Owens Corning: court to rule on asbestos-tobacco claim

A decision on whether a lawsuit brought by Owens Corning against tobacco companies can proceed is expected shortly from the Mississippi high court. The suit calls on tobacco companies to share the hug…

A decision on whether a lawsuit brought by Owens Corning against tobacco companies can proceed is expected shortly from the Mississippi high court. The suit calls on tobacco companies to share the huge cost of asbestos settlements, lawyers and Wall Street experts say. The suit is the latest attempt by a company struggling under the weight of asbestos liabilities to seek reimbursement for billions paid to workers with lung damage. US insulation manufacturer Owens Corning and other asbestos companies have argued unsuccessfully in the past that smoking increased the risk to health of asbestos exposure and that tobacco companies should share the expense of compensating workers affected. Owens Corning declined to comment on the pending case. The Mississippi Supreme Court was scheduled to hear arguments from Owens on 1 October 2003. The company filed for Chapter 11 bankruptcy protection in October 2000 after big payouts on costly asbestos-related claims. The tobacco-asbestos argument was rejected two years ago by a lower Mississippi court which said the company had no legal basis for its claim of damages. The judge in that case ruled Owens could not claim damages for injuries not suffered directly. “The law here is just so well settled at this point,” said John Mulderig, attorney for Altria Group Inc., parent of tobacco company Phillip Morris USA. In 17 consecutive decisions, appeals courts have ruled in Altria“s favor, Mulderig said. “It would be a surprise and unexpected for any court to go in an opposite direction on these settled legal issues,” said. But anti-tobacco lawyers and some Wall Street analysts say the argument stands a chance of succeeding in court. Edward Sweda, a senior lawyer for the Tobacco Products Liability Project at Northeastern University, said there is a long history of scientific knowledge about how smoking and exposure to asbestos produce a health risk far greater than either of the two activities separately. Gene Pisasale, senior investment officer with Wilmington Trust Co agreed. “It“s a fair argument for a company to say this damage could have been partially caused by this substance rather than that substance,” he said, referring to asbestos.” “If Owens Corning is successful, it could indicate a potentially more viable and active strategy on the part of defending companies.”