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Court Rejects $1.5 Billion Settlement In Asbestos Class-Action Lawsuit (WASHINGTON) The Supreme Court rejected a $1.5 billion class-action asbestos settlement Wednesday, ruling that the 1993 accord unfairly excluded some potential plaintiffs. The court also delivered three bitterly divided decisions that limit the ability to sue states. The decisions ended the court's term. The court begins its 1999-2000 term on the first Monday of October. In the asbestos lawsuit, the court, by a 7-2 vote, ruled that a federal judge in Texas wrongly approved the settlement, involving Fibreboard Corp., of Dallas. The decision is of great importance to resolving complex product-liability lawsuits, such as those over breast implants, cigarettes and other allegedly dangerous products. The new guidelines may make it more difficult for manufacturers and other defendants to obtain settlements of such lawsuits. Writing for the court, Justice David H. Souter said that in settlements in which a limited amount of money is available, those seeking the settlement "must show that the fund is limited by more than the agreement of the parties, and has been allocated to claimants belonging within the class by a process addressing any conflicting interests of class members." "With Fibreboard retaining nearly all its net worth, it hardly appears that such a regime is the best that can be provided for class members," Justice Souter added. Fibreboard, a unit of Owens Corning, Toledo, Ohio, manufactures vinyl siding and other building materials at 21 plants in the U.S. and Canada. Its products once contained asbestos, for decades used extensively in insulation and fireproofing before it was linked to severe and sometimes deadly respiratory problems. In 1993 U.S. District Judge Robert Parker in Tyler, Texas, approved a so-called global settlement of about 186,000 potential future claims and several related agreements negotiated by Fibreboard, its insurers and some people with asbestos-related health claims. Judge Parker has since been elevated to the Fifth U.S. Circuit Court of Appeals. The settlement was upheld by the Fifth Circuit, but the Supreme Court last June told the appeals court to restudy the case in light of a 1997 ruling in which the justices made it more difficult to find nationwide solutions in massive product-liability litigation. That decision said judges lack the authority to allow a class-action settlement in a lawsuit that, under federal rules of civil procedure, would be denied class-action status at trial. After restudying the Fibreboard case, the circuit court again upheld the settlement. Wednesday, the justices said the appeals court was wrong. Joining Justice Souter's opinion were Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Ruth Bader Ginsburg. Justice Rehnquist wrote a concurring opinion that said the federal judge made "near-heroic efforts ... to make the best of a bad situation." But he said the court was restricted by federal civil-trial rules, adding that the situation "cries out for a legislative solution." In dissent Justice Stephen G. Breyer said that in complicated cases such as asbestos claims, "our court should allow a district court full authority to exercise every bit of discretionary power that the law provides." He was joined by Justice John Paul Stevens. (Ortiz vs. Fibreboard)
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