virile share credit only if the plaintiff released the party through settlement and that party's liability as a joint tortfeasor is established at trial. Factual disputes about exposure and causation prevented the court from treating the Johns-Manville Trust as a joint tortfeasor in advance.
• Oddo v. Asbestos Corporation Ltd. (4th Circuit, 2015). When a jury's special-verdict answers are irreconcilably inconsistent and the trial court neither sends the jury back nor orders a new trial, that is legal error, and the appellate court reviews the affected findings de novo. In asbestos cases a plaintiff must show exposure to the defendant's product was significant and a substantial factor in causing the disease.
• Terrance v. Dow Chemical Company (1st Circuit, 2007). Mesothelioma was not a compensable occupational disease under the pre-1975 Louisiana workers' compensation statute, so the tort claim against a premises owner was not barred. A defendant seeking a credit for a settling party's fault must prove that party's fault at trial; settlement documents are not admissible to prove it.
• Abadie v. Metropolitan Life Ins. Co. (5th Circuit, 2001). A product is unreasonably dangerous per se if its danger-in-fact outweighs its utility, regardless of the manufacturer's knowledge. Working near contractors who cut the product is enough evidence of exposure to support liability.
• Abadie v. Metropolitan Life Ins. Co. (5th Circuit, 2001). In a long-latency asbestos case, a cause of action accrues, for choosing between pre- and post-1976 law, when exposures were significant enough to start a disease process that progresses independently of further exposure. Under pre-comparative-fault Louisiana law, a settling or bankrupt solidary obligor found liable counts as a virile (pro rata) share, and co-employee safety officers are liable only for a personal breach of a delegated duty.

Maryland

• Colvin v. Eaton Corporation (2019). A discovery plan approved by the court that did not require the plaintiff to produce non-party fact witnesses for deposition could not support a dismissal with prejudice for failure to produce them. Under the scheduling orders, defendants could locate and subpoena those witnesses themselves.
• National Union Fire Insurance Company OF Pittsburgh, PA v. Porter Hayden Company (2014). Under Maryland law, an insurer that was notified of claims and chose not to respond cannot rely on a voluntary obligation or consent-to-settle provision to deny coverage, but it may still challenge the reasonableness of the settlements. The insurer has the burden of production and the insured has the ultimate burden of persuasion on reasonableness.
• National Union Fire Insurance Company OF Pittsburgh, PA. v. Porter Hayden Company (2014). Expert testimony is excluded under Rule 702 when it rests on 'logic' and experience without reliable methodology or sufficient facts, or when it applies a legal rule the court has rejected. Challenges based on bias or data limits go to weight, not admissibility.
• Scapa Dryer Fabrics, Inc. v. Saville (2011). Evidence of regular work within arm's length of the defendant's asbestos-containing felts can satisfy the frequency, regularity and proximity test for substantial-factor causation, and a bankruptcy trust is a joint tortfeasor for offset purposes only as its settlement agreement provides.
• Scapa Dryer Fabrics, Inc. v. Saville (2010). A defendant seeking to reduce a verdict for payments from bankruptcy trusts under Maryland's contribution act must prove the trusts are joint tort-feasors. JNOV in a jury trial requires a motion for judgment at the close of all evidence. A manufacturer's duty to warn can continue after the plaintiff's exposure, so later-dated evidence of its knowledge can be relevant.
• Scapa Dryer Fabrics, Inc. v. Saville (2009). Circumstantial evidence of regular, close-range exposure to a defendant's asbestos product meets Maryland's frequency-regularity-proximity test for substantial-factor causation. A party seeking a verdict reduction for payments by claimed joint tort-feasors, such as bankruptcy trusts, must prove their joint tort-feasor status. A duty to warn can continue after exposure ends, so later-dated evidence of the defendant's knowledge can be relevant.
• Anchor Packing Co. v. Grimshaw (1997). The Maryland cap on noneconomic damages applies to asbestos wrongful death claims arising after October 1, 1994. For personal injury claims, the cause of action arises when the disease develops, not at exposure or at diagnosis. Substantial-factor causation requires evidence of the frequency, regularity and proximity of the plaintiff's exposure to the defendant's product.

Massachusetts

• Barraford v. T & N Limited (2014). A Chapter 11 plan confirmation with a discharge and channeling injunction lifts the automatic stay, so 11 U.S.C. § 108(c) gave only 30 days to sue after that. A tolling letter between class counsel and the CCR did not cover plaintiffs who were not that firm's clients, and equitable tolling did not apply.
• Barraford v. T&N Limited (2013). Under Massachusetts law, an asbestos plaintiff must show product identification, exposure through working with or in close proximity to the product, and that exposure was a substantial contributing factor; a prior deposition from a state case is admissible as former testimony where the earlier defendants had a similar motive and opportunity to examine the witness.