Opinion ID: 1897473
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Heading: The History of the Manville Trust

Text: A tale such as that of the Manville Trust must begin with a discussion of the nature and history of asbestos. As early as the fifth century B.C., asbestos was valued for its relative indestructibility and its resistance to heat and fire. See In re Joint Eastern & Southern Districts Asbestos Litigation ( Asbestos Litigation I ), 129 B.R. 710, 735 (E. & S.D.N.Y.1991) (recounting a detailed history of asbestos use), [15] vacated, 982 F.2d 721 (2d Cir.1992), modified on rehearing, 993 F.2d 7 (2d Cir.1993); Special Project: An Analysis of the Legal, Social, and Political Issues Raised by Asbestos Litigation, Part I, 36 VAND. L. REV. 573, 578 nn. 3 & 4 (1983) (hereafter cited as  Special Project ). Beginning with the industrial age, the mirac[ulous] qualities of asbestos were put to use in products designed to protect persons and property. See id. at 578; Frank J. Macchiarola, The Manville Personal Injury Settlement Trust: Lessons for the Future, 17 CARDOZO L. REV. 583, 588 (1996) (discussing the many uses of asbestos in modern times). Asbestos was used as insulation in homes, offices, factories, ships, and cars. It was also used to make, among other things, cigarette filters, fireproof clothing, and fireproof theater curtains. Id.; see also Special Project, 36 VAND. L. REV. at 578 n. 7 (listing the many consumer applications of asbestos). Although [k]nowledge of the potential health hazards of asbestos ... dates back to ancient times, Asbestos Litigation I, 129 B.R. at 735, [16] most producers and scientists through the late nineteenth century considered asbestos to be a virtually harmless, highly valuable ingredient in a variety of products designed to protect property and human life. Special Project, supra, 36 VAND. L. REV. at 578 (footnote omitted). Toward the end of the nineteenth century, however, scattered reports began to emerge concerning the dangers posed by airborne asbestos particles. Asbestos Litigation I, 129 B.R. at 737. In the 1920s and 1930s, more extensive evidence began to accumulate, and reports of the hazards of asbestos became widespread in medical journals. Id. at 737-738. Finally, by 1935, asbestos was `widely recognized as a mortal threat.' Id. at 738 (quoting B. CASTLEMAN, ASBESTOS: MEDICAL AND LEGAL ASPECTS 32 (2d ed.1978)). Nevertheless, despite this knowledge, the world's annual use of raw asbestos increased dramatically over the next thirty years, from half a million tons in 1934 to two and a half million tons in 1964. Id. at 736 (citing Selikoff, Churg & Hammond, Asbestosis Exposure and Neoplasis, 188 J.A.M.A. 22, 142 (1964)). Johns-Manville Corporation, founded in 1858, was the largest manufacturer of asbestos-containing products and the largest supplier of asbestos in the United States from the 1920s until the 1970s. Id. at 742; see also In re Johns-Manville Corp., 97 B.R. 174, 176 (Bankr.S.D.N.Y.1989). As a result, John-Manville's products saw widespread commercial, industrial and consumer use. Asbestos Litigation I, 129 B.R. at 743. As the illnesses resulting from years of exposure to asbestos started taking their toll in the 1960s, a flood of lawsuits began in the 1970s. Id. at 744. With the assistance of labor unions, thousands of asbestos workers brought suits against Johns-Manville. Id. at 745. Angered by evidence that Johns-Manville had suppressed vital information, [17] juries sought to punish the corporation by awarding punitive damages. Id. at 746. As the number of plaintiffs grew dramatically and jury awards escalated, Johns-Manville, once a highly successful company, began to suffer severe financial stress. Id. at 751. Finally, in August 1982, motivated by the realistic fear of burgeoning asbestos-related tort claims for compensatory and punitive damages, [18] Johns-Manville filed for reorganization under chapter 11 of the United States Bankruptcy Code. Id.; see also In re Johns-Manville Corp., 68 B.R. 618, 620 (Bankr.S.D.N.Y.1986). Following several years of intense negotiations and litigation, a reorganization plan was developed, establishing the Manville Trust to assume the Corporation's asbestos-related liabilities. Id. at 635; see also Kane v. Johns-Manville Corp., 843 F.2d 636 (2d Cir.1988) (affirming Second Amended and Restated Plan of Reorganization). The beneficiaries of the Trust include: (1) persons who are suffering, or who will in the future suffer, from asbestos-related diseases caused in whole or in part by exposure to Johns-Manville products; (2) co-defendants of Johns-Manville in asbestos-related litigation; and (3) manufacturers and distributors of Johns-Manville asbestos and asbestos products who have contribution and indemnification claims against Johns-Manville. In re Joint Eastern & Southern District Asbestos Litigation ( Asbestos Litigation IV ), 78 F.3d 764, 769 (2d Cir.1996). Some time later, the beneficiaries brought a non-optout class action against the Trust, pursuant to Rule 23 of the Federal Rules of Civil Procedure, seeking changes in its obligations and procedures. See Asbestos Litigation I, 129 B.R. at 767. When the assets of the Trust quickly proved to be inadequate, the first attempt to settle the litigation was vacated. See In re Joint Eastern & Southern Districts Asbestos Litigation ( Asbestos Litigation II ), 982 F.2d 721 (2d Cir.1992), modified, 993 F.2d 7 (2d Cir.1993). The matter was remanded to the Bankruptcy Court for further proceedings, including the designation of appropriate subclasses and a precise delineation of the rights accorded to co-defendant manufacturers. Asbestos Litigation IV, 78 F.3d at 770 (citing Asbestos Litigation II, 982 F.2d at 740). Eventually, after the designation of new subclasses and hard fought negotiations among them, followed by extensive trials and motions, a modified settlement emerged (the Settlement). Id.; see Asbestos Litigation III, 878 F.Supp. at 484-512 (summarizing the history and contents of the Settlement).