A federal appeals court scuttled a plan yesterday to settle hundreds of thousands of damage claims for asbestos-related disease and death, ruling that the complex deal is beyond a court's powers and fails to protect many potential victims who have no symptoms of injury yet.
The 3rd U.S. Circuit Court of Appeals in Philadelphia praised the plan as "a brilliant partial solution to the scourge of asbestos" but rejected it because it "cannot conceivably" satisfy the requirements for lumping a vast number of claims into a single case.
"More than a case, this is a saga," the court said.
The ruling appears to leave two alternatives for handling the years-long fight over asbestos: continue to pursue one case at a time, or ask Congress for a federal law that might impose a nationwide answer.
Asbestos victims could have been paid $1.3 billion in the settlement.
The plan would have cut off the right to sue in federal court for between 250,000 and 2 million people who have been exposed to asbestos products, in return for guarantees of some payments to them or their survivors from a coalition of 20 manufacturers. The group includes 5,000 to 6,000 Maryland resi- dents who are suffering from diseases that they claim are linked to exposure to asbestos.
The settlement would not have affected the right to sue in state courts; many individuals harmed by exposure have won damage verdicts in state courts in Maryland and elsewhere.
Under the plan, those who have been exposed, but who so far show no ailments, would have been denied a chance to pursue individual claims should they develop diseases later. They would have received payments in the settlement, but at a lower level than others whose diseases already have developed.
Physical harms, which include lung cancer, sometimes do not appear for up to 40 years after exposure to asbestos, a heat-resistant material that formerly was used widely as insulation and fireproofing.
The plan was devised in early 1993 by lawyers for people who have or may have damage claims and attorneys for the 20 manufacturers. The settlement was approved by a federal judge in 1994.
Supporters of the plan argued that something must be done to deal with the still-burgeoning growth of asbestos claims that threaten to clog the court system. Challengers to the plan contended that it would settle out of existence the potential claims of many people without their knowledge and would result in payments likely to be below what people could win by suing as individuals.
"It was a terribly bad deal," said Peter G. Angelos, a Baltimore lawyer who has represented plaintiffs in asbestos cases for more than a decade and represents about 3,000 people affected by yesterday's ruling. "The decision of the 3rd Circuit is very welcome by the present victims and will be appreciated by people who might develop [an asbestos-related disease]."
Attorneys for the defendants assailed the decision and vowed to appeal, if needed, to the Supreme Court.
"We think [the decision] is wrong and regrettable," said William R. Hanlon, one of the attorneys for the coalition of manufacturers. "It's in conflict not only with the decisions of other courts, but with long-standing practice under class-action rules."
Asbestos cases have flowed into the courts in huge numbers, and judges and lawyers have tried to fashion novel ways to deal with them. Several times, asbestos companies have asked the Supreme Court to fashion a single nationwide approach to the claims. But that plea has been rebuffed.
The cases continue to be filed, as additional people who worked around asbestos-containing productions a generation or more ago begin to suffer from the effects of their exposure. The appeals court in Philadelphia cited estimates of 200,000 asbestos-related deaths by 2000 and 265,000 by 2015.
The appeals court took note of the "asbestos litigation explosion," and praised the federal judge who had approved the settlement. But it said the huge case had forced "the judicial system to choose between forging a solution to a major social problem on the one hand, and preserving its institutional values on the other." Were the settlement allowed to stand, the court said, it would draw a federal court into acting like a lawmaking legislature, "exercising power that it lacks. We leave legislative solutions to legislative channels."
Hanlon, the lawyer for the companies, said the settlement would have greatly speeded the process for asbestos victims seeking payments for their injuries.
Some plaintiffs' attorneys in the case agreed, including the lead lawyers for those claiming asbestos-related diseases, Gene Locks, of Philadelphia, and Ron Motley and Joseph Rice, of Charleston, S.C. They played a major role in shaping the proposed settlement.
Other lawyers for the plaintiffs took a dim view.