Atlas Turner, Inc. v. Welch

Melvin Welch developed mesothelioma and lung damage as a result of his exposure to asbestos and asbestos-containing products at worksites in South Carolina. He and his wife sued the manufacturers and distributors of those products, including Atlas Turner, a Canadian company, in South Carolina state court. Mr. Welch later passed away from his injuries, and his wife continued the case on behalf of his estate. Arguing that the South Carolina court lacked jurisdiction over it, Atlas Turner refused to comply with the state court’s discovery orders. The court later sanctioned Atlas Turner by striking its pleadings and, to protect Mrs. Welch’s ability to recover on a default judgment, appointed a receiver under South Carolina law to investigate whether Atlas Turner had any applicable insurance policies, and, if so, to make claims on those policies.

Atlas Turner appealed the trial court’s sanctions order and its appointment of a receiver. The South Carolina Supreme Court affirmed the sanctions order, and largely affirmed the appointment of a receiver, holding that the state law was properly invoked.

Atlas Turner sought review in the U.S. Supreme Court, arguing that the receivership violated the due process clause because South Carolina lacks in rem jurisdiction over its insurance policies. Representing Mrs. Welch in the Supreme Court, we filed a brief in opposition to the petition. The brief explains, among other things, that the U.S. Supreme Court lacks jurisdiction because there has been no final determination by the state court; that Atlas Turner failed to raise its due-process argument in earlier proceedings; and that the receiver’s powers to investigate and make claims on the insurance policies was not an exercise of in rem jurisdiction. The Supreme Court denied the petition for certiorari.