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Remember Johns-Manville?  It made building supplies — shingles, insulation, possibly dowel sticks.  Lots and lots of building supplies.  And just about everything it produced (excepting perhaps the dowel sticks) contained a fibrous and flexible mineral that featured wondrous heat-resisting properties.  Some deemed it the "miracle mineral".

But asbestos had another, not-so-miraculous aspect — its ability to sicken and kill people who inhaled its floating fibers.  Growing awareness of the connection between asbestos and lung disease led to a flood of lawsuits against Johns-Manville.  The growing torrent eventually sank the company, sending it into bankruptcy on August 26, 1982 — just over a quarter-century ago.

And still the bankruptcy lingers.  The latest twist came today in the form of a Second Circuit decision.  The panel decided that the bankruptcy judge lacked jurisdiction to enjoin lawsuits against one of Johns-Manville’s main insurers.  As Circuit Judge Wesley summed up in a nifty concluding paragraph:

  In our view, the district court lacked subject matter jurisdiction to enjoin claims against Travelers that were predicated, as a matter of state law, on Travelers’ own alleged misconduct and were unrelated to Manville’s insurance policy proceeds and the res of the Manville estate.  The irony in all of this is that while the Direct Actions, with one categorical exception, involve a claim of an independent duty on the part of Travelers, they have met with almost universal failure in the state courts.  Thus, while the bankruptcy court’s order sought to achieve one-stop relief for Travelers that could be seen as well deserved, it seems to us there is not one but many courthouses where the legitimacy of these actions must be tested.  The bankruptcy court’s desire to facilitate global finality for Travelers may not be used as a jurisdictional bootstrap when no jurisdiction otherwise exists.  The order of the district court is VACATED and the case REMANDED for the bankruptcy court to examine whether, in light of this opinion, it had jurisdiction ot enjoin any of the instant claims.

In re Johns-Manville Corp., No. 06-2099 (2d Cir. Feb. 15, 2008).