Baron & Budd, PC v. Unsecured Asbestos Claimants
| Decision Date | 25 February 2005 |
| Docket Number | Civ. A. No. 04-5633(SRC) to 04-5636(SRC). |
| Court | U.S. District Court — District of New Jersey |
| Parties | BARON & BUDD, P.C., et al., Appellant, v. UNSECURED ASBESTOS CLAIMANTS COMMITTEE, et al., Appellee. v. Congoleum Corporation, Debtor. |
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Bruce Hugh Levitt, Levitt & Slafkes, PC, South Orange, NJ, for Appellants Baron & Budd, P.C., Foster & Sear, L.L.P., McCurdy & McCurdy, L.L.P., Motley Rice, L.L.C., Provost & Umphrey, L.L.P., Brayton Purcell, and Silber Pearlman, L.L.P.
Timothy P. Duggan, Stark & Stark, Princeton, NJ, for Appellant Campbell, Cherry, Harrison, Davis & Dove, P.C.
Nancy Isaacson, Goldstein, Lem & Isaacson, PC, Springfield, NJ, for Appellee Unsecured Asbestos Claimants Committee.
Stephen V. Falanga, Connell Foley, LLP, Roseland, NJ, for Appellee Travelers Casualty and Surety Company.
Stefano V. Calogero, Cuyler Burk LLP, Parsippany, NJ, for Appellee St. Paul Fire and Marine Insurance Co.
Martin Frederick Siegal, Siegal & Napierkowski, Cherry Hill, NJ, Barbara Maria Almeida, O'Melveny and Myers L.L.P., New York, NY, for Appellees Century Indemnity Company, ACE American Insurance Company, and ACE Property & Casualty Insurance Company.
Kevin M. Haas, Cozen O'Connor, Newark, NJ, for Appellee Mt. McKinley Insurance Company formerly known as Gibraltar Casualty Company and Everest Reinsurance Company formerly known as Prudential Reinsurance Company.
Before the Court is an appeal by the law firms of Baron & Budd, P.C. ("Baron & Budd"), Campbell, Cherry, Harrison, Davis & Dove, P.C. ("Campbell Cherry"), Foster & Sear, L.L.P. ("Foster & Sear"), McCurdy & McCurdy, L.L.P. ("McCurdy & McCurdy"), Motley Rice, L.L.C. ("Motley Rice") and Provost & Umphrey, L.L.P. ("Provost & Umphrey") (collectively the "Appellants"). On appeal are the bankruptcy court's September 2, 2004 Order Requiring Compliance with Bankruptcy Rule 2019 and Granting Other Relief (Bankr.Dkt. No. 1153) (the "Rule 2019 Compliance Order") and three other Orders of the bankruptcy court, filed on October 5 and 6, 2004. The three other orders are: (1) Order Denying Motion or Application for the Entry of an Order Reconsidering Order Requiring Compliance with Bankruptcy Rule 2019 and Other Relief (dated October 6, 2004) (Bankr.Dkt. No. 1341) (the "Order Denying Campbell & Cherry Motion to Amend"); (2) Order Denying Motion to Amend Order Requiring Compliance with Bankruptcy Rule 2019 and Granting Other Relief filed by Motley Rice (dated October 5, 2004) (Bankr.Dkt. No. 1343) (the "Order Denying Motley Rice Motion to Amend"); (3) Order Denying Motion to Amend Order Requiring Compliance with Bankruptcy Rule 2019 and Granting Other Relief filed by Baron & Budd and Silber Pearlman (dated October 6, 2004) (Bankr.Dkt. No. 1344) (the "Order Denying Baron & Budd Motion to Amend").
Movants in the bankruptcy court, and now opposing this appeal, are Century Indemnity Company & ACE American Insurance Company ("Century") and Travelers Casualty and Surety Company & St. Paul Fire and Marine Insurance Company ("Travelers") (collectively the "Appellees" or "Insurers").
Appellants represent multiple tort-victim creditors in this Chapter 11 bankruptcy case pending before Judge Ferguson. Appellees are the issuers of liability insurance policies to the Debtors. The Insurers are currently engaged in state court coverage litigation with the Debtors over the extent of coverage their policies provide for asbestos related claims. See Motion to Compel the Law Firm of Motley Rice, L.L.C. to Comply with its Obligation under Federal Rule of Bankruptcy Procedure 2019 (filed on July 6, 2004) (Bankr.Dkt. No. 922) ("Century Rule 2019 Motion") at 5 ().
On July 6, 2004, Travelers filed a Motion Pursuant to Fed. R. Bankr.P.2019 and 11 U.S.C. § 105 for an Order (a) Determining that Certain Asbestos Claimants Counsel Have Failed to Comply with Rule 2019 and Barring those Certain Counsel from Being Heard in this Case; (b) Invalidating any Authority or Acceptances Given, Procured, or Received by those Certain Non-Complying Counsel in Support of the Debtor's Proposed Plan; and/or (c) For Other Appropriate Relief (filed on July 6, 2004) (Bankr.Dkt. No. 919) ("Travelers' Rule 2019 Motion"). On July 7, 2004, Century filed an additional motion seeking similar relief. See Century Rule 2019 Motion.
Judge Ferguson heard oral argument on July 26, 2004 and issued an oral ruling on the record granting, in substantive part, the Rule 2019 Motions. Then, on September 2, 2004, Judge Ferguson entered the Rule 2019 Compliance Order, calling on all noncomplying Plaintiff firms to file Rule 2019 statements within ten days. The Order was specifically directed at the four firms who opposed the Rule 2019 motions—Motley Rice, Baron & Budd, Silber Perlman, and Provost & Umphrey—and provided, in relevant part, that:
Rule 2019 Statements ... shall include... (d) a list and detailed explanation of any type of co-counsel, consultant or fee-sharing relationships and arrangements whatsoever, in connection with this bankruptcy case or claims against any of the Debtors, and attachment of copies of any documents that were signed in conjunction with creating that relationship or arrangement ... Rule 2019 Compliance Order at 3.
A Motion for Reconsideration of the Rule 2019 Compliance Order, pursuant to Fed.R.Civ.P. 59 and Fed. R. Bankr.P. 9023, was filed by Campbell Cherry on September 13, 2004 and, on the same day, separate Motions to Amend were filed by Motley Rice, and by Baron & Budd, Provost & Umphrey, and Silber Pearlman. On September 28, 2004, Foster & Sear, McCurdy & McCurdy and Campbell Cherry filed joinders to the Baron & Budd Motion to Amend. Together with these motions, Appellants filed applications under Fed.R.Civ.P. 62(b) and Fed. R. Bankr.P. 7062 seeking to stay the Rule 2019 Compliance Order pending a hearing on the motion. Judge Ferguson denied the stay application and, on October 5, 2004, in three separate orders, denied the Rule 59 Motions. On October 15, 2004, a slightly different group of firms than the four that opposed the Rule 2019 Compliance Order, sought to stay the Order pending its appeal, and appeal of each of the three orders denying the Rule 59 Motions. On October 25, 2004, after additional briefing and oral argument, Judge Ferguson denied this second stay application.
Appellants purport to have already complied with their disclosure obligations under Rule 2019: Baron & Budd, Campbell Cherry, Motley Rice and Provost Umphrey have each filed Rule 2019 Statements which provide information about the creditors they represent in this bankruptcy case. Thus, on October 15, 2004, appellant firms filed four separate notices of appeal, one appealing from the Rule 2019 Compliance Order and three appealing from Judge Ferguson's three October Orders denying the firms' Rule 59 Motions (Bankr.Dkt.Nos.1373, 1374, 1375). On November 19, 2004, Appellants filed a motion requesting this Court to stay the Rule 2019 Compliance Order pending decision of this appeal. That request was denied, after full briefing and oral argument, on December 20, 2004.
Jurisdiction of the district courts over appeals from orders of bankruptcy courts is governed by 28 U.S.C. § 158(a), which provides that "the district courts of the United States shall have jurisdiction to hear appeals (1) from final judgments, orders, and decrees...." 28 U.S.C. § 158(a). Appellees argue that the bankruptcy court's Rule 2019 and Rule 59 Orders do not satisfy the § 158 "finality" requirement.
It is well settled in the Third Circuit, however, that "considerations unique to bankruptcy appeals have led us consistently in those cases to construe finality in a more pragmatic, functional sense than with the typical appeal," which generally requires an order to "dispose of all issues as to all parties to the case" before such an order can be considered final. See, e.g., In re Prof I Ins. Mgmt, 285 F.3d 268, 279 (3d Cir.2002). The rationale behind the Third Circuit's pragmatic interpretation of finality stresses the protracted nature of bankruptcy proceedings; the large number of involved parties with varied claims; and the fact that delay in resolving discrete claims until after final approval of a reorganization would waste time and resources, particularly if the appeal resulted in reversal of a bankruptcy court order necessitating re-appraisal of the entire plan. Id. (citing In re White Beauty View, 841 F.2d 524, 526 (3d Cir.1988)).
In this case, the Court is satisfied that jurisdiction is proper either as an appeal of a final...
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