In re Joint E. & S. Dist. Asbestos Litigation

• Decision Date: 19 January 1995
• Docket Number: No. 82 B 11656 (BRL)- 82 B 11676 (BRL).,Civ. A. No. 90-3973 (E.D.N.Y.),90-7518 (S.D.N.Y.),Index No. 4000,82 B 11656 (BRL)- 82 B 11676 (BRL).
• Citation: 878 F. Supp. 473
• Parties: In re JOINT EASTERN AND SOUTHERN DISTRICTS ASBESTOS LITIGATION. Bernadine K. FINDLEY, as Executrix of the Estate of Hilliard Findley, Uma Lail Caldwell, as Executrix of the Estate of Odell Caldwell, Edward Lindley, Joseph C. Jones, and James William Barnette, Jr., on behalf of themselves, and all others similarly situated as beneficiaries of the Manville Personal Injury Settlement Trust, Plaintiffs, v. Robert A. FALISE, Louis Klein, Jr., Christian E. Markey, Jr., and Frank Macchiarola, not individually but solely in their capacities as Trustees of the Manville Personal Injury Settlement Trust, Defendants. In re JOHNS-MANVILLE CORPORATION, et al., Debtors.
• Court: U.S. District Court — Eastern District of New York

878 F. Supp. 473

In re JOINT EASTERN AND SOUTHERN DISTRICTS ASBESTOS LITIGATION Bernadine K. FINDLEY, as Executrix of the Estate of Hilliard Findley, Uma Lail Caldwell, as Executrix of the Estate of Odell Caldwell, Edward Lindley, Joseph C. Jones, and James William Barnette, Jr., on behalf of themselves, and all others similarly situated as beneficiaries of the Manville Personal Injury Settlement Trust, Plaintiffs, v. Robert A. FALISE, Louis Klein, Jr., Christian E. Markey, Jr., and Frank Macchiarola, not individually but solely in their capacities as Trustees of the Manville Personal Injury Settlement Trust, Defendants In re JOHNS-MANVILLE CORPORATION, et al., Debtors.

Index No. 4000, Civ. A. Nos. 90-3973 (E.D.N.Y.), 90-7518 (S.D.N.Y.), Nos. 82 B 11656 (BRL)- 82 B 11676 (BRL).

United States District Court, E. and S.D. New York.

January 19, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Caplin & Drysdale, New York City by Elihu Inselbuch, James Sottile, IV, Christian R. Pastore, Cartwright, Slobodin, Bokelman, Borowsky, Wartnick, Moore & Harris, Inc., San Francisco, CA by Harry F. Wartnick, Baron & Budd, Dallas, TX by Frederick M. Baron, Rose, Klein & Marias, Los Angeles, CA by Robert B. Steinberg, Ness, Motley, Loadholt, Richardson & Poole, P.A., Charleston, SC by Ronald L. Motley, Joseph F. Rice, Wilentz, Goldman & Spitzer, P.C., Woodbridge, NJ by Christopher M. Placitella, Philip Pahigian, for the Class.

Paul, Weiss, Rifkin, Wharton & Garrison, New York City by Leslie Gordon Fagen, Jean McMahon, for Future Claimants.

Pepper, Hamilton & Scheetz, Philadelphia, PA by Francis J. Lawall, Charles H. Carpenter, Steele & Sales, P.S., Seattle, WA by Katherine Steele, for Distributor Subclass.

Debevoise & Plimpton, New York City by Anne E. Cohen, Roger E. Podesta, for Codefendant Subclass.

Lani A. Adler, New York City, for Subclass of Claimants with Pre-November 1990 Settlements and Judgments.

John H. Faricy, Jr., Minneapolis, MN, for MacArthur Subclass.

Weitz & Luxenberg, P.C., New York City by Perry Weitz, Richard Nemsoff, for Subclass of Present Claimants.

Cohen, Shapiro, Polisher, Shiedman & Cohen, Philadelphia, PA by Roberta Golden, Robert Lapowsky, Judah Labovitz, for Pacor Settlement Trust.

Law Offices of Peter G. Angelos, Baltimore, MD by Peter G. Angelos, Timothy J. Hogan, for Maryland Plaintiffs.

Goldberg, Persky, Jennings & White, P.C., Pittsburgh, PA by Craig L. Vandergrift, Theodore Goldberg, Robert L. Jennings, for Pennsylvania Plaintiffs.

Cooney & Conway, Chicago, IL by Kathy Byrne, Gavin & Gavin by James C. Gavin, Greitzer & Locks, Philadelphia, PA by Lee B. Balefsky, Thomas W. Henderson, Pittsburgh, PA, Hal Pitkow, Washington Crossing, PA, Robert E. Sweeney Co., L.P.A., Cleveland, OH by Robert E. Sweeney, for Various Other Claimants.

Carla G. Hancock and Maxine Smith, Vivian, LA, for J.C. Smith.

Pollack & Greene, New York City by Harold Goldfuss, for Laura Goldfuss.

Zeldonia J. Jackson, Fort Worth, TX, for Estate of George E. and Tena Lee Jackson, Sr.

Berlack, Israels & Liberman, New York City by Carole L. Fern, for Keene Corp.

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, NY by Michael P. Murphy, Wiley, Rein & Fielding, Washington, DC by Bert W. Rein, Keith S. Watson, for U.S. Fidelity & Guar. Co.

Whiteford, Taylor & Preston, L.L.P., Baltimore, MD by Louis G. Close, Jr., Gardner M. Duvall, for Porter Hayden Co.

Jeffrey M. Weiner, Wilmington, DE for DI Distributors, Inc.

Myles O'Malley, William Rausnitz, Barbara Zelluck, Newark, NJ, for Nat. Asbestos Victims Legal Organizing Committee and White Lung Information Centers of New York and New Jersey.

James Fite, Paul Safchuck, Baltimore, MD for White Lung Ass'n David T. Austern, Patricia Dansbury, Manville Personal Injury Settlement Trust, Fair-fax, VA, Donovan, Leisure, Newton & Irvine, New York City by James L. Stengel, Laurie S. Dix, Richard De Marco, Steven Fink, for Manville Personal Injury Settlement Trust.

Mark Peterson, Rand Institute, Santa Monica, CA, Special Advisor to the Courts.

Before WEINSTEIN, Senior District Judge, Eastern District of New York, also sitting by designation in the Southern District of New York, and BURTON L. LIFLAND, Chief Bankruptcy Judge, Southern District of New York.

AMENDED MEMORANDUM, ORDERS AND FINAL JUDGMENT

                                                Table of Contents
                   I.  Introduction ...............................................................      479
                   II. Prior Proceedings ...........................................................     485
                       A. Trust's Initial Operating Difficulties ...................................     485
                       B. Class Action and First Settlement ........................................     487
                       C. Appeal and Remand .......................................................      487
                  III. Present Proceedings .........................................................     488
                       A. Proceedings on Remand ....................................................     488
                       B. Amended Complaint ........................................................     489
                       C. Settlement Negotiations ..................................................     491
                          1. Notice of Settlement and Hearings ....................................      492
                          2. Summary of Settlement .................................................     493
                             a. Pro Rata Shares ...........................................     493
                             b. Removal of Trust from Tort System .................................      494
                             c. Scheduled Disease Values ...........................................     495
                             d. Settlement of Claims Outside Trust Distribution Process ............     496
                               1. Codefendants' Claims .........................................       496
                               2. Distributors' Claims .........................................       496
                         3.  Amendments During Fairness Hearings ..................................      497
                       D.  Rule 706 Court-Appointed Panel Projections of Future Claims .............     498
                          1. Background and Role of Panel .........................................      498
                          2. Panel Projections .....................................................     498
                          3. Impact of Trust and Rule 706 Projections ..............................     501
                       E.  Graphic Representations of Effect of Settlement .........................     502
                       F.  Objections to the Settlement .............................................    509
                       G.  Amended Memorandum, Orders and Final Judgment ............................    510
                           1.  Request by Berlack, Israels & Liberman on Behalf of the Keene Corp. ...   511
                           2.  Motions to Intervene ..................................................   511
                           3.  Motions for Additional Findings of Fact in Relation to USF & G ........   512
                           4.  Motion to have the Courts Disapprove the MacArthur Fund ................  512
                           5.  Motions to Eliminate Escrow Requirements for Trust Payments in Maryland.. 512
                           6.  Motions to Authorize Claims Payments Starting February 1, 1995 ........   512
                    IV.  Power to Modify Trust Payments Under New York Law ............................  512
                       A.  New York Substantive Law Applicable .......................................   512
                       B. Origins of Trusts in English Equity .......................................    515
                          1. Development of Equity Jurisdiction .....................................    515
                          2. Trusts in Equity .......................................................    517
                       C.  Equity Antecedents in New York ............................................   518
                          1. History of Equity Courts ................................................   518
                          2. Reception of English Substantive Law ....................................   521
                          3. Equity in Twentieth Century New York ...................................    524
                       D.  Aspects of Equity Substantive Jurisprudence in Modern Adjudications .......   525
                           1. Equity is Flexible .....................................................   525
                           2. Equity Provides Remedies to the Otherwise Remediless ...................   526
                           3. Equity is Equality .....................................................   526
                           4. Equity Fills the Vacuum Created by Failure to Legislate ................   527
                           5. Limitations on Modern Equity Jurisprudence ..............................  527
                       E. New York Trust Law Permits Deviation .......................................   528
                           1. Consent of All Beneficiaries Not Needed .................................  530
                           2. Benefits of Deviation to Most ..........................................   533
                           3. Administrative vs. Distributive Provisions .............................   535
                

                        F. Trust Law in Other States .............................................  536
                           1. Case Law ...........................................................  536
                           2. Statutes ...........................................................  538
                        G. Application of Trust Law to the Facts .................................  540
                    V.   State and Federal Law on Contribution and Settlement ....................  540
                        A.  Varied Approaches ....................................................  540
                        B.  Problem Solved by Settlement .........................................  545
                  VI.  Maryland Contribution and Set-Off Issue ..................................   546
                       A.   Choice of Law .......................................................   547
                       B.   Contribution Among Multiple Tortfeasors ..............................  548
                       C.   Dispute Among the Parties ...........................................   550

...