Two Rulings From MDL Allow Previously Dismissed Asbestos Claims to Proceed Against Various Ship Owners Despite Previous Dismissed Actions Not Listed as Assets in Bankruptcy U.S. District Court for the Eastern District of Pennsylvania, January 25, 2016
In a follow-up to six cases previously reported on in ACT, two more cases were decided in the United States District Court for the Eastern District of Pennsylvania. Both cases had started in the Northern District of Ohio, and were transferred to the MDL 875 in the Eastern District of Pennsylvania. In both cases, the plaintiffs brought claims against various ship owners represented by Thompson Hine LLP, and all alleged asbestos exposure while working on ships. All cases were administratively dismissed; after dismissal, the plaintiffs filed for bankruptcy, and did not list their asbestos claims as assets. After bankruptcy was discharged, the claims were reinstated, and defendants filed summary judgments, arguing that the plaintiffs’ claims were: (1) judicially estopped because the claims were not listed on the bankruptcy; (2) the claims belonged to the bankruptcy trustee, not the plaintiffs. The court denied defendants’ motions for summary judgments.
The court found that: (1) the plaintiffs took irreconcilably inconsistent positions in not listing the claims as assets during bankruptcy, but then pursued the same claims that they represented did not exist; (2) But, this was not done in bad faith, because the plaintiffs could not have known that years later these claims would resurface. Further, although the bankruptcy trustees were the proper plaintiffs, the court allowed for time for the proper plaintiffs to be substituted in these actions.