Owens Corning's $33 Bln Suit Against Cigarette Makers Dismissed
Fayette, Mississippi, May 24 (Bloomberg) -- Owens Corning's bid to force tobacco companies to pay as much as $33 billion for asbestos claims against the insulation maker was thrown out by a Mississippi judge.
Jefferson County Circuit Judge Lamar Pickard dismissed the case less than a month before it was due to go to trial. Owens Corning claimed Philip Morris Cos., R.J. Reynolds Holdings Inc. and other cigarette makers contributed to illnesses of thousands of people who said asbestos caused their cancer and lung disease.
Officials of Toledo, Ohio-based Owens Corning, which filed for bankruptcy protection in October, said earlier this year they hoped the Mississippi case and an identical suit in California would raise as much as $33 billion to help cover the cost of compensating asbestos victims.
``It appears to me that to proceed with this lawsuit we will have to change Mississippi law,'' said Pickard after an hour-long hearing today.
Owens Corning attorneys said they will appeal Pickard's ruling to the Mississippi Supreme Court.
The company filed for bankruptcy after it was engulfed by suits over the asbestos-laden pipe insulation it once made. The insulation, used in shipbuilding and power plants, has been linked to a type of cancer that can surface years after exposure.
The U.S.'s top insulation maker paid out more than $6 billion to settle hundreds of thousands of asbestos cases by 1998. The company said it was forced to seek bankruptcy protection after the number of asbestos suits increased.
Owens Corning officials say hundreds of thousands of asbestos victims suffered additional harm from smoking. The insulation maker cited studies that show smokers are 90 times more likely to develop asbestos-related diseases than non-smokers.
Tobacco companies knew that but hid the information to shift the liability onto asbestos makers, Owens Corning officials have said in court papers. Owens Corning filed suit in 1996 in Mississippi seeking to recoup damage payments from cigarette makers.
Tobacco industry lawyers said any illnesses developed by those exposed to asbestos-laden products are too remotely connected to smoking to create liability for them.
Pickard noted that Mississippi law prohibits Owens Corning ``from recovering from the tobacco defendants for an indirect injury.''
Owens Corning wasn't able to show that it had been directly injured by the cigarette makers' actions, so the insulation maker's fraud, restitution and antitrust claims were barred by state law.
The judge's ruling is in line with an opinion handed down earlier this month by a special master Pickard appointed to oversee pretrial motions in the case.
Owens Corning shares, which traded at a high of $41 in May 1999, were unchanged at $2.09.