In an attempt to rein in soaring legal costs, the Big Three automakers have been fighting to get thousands of lawsuits filed by people who say they were sickened by asbestos in car brakes out of state courts and before a federal judge.
So far they haven’t succeeded.
The latest setback came this month when the Supreme Court declined to review a 3rd US Circuit Court of Appeals decision.
The appeals court in Philadelphia threw out the carmakers’ request to be named as ”related parties” in the bankruptcy of Federal-Mogul Global Inc. – one of several dozen companies driven into bankruptcy by asbestos litigation.
The carmakers had hoped that by being added to the case they could consolidate thousands of asbestos lawsuits before a single bankruptcy judge in Delaware, and that the resulting trial would decide conclusively whether asbestos in brake pads posed a health risk.
Other automakers, including Volkswagen, DaimlerChrysler, BMW North America, Volvo, Rolls Royce Bentley Motor Cars and Nissan, had joined in the request.
Thousands of auto mechanics and factory workers have filed suit in recent years claiming they got cancer from handling brake parts containing asbestos fibres.
Industry lawyers say the majority of the suits are baseless, but that trying each individually in state court would cost billions and expose the companies to as much as $100-billion in damages.
”There is no way to defend all those cases,” said David Bernick, a Chicago lawyer whose asbestos clients include Ford, General Motors and DaimlerChrysler.
Bankruptcy court is a more favourable venue because it avoids state juries, which are thought to be more sympathetic to personal injury lawsuits, and because the court’s findings can apply nationally, rather than in a single jurisdiction.
”The real issue is whether a court with sufficient status and influence decides to take on this issue,” Bernick said. ”If we could do that, we could get the focus back on the science.”
The consolidation attempts have run into fierce resistance from plaintiffs, who say each case is unique and should be considered separately.
”I understand why they would like one consolidated proceeding, but each of the widows I represent would like their day in court,” said Charles Siegel, who represents the families of workers in a number of wrongful death suits. ”What the automakers want is to avoid, at all costs, a trial in front of a jury.”
Siegel said consolidating cases also forces people whose families have been harmed by asbestos to share any court award with thousands of people who weren’t sick and filed frivolous suits.
Federal-Mogul, an auto parts manufacturer, filed for bankruptcy in October. At the time it was facing thousands of asbestos lawsuits. Many of those claims were withdrawn after the company went bankrupt, but the plaintiffs shifted their attack to solvent companies, including automakers.
Initially, the courts had approved the transfer of 20 000 cases to Delaware, where a federal judge was presiding over the asbestos-related bankruptcies of USG Corp., WR Grace, Federal-Mogul, Armstrong and Owens Corning.
The judge later reversed the flow and ordered the cases back to the state courts on the grounds that the auto companies didn’t have sufficient financial ties to Federal-Mogul to justify their inclusion in the case. The 3rd Circuit upheld the decision.
Bernick said the Delaware bankruptcy proceedings may still be key in asbestos litigation, even though the automakers won’t be party to the case. – Sapa-AP