In re Federal-Mogul Global, Inc., No. 02-1426.

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtSloviter
Citation300 F.3d 368
PartiesIn re FEDERAL-MOGUL GLOBAL, INC. DaimlerChrysler Corporation; Ford Motor Company; General Motors Corporation, Appellants. In re Federal-Mogul Global, Inc. Hennessy Industries, Inc., Appellant. In re Federal-Mogul Global, Inc. MG Rover Group, Inc.; Nissan North America, Inc.; Volkswagen of America, Inc.; Volkswagen AG; Mercedes-Benz USA, LLC; BMW North America, Inc.; Volvo Cars North America, Inc.; Harley-Davidson Motor Company Group, Inc., Appellants. In re Federal-Mogul Global, Inc. Salvo Auto Parts; Holman Enterprises, Inc.; B.F. Goodrich, Inc., Appellants. In re Federal-Mogul Global, Inc. Honeywell International, Inc., Appellant. In re Federal-Mogul Global, Inc. British Motor Cars Distributors, Inc., Appellant. In re Federal-Mogul Global, Inc. Official Committee of Unsecured Creditors, Appellant. In re Federal-Mogul Global, Inc. International Truck and Engine Corp., Appellant.
Decision Date31 July 2002
Docket NumberNo. 02-1491.,No. 02-1688.,No. 02-1652.,No. 02-1664.,No. 02-1741.,No. 02-1426.,No. 02-1528.,No. 02-1492.
300 F.3d 368
In re FEDERAL-MOGUL GLOBAL, INC.
DaimlerChrysler Corporation; Ford Motor Company; General Motors Corporation, Appellants.
In re Federal-Mogul Global, Inc.
Hennessy Industries, Inc., Appellant.
In re Federal-Mogul Global, Inc.
MG Rover Group, Inc.; Nissan North America, Inc.; Volkswagen of America, Inc.; Volkswagen AG; Mercedes-Benz USA, LLC; BMW North America, Inc.; Volvo Cars North America, Inc.; Harley-Davidson Motor Company Group, Inc., Appellants.
In re Federal-Mogul Global, Inc.
Salvo Auto Parts; Holman Enterprises, Inc.; B.F. Goodrich, Inc., Appellants.
In re Federal-Mogul Global, Inc.
Honeywell International, Inc., Appellant.
In re Federal-Mogul Global, Inc.
British Motor Cars Distributors, Inc., Appellant.
In re Federal-Mogul Global, Inc.

Page 369

Official Committee of Unsecured Creditors, Appellant.
In re Federal-Mogul Global, Inc.
International Truck and Engine Corp., Appellant.
No. 02-1426.
No. 02-1491.
No. 02-1492.
No. 02-1528.
No. 02-1652.
No. 02-1664.
No. 02-1688.
No. 02-1741.
United States Court of Appeals, Third Circuit.
Argued June 17, 2002.
Filed July 31, 2002.

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COPYRIGHT MATERIAL OMITTED

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David M. Bernick (Argued), John Donley, Douglas G. Smith, Kirkland & Ellis, Chicago, IL, Christopher Landau (Argued), Eric B. Wolff, Kirkland & Ellis, Washington, D.C., for Appellants, Daimler-Chrysler Corp., Ford Motor Co., and General Motors Corp.

Arthur Makadon (Argued), William A. Slaughter, Robert R. Baron, Jr., Peter C. Amuso, Ballard Spahr Andrews & Ingersoll, Philadelphia, PA, for Appellants Honeywell International, Inc.

Charlene D. Davis, Eric M. Sutty, The Bayard Firm, Wilmington, DE, Robert B. Millner (Argued), Peter D. Wolfson, Andrew P. Lederman, Sonnenschein, Nath & Rosenthal, Chicago, IL, for Appellant, Official Committee of Unsecured, Creditors.

David E. Wilks, White & Williams, Wilmington, DE, for Appellants, MG Rover Group, Inc., Nissan North America, Inc., Volkswagen America, Volkswagen AG, Mercedez-Benz USA, BMW of North America, Volvo Cars North America, Harley Davidson Motor Co., International Truck & Engine Corp., British Motor Cars Distributors, Inc.

Lee Baylin, Towson, MD, for Appellant Salvo Auto Parts, Inc.

Michael A. Stover, Whiteford, Taylor & Preston, Baltimore, MD, for Appellant Holman Enterprises, Inc.

Douglas F. Murray, Whiteford, Taylor & Preston, Baltimore, MD, for Appellant BF Goodrich, Inc.

Henry A. Heiman, Heiman, Aber, Goldlust & Baker, Wilmington, DE, for Appellant Hennessy Industries, Inc.

Alan B. Rich (Argued), Baron & Budd, Dallas, TX, Robert T. Haefele, Wilentz, Goldman & Spitzer, Woodbridge, NJ, Jonathan A. Smith-George, Law Office of Jonathan A. Smith-George, Newport News, VA, Robert Paul, Philadelphia, PA, Marla R. Eskin, Wilmington, DE, Ronald L. Motley, Nancy Worth Davis, Ness Motley Loadholt Richardson & Poole, Mount Pleasant, SC, for Appellee Consolidated Asbestos Claimants.

Elihu Inselbuch (Argued), Caplin & Drysdale, New York City, Trevor W. Swett, III, Peter Van N. Lockwood, Albert G. Lauber, Caplin & Drysdale, Washington, D.C., Matthew G. Zaleski, III, Campbell & Levine, Wilmington, DE, for appellee Official Committee of Asbestos Claimants.

Charles S. Siegel (Argued), Peter A. Kraus, Waters & Kraus, Dallas, TX, for appellee Unofficial Committee of Select Asbestos, Claimants; Waters & Kraus Plaintiffs.

William F. Taylor, Jr., McCarter & English, Wilmington, DE, Michael B. Pullano, McCarter & English, Philadelphia, PA, for appellee, Kaeske-Reeves Claimants.

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Philip A. Harley, Paul, Hanley & Harley, Berkeley, CA, for appellees Alice Edmiston and Barry Edmiston.

Constance J. McNeil, Lewis, D'Amato, Brisbois & Bisgaard, San Francisco, CA, for appellee, The Pep Boys — Manny, Moe & Jack.

Barry R. Ostrager, Simpson, Thacher & Bartlett, New York City, for Amicus-Appellants, Travelers Indemnity, Travelers Casualty and Surety Company.

Daniel J. Popeo, Paul D. Kamenar, Washington Legal Foundation, Washington, D.C., Bruck R. Zirinsky, John H. Bae, Edward A. Smith, Cadwalader, Wickersham & Taft, New York City, for the Washington Legal Foundation as Amicus Curiae in support of appellants, DaimlerChrysler Corporation, Ford Motor Company, and General Motors Corporation.

Before: SLOVITER, COWEN and GIBSON,* Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.


Before us is an appeal of the District Court's decision denying the motion to transfer tens of thousands of asbestos-related tort claims and remanding these claims to the state courts where they were originally filed, primarily on the ground that the District Court had no subject matter jurisdiction. The appellants, who moved for the transfer in the District Court, argue that the District Court has subject-matter jurisdiction over these claims because they are "related to" the ongoing bankruptcy proceeding of Federal-Mogul Global, a company which, through its affiliates, manufactured products allegedly involved in the asbestos-related torts. The central issue before us is whether this court has jurisdiction to review the District Court's decision to deny the transfer and to remand.

I.
BACKGROUND
A.
Procedural Posture

Tens of thousands of individuals (Friction Product Plaintiffs or Plaintiffs) have brought personal injury and wrongful death claims in state courts across the country seeking damages for injuries allegedly caused by asbestos used in so-called friction products, such as brake pads (Friction Product Claims). The Friction Product Plaintiffs allege that they were exposed to asbestos fibers through, inter alia, the manufacture, installation, repair, and/or use of friction products and that this exposure caused them or their decedents to develop severe respiratory diseases, such as asbestos-related mesothelioma, asbestos-related lung, laryngeal or esophageal cancer, or asbestosis. They have brought their tort claims against various manufacturers and distributors of friction products (including Federal-Mogul Global, Inc., which had acquired Apex and Wagner, makers of friction products) as well as against companies that made and sold products that incorporated friction products (in particular, automobile manufacturers that used brake pads containing asbestos).

On October 1, 2001, Federal-Mogul and its 156 affiliates and subsidiaries (Debtors) filed Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. At that time, Debtors were co-defendants in many (though not all) of

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the thousands of Friction Product Claims now before us. The filing of the Debtors' Chapter 11 petitions stayed the state court proceedings as to them.

Thereafter, the Friction Product Plaintiffs began severing or dismissing their claims against Debtors. Other defendants named in the Friction Product suits (Friction Product Defendants or Defendants) began removing the claims against them from state courts to the appropriate federal district courts pursuant to 28 U.S.C. § 1452(a) (bankruptcy removal), arguing that the Friction Product Claims were "related to" the Debtors' bankruptcy proceeding and thus subject to the bankruptcy jurisdiction of the federal courts under 28 U.S.C. § 1334(b). The primary theory in support of "related to" jurisdiction is that the Friction Product Defendants would be able to seek indemnification or contribution from Debtors because some of the friction products used by Defendants were purchased from Debtors.

In response to the removal of the claims, the Friction Product Plaintiffs filed motions in the respective federal district courts to remand the cases to state court on the theory that removal was improper. Some of these district courts granted these motions to remand.

In November 2001, the chief judge of this circuit, pursuant to 28 U.S.C. § 292(b), assigned Judge Alfred M. Wolin, a senior district judge in the District of New Jersey, to sit by designation in the District of Delaware to manage five asbestos-related Chapter 11 proceedings, including that of Debtors. Three of the Friction Product Defendants (DaimlerChrysler Corporation, Ford Motor Company, and General Motors; hereinafter, the Big Three Automakers) had previously filed a motion to transfer provisionally to the District Court, pursuant to 28 U.S.C. § 157(b)(5),1 all of the removed Friction Product Claims pending against them in various district courts throughout the country. Thereafter, Volkswagen of America, Inc., Volkswagen AG, Mercedes-Benz USA, LLC, BMW North America, Inc., Volvo Cars North America, Inc., Rolls Royce Bentley Motor Cars, Inc., and Nissan North American, Inc. (hereinafter, the International Automakers) and Honeywell International, Inc.,2 as well as other Friction Product Defendants, also started removing and then transferring the Friction Product Claims against them to the District Court in Delaware.

Before the District Court could rule on any motions, some of the district courts to which the Friction Product Claims had originally been removed remanded cases before them back to the state courts. See, e.g., Dunn v. DaimlerChrysler Corp., No. 3:01-CV-2870-X, 2002 WL 1359701 (N.D.Tex. Jan.3, 2002); In re Asbestos Litig., 271 B.R. 118 (S.D.W.Va. Dec.7, 2001); Clamon v. Kellogg-Brown & Root, Inc., No. G-01-784 (S.D.Tex. Dec. 6, 2001). Other district courts refused to transfer their Friction Product Claims to the District Court. See, e.g., In re Asbestos Litig., No. 01-1790, 2002 WL 649400, 2002 U.S.Dist. LEXIS 3083 (D.Or. Feb. 1,

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2002). And some of the plaintiffs in cases that had been transferred to the District Court filed emergency motions for remand because they were in extremis, and sought to have the cases tried in state court before they died. The most pressing matter before the District Court was decision on the motions of the Friction Product Defendants for immediate and ex parte provisional transfer of all Friction Product Claims and their proposal that the District Court thereafter render a...

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139 practice notes
  • In re Best, Bankruptcy No. 08-17185bf.
    • United States
    • United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — District of Delaware
    • 12 Junio 2009
    ...has no jurisdiction to review the application of discretionary abstention. See 28 U.S.C. § 1334(d); In re Federal-Mogul Global, Inc., 300 F.3d 368, 389 n. 14 (3d Cir.2002). Thus, there can be no circuit court-mandated 9. Quoting Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180,......
  • In re Combustion Engineering, Inc., No. 03-3392.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 2 Diciembre 2004
    ...to" the debtor's Chapter 11 case. Recently we affirmed the validity of the Pacor test in In re Federal-Mogul Global, Inc., 300 F.3d 368 (3d Cir.2002). As in the current case, Federal-Mogul involved an asbestos-related bankruptcy. Page 227 of individuals brought personal injury claims i......
  • In re Federal–Mogul Global Inc., Nos. 09–2230
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 1 Mayo 2012
    ...over $350 million in the preceding year defending and indemnifying asbestos claims. See generally In re Federal–Mogul Global, Inc., 300 F.3d 368, 372–73 (3d Cir.2002) (describing the origins of the Federal–Mogul bankruptcy and the “[t]ens of thousands” of asbestos claims against the debtor ......
  • Retirement Sys. of Alabama v. J.P. Morgan Chase, No. CV-02-A-898-N.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Alabama
    • 24 Septiembre 2002
    ...that "related to" jurisdiction does not exist include: In re Federal-Mogul Global, Inc., ("Federal-Mogul # 2") 300 F.3d 368 (3d Cir.2002); Pacor Inc., v. Higgins, 743 F.2d 984 (3d Cir.1984); Wise v. Travelers Indem. Co., 192 F.Supp.2d 506 (N.D.W.Va.2002); Skylark v. Hone......
  • Request a trial to view additional results
139 cases
  • In re Best, Bankruptcy No. 08-17185bf.
    • United States
    • United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — District of Delaware
    • 12 Junio 2009
    ...has no jurisdiction to review the application of discretionary abstention. See 28 U.S.C. § 1334(d); In re Federal-Mogul Global, Inc., 300 F.3d 368, 389 n. 14 (3d Cir.2002). Thus, there can be no circuit court-mandated 9. Quoting Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180,......
  • In re Combustion Engineering, Inc., No. 03-3392.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 2 Diciembre 2004
    ...to" the debtor's Chapter 11 case. Recently we affirmed the validity of the Pacor test in In re Federal-Mogul Global, Inc., 300 F.3d 368 (3d Cir.2002). As in the current case, Federal-Mogul involved an asbestos-related bankruptcy. Page 227 of individuals brought personal injury claims i......
  • In re Federal–Mogul Global Inc., Nos. 09–2230
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 1 Mayo 2012
    ...over $350 million in the preceding year defending and indemnifying asbestos claims. See generally In re Federal–Mogul Global, Inc., 300 F.3d 368, 372–73 (3d Cir.2002) (describing the origins of the Federal–Mogul bankruptcy and the “[t]ens of thousands” of asbestos claims against the debtor ......
  • Retirement Sys. of Alabama v. J.P. Morgan Chase, No. CV-02-A-898-N.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Alabama
    • 24 Septiembre 2002
    ...that "related to" jurisdiction does not exist include: In re Federal-Mogul Global, Inc., ("Federal-Mogul # 2") 300 F.3d 368 (3d Cir.2002); Pacor Inc., v. Higgins, 743 F.2d 984 (3d Cir.1984); Wise v. Travelers Indem. Co., 192 F.Supp.2d 506 (N.D.W.Va.2002); Skylark v. Hone......
  • Request a trial to view additional results

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