The U.S. Supreme Court overturned Fibreboard Corp.'s $1.5 billion global asbestos settlement June 23. Parent company Owens Corning now estimates it will pay about $5 billion in claims for people suffering from health problems due to exposure to Fibreboard and Owens Corning products containing asbestos.
Dallas-based Fibreboard's original settlement would have made a limited amount of money available to pay claims on a first-come, first-served basis. Once the coffers went dry, people left with respiratory problems who had failed to make an earlier claim would have been out of luck.
However, the Supreme Court's decision is expected to make it harder for companies to negotiate massive settlements with class-action lawyers representing only some potential claimants.
``We're not surprised by the ruling. Given recent rulings by the Supreme Court in other class-action cases, we were expecting this,'' said Bill Hamilton, an Owens Corning spokesman.
In fact, Owens Corning of Toledo, Ohio, took matters into its own hands in December when it established a national settlement program.
Under the program, the company will handle individual claims and agree to make payments to injured people without any involvement by the courts. The funding will come from Owens Corning's existing bank accounts and cash and credit resources, Hamilton said.
So far, Owens Corning has resolved more than 188,000 claims against its products.
The Supreme Court has remanded the Fibreboard case back to the lower courts for further consideration, an Owens Corning news release said.
Should the final decision void the global agreement, Fibreboard will receive a $1.9 billion insurance settlement, which will be used to pay more than 100,000 asbestos claims.
Owens Corning probably will handle Fibreboard claims through its settlement program. The company already has paid more than $3 billion in claims and predicts the final number will top $5 billion.
Hamilton said the asbestos litigation is not expected to hinder Owens Corning's plastics business.
Before the 1970s, Fibreboard and Owens Corning manufactured high-temperature insulation containing asbestos for use in military ships, power plants and refineries. The federal government took asbestos products off the market because it was determined the material could cause lung cancer and other respiratory problems, Hamilton said.
Owens Corning acquired Fibreboard in 1997.