United States Supreme Court Orders Closer Look at Fibreboard Class Action

Friday June 27 12:02 PM EDT

Striking another blow against collusion and sweetheart deals, the US Supreme Court ordered the lower courts to take a second look at the fairness of the Fibreboard class action. The high court, in a brief order, set aside a U.S. appeals court ruling that upheld the settlement.

The Supreme Court ordered the appeals court to further consider the settlement in light of its decision to bust the CCR settlement scam.

In 1993, Fibreboard, the two insurers and attorneys representing the victims announced a proposed global settlement in which a trust would be created to handle all future asbestos claims. The settlement put an arbitrary cap on damages, denied access to the courts, refused to let plaintiffs opt out and pursue their rights in the court system, refused to settle non-malignant asbestos injuries, and of the malignant claims submitted, allowed expedited settlements only for mesothelioma patients.

My firm had rejected the paltry offers made by Fibreboard in four mesothelioma cases and chose to arbitrate. Based on my experience, the arbitration procedures were one sided in favor of Fibreboard.

The major defects of the deal were (1) the class action was mandatory and did not allow an opt out provision for plaintiffs who wished to purse their right to a jury trial and (2)the judge erred by predicating class certification entirely on the existence of a settlement. There is nothing inherently fair about a settlement, especially one that is foisted upon victims by the courts. In this case, the amounts offered in the settlement bore little if any relation to the actual damages suffered by the plaintiffs.

Fibreboard was recently bought out by Owens Corning Fiberglas. Also, Fibreboard within the past year moved its headquarters from California to Dallas, Texas. If after further review the courts dismantle the Fibreboard class action, this may allow non-Texas residents to continue to litigate their claims in Texas, where Fibreboard is now headquarted.