The Delaware Court of Chancery has denied a motion to dismiss a lawsuit filed by several companies that are frequently defendants in asbestos litigation. These companies, often referred to as the “Repeat Litigants,” are seeking to prevent asbestos settlement trusts from implementing new data retention policies that would lead to the destruction of crucial claims data. The court’s decision allows the case to move forward, potentially impacting how asbestos-related information is preserved and used in future legal proceedings.
The Core of the Dispute
At the heart of this case is a disagreement over the preservation of “Claims Data.” This data includes information submitted by individuals who have filed claims against asbestos settlement trusts, detailing their work history, potential asbestos exposures, and other relevant facts. The Repeat Litigants argue that this data is essential for their defense in asbestos lawsuits, as it helps them identify other potential sources of exposure and determine the extent of their own liability.
The defendant in this case is not a single entity but rather a collection of ten settlement trusts and the Delaware Claims Processing Facility, LLC, which handles claim processing for many of the trusts. In January 2025, these entities announced new data retention policies that would generally lead to the destruction of resolved claims data after one year. The Repeat Litigants contend that this policy would severely limit their ability to access and utilize this critical information.
The Plaintiffs’ Argument: Why the Data Matters
The Repeat Litigants’ central argument is that the Claims Data is vital for their defense against asbestos claims. They contend that without access to this data, they will face greater difficulty in defending cases, potentially leading to higher settlement costs and increased liability.
Asbestos litigation is notoriously complex, due to the long latency periods of asbestos-related diseases. This means that individuals may not develop symptoms for decades after exposure, making it difficult to pinpoint the exact source of their illness. In asbestos lawsuits, multiple defendants are often named, and the allocation of liability can be complex. The Repeat Litigants argue that the Claims Data allows them to identify other potential sources of exposure, which can help to reduce their individual liability and facilitate more favorable settlements.
The Defendants’ Defense: Why the Data Destruction is Necessary
The defendants, the settlement trusts and the claims processing facility, maintain that the new data retention policies are necessary for several reasons, including protecting claimant privacy and preventing data breaches. They assert that retaining the data indefinitely would pose significant risks and could lead to the misuse of sensitive personal information.
The Court’s Decision: Rejecting the Motion to Dismiss
Vice Chancellor Laster of the Delaware Court of Chancery denied the defendants’ motion to dismiss the lawsuit. The court addressed three key arguments raised by the defendants:
1. Subject Matter Jurisdiction: The defendants argued that the court lacked the authority to hear the case. The court disagreed, stating that it had jurisdiction because the plaintiffs were seeking an equitable remedy in the form of an injunction. The court also noted that the plaintiffs had sought a preliminary injunction to maintain the status quo, which provided a sufficient basis for jurisdiction.
2. Standing: The defendants also claimed that the Repeat Litigants lacked standing, meaning they did not have a sufficient legal interest in the outcome of the case to bring the lawsuit. The court rejected this argument, finding that the Repeat Litigants had demonstrated a concrete and particularized injury—the potential inability to access crucial claims data—that was directly caused by the defendants’ actions. The court also noted that, as beneficiaries of the trusts, the Repeat Litigants had a legally protected interest in the data.
3. Failure to State a Claim: The defendants asserted that the Repeat Litigants had failed to state a claim upon which relief could be granted, meaning they had not presented a legally cognizable basis for their lawsuit. The court disagreed, holding that the complaint adequately pleaded the elements of a “bill of discovery,” an equitable remedy used to obtain or preserve evidence for use in other proceedings. The court found that the Repeat Litigants had demonstrated an interest in the pending or anticipated asbestos cases, the materiality of the Claims Data, and the inability to obtain the evidence through other means.
The Implications of the Ruling
The court’s decision is significant because it allows the lawsuit to proceed past the initial pleading stage. This means the Repeat Litigants will have the opportunity to present evidence and argue their case more fully. The outcome of the case could have a significant impact on the availability of Claims Data in asbestos litigation. If the court ultimately rules in favor of the Repeat Litigants, the settlement trusts may be required to modify their data retention policies, potentially leading to the preservation of a vast amount of information.
The case underscores the ongoing complexities of asbestos litigation, the importance of evidence, and the role of the courts in balancing competing interests.