Asbestos Docket on Trial at South Carolina Supreme Court
- SCCLR Newsletter
- Feb 26
- 8 min read
By: Jenn Wood
In a tense and probing two-hour hearing, South Carolina’s highest court took direct aim at the legal foundations underpinning a controversial asbestos receivership — an insular, highly unusual court docket that has dominated the Palmetto State’s mass-tort landscape for more than a decade.
From the opening moments of oral arguments in Tibbs v. 3M — one of several dozen cases routed through this incestuous system — it was clear the justices were not inclined to let either side off easy.
They pressed defense counsel on whether the receivership was legally valid to begin with. They pressed plaintiffs’ counsel on why they were using a receiver before obtaining a judgment. And they repeatedly circled back to one foundational question that cut through all the legal jargon: What, exactly, is the asset that justifies this receivership?
At stake is not merely a procedural dispute — but whether the legal structure supporting South Carolina’s asbestos docket can survive constitutional and statutory scrutiny.
To recap: a “receiver” is typically a neutral third party appointed by a court to take temporary control of specific property — usually to prevent it from being hidden, wasted, or dissipated while a lawsuit proceeds. It is an extraordinary remedy. Courts do not appoint receivers lightly, and they generally must identify a specific piece of property at risk.
In this case, however, the receiver is not managing a factory, a bank account, or a building. Instead, the receiver has been authorized to pursue claims and potentially insurance rights connected to foreign corporate entities — a far more abstract and controversial use of the statute.
That is what the Supreme Court is now examining.
THE LIMITS OF JUDICIAL POWER
Counsel for one of the appellants hauled before the dubious asbestos docket opened aggressively – arguing that the receivership never legally existed in the first place.
Todd Carroll, representing Altrad, told the court the receivership appointment was “a nullity” – an act or entity that is null and void – from its inception, emphasizing three core facts:
Cape Intermediate Holdings Limited (CIHL), a foreign company linked to the case, is not a party to the current litigation.
CIHL was never properly served.
CIHL has no property in South Carolina.
He argued that a South Carolina judge cannot appoint a receiver to take control of a foreign company that has no property or assets in the state — asserting the entire receivership structure was invalid from the beginning.
In plain terms, Carroll told the justices that a court cannot exercise power over a foreign corporation that was never properly brought before it and has no in-state property. If those foundational jurisdictional steps never occurred, he argued, the entire receivership collapses.
Justice Garrison Hill immediately pushed back, questioning whether earlier judges had already ruled that service and jurisdiction were satisfied — and whether the Supreme Court should defer to those findings.
The justices also drilled into the reach of the receivership statute itself. Does it allow a South Carolina court to appoint a receiver over a foreign company? And if so, can that authority extend beyond the state’s borders?
That line of questioning quickly led to discussion of Welch — a 2025 South Carolina Supreme Court decision that looms large over this dispute.
In Welch, the Court allowed a receiver to pursue certain insurance rights connected to asbestos claims. The key premise of that decision was that identifiable insurance policies — even though intangible — could qualify as “property” subject to receivership. In other words, the Court concluded that insurance coverage tied to South Carolina litigation could justify appointing a receiver, even if the insured entity itself was foreign.
Chief justice John Kittredge raised the obvious implication: if receivers truly lack authority outside South Carolina, does that undermine the reasoning in Welch?
Carroll attempted to distinguish Welch, arguing that it was fundamentally an insurance asset case. There, he said, specific insurance policies were identified and tied to claims. Here, by contrast, he maintained there are no identified insurance assets at all — only speculation.
If no identifiable property exists, Carroll argued, the statutory basis for a receiver disappears.
That assertion did not go unchallenged.
THE BOND PROBLEM
One of the most consequential exchanges centered on South Carolina Code §15-65-60 — which mandates that if a receiver is appointed prior to a judgment, the order “shall” include a valuation of the property and a bond provision.
A bond functions as financial protection. If the receivership later proves improper, the bond compensates the affected party. It is meant to guard against the potential abuse of this court-imposed remedy.
Attorney Victor Rawl argued the statute’s language is mandatory — and that because no bond was ever set, the appointment order is void.
Chief justice Kittredge posed a practical question: how can a court calculate a bond when the defendants have not disclosed assets or cooperated in identifying what property exists?
Justice John Few went a step further. If no identifiable property can be valued, he asked, does that mean the receivership statute does not fit this situation at all?
The bond debate revealed a deeper structural tension: the receivership statute presupposes a specifically identified asset at risk of dissipation. But here, the alleged “asset” appears to be something more abstract — potentially a corporate claim or an insurance right.
Justice George James distilled the issue sharply: “What is the asset?”
Rawl replied this confusion was the root of the problem — no concrete, identified asset was placed at risk before the receiver was appointed.
The statute appears designed for situations where there is a clearly defined piece of property in danger of disappearing. Here, the alleged “asset” may be something intangible — such as a potential insurance right or corporate claim.
That distinction matters. Courts are traditionally far more cautious when dealing with abstract rights than with physical property.
BUILDING THE CASE BACKWARD?
Justice Few repeatedly returned to a fundamental question: If plaintiffs believe a particular company committed fraud and caused harm, why not simply obtain a judgment first — and then pursue collection?
In most civil cases, that is exactly how the system works. A plaintiff proves liability, obtains a judgment, and then uses standard enforcement mechanisms to collect.
Plaintiffs’ counsel Theile McVey answered candidly: because a judgment entered in South Carolina is unlikely to be enforceable in the United Kingdom, which is where one of the companies involved in the litigation is located.
Cape is a UK-based entity, a former asbestos manufacturer now owned by Altrad. According to plaintiffs, British courts have historically refused to enforce certain U.S. default judgments. McVey described that history as part of a long-running strategy allowing the company to avoid paying American asbestos claims while continuing to benefit from U.S. sales.
But Justice Few pressed the logic: Even if a judgment is difficult to enforce abroad, insurance carriers would still require a judgment before paying claims. So why attempt to expand receivership authority pre-judgment?
McVey’s answer: the receiver allows the process to be made “fair” — enabling the receiver to tender claims to insurers and potentially secure a defense for Cape.
In other words, the receivership is framed not merely as a collection device — but as a mechanism to force participation. That rationale, however, did not appear to fully resolve the Court’s concerns.
INSURANCE – OR NOT?
Amajor dividing line in the hearing was whether any insurance policy exists that could qualify as property within South Carolina’s reach.
Defense counsel insisted that, unlike in Welch, no identified insurance asset has been shown.
Plaintiffs pointed to a letter in the record — written on Altrad letterhead and signed by a Cape director to Lloyd’s of London — suggesting insurance may exist and that efforts were made to limit the receiver’s access to information about it.
If such insurance rights exist, plaintiffs argue they are intangible property subject to receivership. If they do not, the statutory foundation becomes more precarious.
The justices repeatedly returned to this distinction, suggesting it may be pivotal to the outcome.
THE BIGGER QUESTION: CAN THIS MODEL WORK AT ALL?
Beyond the technical arguments, a broader concern surfaced repeatedly: is South Carolina attempting to use its receivership statute to accomplish something that ultimately cannot be enforced overseas?
Justice Few crystallized the issue with a pointed analogy: “why are you wasting your time trying to use the authority of a South Carolina court to change the locks on a warehouse in France?”
The metaphor captured the court’s apparent frustration. If the assets at issue — whether corporate entities, subsidiaries, or property — are located in Europe and beyond the physical reach of South Carolina courts, what practical authority does a state receiver actually have?
Justice Few framed the concern more directly: if South Carolina cannot seize or enforce control over foreign assets, why expend judicial resources attempting to do so?
Plaintiffs responded that not all assets are physical. They argued that intangible rights — particularly insurance policies or contractual claims tied to asbestos liabilities — may fall within the court’s reach even if the companies themselves operate abroad.
Appellants countered that stretching the receivership statute to cover hypothetical or undefined “intangible” assets goes beyond what the law permits. In their view, the statute requires a clearly identified piece of property at risk — not a broad theory of potential future recovery.
The justices did not tip their hand. But their sustained focus on statutory limits, identifiable assets, and real-world enforceability suggested they are not merely reviewing minor procedural defects. They are examining whether the receivership structure itself rests on solid legal ground — or whether it attempts to project South Carolina’s judicial authority far beyond its lawful borders.
THE OPTICS OF POWER
One moment during the hearing underscored the institutional tension hovering over the case.
As attorney John T. Lay presented arguments defending the receivership, court-appointed receiver Peter Protopapas briefly approached the lectern and appeared to assist him in responding to a justice’s question.
It was a small moment – but a symbolically potent one.
Protopapas and Lay both serve on the S.C. Judicial Merit Selection Commission (JMSC) — the legislatively controlled body that determines which judicial candidates advance to an election before the S.C. General Assembly. Two sitting members of that commission were effectively standing before the very justices they help screen and influence through the judicial election process.
In South Carolina — one of only two states where lawmakers elect judges, and the only state where legislators control the nominating process — those optics matter. They mattered even more given the timing of the hearing.
Justice Few, who has drawn legislative ire with his independent streak, made a pointed remark during oral arguments.
“It’s been 26 or seven years since I tried cases,” Few said. “Looks like I’m gonna get the opportunity to do it again soon.”
The comment was widely understood as a reference to the ongoing effort to replace him on the bench with former House speaker Jay Lucas — a move critics have described as legislative retaliation and a test of judicial independence.
Whether connected or coincidental, the receivership hearing unfolded against the backdrop of an active judicial election cycle — during the JMSC solicitation period — as lawmakers consider whether to unseat a sitting justice.
That context does not change the legal questions before the court, but some have suggested could impact how those questions are ultimately answered. In a state where lawmakers elect judges, judges appoint receivers, and receivers sit on the commission that screens judges – the line between the merits of an argument and the political influence of particular attorneys is worth watching.
And in a case challenging the legal foundation of one of the state’s most powerful dockets, those institutional relationships loom large — even when unspoken.
