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.

Minnesota

• In re Api, Inc. (2005). A party objecting to Chapter 11 plan confirmation must satisfy constitutional and prudential standing for each issue it raises, and § 1109(b) does not override that requirement. A § 524(g) asbestos trust plan that preserves insurers' pre-petition rights and substitutes the trust as insured does not impair those rights.

Mississippi

• Illinois Central Railroad Company v. Oakes EX rel. Hagan (2018). Under FELA, a railroad defendant is entitled to a dollar-for-dollar (pro tanto) setoff against a verdict for money already paid to the plaintiff for the same injuries; Ayers bars apportioning fault to nonparties but does not bar setoffs.

Missouri

• Poage v. Crane Co. (Eastern District, 2nd Division, 2017). A plaintiff can show a valve maker's product was a substantial factor in causing mesothelioma through a co-worker's testimony about shared work on the valves, and the maker owes a duty to warn and to design safely where its valves required or specified asbestos gaskets and packing. Missouri's statutory cap on punitive damages does not apply to this wrongful death action, and a defendant's setoff under § 537.060 is limited to settlements actually reached, not possible future asbestos trust recoveries.
• Urbach v. the Okonite Company (Eastern District, 2017). Under Wisconsin substantive law, co-worker testimony and expert bystander-exposure evidence can support a jury finding that a defendant's asbestos product was a substantial factor in causing mesothelioma. Wisconsin's wrongful-death cap applies after fault is apportioned, and the Wisconsin statute requiring assignment of asbestos trust claims before collecting a judgment is procedural, so Missouri law governs it.
• Wagner v. Bondex International, Inc. (Western District, 2012). Missouri requires but-for causation (the substantial factor test applies only in two-fires cases), and a plaintiff must identify the defendant's asbestos-containing product as the source of exposure. Section 537.060 reduces a judgment only by settlements actually made, not by trust payments the plaintiff never sought.

Montana

• Wells v. BNSF Railway Company (2023). Under Montana's comparative-fault statute, a defendant may not assign fault to an unsettled nonparty such as W.R. Grace, and must prove a settled party's negligence with expert testimony where the issues are beyond lay knowledge. The HMTA and FRSA do not preempt state-law claims over transporting asbestos-bearing vermiculite ore.

New Jersey

• In re Ltl Management, LLC (2022). A chapter 11 petition is dismissible for lack of good faith only if it serves no valid bankruptcy purpose or is filed merely for a tactical litigation advantage. Using a Texas divisional merger to create a debtor that seeks to resolve present and future talc claims through a settlement trust did not show bad faith.
• In re Congoleum Corp. (2009). Pre-petition settlement payments to claimants who retained no stub claims against the estate did not create unequal treatment under Combustion Engineering, but fees paid to claimants' counsel are subject to court approval as reasonable under 11 U.S.C. § 1129(a)(4). Dismissing a Chapter 11 case sua sponte without notice and a hearing on creditors' best interests was an abuse of discretion.
• In re Congoleum Corp. (2007). A § 524(g) plan must give the trust a majority of voting shares through a contingency that would operate while the shares still have meaningful value, and must treat similar asbestos personal injury claims in substantially the same manner. Separate classification and preferential treatment of pre-petition settling claimants violates that requirement.
• In re GI Holdings, Inc. (2005). Asbestos personal injury claimants hold Seventh Amendment and statutory jury trial rights that a § 502(c) estimation for distribution cannot strip, so a matrix that finally liquidates claims without a jury is rejected; the court may estimate aggregate liability and decide the legal validity of claims.

New York

• Matter of New York City Asbestos Litig. (2017). The Coordinating Judge issued a case management order setting procedures for all NYCAL asbestos personal injury and wrongful death cases, superseding earlier orders effective July 20, 2017; no party won or lost.
• In re Johns-Manville Corp. (2016). A person exposed to asbestos before the debtor's petition date holds a prepetition claim even if disease appears later. Such a claim against a Manville subsidiary is discharged by that subsidiary's plan and is also channeled to the Manville Trust under the Manville injunction, and notice by publication plus a future claims representative satisfied due process.
• Assenzio v. AO Smith Water Prods. Co. (2015). After verdict, a court may mold the judgment using the aggregate amount of settlements (the Didner method) without disclosing individual settlement agreements or amounts. Disclosure is not required where plaintiffs timely disclosed their claims and the agreements show no new liability information.
• Konstantin v. 640 Third Ave. Assoc. (2014). A court may vacate or revisit a judgment under CPLR 5015(a) or in the interests of justice, but reopening discovery after judgment requires newly discovered evidence, misconduct, or a reasonable basis to think the discovery would yield relevant information. An unrelated bankruptcy court's findings about abuse by other plaintiffs did not supply that basis.
• Konstantin v. 640 Third Ave. Assoc. (2014). A court may vacate a judgment under CPLR 5015(a) or in the interests of justice, but reopening discovery needs newly discovered evidence, misconduct, or a reasonable basis to think the subpoenas would reveal relevant information. Plaintiff's failure to update an interrogatory answer after filing trust claims did not amount to misconduct here.
• Carmody v. DAP (Matter of New York City Asbestos Litig.) (2014). Under Kapon v Koch, a movant seeking to quash a non-party subpoena must show the discovery is utterly irrelevant or the process futile, and a subpoenaing party need only show the material is relevant to the action. Trust claim submissions are relevant and discoverable.
• Garner v. Ngc Bodily Injury Trust (2012). Under New York CPLR 214-c, a personal injury claim accrues when the physical condition or symptoms of the latent disease appear, not when its cause is discovered. The earlier ruling on the accrual date therefore barred relitigation by collateral estoppel, and the claims were time-barred in any event.
• In re Quigley Company, Inc. (2010). A plan is not proposed in good faith under 11 U.S.C. § 1129(a)(3) when the parent seeking a § 524(g) channeling injunction buys the votes needed for acceptance through side settlements. A § 524(g) injunction is fair and equitable only if the third party's contribution is consistent with its likely liability outside bankruptcy. The best-interests test also counts the claims that dissenting creditors keep against the non-debtor.
• In re Quigley Co., Inc. (2008). A person exposed to asbestos before the petition date holds a bankruptcy "claim" even if state law delays enforcement of the cause of action until a future event, so state tort reform statutes that defer unimpaired asbestos claims do not affect the right to vote on a plan.
• In re Quigley Co. (2006). A bankruptcy court has discretion to estimate unliquidated asbestos claims for voting so that voting power matches economic interests. The $1.00-per-vote method is acceptable only when it is harmless error, and claimants' contractual 90% reduction of their recovery can be reflected in a reduced vote.
• Falise v. American Tobacco Co. (2000). A RICO plaintiff relying on mail or wire fraud must show reliance, which is less demanding for a broad scheme aimed at the public, and must show proximate cause under the Holmes factors. The Trust could not show its own reliance for the settlement and litigation theories, but could show the claimants' reliance for the direct payment theory.
• Ciletti v. Raymark Indus. (In re Asbestos Litigation) (1997). A defendant asserting the military contractor defense to a design defect claim must prove every Boyle element, including warnings to the government, and merely raising some elements is not enough. New York does not recognize a child's claim for loss of parental consortium, and filing a proof of claim with the Manville Trust is not a settlement that supports a set-off under General Obligations Law § 15-108.
• In re Joint Eastern & Southern Dist. Asbestos Lit. (1990). A federal court may enjoin pending state and federal suits against an insolvent asbestos personal injury trust, despite the Anti-Injunction Act, under the "in aid of jurisdiction" and "protect or effectuate judgments" exceptions, the All-Writs Act, and Bankruptcy Code section 105(a), to prevent inequitable distribution of limited trust assets.
• Kane v. Johns-Manville Corp. (1988). A creditor harmed by a reorganization plan may appeal, but may not assert the rights of future claimants or of other creditors who are already represented in the case or who accepted the plan. Voting-procedure irregularities that could not have changed the outcome of the vote are harmless error and do not defeat confirmation.

North Carolina

• In re Alrich Pump, LLC (2023). A motion to stay pending appeal under Bankruptcy Rule 8007 is judged by the four preliminary-injunction factors in the Fourth Circuit; the court found all four favored a stay of an order requiring the claimants to identify themselves publicly.
• Non-Party Certain Matching Claimants v. Aldrich Pump LLC (2023). A stay pending appeal is judged under the four-factor preliminary injunction standard (likelihood of success, irreparable harm, balance of equities, public interest), and all four were met where disclosure of claimants' identities would moot the appeal and expose confidential information.
• The Manville Trust Matching Claimants v. Dbmp, LLC (2023). A decision whether to allow parties to proceed anonymously is reviewed for abuse of discretion, and a court acts within that discretion in denying anonymity where the parties show only speculative harm and no exceptional circumstances under the Jacobson factors.
• In re Garlock Sealing Technologies LLC (2017). A reorganization plan that creates an asbestos trust, was approved by the required 75% of voting asbestos claimants, and meets the other requirements of Bankruptcy Code section 524(g) and section 1129 may be confirmed with a channeling injunction protecting the debtors and related parties.
• In re Garlock Sealing Technologies, LLC (2014). In estimating aggregate asbestos liability, a bankruptcy court may use a merits-based legal-liability analysis instead of the debtor's settlement history when that history is unreliable because exposure evidence was withheld and because settlements reflected avoided defense costs rather than liability.

North Dakota

• Pyle v. AH Bennett Co. (2023). Because no federal rule or North Dakota provision authorizes a court to order a plaintiff to file asbestos trust claims, the court could not compel filing whether or not the state statute's investigation and filing requirements apply in federal court. Trust-related discovery relevant to apportionment of fault is still allowed under Rule 26.
• Pyle v. AH Bennett Co. (2022). In a diversity case, Federal Rule of Civil Procedure 26 directly conflicts with and displaces the disclosure requirements of North Dakota's Asbestos Bankruptcy Trust Transparency Act, and Rule 26 is valid under the Rules Enabling Act.

Ohio

• Heaton v. Ford Motor Co. (8th Appellate District, 2017). A trial court may exclude evidence under Civ.R. 26(E) and 37(C) when a party fails to supplement discovery responses, even if the failure was inadvertent, where the resulting prejudice to the opposing party cannot be cured by a lesser sanction. Without that testimony, product identification evidence against McCord was lacking.
• Potts v. 3M Co. (8th Appellate District, 2007). Under R.C. 2307.78(B)(1), 'not subject to judicial process' means not subject to personal jurisdiction, and manufacturers that filed bankruptcy but have funded trusts are neither outside judicial process nor insolvent, so a supplier is not vicariously liable for them.

Oregon

• Golik v. CBS Corp. (2020). A trial court may infer, from the circumstances, that counsel deliberately withheld responsive discovery. That is misconduct supporting a new trial under ORCP 64 B(2) if it materially affects the moving party's substantial rights. Under Washington law, a premises owner can be liable to an independent contractor's employee for a dangerous condition if the owner negligently directed the contractor to create it.

Other federal courts

• In re Federal-Mogul Global Inc. (2012). Section 1123(a)(5)(B) of the Bankruptcy Code expressly preempts anti-assignment provisions in insurance policies to the extent they bar transfer of insurance rights to a § 524(g) asbestos trust under a reorganization plan.
• In re Congoleum Corp. (2005). Pre-petition conduct of a law firm in negotiating a pre-packaged asbestos plan is relevant to whether it may be retained as debtor's counsel. A firm with unwaived concurrent conflicts, serving as co-counsel for claimants and counsel for the debtor, violates the Rules of Professional Conduct and the disinterestedness requirement of 11 U.S.C. § 327(a).
• Matter of Unr Industries, Inc. (1994). A substantially consummated plan of reorganization should be disturbed only for compelling reasons, and a bankruptcy plan may treat persons whose asbestos injuries are not yet manifest as holders of 'claims' paid from a trust. The court rejected the label 'equitable mootness' and asked instead whether it is prudent to upset the plan.
• Sealover v. Carey Canada Inc. (1993). A claimant who has merely a claim against the Manville Trust, and has not settled with or released it, does not have a settled defendant for molding a verdict. Under Pennsylvania Rule 238, a continuance requested by plaintiff's counsel counts as plaintiff-caused delay and is excluded from delay damages.
• Feldman v. Owens-Illinois (In re Brooklyn Navy Yard Asbestos Litigation) (1992). Plaintiffs could prove causation in the Brooklyn Navy Yard cases without identifying the exact product that injured each person, and the Navy's failure to warn did not relieve manufacturers of their own duty to warn. Under New York law, the settlement set-off and the cap on non-economic damages operate independently, each calculated from the original verdict, and a settlement occurs only when the plaintiff gives a release.
• In re Joint E. & So. Dist. Asbestos Litigation (1992). A mandatory non-opt-out Rule 23(b)(1)(B) class settlement that readjusts creditors' rights against an insolvent entity requires proper subclasses, and co-defendant manufacturers cannot be in the same class as health claimants. Bankruptcy jurisdiction cannot be used to modify a confirmed and substantially consummated plan in violation of section 1127(b).
• Ocasek v. Manville Corp. Asbestos Comp. Fund (1992). Under Johns-Manville's confirmed reorganization plan, which binds claimants under 11 U.S.C. § 1141(a), the ban on interest for Class Four asbestos claimants applies to post-filing judgments, and the narrow exception covers only claims disposed of by an order before the Filing Date. The plan's terms control over state and federal post-judgment interest statutes.

Pennsylvania

• Vitcavich v. Owens Corning/fibreboard Asbestos Personal Injury Trust (2023). Claimants against a Section 524(g) asbestos trust may litigate only the tort claims the trust distribution procedures authorize. Those claims accrue when the trust issues its authorization letter and are subject to the two-year Pennsylvania limitations period.
• In re All Matters Related TO North American Refractories Company (2022). A bankruptcy court approves a compromise after weighing the Martin factors: probability of success, collection difficulty, litigation complexity and expense, and the paramount interest of creditors. Under Delaware trust law, a court disturbs trustees' discretionary decisions only for abuse of discretion.
• In re All Matters Related TO North American Refractories Company (2022). A right of public access under 11 U.S.C. §107 or the common law applies only to documents filed with the court or otherwise made judicial records, and parties may redact exhibits they choose to introduce without making the unredacted versions public.
• Roverano v. John Crane, Inc. (2020). Pennsylvania's Fair Share Act does not displace the common-law rule that liability among strictly liable defendants is apportioned equally, and percentage apportionment is impossible for an indivisible asbestos injury. Bankruptcy trusts that were joined as defendants or that released the plaintiff may be listed on the verdict sheet, for apportioning liability only, on appropriate requests and proofs.
• Rabovsky v. Air & Liquid Systems Corporation (2016). Under Pennsylvania's common-law joint and several liability rule and Charles v. Giant Eagle, a non-settling joint tortfeasor must pay its full apportioned share of the verdict and gets no further set-off for settlements. A defendant gets a set-off only for settlements by parties found to be joint tortfeasors, not for unadjudicated asbestos bankruptcy trust claims. Delay damages under Rule 238 do not cover a loss of consortium award.
• In re All Matters Related TO North American Refractories Company (2015). A party seeking a preliminary injunction must show irreparable harm; a purely monetary loss, even if unrecoverable, is not irreparable unless it causes special or serious harm to the movant. Honeywell also did not show a likelihood of success in interpreting the trust documents under Delaware law, because the record on the circumstances of the Trust's creation was insufficient.
• Mt. McKinley Ins. Co. v. Pittsburgh Corning Corp. (2014). An excess insurer has no standing to object to an asbestos reorganization plan when insurance-neutrality language preserves its policy rights and the plan does not materially increase the quantum of liability or administrative burdens, distinguishing In re Global Industrial Technologies.
• In re Pittsburgh Corning Corporation (2013). A plan that creates an asbestos personal injury trust and channeling injunction can be confirmed under §524(g) and §1129 when the trust is adequately funded, treats present and future claims equitably, and covers non-debtor parties only for claims derivative of the debtor. A plan that is "insurance neutral" and leaves coverage rights to non-bankruptcy proceedings does not harm non-settling insurers.
• In re Pittsburgh Corning Corporation (2013). A Chapter 11 plan may create an asbestos personal injury trust and a §524(g) channeling injunction protecting nondebtor shareholders and insurers whose alleged liability derives from the debtor, if the plan is fair and equitable to present and future claimants. The plan here was 'insurance neutral', so a non-creditor insurer and a non-creditor co-defendant lacked standing and their objections failed on the merits.