Food Flavoring Firm's Bankruptcy Bars Future Torts

I'm blogging several times a day about products liability for Law.com. Each day I cross-post an excerpt of the day's blog I found most interesting.

A notice in a Chapter 11 reorganization bankruptcy, that tort claims would be barred after a date certain, applies to plaintiffs who did not know they would develop illnesses induced from a chemical producer's product, a federal judge has ruled.

Nine plaintiffs who worked for Chemtura Corporation's Firmenich plant filed lawsuits alleging they had been injured by exposure to diacetyl, a butter-flavor ingredient used in food products. Exposure to diacetyl can lead to lung disease.

The plaintiffs argued to U.S. District Jesse M. Furman of the Southern District of New York that they did not receive constitutionally adequate notice of the “bar date” for creditors because they did not know they had diacetyl-induced illnesses until after then. “The appellants argue that, while the notice may have been adequate as to people with reason to know they might have diacetyl-related claims, it was inadequate as to appellants because they 'had not yet been diagnosed with diacetyl-induced disease' and thus had no reason to know that they might have claims,” the opinion said.

Furman thought otherwise. “It cannot be said that, had the Firmenich claimants read the notice, they 'would have remain completely unaware that their substantive rights were affected' by the bar date,” the judge opined. “The notice, which was disseminated in a local newspaper circulated in the area of the Firmenich plant, advised that Chemtura had sold diacetyl to flood-favoring companies throughout the United States from 1998 to 2005, and specifically referenced Firmenich as one of those companies.”

The bankruptcy judge had barred from the plaintiffs from bringing tort actions.

The Oct. 31, 2009, bar date requires all creditors, including diacetyl claimants to file their proofs of claim. Notice included a publication in the Homes News Tribune, a newspaper circulated in Middlesex County, N.J. — the same county in which the plaintiffs filed their lawsuits. The notice alerted tort plaintiffs that they would have their claims barred for an injury that “becomes apparent either now or in the future,” the judge said.

The plaintiffs were on notice that they might have been exposed to diacetyl, that they might have been injured and that they would lose their rights to recover for injuries that had not yet manifested if they did not file a proof of claim form by the bar date, Furman said.