WASHINGTON -- Efforts by asbestos companies to wipe out tens of thousands of legal claims against them and to block many thousands more in the future appeared on the verge of collapse in the Supreme Court yesterday.
A majority of the justices reacted negatively to pleas by the companies' lawyer to revive a $1.3 billion settlement that was rejected by a federal appeals court last year.
The lower court concluded that the settlement failed to protect many potential victims who as yet have no symptoms of asbestos injury. The appellate court also said the deal went beyond a court's power to craft a solution to a serious social problem.
Justice Ruth Bader Ginsburg complained that the settlement would "stop every court in the country" from acting on claims of individuals who were exposed to asbestos.
Ginsburg, who seemed the most vocal opponent of the settlement, said everyone has a right to pursue his or her own claim, unless there is a "good reason" against it. She suggested that a desire to reduce the huge caseload of lawsuits against the asbestos industry was not such a reason.
About 150,000 pending asbestos lawsuits were lumped together in the settlement, which affects 2 million people, including 5,000 to 6,000 Marylanders. Then the lawsuits were wiped out in return for payments to victims and their families totaling $1.3 billion.
Twenty asbestos companies agreed to the deal on the condition that the case would resolve the claims of virtually everyone who had been exposed to asbestos but had not sued by early 1993. The companies also won assurances that no new lawsuits could be filed against them.
When the Supreme Court decides the case in coming months, the outcome will have a major effect on the use of class actions to settle a wave of lawsuits, such as those against the asbestos, tobacco and auto industries.
Yesterday, it appeared that a majority of justices doubted that courts had authority -- without new legislation from Congress -- to approve huge class-action settlements. A trial judge originally approved the asbestos settlement.
Justice Anthony M. Kennedy conceded that the settlement technique may be "marvelously superior" to having trials in thousands of cases. But Kennedy said he could find no source in the law for courts to embrace that technique.
Stephen M. Shapiro, a Chicago lawyer for the 20 companies, argued that the asbestos settlement was not unusual for such cases. He also said that those who worked out the deal had sought to ensure that all individuals potentially affected knew their rights and had the chance to opt out and seek remedies separately.
Laurence H. Tribe, a Harvard law professor who represented challengers to the deal, said the class-action settlement had been worked out to achieve "a nationwide revision" of industry's liability for harm from asbestos exposure. This goes far beyond judicial authority to act on class actions, Tribe argued.
In other actions, the court ruled unanimously that a federal taxpayer cannot seek a tax refund if he or she misses the filing deadline because of mental disability such as alcoholism or senility.
Mental disability sometimes is a valid excuse for missing legal deadlines, the court conceded in the cases of two Californians involving overpayments of $7,000 and $30,000. But such disability, the court said, cannot justify missing a deadline to claim a refund.
Ruling in the case of a Jessup man, the court decided unanimously that it is illegal for a company to send out a negative job reference letter about a former employee in retaliation for that worker's earlier claim of racial discrimination. The law against retaliation for making a claim of job bias applies to former employees as well as to current ones, the court said in a decision written by Justice Clarence Thomas.
Plaintiff Charles T. Robinson Sr. filed the discrimination charge after he was fired as a sales representative in Rockville for Shell Oil Co. He sought a job with Metropolitan Life Insurance Co., but that company turned him down after receiving a negative evaluation of him by Shell. Robinson then added a charge of retaliation to his civil rights claim.
Pub Date: 2/19/97