Asbestos Victims Seek Reversal of Travelers Ruling
Will the U.S. Court of Appeals for the Second Circuit overturn a federal court’s order allowing Travelers Indemnity Co. to avoid paying $510 million in settlement funds to thousands of asbestos victims?
That’s the question now being asked in this long-running and complicated litigation. Law360 (subscription required) reports the 2ndCircuit heard a brief last week filed by attorneys for the asbestos plaintiffs arguing that the insurer’s agreement to satisfy the claims stemming from its coverage of Johns-Manville Corp. was finalized by a bankruptcy court’s clarifying order.
Johns-Manville was once the largest manufacturer of asbestos products and raw asbestos in the U.S.
The settlement, signed in 2004, had a clause stating that no further personal injury claims would be brought against Travelers. However, earlier this year a federal district court found that the order was not final because of a 2010 2nd Circuit ruling that allowed third-party Chubb Indemnity Insurance Co. to bring claim against Travelers, according to Law360. That ruling released Travelers from having to pay more than $500 million in settlement funds to asbestos victims.
In their brief, the asbestos plaintiffs said that Travelers was not entitled to “complete and total peace” under the agreement and a third-party's ability to successfully bring a new claim does not mean that the bankruptcy’s court clarifying order was not final.
The brief says the operative language of the settlement is clear and the condition precedent relied on by Travelers required that the bankruptcy court enter an order with a broad injunction against direct action claims, writes Law360.