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Judges Ruling Could Have Lasting Effect on Future Asbestos Lawsuits

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A recent judges interpretation of a clause in an insurance contract could have an effect on asbestos-related lawsuits across the country. The case involves mining giant Asarco and its insurer, Fireman’s Insurance Fund.

Asarco operated a zinc refinery in Corpus Christi, Texas from 1942 to 1985. They reopened as a waste management facility under the name Encycle Texas in 1988. Federal officials have alleged Encycle operated a “sham recycling” scheme in which waste was trucked from Corpus Christi to a smelter in El Paso and later East Helena, Mont. The facility was shut down again in 2003.

The insurance contract between Asarco and Fireman’s Insurance Fund contains a clause that excluded coverage for a specific type of asbestos-related illness called asbestosis. Asarco wants the insurance company to cover the costs of lawsuits related to other asbestos-related diseases, such as mesothelioma and lung cancer. However, the insurance company doesn’t want to cover those costs, asserting that they were excluded under the asbestosis clause.

Judge J. Manuel Bañales of the 105th District Court ruled last week that Fireman’s Insurance Fund is not excluded of coverage under the asbestosis clause. The ruling removes one of the insurance company’s primary defenses to certain types of asbestos claims. According to lawyers for Asarco, this issue will repeat itself all over the country. Moreover, the judge’s decision with have an effect on future asbestos-related lawsuits around the country.