Court Upholds Settlement In Asbestos Lawsuits

"So long as respondents or those in privity with them were parties to the Manville bankruptcy proceedings, and were given a fair chance to challenge the bankruptcy court's subject matter jurisdiction, they cannot challenge it now by resisting enforcement of the 1986 orders," said Justice David Souter, writing the court's 7-2 opinion.

A Travelers spokesman was not immediately available for comment.

Sandler, O'Neill & Partners analyst Paul Newsome said the ruling appears positive for the insurer.

"One of the big issues for asbestos liability has been that companies think they have maxed out their limits and they think they have paid all their claims and then all of a sudden they have either new claims or old claims that somehow get bigger," Newsome said.

The court made clear that the decision applies only in this case. The high court also did not decide whether all of the people who want to challenge the Travelers settlement are bound by the Manville Trust agreement. "On remand, the Court of Appeals can take up this objection," Souter said.

Justices John Paul Stevens and Ruth Bader Ginsburg dissented.