Last Friday, the Supreme Court agreed to consider reinstating a $500 million settlement of asbestos-related lawsuits against the Travelers Companies Inc. Reinstating the settlement would effectively block any new lawsuits against Travelers stemming from the insurance company’s prior relationship with the one time asbestos producing giant, John Manville Corp.

Travelers has been named in dozens of lawsuits claiming that they tried to hide the dangerous health effects of asbestos. Travelers believes that the claims should be paid by the trust that was established by Johns Manville in the 1980’s, that was approved by a federal bankruptcy judge. The money in the trust largely came from insurers like Travelers.

Travelers has agreed to settle with several different groups of plaintiffs provided that the federal courts protect them against any similar cases that they could potentially face in the future.

The 2^nd U.S. Circuit Court of Appeals in New York has overturned the lower courts approval of the settlement, questioning if a bankruptcy judge even has the authority to make such a decision.

In March the justices will consider the question of the bankruptcy court’s power at arguments in March.

The Supreme Court today rejected an appeal made by W.R. Grace, the company that owned and operated the vermiculite mines in Libby, Montana.  The new decision allows the case against W.R. Grace to go to trial; in 2005, federal prosecutors accused the company and six of its executives of violating the Clean Air Act.

Grace claimed that under the specifications of the Act, asbestos was not clearly defined and did not necessarily pertain to substances released from the mine.  The claim was rejected by the 9th U.S. Circuit Court of Appeals.

In April, the company agreed to a $3 billion arrangement that would allow it to emerge from bankruptcy without facing further asbestos liability.  Additionally, Grace must pay $250 million to the federal government for fees incurred when investigating and cleaning the vermiculite mines.

For more information, click here.