On October 24, 2025, Vice Chancellor Laster of the Delaware Court of Chancery denied motions to dismiss in a high-profile challenge to asbestos trust data-retention policies, allowing asbestos defendants’ claims to proceed past the pleading stage.
Background: Trust Data and Why It Matters
Asbestos personal injury trusts (“PI trusts”) are pre-funded legal entities established by bankrupt entities that previously manufactured or sold allegedly asbestos-containing products, and exist to compensate victims of asbestos-related disease. For decades,
PI trusts have collected vast “Claims Data” (e.g., work histories, product identification, exposure details, and supporting materials) from claimants seeking compensation.
In ongoing asbestos actions, asbestos defendants often request access to this data in order to uncover other possible sources of asbestos exposure, assign responsibility among different parties, pursue reimbursement or shared liability, and verify the accuracy of the injured parties’ statements and allegations. This process is recognized by numerous state “trust transparency” statutes and specialized asbestos case-management orders.
In January 2025, ten asbestos PI trusts and the Delaware Claims Processing Facility (collectively, the “Claim Processors”) issued new policies to destroy most resolved-claim data on a rolling one-year schedule beginning April 15, 2025, citing that destruction of such information was for privacy and cybersecurity protections. The plaintiffs (which are repeat asbestos defendants) alleged the policies would wipe out most existing data and severely curtail future availability, impairing their defenses and contribution rights.
Plaintiffs filed suit on April 14, 2025, seeking a declaratory judgment that the trusts must preserve Claims Data and a permanent injunction barring implementation. A preliminary injunction application was mooted by a stipulation preserving the status quo pending litigation, which the court entered on April 24, 2025.
The Court’s Ruling: Three Key Holdings
- Subject Matter Jurisdiction
The court held it has equitable jurisdiction based on the need for injunctive relief to maintain the status quo and the request for permanent injunctive relief implementing any declaration. The trusts’ agreement to pause deletion did not divest the court of jurisdiction. The court also found an independent equitable basis: the long-recognized “bill of discovery,” enabling equity to aid in obtaining or preserving evidence for pending or anticipated actions.
- Standing
Plaintiffs adequately alleged injury-in-fact, causation, and redressability. It is reasonably conceivable they will suffer concrete harm, which was losing access to unique Claims Data, leading to worse litigation outcomes and higher settlements if the policies proceed. The court also credited plaintiffs’ status as trust beneficiaries (Indirect Claimants) with a legally protected interest under the trust instruments, and found it reasonably conceivable the trusts have an ongoing preservation duty given omnipresent asbestos litigation and routine subpoenas.
- Failure to State a Claim (12(b)(6))
The complaint states a viable claim for equitable relief akin to a bill of discovery. Plaintiffs pled: (i) pending/anticipated cases; (ii) materiality of Claims Data; and (iii) inability to obtain comparable evidence as effectively, conveniently, or completely elsewhere, especially if the data is destroyed. The court rejected defenses that modern rules displace the bill of discovery, that relief must be sought in the same jurisdiction or only from parties, or that preservation orders are unavailable. It also noted any ultimate remedy could be tailored (including conditions like cost-sharing or data-security safeguards) and that ruling on specific remedies is premature at the pleading stage.
Why This Matters: Implications for Asbestos Litigation
- Preservation Duties for Trusts: The opinion signals Delaware courts will entertain claims in equity to preserve asbestos-trust data where destruction would frustrate defendants’ ability to obtain evidence critical to alternative-exposure defenses and contribution/indemnity claims.
- Revitalization of Equitable Tools: By grounding jurisdiction in the historic bill of discovery, the court provides a pathway to preempt spoliation where ordinary discovery would be rendered futile by planned deletion, potentially influencing litigation strategy in high-volume mass-tort contexts.
- Tailored, Conditional Relief Likely: Any final injunction, if granted, could be conditioned (e.g., cost reimbursement, cybersecurity protocols, data-categorization) and calibrated to balance equities between privacy/security concerns and defendants’ evidentiary needs.
- National Ripple Effects: With at least fifteen states expressly recognizing the relevance and discoverability of trust-claim evidence, this ruling may shape how trusts nationwide approach retention and how defendants pursue data to litigate exposure and allocation issues.
Bottom Line
The Delaware Court of Chancery refused to dismiss the repeat asbestos defendants’ effort to stop asbestos trusts from implementing one-year destruction policies for resolved-claim data. By affirming jurisdiction, standing, and a viable equitable claim to preserve evidence, the decision keeps the door open to injunctive relief and sets the stage for merits litigation over whether, and on what terms, trusts must retain Claims Data crucial to defense and contribution strategies in asbestos cases.
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