In re ACandS, Inc.

• Decision Date: 07 October 2011
• Docket Number: 01–2094–JKF,01–1139–JKF,03–35592–JKF.,00–22876–JKF,02–10429–JKF,00–3837–JKF,Nos. 02–12687–JKF,03–10495–JKF,04–11300–JKF,00–4471–JKF,01–2471–JKF,02–20198–JKF,s. 02–12687–JKF
• Citation: 462 B.R. 88
• Parties: In re ACANDS, INC., Debtor(s) (Closed).Armstrong World Industries, Inc., Debtor(s) (Closed).Combustion Engineering, Inc., Debtor(s) (Closed).The Flintkote Company, et al., Debtor(s).Kaiser Aluminum Corp., et al., Debtor(s).Owens Corning, Debtor(s) (Closed).United States Mineral Products Company, Debtor(s) (Closed).USG Corp., et al., Debtor(s) (Closed).W.R. Grace & Co., et al., Debtor(s).In The United States Bankruptcy Court for the Western District Of Pennsylvania.In re Pittsburgh Corning Corporation, Debtor(s).North American Refractories Company, Debtor(s).Mid–Valley, Inc., et al., Debtor(s) (Closed).
• Court: U.S. Bankruptcy Court — District of Delaware

462 B.R. 88

In re ACANDS, INC., Debtor(s) (Closed).Armstrong World Industries, Inc., Debtor(s) (Closed).Combustion Engineering, Inc., Debtor(s) (Closed).The Flintkote Company, et al., Debtor(s).Kaiser Aluminum Corp., et al., Debtor(s).Owens Corning, Debtor(s) (Closed).United States Mineral Products Company, Debtor(s) (Closed).USG Corp., et al., Debtor(s) (Closed).W.R. Grace & Co., et al., Debtor(s).In The United States Bankruptcy Court for the Western District Of Pennsylvania.In re Pittsburgh Corning Corporation, Debtor(s).North American Refractories Company, Debtor(s).Mid–Valley, Inc., et al., Debtor(s) (Closed).

Nos. 02–12687–JKF

00–4471–JKF

03–10495–JKF

04–11300–JKF

02–10429–JKF

00–3837–JKF

01–2471–JKF

01–2094–JKF

01–1139–JKF

00–22876–JKF

02–20198–JKF

03–35592–JKF.

United States Bankruptcy Court,D. Delaware.

Oct. 7, 2011.

Bruce L. Ahnfeldt, Law Offices of Bruce L. Ahnfeldt, Napa, CA, Curtis A. Hehn, James E. O'Neill, Laura Davis Jones, Michael Paul Migliore, Rachel Lowy Werkheiser, Pachulski, Stang, Ziehl, Yount, Jones & Wein, Wilmington, DE, George C. Greatrex, Jr., Shivers, Speilberg, Gosnay & Greatrex LLC, Cherry Hill, NJ, Sheldon K. Rennie, Fox Rothschild, LLP, Wilmington, DE, Thomas Michael Wilson, Kelley & Ferraro, LLP, Cleveland, OH, for Debtors.

MEMORANDUM OPINION¹

JUDITH K. FITZGERALD, Bankruptcy Judge.

Before the Court are three motions filed by Garlock Sealing Technologies, Inc., (a Chapter 11 debtor in the Western District of North Carolina, Case No. 10–31607), related to statements filed under Fed.R.Bankr.P. 2019 in the above-captioned cases. Garlock filed motions for access to Rule 2019 statements and motions to intervene in each of the above cases.² In the cases that are closed it also filed motions to reopen. ³ Under the circumstances of this case, we find that Garlock is not entitled to intervene in these cases or to access the 2019 statements at this time. Therefore, it is not appropriate to reopen the cases that are closed. All three motions, therefore, will be denied.

Before we address the substance of the 2019 motion, we first examine whether Garlock has standing to intervene in these cases. To satisfy Article III (constitutional) standing ⁴ “a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” PA Prison Soc'y v. Cortes, 622 F.3d 215, 228 (3d Cir.2010), cert. denied ––– U.S. ––––, 131 S.Ct. 1808, 179 L.Ed.2d 655 (2011), citing Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). See also Freeman v. Corzine, 629 F.3d 146, 153 (3d Cir.2010). The injury must be “palpable and distinct” and “must affect the plaintiff in a personal and individual way,” even if the injury is “widely shared.” 629 F.3d at 153 (citations omitted). There must be a “substantial likelihood” that the injury can be remedied by a judicial decision. Id.

In addition, prudential standing must be established. Prudential standing requires (1) that a litigant assert its own interests, (2) that courts refrain from adjudicating abstract questions amounting to generalized grievances and (3) that the litigant's interests are “arguably within the zone of interests intended to be protected.” Id. at 154.

STANDINGHarm

As noted, Garlock has filed its own bankruptcy case. Garlock asserts that it “likely is or was a party in interest in” these bankruptcy cases and “likely is or was a party” or party in interest to personal injury cases in the tort system in which various debtors were sued because it “was routinely sued in asbestos personal injury cases with the debtors.” Amended Motion of Garlock Sealing Technologies LLC for Orders Authorizing Access to 2019 Statements Filed in This Court and for Related Relief at unnumbered page 3 (hereafter “2019 Motion”), at unnumbered page 3 and ¶¶ 63, 65, 80. Garlock is no longer a defendant in the tort system and has never filed a claim in any of the bankruptcy cases.⁵ Thus, it has never established that it is or was a party or a party in interest in these bankruptcy cases.

Injury

The first factor the court must analyze is injury. Garlock has not shown that it has suffered any injury, much less a concrete or particularized harm or injury that is imminent. In fact, its allegations of harm are entirely a matter of conjecture and speculation. That is, Garlock contends that it needs the information to be able to prove that asbestos plaintiffs' law firms were concealing clients' exposure to the asbestos products of other bankruptcy debtors for the purpose of inflating settlement values against Garlock in the tort system, id. at ¶ 10, and that the 2019s show the law firms' knowledge of which clients were exposed to which debtor's products and constitute verification under penalty of perjury that the law firms' clients were creditors in these cases, not against Garlock. Id. at ¶ 14.⁶ In other words, Garlock raises the specter of a nationwide conspiracy by every law firm involved in each of these bankruptcy cases, every attorney who represents asbestos tort victims in those firms, and every asbestos personal injury victim (whether or not that victim was exposed to Garlock's products) to defraud Garlock, without identifying even one of its creditors whose 2019 information it seeks.

Garlock says it needs the information with respect to causes of action it “may have” under RICO (Racketeer Influenced and Corrupt Organizations, 18 U.S.C. § 1961 et seq.). By its own terms, the alleged action it “may have” is speculative. Garlock does not assert that it has suffered from racketeering activities. Significantly, no such actions have been filed. Garlock is no stranger to the tort system as to asbestos claims, as it admitted having been a co-defendant for many years. Thus, by virtue of its alleged status as a “co-defendant,” it has been aware of who the claimants against it were, that the claimants were also suing other asbestos defendants, and the identity of those co-defendants. Garlock settled cases while in the tort system and those settlements obviously resolved what it determined was in its own best interests and what the opposing litigants would accept. Garlock now wants to revisit its past practices in dealing with asbestos tort plaintiffs who asserted claims against it; it has made clear that its intent is to “prove” that it would not have made the settlement payments it actually made if it had known that those it settled with were asserting claims against other asbestos defendants/bankruptcy debtors. This argument is disingenuous. Garlock's settlement decisions were not made in a vacuum or in ignorance of the tort litigation or the bankruptcy landscape. See, e.g., Garlock's Amended Motion for Access to 2019 Statements (Doc. No. 5693 in Flintkote ) at ¶ 24 (“Garlock is investigating the possibility of damages actions against plaintiffs' firms or claimants to recoup settlements obtained through the concealment of exposure evidence”); ¶ 82 (the 2019 statements “will help show the extent to which plaintiffs' firms concealed exposure evidence in order to inflate Garlock's settlement values”).

Garlock has not alleged an injury at all. It cannot undo or modify decades of settlements by seeking to extract information which, as a non-party to these cases, it would not have had access to in the tort system.⁷ As we explained on the record in Pittsburgh Corning, To the extent that there is a discreet [ sic] piece of litigation that at some point in the future means that Garlock needs access, this is without prejudice, you're raising that in that litigation at that time because you may file a motion for access regarding a particular discreet [ sic] piece of litigation. But to fashion some wholesale idea that there is large, I'll use the word fraud because I think that's essentially what you're suggesting, fraud in either the tort system or here without any evidence of that in this case, is simply uncalled for and you've got to prove it. So you show me on the ballots or a ballot where an individual is filing a claim here and has made a representation in the tort system that they have no such claim here and then I'll reconsider.Bankr. No. 00–22876, Doc. No. 7422, Tr. 1/13/2010, at 46–47. This court further concluded that if Garlock could identify a specific individual who is claiming exposure to asbestos related to Garlock and/or Pittsburgh Corning and had earlier denied such exposure, Garlock could seek relief from this court. Id. at 50. At the time, the court was referring to actions against Garlock in the tort system but the same rationale applies to a claimant against Garlock in Garlock's bankruptcy.

Injury Redressable by Judicial Decision

Assuming, arguendo, that Garlock has an actual injury, permitting access to the 2019 statements will not redress the harm or even lead to redress because 2019 statements are representations by counsel to a court as to who their clients are. The statements are not claims, nor are they ballots cast with respect to a plan of reorganization, which are assertions of claims. Permitting access to the statements by strangers to the bankruptcy cases in which they were filed will not redress anything. If Garlock has grounds with respect to specific creditors or their law firms in its own bankruptcy case, it can file a new motion setting forth the facts. To date it has not identified a creditor in its case who also was a creditor in one of these bankruptcy cases and whose exposure evidence was allegedly concealed. Garlock simply surmises it “likely is or was” a party or party in interest in these bankruptcy...