The Supreme Court has agreed to consider reinstating a $500 million settlement of asbestos-related lawsuits against the Travelers Company Inc.. This settlement would prevent any further lawsuits from being filed against Travelers arising out of the company’s extensive relationship with Johns Manville Corp., which was once the world’s largest producer of asbestos.
Asbestos was used in the 1970s for insulation and fireproofing material. According to federal health agencies, exposure can increase the likelihood of lung cancer, mesothelioma and other health ailments. Travelers Company Inc. has been named in numerous lawsuits claiming it tried to conceal the dangerous health effects of asbestos. The company has argued that the lawsuit claims should come from a trust set up by Johns Manville in the 1980s, which was approved by a federal bankruptcy judge; money for the trust came largely from insurers. Travelers agreed to settle with several plaintiffs as long as federal courts made it clear that they would not face similar lawsuits in the future. The 2nd United States Circuit Court of Appeals in New York reversed lower-court approval of the agreement, stating a bankruptcy judge does not have the authority to act so broadly. In March, the justices will consider the question of the bankruptcy court’s power.
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