Asbestos Class Action Update: US Supremes to Review Fibreboard Sweetheart Deal

By MICHAEL KIRKLAND

WASHINGTON, June 22 (UPI) - The Supreme Court has agreed to take another look at a huge class-action settlement involving asbestos.

The case out of federal court in Tyler, Texas, is designed to determine whether the Fibreboard Corp., its insurers and others entered into a sweetheart "global settlement'' with lawyers hand-picked by the firm to limit liability in tens of thousands of asbestos-exposure cases, or whether, as Fibreboard says, a lower court was correct in approving the settlement despite Supreme Court precedent.

Fibreboard is owned by Owens Corning.

The "global settlement'' meant those who wanted to sue Fibreboard separately for asbestos would not have that opportunity, even if they thought the settlement was unfair.

In 1997, however, the Supreme Court ruled in a separate landmark asbestos case, Amchem vs. Windsor, in favor of plaintiffs who wanted to "opt out'' of a global settlement.

In Amchem, 20 companies wanted to settle present and future lawsuits over asbestos exposure at the same time,

The plaintiffs claimed that the attorneys were picked by the companies to begin a class action lawsuit that would lead to a binding settlement, despite the objections of many plaintiffs whom the attorneys were supposed to represent. The attorneys would have received $70 million in fees, about a third of the settlement.

At the time, the federal courts estimated there were more than 150,000 lawsuits involving claims of exposure to asbestos, a flame-proof material widely used for insulation and other building needs before it was discovered to cause lung injury.

When a federal appeals court approved the Fibreboard settlement, plaintiffs who were unhappy also took their case to the Supreme Court. Without hearing argument, the justices threw out the appeals court ruling and ordered a new hearing in light of the Amchem decision.

But the appeals court again approved the Fibreboard settlement, saying it was different from Amchem, by a vote of 2-1, despite the strong dissent of one judge who said the approval flouted Supreme Court precedent and ``overrides the substantive and procedural rights of large groups of asbestos claimants.''

The plaintiffs then once again took their cases to the Supreme Court, saying of the appeals court, "Some people just can't take a hint.''

The Supreme Court should hear argument in the case sometime next winter or spring.

(Nos. 97-1704, Ortiz et al vs. Fibreboard et al; and pending, 97-1695, Flanaghan and Middleton vs. Ahearn et al)

Copyright 1998 by United Press International.

*** POSTED JUNE 25, 1998 ***