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Supreme Court Throws Out Class Action Settlement in Asbestos Case
Description The high court rejected a class action settlement agreed to by an asbestos maker and plaintiffs' attorneys. The court held that the trial court did not show that there were no other funds available or that all claims and conflicts among the plaintiffs had been reasonably addressed in the final settlement approved by the court.
Topic Court Procedure
Key Words Class Action Suits
C A S E   S U M M A R Y
Facts For decades, Fibreboard, an asbestos maker, has been involved with thousands of personal injury claims against it. Fibreboard, its insurers, and asbestos plaintiffs' lawyers agreed to a $1.535 billion class action settlement, which was approved by the trial court and appeals court. Some plaintiffs appealed the settlement; the Supreme Court agreed to hear the appeal.
Decision Reversed. The class certification was impermissible, as there was an insufficient showing that the funds were limited to the amount agreed upon or that there was equitable treatment of class members. For a court to certify a mandatory settlement class such as this, there must be a showing that the funds are in fact limited and that the class includes all those with unsatisfied claims, and that conflicts within the class have been addressed. The fact that the company and the plaintiffs' attorneys agreed to the settlement did not satisfy these requirements that the court must meet.
Citation Ortiz v. Fibreboard Corp., 119 S. Ct. 2295 (1999)

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