Court Ruling on Asbestos Opens U.S. to Suits

NEW YORK —  In a ruling that could expose the government to millions of dollars in liability, a federal appeals court said three asbestos makers can sue the United States for compensation paid to sick workers at U.S. Navy shipyards.

Attorneys said Wednesday that the decision would lead to lawsuits by dozens of companies that are trying to force the government to share in payments already exceeding $1 billion for asbestos-related diseases afflicting tens of thousands of workers.

The government to date has not admitted responsibility or agreed to pay compensation for illnesses contracted by workers at Navy shipyards where asbestos was used, predominantly during and after World War II.

The ruling was a 2-1 decision Monday by the U.S. Court of Appeals for the Federal Circuit in Washington. It allows Eagle-Picher Inc., Keene Corp. and UNR Industries Inc. to pursue reimbursement from the government for payments made to asbestos victims who worked for the Navy as long ago as the 1930s.

“So far only our clients have paid the tab,” said Joe G. Hollingsworth, a Washington attorney representing UNR and Eagle-Picher. “The government has escaped liability by virtue of technical arguments. We’d like to prove what (its) real responsibility was.”

David S. Fishback, a Justice Department lawyer handling the case, declined to comment.

Asbestos makers have paid well over $1 billion in compensation to workers afflicted with lung cancer and other severe and sometimes fatal diseases. More than 100,000 asbestos cases are clogging U.S. court dockets.

The bulk of the payouts have been made by a trust created in Manville Corp. bankruptcy proceedings. The trust has run out of money and is being restructured to speed payments to needy victims. Other companies also have been pushed into bankruptcy by asbestos lawsuits and want to reduce their liability.

Widespread illnesses from inhaling fibers of asbestos--a mineral used widely for its heat resistant and fire retardant qualities--did not appear until the 1970s, in some cases after decades of exposure.

Manufacturers have argued that the government should be held liable because it allegedly failed to tell them about asbestos’ health hazards and because it was the government’s responsibility to maintain a safe workplace.

“The government specified products with asbestos in it, the government controlled working conditions and the government in the view of many people has the primary responsibility for what happened,” said Andrew Berry, a Newark, N.J., attorney for several asbestos makers.

But in numerous decisions in the last 10 years, courts have shielded the government from liability on the grounds that it has immunity against lawsuits filed by federal employees. Other procedural arguments have helped keep cases from proceeding to trial.

Berry said the latest ruling “places pressure on the government to assist in resolving the cases.”