In Re: Owens Corning

Filing 68

CORRECTED OPINION re appeal of Bankruptcy Orders (See D.I. 64 ). Signed by Judge Leonard P. Stark on 3/15/13. (ntl)

t

1
l

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

INRE:
Motions for Access of Garlock Sealing
Technologies LLC

Civ. No. 11-1130-LPS

GarlandS. Cassada, Esq. and Richard C. Worf, Jr., Esq., ofROBINSON, BRADSHAW &
HINSON, P.A., Charlotte, NC.
Gregory W. Werkheiser, Esq. and Matthew B. Harvey, Esq., of MORRIS, NICHOLS, ARSHT &
TUNNELL LLP, Wilmington, DE.
Attorneys for Appellant Garlock Sealing Technologies LLC.

Kevin E. Irwin, Esq., Jennifer Morales, Esq., and Bethany P. Recht, Esq., of KEATING
MUETHING & KLEKAMP PLL, Cincinnati, OH.
Scott J. Leonhardt, Esq. and Frederick B. Rosner, Esq., of The ROSNER LAW GROUP LLC,
Wilmington, DE.
Attorneys for Reorganized Debtors ACandS, Inc. and United States Mineral
Products Company.

Stephen Karotkin, Esq., Debra A. Dandeneau, Esq., and Abigail L. Zigman, Esq., ofWEIL,
GOTSHAL & MANGES, LLP, New York, NY.
Mark D. Collins, Esq., Jason M. Madron, Esq., and Lee E. Kaufman, Esq., of RICHARDS,
LAYTON & FINGER, P.A., Wilmington, DE.
Attorneys for Reorganized Debtor and Appellee Armstrong World Industries, Inc.

Jeffrey N. Rich, Esq., ofK&L GATES LLP, New York, NY.
Adam Paul, Esq., of KIRKLAND & ELLIS, LLP, Chicago, IL.
Laura Davis Jones, Esq. and Curtis A. Hehn, Esq., of PACHULSKI STANG ZIEHL & JONES
LLP, Wilmington, DE.
Attorneys for Reorganized Debtor Combustion Engineering Inc.

Kevin T. Lantry, Esq., Sally S. Neely, Esq., Christina M. Craige, Esq., and Jeffrey E. Bjork, Esq.,
of SIDLEY AUSTIN LLP, Los Angeles, CA.
Laura Davis Jones, Esq. and Curtis A. Hehn, Esq., of PACHULSKI STANG ZIEHL & JONES
LLP, Wilmington, DE.
Attorneys for Debtors The Flintkote Company, et al.

Gregory M. Gordon, Esq., {CORRECTED 3/15113] of JONES DAY, Dallas, TX.
Daniel J. DeFranceschi, Esq. and Jason M. Madron, Esq., ofRICHARDS, LAYTON &
FINGER, P.A., Wilmington, DE.
Attorneys for Debtors Kaiser Aluminum Corp., et al.

Adam H. Isenberg, Esq. and MaryJo Bellew, Esq., of SAUL EWING LLP, Philadelphia, PA.
Mark Minuti, Esq., of SAUL EWING LLP, Wilmington, DE.
Attorneys for Appellee Reorganized Owens Corning Sales, LLC f/k/a Owens
Corning and its Affiliated Reorganized Debtors.

David G. Heiman, Esq., of JONES DAY, Cleveland, OH.
Brad B. Erens, Esq., of JONES DAY, Chicago, IL.
Daniel J. DeFranceschi, Esq. and Paul N. Heath, Esq., of RICHARDS, LAYTON & FINGER,
P.A., Wilmington, DE.
Attorneys for Debtors USG Corp., et al.

John Donley, Esq. and Adam Paul, Esq., of KIRKLAND & ELLIS LLP, Chicago, IL.
Laura Davis Jones, Esq. and James E. O'Neill, Esq., ofPACHULSKI STANG ZIEHL & JONES
LLP, Wilmington, DE.
Attorneys for Debtors WR. Grace & Co., et al.

Ellen C. Brotman, Esq., ofMONTGOMERY, MCCRACKEN, WALKER & RHOADS, LLP,
Philadelphia, PA.
Natalie D. Ramsey, Esq.,Laurie A. Krepto, Esq., and Davis Lee Wright, Esq., of
MONTGOMERY, MCCRACKEN, WALKER & RHOADS, LLP, Wilmington, DE.
Attorneys for Certain Law Firm Appellees- Kazan, McClain, Lyons, Greenwood
& Harley; Waters & Kraus LLP {CORRECTED 3/15113]; Simmons Browder
Gianaris Angelides & Barnerd LLC; Bergman, Draper & Frockt;, Gori, Julian &
Associates, P.C; Early, Lucarelli, Sweeney & Strauss; Cooney & Conway; Lipsitz
& Ponterio, LLC; Bifferato LLC; and Montgomery, McCracken, Walker &
Rhoads, LLP.

Sander L. Esserman, Esq., David A. Klingler, Esq., David J. Parsons, Esq., and Cliff I. Taylor,
Esq., of STUTZMAN, BROMBERG, ESSERMAN & PLIFKA, P.C., Dallas, TX.
Daniel K. Hogan, Esq., of THE HOGAN FIRM, Wilmington, DE.
Attorneys for Appellees, The Law Firms- The Law Offices of Peter G. Angelos,
P. C.; Baron & Budd, P. C.; Brayton Purcell, LLP; Hissey Kientz, LLP; the
Lipman Law Firm; Reaud, Morgan & Quinn, Inc.; Thornton & Naumes, LLP;
{CORRECTED 3115113] Weitz & Luxenberg P.C; and Williams Kherkher Hart
Boundas, LLP.

Joseph F. Rice, Esq., Jeanette Gilbert, Esq., and John Baden, Esq. of MOTLEY RICE LLC, Mt.
Pleasant, SC.
Daniel K. Hogan, Esq., of THE HOGAN FIRM, Wilmington, DE.
Attorneys for Various Asbestos Claimants represented by Motley Rice LLC

Elihu Inselbuch, Esq., of CAPLIN & DRYSDALE, CHARTERED, New York, NY.
Peter Van N. Lockwood, Esq., Trevor W. Swett, Esq., and Kevin C. Maclay, Esq., of CAPLIN &
DRYSDALE, CHARTERED, Washington, DC.
Philip E. Milch, Esq. and David B. Salzman, Esq., of CAMPBELL & LEVINE, LLC, Pittsburgh,
PA.

J

MarlaR. Eskin, Esq. and Mark T. Hurford, Esq., of CAMPBELL & LEVINE, LLC, Wilmington,
DE.

Attorneys for the ACC Appellees- Official Committees ofAsbestos Claimants in
The Flintkote Company, et al. and WR. Grace & Co., et al. bankruptcy cases.

Ramona D. Elliott, Esq., Nan R. Eitel, Esq., and Paul W. Bridenhagen, Esq., ofthe UNITED
STATES DEPARTMENT OF JUSTICE, Washington, DC.
Richard L. Schepacarter, Esq. and David M. Klauder, Esq., of the UNITED STATES
DEPARTMENT OF JUSTICE, Wilmington, DE.

Attorneys for Appellee Roberta A. DeAngelis, United States Trustee for Region 3.

OPINION 1

CORRECTED OPINION
ISSUED ON MARCH 15,2013

March 1, 2013
Wilmington, Delaware
1

In identifying the parties and counsel, the Court endeavored to be as comprehensive as
possible, consulting: (i) Appellant's list of names of all parties to the relevant opinion and order
appealed from and the names of their respective attorneys; (ii) the pleadings filed in these nine
appeals; and (iii) the transcripts of proceedings before this Court, in which parties and counsel
identified themselves.

This case involves a request for access to materials submitted to the Clerk of the
Bankruptcy Court in compliance with a Bankruptcy Rule and an implementing order of the
Bankruptcy Court. The same request was filed, and denied, in these nine related bankruptcy
proceedings, some of which had already been closed and others which remain open. In this
appeal from the Bankruptcy Court's denial of access, the Court concludes that access should be
provided, subject to certain limitations.
BACKGROUND
Garlock and Its Bankruptcy Case
On June 5, 2010, Garlock Sealing Technologies LLC ("Garlock" or "Appellant"), a
manufacturer of sealing products, and two of its affiliates, filed for chapter 11 bankruptcy
protection in the United States Bankruptcy Court for the Western District ofNorth Carolina (the
"North Carolina Bankruptcy Court"). (See (Docket Item ("D.I.") 17 at 6; D.I. 52 at 2-3)2 Their
pending chapter 11 bankruptcy cases are jointly administered as In re Garlock Sealing

Technologies LLC, Bankr. Case No. 10-31607 (Bankr. W.D.N.C.). (See D.I. 52 at 3)
Garlock sought bankruptcy protection to establish a trust to resolve all current and future
asbestos claims against the company. As part of its bankruptcy proceedings, the North Carolina
Bankruptcy Court has scheduled a trial for the purposes of estimating Garlock's liability for
mesothelioma claims. (See, e.g., id. at 4; Hr'g Tr., Feb. 15, 2012 (D.I. 49) (hereinafter "2/15112
Tr."), at 9-10; Hr'g Tr., June 12, 2012 (D.I. 58) (hereinafter "6/12/12 Tr."), at 10, 34-35; D.I. 60;

2

Unless otherwise noted, references to docket items are to In reMotions for Access of
Garlock Sealing Technologies LLC, Civil A. No. 11-1130-LPS (D. Del.).
1

Hr'g Tr., Feb. 21, 2013 (D.I. 63) (hereinafter "2/21113 Tr."), at 7-8) In preparation for these
estimation proceedings in its own bankruptcy case, Garlock seeks access to information filed in
numerous asbestos-related bankruptcies, including bankruptcies pending in this District.

The Delaware Bankruptcy Cases
The present appeal relates to orders entered in nine asbestos-related bankruptcy cases
filed in the United States Bankruptcy Court for the District of Delaware ("Bankruptcy Court"). 3
Each of the nine Delaware Bankruptcy Cases is presided over by the Honorable Judith K.
Fitzgerald, United States Bankruptcy Judge for the Western District of Pennsylvania, sitting by
designation in the District of Delaware. Six of the Delaware Bankruptcy Cases are closed

(Owens, A CandS, Armstrong, CE, USMP, and USG) while the remaining three (Flintkote,
Kaiser, and Grace) are open. (See D.I. 1 Exs. A & B, Op. at 4)
The WDPa Bankruptcy Cases
In addition to the nine asbestos-related Delaware Bankruptcy Cases, Garlock is also the

appellant in three appeals pending before the United States District Court for the Western District
of Pennsylvania (collectively, the "WDPa Appeals"). Judge Fitzgerald handled the WDPa

3

The nine asbestos-related "Delaware Bankruptcy Cases," and corresponding bankruptcy
docket numbers of the Orders and Opinions Garlock is appealing, are as follows: (i) In re
ACandS, Inc. ("ACandS''), Bankr. Case No. 02-12687 (JKF) (D.I. 3697 & 3698); (ii) In re
Armstrong World Indus., Inc. ("Armstrong"), Bankr. Case No. 00-04471 (JKF) (D.I. 10757 &
10758); (iii) In re Combustion Eng'g, Inc. ("CE'), Bankr. Case No. 03-10495 (JKF) (D.I. 3437
& 3438); (iv) In re Flintkote Co., et al. ("Flintkote"), Bankr. Case No. 04-11300 (JKF) (D.I.
6244 & 6246); (v) In re Kaiser Aluminum Corp., et al. ("Kaiser"), Bankr. Case No. 02-10429
(JKF) (D.I. 10166 & 10167); (vi) In re Owens Corning ("Owens"), Bankr. Case No. 00-03837
(JKF) (D.I. 21027 & 21028); (vii) In reUnited States Mineral Products Co. d/b/a Isoletek Int'l
("USMP"), Bankr. Case No. 01-02471 (JKF) (D.I. 3934 & 3935); (viii) In re USG Corp., et al.
("USG"), Bankr. Case No. 01-02094 (JKF) (D.I. 12652 & 12653); and (ix) In re WR. Grace &
Co., et al. ("Grace"), Bankr. Case No. 01-01139 (JKF) (D.I. 27737 & 27740). (See D.I. 1 Ex. A;
D.I. 2 at 16)
2

bankruptcy proceedings4 that led to these appeals. United States District Judge Nora Barry
Fischer is presiding over the WDPa Appeals. On June 21, 2012, Judge Fischer stayed the WDPa
Appeals pending the disposition of the instant appeals in this Court. 5

The Orders Being Appealed
On October 12, 2011, pursuant to 28 U.S.C. § 158(a)(1) and Rules 8001 and 8002 ofthe
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), Garlock appealed from the
October 7, 2011 Order Denying Motions for Access to 2019 Statements, Denying Motions to
Intervene and Denying Motions to Reopen Certain Closed Cases (the "Order") and a companion
Memorandum Opinion ("Opinion" or "Op."). 6 Judge Fitzgerald entered an essentially identical
Order and Opinion in each of the nine Delaware Bankruptcy Cases and the three WDPa
bankruptcy cases. (See generally D.I. 1; D.I. 2 at 2-3; see also In re ACandS, Inc., 462 B.R. 88
(Bankr. D. Del. 2011))

Appellees
The responding appellees in this matter are: (1) two groups of law firms ("Certain Law

4

See In re Mid-Valley, Inc., et al., Bankr. Case No. 03-35592 (JKF) (D.I. 2817); In re
North American Refractories Co., Bankr. Case No. 02-20198 (JKF) (D.I. 7246); In re Pittsburgh
Corning Corp. ("PCC' or "Pittsburgh Corning"), Bankr. Case No. 00-22876 (JKF) (D.I. 8488).
(See D.I. 2 at 3)
5

See Garlock Sealing Techs. LLC v. Pittsburgh Corning Corp., Civ. A. No. 11-1406NBF, D.I. 26 & 27; Garlock Sealing Techs. LLC v. Mid-Valley, Inc., Civ. A. No. 11-1439-NBF,
D.I. 20 & 21; Garlock Sealing Techs. LLC v. Armstrong World Indus., Inc., et al., Civ. A. No.
11-1452-NBF, D.I. 25 & 26.
6

See D.I. 1 Ex. B (Orders and Opinions appealed from and list of names of all parties
thereto).
3

l

Firm Appellees" and "Law Firms") who have filed the Rule 2019 statements at issue on appeal; 7
(2) the Official Committees of Asbestos Claimants in the open Flintkote and Grace bankruptcies
(the "ACC Appellees"), representing the constituencies of asbestos plaintiffs whose attorneys
filed Rule 2019 statements; and (3) various reorganized debtors in the closed Bankruptcy Cases
Garlock now seeks to reopen ("Closed Case Appellees"). (See D.l. 53 at 2; see also, e.g.,
2/15112 Tr. at 1-7; 6/12/12 Tr. at 1-6, 75-76; 2/21/13 Tr. at 1-6)

Garlock's Requests for Access to Rule 2019 Exhibits
At the pertinent time, Rule 20 19 of the Federal Rules of Bankruptcy Procedure required
an entity, other than a committee appointed by the bankruptcy court, to file a verified statement
setting forth:
(1) the name and address ofthe creditor ... ; (2) the nature and
amount of the claim or interest and the time of acquisition thereof
unless it is alleged to have been acquired more than one year prior
to the filing of the petition; (3) a recital of the pertinent facts and
circumstances in connection with the employment of the entity ... ;
and (4) with reference to the time of the employment of the entity, .
. . the amounts of claims or interests owned by the entity, ... the
times when acquired, the amounts paid therefor, and any sales or
other disposition thereof. ...

7

The two counsel groups consist of the following law firms:

(i) Kazan, McClain, Lyons, Greenwood & Harley; Waters & Kraus LLP {CORRECTED
3115113}; Simmons Browder Gianaris Angelides & Bamerd LLC; Bergman, Draper & Frockt;
Gori, Julian & Associates, P.C.; Early, Lucarelli, Sweeney & Strauss; Cooney & Conway; Lipsitz
& Ponterio, LLC; Bifferato LLC; and Montgomery, McCracken, Walker & Rhoads, LLP
(collectively, "Certain Law Firm Appellees"); and
(ii) The Law Offices of Peter G. Angelos, P.C.; Baron & Budd, P.C.; Brayton Purcell,
LLP; Hissey Kientz, LLP; The Lipman Law Firm; Reaud, Morgan & Quinn, Inc.; Thornton &
Naumes, LLP; {CORRECTED 3115113}; Weitz & Luxenberg P.C.; and Williams Kherkher Hart
Boundas, LLP (collectively, the "Law Firms").
4

l
Fed. R. Bankr. P. 2019[(a)] (eff. Aug. 1, 1991) (D.I. 32, Law Firms App., Tab 1).

In an effort to direct how law firms and other affected entities were to comply with
Bankruptcy Rule 2019 in the context of these mass tort asbestos bankruptcy cases, Judge
Fitzgerald entered several orders (the "2019 Orders"). 8 The 2019 Orders required, among other
things, that all counsel representing multiple asbestos claimants file with the Clerk of the
Delaware Bankruptcy Court statements in accordance with Bankruptcy Rule 2019 (the "2019
Statements"). (See, e.g., D.I. 21 at 3-4) These 2019 Statements identified the name and address
of the filing law firm but did not include substantive disclosures; generally, they were

I

l

electronically filed and docketed. (See, e.g., D.I. 31 at 7-8) The 2019 Orders also required that
exhibits to the 2019 Statements be provided to the Clerk of the Delaware Bankruptcy Court
("2019 Exhibits"). (See, e.g., id.; D.I. 21 at 4) Unlike the 2019 Statements, however, the 2019
Exhibits were not to be filed electronically on the public docket; instead, after being submitted to
the Clerk's office, the 2019 Exhibits were to be retained and eventually archived by the Clerk.
(See, e.g., D.I. 31 at 7-8, 19; D.l. 43 at 5-6)

t

I

The 2019 Orders contemplated providing access to the 2019 Exhibits only upon a motion
and order of the Bankruptcy Court. See In re Pittsburgh Corning Corp., 260 F. App'x 463,465

8

See, e.g., D.l. 30 at 4; D.l. 31 at 7; Revised Order Requiring Filing of Statements
Pursuant to Fed. R. Bankr. P. 2019, dated October 22, 2004, entered in PCC (D.I. 2, Garlock
Record on Appeal ("ROA'') Tab 56; D.l. 5, Law Firms ROA, Tab 18; D.l. 32, Law Firms App.,
Tab 4); Revised Order Requiring Filing ofStatements Pursuant to Fed. R. Bankr. P. 2019 but
Staying Effective Date, dated October 22, 2004, entered in Armstrong (D.I. 5, Law Firms ROA,
Tab 9; D.l. 6, Certain Law Firm Appellees ROA, Tab 24; D.l. 22, Armstrong App., Tab 1). The
2019 Orders in the other Delaware Bankruptcy Cases may be found at: Law Firms ROA Tab 8
(ACandS); Law Firms ROA Tab 10 (CE); Law Firms ROA Tab 11 (Flintkote); Law Firms ROA
Tab 12 (Kaiser); Law Firms ROA Tab 13 (Owens); Law Firms ROA Tab 14 (USMP); Law Firms
ROA Tab 15 (USG); Law Firms ROA Tab 16 (Grace). (D.I. 31 at 7 n.29)

5

I

(3d Cir. Jan. 10, 2008) ("The Bankruptcy Court fashioned an order that allowed law firms to file
'exemplars' of their empowering documents and required anyone who wished to view the Rule
2019 submissions to file a motion with the court to gain permission."). Specifically, the 2019
Orders provided:
It is further ORDERED that the docket entry of the [2019
Statement] that is filed shall state that Exhibits (as described
below) have not been scanned into the docket but are available
upon motion to and order of the Court. The docket entry shall be
in substantially the following format:

Verified Statement Pursuant to Fed.R.Bankr.P. 2019 filed
by [INSERT FILING ENTITY'S NAME]. Exhibits have
not been scanned but may be accessed by parties who
obtain Court order authorizing access.

It is further ORDERED that upon filing a 2019 Statement
with the Clerk, each entity filing a 2019 Statement shall
electronically file the 2019 Statement without exhibits, and shall
provide all exhibits on CD's only to the Clerk, who shall maintain
the exhibits without putting them into the electronic data base.

(D.I. 30 at 4 (citing Revised Order Requiring Filing of Statements Pursuant to Fed. R. Bankr. P.

2019, dated October 22, 2004, entered in Owens (see D.I. 3, Owens ROA, Tab 1 at 2-3)
(emphasis added)); see also D.I. 18, Garlock App., Tab 2 (same))
This procedural framework - requiring compliance with Rule 2019, making the 2019
Statements available on the public docket, and retaining the 2019 Exhibits in the Clerk's
possession and accessible only by motion to and order of the Court - was upheld on appeal by
two district courts as well as the Third Circuit. See In re Kaiser Aluminum Corp., 327 B.R. 554,
559, 560 (D. Del. 2005) (concluding that "Bankruptcy Court did not err in permitting exemplars

6

to be filed or in restricting access to the Rule 2019 information," as 2019 Orders "strike the
appropriate balance between maintaining the public's right to access the Rule 2019 information
and ensuring that the information is not misused," adding that "Bankruptcy Court did not err in
declining to post the information on the electronic docket and in permitting access to that
information by motion of the parties and order of the court"); In re Pittsburgh Corning Corp.,
2005 WL 6128987 (W.D. Pa. Sept. 27, 2005), aff'd, 260 F. App'x 463 (3d Cir. Jan. 10, 2008). In
affirming the framework established by the 2019 Orders, the reviewing courts noted that specific
requests for access to the 2019 Exhibits might be filed and might then be granted or denied. See

Pittsburgh Corning, 2005 WL 6128987, at *10 ("The bankruptcy court in this case made clear
that it was important to have the statements filed and that the issue of access would be addressed
if and when a party files a proper motion. . . . If a motion is filed and briefed, the bankruptcy
court, after notice and hearing, may well conclude that information initially protected by the 2019
Order should be filed of record for public access."); Pittsburgh Corning, 260 F. App'x at 465
("find[ing] no error in the District Court's resolution of [the] access challenge"); Kaiser, 327
B.R. at 560 (stating "the Bankruptcy Court did not seal the Rule 2019 information" but, instead,
2019 Orders "maintain[ed] the public's right to access the Rule 2019 information ... [but]
permit[ted] access to that information by motion of the parties and order of the Court").
On January 10, 2011, Garlock filed motions in the nine Delaware Bankruptcy Cases and
the three WDPa bankruptcy cases seeking access to the 2019 Exhibits. (See, e.g., D.I. 1 Ex. B;
D.I. 2, Garlock ROA, Tab 1; D.I. 17 at 11; D.I. 21 at 4; D.I. 22, Armstrong App., Tab 6 at 343;
D.I. 31 at 11; D.I. 43 at 6) On February 14,2011, the Bankruptcy Court conducted a hearing on
the motions and instructed Garlock that its motions could not be filed as to debtors whose cases

7

were closed until the closed cases were reopened. (See, e.g., D.I. 2, Garlock ROA, Tab 25; D.I.
17 at 14; D.I. 21 at 4; D.I. 22, Armstrong App., Tab 6 at 343 n.1, 348, 350-51; D.I. 31 at 12)
Hence, on February 18, 2011, Garlock filed motions to open the closed bankruptcy cases,
motions to intervene in the bankruptcies for the limited purpose of seeking access to the 2019
Exhibits, and amended motions for access. (See, e.g., D.I. 2, Garlock ROA, Tabs 9, 15; D.I. 21
at 4-5; D.I. 22, Armstrong App., Tab 6; D.I. 30 at 4) By its motions, Garlock sought to view and
copy the 2019 Exhibits; to intervene in cases, if necessary, to obtain access to the exhibits; and to
reopen closed bankruptcy cases, if necessary, for the limited purpose of obtaining access to the
exhibits.
In her Opinions and Orders of October 7, 2011, Judge Fitzgerald denied all of the relief

sought by Garlock in all of the bankruptcy cases. She denied access to the 2019 Exhibits, denied
the request to reopen closed bankruptcies, and denied the request to intervene. (See generally
D.I. 1 Ex. B, Op.; D.I. 2, Garlock ROA, Tabs 31 (Op.) & 32 (Order)) In particular, Garlock was
not permitted to intervene because it lacked standing to do so at such a late stage in chapter 11
proceedings in which, for the most part, Garlock had not previously participated. (See D.I. 1 Ex.
B, Op. at 4-1 0) Garlock also lacked Article III standing and could not assert the public right of
access because "Garlock is not and was not a party and has no claims in any of the cases." (!d. at
23-24) The Bankruptcy Court further found Garlock lacked prudential standing, remarking that
Garlock "has not alleged other than an imagined harm" and a mere "generalized ... grievance."
(!d. at 9) Moreover, the negative consequences that would result from granting Garlock's request

to reopen the closed cases - some of which involved debtors that had emerged from bankruptcy a
decade earlier - "would be enormous." (!d. at 9-1 0)

8

I
The Bankruptcy Court also concluded that Garlock sought, improperly, to use Rule 2019
for purposes for which it was not intended. "Rule 2019 is not a discovery tool but is to ensure
that plans are negotiated and voted on by those authorized to act on behalf of real parties in
interest in a case . ... The 2019 statements are not, and do not substitute for, proofs of claim or
ballots of creditors who vote on a plan of reorganization." (!d. at 13) Nor did the Bankruptcy
Court believe the 2019 Exhibits would be helpful to Garlock, as they are "attorney statements of
authority to represent multiple clients as listed thereon. They are not claims and are not
affirmative statements by the clients themselves." (!d. at 12)
The Bankruptcy Court further discussed the public right of access to judicial records:
The right of the public to access judicial records is to promote
trustworthiness of the judicial process, to curb judicial abuses, and
to provide the public with a more complete understanding of the
judicial system, including a better perception of its fairness. The
requirement that counsel establish their authority to represent
clients they list in their 20 19s serves that purpose in the particular
bankruptcy case. That access to the individuals' personal details is
restricted is not inconsistent with the public's right of access.
(!d. at 15-16 (internal citations and quotation marks omitted))

Proceedings on Appeal

Garlock's appeals ofthe October 7, 2011 decisions entered by the Bankruptcy Court were
docketed in this Court on November 16, 2011. (D.I. 1) On November 23, 2011, they were
assigned to the undersigned District Judge.
On December 16, 2011, the Court ordered the nine appeals consolidated for procedural
purposes and granted Garlock's requests to bypass mediation, expedite the appeals, and schedule
oral argument. (D.I. 16) The parties completed briefing on January 27, 2012.

9

On May 18, 2012, Garlock filed a Judicial Notice Motion (D.L 52), asking the Court to
take judicial notice of certain proposed legislation at the state and federal levels and, if necessary,
to supplement the appellate record with the proposed legislation.
The Court heard oral argument on the appeals and Judicial Notice Motion on June 12,
2012. (See 6/12/12 Tr.)

JURISDICTION
The Bankruptcy Court's Orders denying Garlock access to the 2019 Exhibits are
appealable as final orders. See 28 U.S.C. §§ 158(a)(1) and 1334; United States v. Smith, 123
F.3d 140, 145 (3d Cir. 1997) ("Orders either granting or, as in this case, denying access to court
proceedings or records are appealable as final orders .... "). The same is true of the Bankruptcy
Court's denials of Garlock's motions to intervene and reopen closed bankruptcy cases. See In re
Smith, 189 F. App'x 88, 89 (3d Cir. June 22, 2006) ("The denial of a motion to reopen is a final,
appealable order."); United States v. A/can Aluminum, Inc., 25 F.3d 1174, 1179 (3d Cir. 1994)
("The denial of a motion to intervene is a final, appealable order.").

LEGAL STANDARDS
This Court reviews the Bankruptcy Court's findings of fact for clear error and exercises
plenary review over decisions oflaw. See Am. Flint Glass Workers Union v. Anchor Resolution
Corp., 197 F.3d 76, 80 (3d Cir. 1999). When an appeal involves mixed findings of fact and
conclusions of law, the Court must "break down [such] mixed questions of law and fact,
applying the appropriate standard to each component." Meridian Bank v. A/ten, 958 F.2d 1226,
1229 (3d Cir. 1992).
"Bankruptcy court decisions involving the exercise of discretion are reviewed for abuse
10

of discretion." In re Cant 'l Airlines, 150 B.R. 334, 336, 338 (D. Del. 1993). Decisions to protect
judicial records from public disclosure are subject to review for abuse of discretion, see id., as are
denials of requests to permit access to judicial records, see LEAP Sys., Inc. v. MoneyTrax, Inc.,
638 F.3d 216, 220 (3d Cir. 2011). Additionally, decisions to permit or deny intervention and
reopening of closed bankruptcy cases are reviewed for abuse of discretion. See Alcan Aluminum,
25 F.3d at 1179; In re Zinchiak, 406 F.3d 214, 221-22 (3d Cir. 2005).

THE PARTIES' CONTENTIONS

I.

Garlock's Briefs
In its opening brief on appeal, Garlock argues that the Bankruptcy Court failed to apply

the "settled" standards governing the public's right to access documents filed in federal court,
which Garlock contends are set out in Goldstein v. Forbes (In re Cendant Corp.), 260 F.3d 183,
192 (3d Cir. 2001). (See D.I. 17 at 14-18) Contrary to the Bankruptcy Court's determination that
Garlock lacks standing to assert the right of public access to obtain the 2019 Exhibits, under
Third Circuit case law any member of the public has standing to vindicate the right of public
access to judicial records, provided that the party can identify an obstacle to access to a judicial
record. (See id. at 14-15, 18-19)
In Garlock's view, the Bankruptcy Court erred by placing the burden on Garlock to show

a proper purpose, rather than requiring the objecting parties to demonstrate the impropriety of
Garlock's purpose. (See id. at 24) This is particularly so because Garlock's intention to use the
2019 Exhibits in its own bankruptcy cases is a "quintessentially proper purpose," as it fosters
sharing of judicial records among courts. (/d. at 15, 24-27)
Garlock further argues that the closed cases need not be reopened in order to provide

11

l
Garlock access to the 2019 Exhibits submitted in those cases. (See id. at 42-44) Nor is it
necessary for Garlock to be permitted to formally intervene in any ofthe cases. (See generally

id.)
In its reply brief, in addition to reiterating its other arguments, Garlock argues that its

appeals are not barred by either collateral estoppel or res judicata. (See D.I. 39 at 4-9)

II.

Appellees' Briefs
A.

Certain Law Firm Appellees

Certain Law Firm Appellees argue that both collateral estoppel and res judicata thwart
Garlock's attempt to obtain access to the 2019 Exhibits. (See D.I. 43 at 9-16) These contentions
arise from Garlock's failed effort to access the 2019 Exhibits in the Pittsburgh Corning
bankruptcy, a case in which the Western District of Pennsylvania's order was affirmed by the
Third Circuit on appeal. See In re Pittsburgh Corning Corp., 2005 WL 6128987 (W.D. Pa. Sept.
27, 2005), aff'd, 260 F. App'x 463 (3d Cir. Jan. 10, 2008).
The Certain Law Firm Appellees also explain why Judge Fitzgerald's decisions should be
affirmed on other grounds. Not only would reopening closed bankruptcy cases be inappropriate
here, but with respect to the open cases, Judge Fitzgerald correctly found that "provision of the
2019 Exhibits could not cure any of the speculative injuries Garlock alleged it was suffering,"
and Garlock lacked standing to move to intervene in those cases. (D.I. 43 at 9; see id. at 20-25)
Garlock failed to demonstrate sufficient injury and, thus, did not satisfy the requirement for
constitutional standing; Garlock further fails in satisfying any prudential standing requirement.

(See id. at 20-24) Moreover, the 2019 Exhibits were not filed with the Bankruptcy Court and,
therefore, are not judicial records entitled to a presumption of public access. (See id. at 21)
12

Additionally, to the Certain Law Firm Appellees it is apparent that Garlock desires the
information in the 2019 Exhibits for an improper purpose, to "prove fraud in the tort system."

(!d. at 23; see also id. at 10, 27-38) In the view ofthese appellees, the "2019 Exhibits do not
prove fraud in the tort system, nor are they likely to be admissible, probative evidence in
Garlock's own estimation process." (!d. at 23)

B.

Law Firms

The Law Firms also seek affirmance of the Bankruptcy Court's decision. They fault
Garlock for being "indifferent to the reality that counsel for asbestos victims, attentive to the
purpose of Rule 2019 and without the benefit of discovery against a bankrupt asbestos defendant,
may be constrained to include clients who are just potential creditors in disclosure given under
Rule 2019." (D.I. 31 at 17 n.69; see also id. at 16-18, 20-21) Hence, the 2019 Exhibits are
"relevant to who was represented by whom in the [Bankruptcy Cases] and to little else." (!d. at
18)
Judge Fitzgerald appropriately and sensibly balanced the need to verify agency with the
legitimate and sensitive privacy concerns of potential asbestos claimants, and applied the proper
standard in denying Garlock's request for "public access" to the confidential2019 Exhibits. (See

id. at 27-30, 32-33) The Law Firms also argue that both collateral estoppel and res judicata bar
Garlock's attempt to obtain the 2019 Exhibits. (See id. at 10 n.37)
Finally, the Law Firms characterize Garlock's efforts as "a cynical fishing expedition of
almost unprecedented scope across a dozen of the biggest mass tort bankruptcies of the last
decade," adding that the "volume of the materials to which Garlock seeks access is staggering,
raising serious doubts as to how Garlock could possibly make any meaningful use of it in its
13

forthcoming asbestos claims estimation." (Id. at 11 n.38, 20)

C.

ACC Appellees

The ACC Appellees assert that Garlock's request for information is barred by collateral
estoppel and res judicata. (See D.l. 29 at 10-16) Moreover, the ACC Appellees emphasize that
Judge Fitzgerald's 2019 Orders established an appropriate balancing framework. (See id. at 21)
Garlock's intended use for the information in its own bankruptcy case is speculative, irrelevant,
and improper. (See id. at 22-27) Although Bankruptcy Code§ 107(a) "evidences a strong desire
by Congress to preserve the public's right to access judicial records," it is inapplicable here
because the 2019 Exhibits were never incorporated into or referenced in any adjudicatory
proceedings in the bankruptcy cases, nor were they filed on the docket; thus, they are not
"public" or 'judicial" records to which access is presumed. (Id. at 22; see id. at 28-30)
Furthermore, disclosure of the information in the 2019 Exhibits would create an undue risk of
identity theft and other unlawful injury. (See id. at 10, 30-32)

D.

Closed Case Appellees

Armstrong supports affirmance of the Bankruptcy Court for three primary reasons. First,
by denying Garlock access to the 2019 Exhibits, Judge Fitzgerald did not hamper Garlock's
ability to secure the desired information, as Garlock can seek discovery in its own bankruptcy
case and can informally reach out to lawyers representing asbestos creditors. (See D.l. 21 at 2-3,
5-6) Second, because Garlock's demand really "amounts to nothing more than what will
ultimately become a discovery dispute between Garlock and the filers of the 2019 Statements and
exhibits, Garlock fails to establish the requisite close nexus to [Armstrong's] bankruptcy case to
confer subject matter jurisdiction on the Delaware Bankruptcy Court." (Id. at 3, 7; see also id. at

14

7-11) Lastly, reopening closed bankruptcy cases is onerous, expensive, and unjustifiable. (See
id. at 3, 12-13)
Owens takes no position as to whether Garlock should have access to the 2019 Exhibits.
(See D.I. 30 at 1, 6) Owens does not believe the closed cases need to be reopened even ifthe
Court is to grant Garlock access. (See id. at 8-10) If, however, the Owens bankruptcy case is
reopened, it should be done in a manner that avoids harm to the reorganized debtor. (See id. at
10)
ACandS and USMP also do not take a position on the underlying merits of Garlock's
appeals. (See D.I. 23; D.I. 24) If their closed bankruptcy cases are reopened, however, these
reorganized debtors ask to be indemnified by Garlock for any resulting liabilities. (See D.I. 23 at
2; D.I. 24 at 2)

III.

United States Trustee
The United States Trustee ("UST") takes no position with respect to whether Garlock

may obtain access to the 2019 Exhibits, nor does it oppose reopening the six closed cases. (See
D.I. 26 at 1) The UST's interest is that, in the event of reopening, "the Court should hold that the

payment of Quarterly Fees in a re-opened, and therefore pending case, [is] statutorily mandated
by operation of28 U.S.C. § 1930(a)(6) and that neither the fees nor the related reporting
requirement can be 'waived."' (!d. at 6)

15

l

DISCUSSION9

I.

Standing
Garlock asserts that the Bankruptcy Court did not apply the proper legal standard for

assessing whether it had standing to seek access to the 2019 Exhibits. Citing Pansy v. Borough

of Stroudsburg, 23 F.3d 772, 777 (3d Cir. 1994), Garlock contends that it has standing based on
its identification of an "obstacle" to access to judicial records. (See D.l. 17 at 18) The
Bankruptcy Court's Orders are just such an obstacle. Appellees argue, by contrast, that because
the 2019 Exhibits are not judicial records subject to a right to access, Garlock must demonstrate
that it has constitutional standing under Article III. 10
The Court agrees with Garlock. The Third Circuit has "routinely found, as have other
courts, that third parties have standing to challenge protective orders and confidentiality orders in
an effort to obtain access to information or judicial proceedings." Pansy, 23 F.3d at 777. "[T]he

9

The parties have raised various issues for the first time on appeal, including collateral
estoppel, res judicata, whether the 2019 Exhibits are "judicial records," and whether disclosure is
inconsistent with Bankruptcy Code§ 107(c). (See, e.g., D.l. 29 at 10-20; D.l. 31 at 10 n.37; D.l.
43 at 10-16) Generally, the Court will not consider arguments that were not presented to the
Bankruptcy Court, as the Bankruptcy Court has not had a chance to consider them. See generally
Exxon Corp. v. Tex. Motor Exchange ofHouston, Inc., 628 F.2d 500,508 n.3 (5th Cir. 1980)
("[R]es judicata and collateral estoppel ... are affirmative defenses that must be pleaded in the
trial court. They will not be considered for the first time on appeal.") (internal citation omitted);
accord Kane v. Heckler, 776 F.2d 1130, 1132 (3d Cir. 1985). Here, however, the Court has
considered each of the new arguments because the record is adequate to permit the Court to do
so, none of the new issues warrants depriving Garlock of the access it seeks, and in the interests
of judicial economy.
10

Article III "requires the party who invokes the court's authority to show that he
personally has suffered some actual or threatened injury as a result of the putatively illegal
conduct of the defendant, and that the injury fairly can be traced to the challenged action and is
likely to be redressed by a favorable decision." Valley Forge Christian College v. Americans
United for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982) (internal quotation
marks and citations omitted).
16

procedural device of permissive intervention is appropriately used to enable a litigant who was
not an original party to an action to challenge protective or confidentiality orders entered in that
action," even "long after a case has been terminated" or "after the underlying dispute between the
parties has long been settled." I d. at 778-79. 11 Under these circumstances, in order to have
standing, the third party need only show an obstacle that prevents access to a judicial record. I d.
at 777.
Because Garlock is a member of the public and faces an obstacle to obtaining access to
2019 Exhibits, Garlock has standing. 12
II.

Standing to Appeal
Some appellees contend that even if Garlock possessed standing in the Bankruptcy Court

below, it lacks appellate standing here. These appellees rely on the prudential standing
requirement, which "limits bankruptcy appeals to persons whose rights or interests are directly
and adversely affected pecuniarily by an order or decree of the bankruptcy court," and prior
litigation involving requests for access to Rule 2019 information in connection with asbestosrelated bankruptcies. Pittsburgh Corning, 260 F. App'x at 466 n.4; see also Kaiser, 327 B.R. at
558-59) (describing "type of direct, pecuniary interest contemplated by the 'aggrieved person'

11

The Court deems Garlock's interest in obtaining access to the 2019 Exhibits to be
adequate for purposes of permitting intervention by Garlock in the bankruptcy cases, to the
extent intervention is required. See generally Bankruptcy Rule 2018(a) ("In a case under the
Code, after hearing on such notice as the court directs and for cause shown, the court may permit
any interested entity to intervene generally or with respect to any specified matter."); In re First
Interregional Equity Corp., 218 B.R. 731, 736 (Bankr. D.N.J. 1997) ("The court may exercise its
discretion granting permissive intervention to the moving party.").
12

"[I]n cases where intervenors seek to modify an order of the court, the court has
jurisdiction based on the fact that it already has the power to modify the ... order and no
independent jurisdictional basis is needed." Pansy, 23 F.3d at 778 n.3.
17

l

test," and distinguishing "incidental costs apply[ing] to anyone seeking access to the Rule 2019
information"); Pittsburgh Corning, 2005 WL 6128987, at *6 (finding "pecuniary concerns raised
by appellants in this case do not support a finding that they meet the 'aggrieved persons' test.")
The Court is not persuaded by appellees. The same interests which gave Garlock
standing in the Bankruptcy Court persist and give Garlock standing to press its appeals. Garlock
remains aggrieved by the "obstacle" of the Bankruptcy Court Orders depriving it of access to the
2019 Exhibits. See generally In re Congoleum Corp., 426 F.3d 675, 685 (3d Cir. 2005) (stating
appellate standing extends to, among others, "entities that are aggrieved by an order which
diminishes their property, increases their burdens, or detrimentally affects their rights"). Nothing
in the prior litigation cited by appellees holds that denial of a request for access to the 2019
Exhibits for the purpose to which Garlock intends to use them (i.e., development of evidence in
connection with the estimation proceeding as part of its own bankruptcy case) is an insufficient
interest to press on appeal.

III.

Collateral Estoppel
Collateral estoppel, or issue preclusion, prohibits a party from re-litigating an issue it has

already litigated. Collateral estoppel applies where "(1) the identical issue was previously
adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to
the decision; and (4) the party being precluded from relitigating the issue was fully represented in
the prior action." Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 249 (3d
Cir. 2006) (internal quotation marks omitted).
Collateral estoppel does not bar Garlock here because neither the 2019 Orders, nor any
other decision in any litigation, decided the issue of Garlock's right as a member of the public to

18

access the 2019 Exhibits. The issue of the public's right to access the 2019 Exhibits has in no
previous action been "actually litigated." None of the prior decisions actually deprived anyone of
access of the 2019 Exhibits.
In connection with the Pittsburgh Corning bankruptcy, certain insurance companies

challenged the 2019 Orders on the basis that the Bankruptcy Court failed to follow the mandates
of Rule 2019 in all respects, by tailoring some of its requirements in recognition of the realities
of mass tort asbestos-related bankruptcy litigation. See Pittsburgh Corning, 2005 WL 6128987,
at *1. Although the insurer-appellants contended the Rule 2019 Orders violated the public's
right to access to judicial records, which is protected under the First Amendment as well as
common and statutory law, the district court dismissed their appeal for lack of standing or, in the
alternative, lack of ripeness. See id. Moreover, as the district court explained, as of the time of
that appeal "[t]he bankruptcy court did not resolve issues relating to the right of access; rather it
created a procedure to determine those issues at another time if a motion is filed seeking public
access." !d.; see also Kaiser, 327 B.R. at 558-59 (finding lack of standing as insurer appellants
had not moved for access).
Later, Garlock tried itself to access Rule 2019 information in the Pittsburgh Corning
bankruptcy. Not only did Garlock object to the Third Amended Plan in that case, but it also
made a request to access 2019 Exhibits. (See Op. at 6 n.5) On March 24, 2010, Judge Fitzgerald
denied Garlock's motion. (See id.) The order denying Garlock's motion indicated it was
"without prejudice to a request for access to information contained in a specific 2019 Statement
as to a particular client in specific instances of need or cause." (See D.I. 22, Armstrong App.,
Tab 5, Ex. Fat 3) In neither its initial motion nor its objections-related filings did Garlock
19

invoke the public access doctrine; instead, Garlock relied solely on its status as a party in interest.
Hence, the applicability of the public access doctrine was not put at issue. See generally Gruntal
& Co., Inc. v. Steinberg, 854 F. Supp. 324, 336-37 (D.N.J. 1994) (noting issue to be precluded

"must have been distinctly put in issue and directly determined adversely to the party against
which estoppel is asserted") (internal quotation marks omitted), aff'd, 46 F.3d 1116 (3d Cir.
1994).
Accordingly, appellees have failed to demonstrate that Garlock's access requests are
barred by collateral estoppel.

IV.

Res Judicata
Res judicata, or claim preclusion, bars a party from re-litigating a claim that has already

been determined on the merits by a competent court. Res judicata is established upon a showing
that there has been "( 1) a final judgment on the merits in a prior suit involving (2) the same claim
and (3) the same parties or their privies." EEOC v. US. Steel Corp., 921 F.2d 489, 493 (3d Cir.
1990).
Garlock only appeared in one of the bankruptcy cases: Pittsburgh Corning. To this
Court's knowledge, no plan confirmation order has been entered in that bankruptcy. In the
absence of a final order, res judicata is not applicable. Additionally, there is no basis to find that
Garlock raised the "same claim" in any of the bankruptcy cases other than (arguably) Pittsburgh

Corning.

20

I
j

I

IV.

Garlock Will Be Granted Access to the 2019 Exhibits Pursuant to
the Common Law Right of Public Access to Judicial Records
A.

The 2019 Exhibits Are Judicial Records

The Court concludes that the 2019 Exhibits are ''judicial records." 13 The 2019 Orders
require that the 2019 Statements be "filed" with the Bankruptcy Court. (See, e.g., D.I. 6, Certain
Law Firm Appellees ROA, Tab 24; D.I. 22, Armstrong App., Tab 1 ("[A]ny entity or committee
representing more than one creditor or equity security holder and any indenture trustee that has
entered an appearance, filed a claim, cast a ballot or taken any other affirmative action to
participate in the Debtor's bankruptcy case in any way shall file with the Clerk a statement (a
'2019 Statement')." (emphasis added))) The 2019 Orders then define the 2019 Exhibits to be
part ofthe "Statements." (See, e.g., D.I. 6, Certain Law Firm Appellees ROA, Tab 24; D.I. 22,
Armstrong App., Tab 1 ("It is further ORDERED that the 2019 Statement shall be a verified
statement identifying the name and address of the entity filing such statement and that includes
the following exhibits ... ") (emphasis added)) Consistent with the 2019 Orders, in her Opinions
Judge Fitzgerald describes "determin[ing] that the information would be filed with the Clerk but
not placed on the public electronic docket system because of the great potential for abuse of
personal (medical) information and identity theft (because of the identifying information
included on the 2019s)." (Op. at 17 n.16 (emphasis added)) In the Pittsburgh Corning appeal,
the Western District of Pennsylvania appeared also to view the 2019 materials as having been
"filed." See Pittsburgh Corning, 2005 WL 6128987, at *10 ("The bankruptcy court in this case

13

While the Court discussed with the parties the possibility of remanding to the
Bankruptcy Court for a factual determination as to whether the 2019 Exhibits are judicial records
(see 6112/12 Tr. at 18), no party suggested the Court should do so (see, e.g., id. at 47-48).
21

1
•
1
!

j

!

l

l

made clear that it was important to have the [20 19] statements filed and that the issue of access
would be addressed if and when a party files a proper motion.") (emphasis added).
The 2019 Statements were available to the parties and could be used to monitor the
propriety of the plan confirmation voting process. (See, e.g., 6112/12 Tr. at 18 ("[E]ven in the
ruling denying access, the [Bankruptcy] Court says that it did make exhibits available to parties
so that they could police the votes that were cast in favor of the plan. So the exhibits were -the
best evidence we have is that they were used in the bankruptcy case."); Op. at 14 n.11 ("The
purpose [of requiring 2019 statements] is to make sure that the entities who vote in this case have
actually been identified and somebody makes the comparison to determine that in fact the law
firm that purports to represent that party represents that party."))
Thus, the 2019 Statements, including the Exhibits, were "filed with" the Bankruptcy
Court. They are, therefore, "judicial records." See Pansy, 23 F.3d at 781.

B.

There Is a Presumptive Right of Access to the 2019 Exhibits

As the 2019 Exhibits are judicial records that were filed with the Bankruptcy Court, there
is a presumptive right of public access to them. See generally Goldstein v. Forbes (In re

Cendant Corp.), 260 F.3d 183 (3d Cir. 2001). The filing of a document with a court "clearly
establishes" it is subject to the right of access. Id. at 192. 14 As the Third Circuit has explained,
public access "promotes public confidence in the judicial system by enhancing testimonial
trustworthiness and the quality of justice dispensed by the court;" "diminishes possibilities for
injustice, incompetence, perjury, and fraud;" "provide[s] the public with a more complete

14

See also 11 U.S.C. § 107(a) ("Except as provided in subsections (b) and (c) and subject
to section 112, a paper filed in a case under this title and the dockets of a bankruptcy court are
public records and open to examination by an entity at reasonable times without charge.").
22

understanding of the judicial system and a better perception of its fairness;" and "helps assure
that judges perform their duties in an honest and informed manner." Id.

C.

The Presumption of Access Has Not Been Rebutted

"In order to override the common law right of access, the party seeking the closure of a
hearing or the sealing of part of the judicial record bears the burden of showing that the material
is the kind of information that courts will protect and that disclosure will work a clearly defined
and serious injury to the party seeking closure." Goldstein, 260 F.3d at 194 (internal quotation

I

marks omitted). Though there exists a "strong common law presumption of access," which

J

"must be balanced against the factors militating against access," "[t]he burden is on the party

I

I

who seeks to overcome the presumption of access to show that the interest in secrecy outweighs
the presumption." Id.
Here, the presumption of access has not been rebutted. Although the appellees raise
numerous arguments against disclosure, their contentions do not show, individually or
collectively, that here the interest in secrecy outweighs the presumption of public access. For
instance, while appellees are concerned about the possibility of misuse of potential asbestos
claimants' personal information, leading to identity theft or other abuses, they fail to show any
clearly defined and serious injury, particularly given the restrictions the Court will place on
Garlock's use ofthe 2019 Exhibits.
While it is undoubtedly true that Rule 2019 is not intended for the purpose to which
Garlock seeks to put it, this fact does not rebut the presumption of public access to judicial
records. Similarly, some appellees emphasize that Garlock could seek the same information it is
requesting here through the discovery process in its own bankruptcy, for instance by subpoenaing

23

l
I

the third-party law firms. Garlock acknowledges this potential opportunity - and has evidently
pursued it to some extent. (See 6/12112 Tr. at 12-13) But just because Garlock might have
another mechanism for obtaining the information it seeks here does not, in the circumstances
presented here, diminish Garlock's right to pursue access through the process it is pursuing in
this Court.
Some appellees contend that everyone understood at the time the Bankruptcy Court
entered the 2019 Orders that access would be provided only for purposes of monitoring the
voting process. (See, e.g., id. at 44) However, the appellees have pointed to nothing in the
record to support such a view. Certainly, nothing in the 2019 Orders or in the Opinions states
that this was the only anticipated grounds on which a successful motion for access could be
based.
Appellees point out that Rule 2019 has recently been amended, and disclosure
requirements relaxed, so if the current version had been in place in 2004, statements would not
have been required. (See id. at 44 ("The new Rule 2019 would not require the disclosure of
passive representation."); see also D.l. 31 at 5-7, 30-32; D.l. 43 at 4 & nn.3-4; D.l. 29 at 8; D.l.
32, Law Firms App., Tab 2 (amended Fed. R. Bankr. P. 2019, eff. Dec. 1, 2011)) This is largely
irrelevant, as the Bankruptcy Court had to follow the version of Rule 2019 that was in effect at
the time it entered the 2019 Orders. More importantly, the Bankruptcy Court did enter the 2019
Orders, which were affirmed on appeal, and are not (and could not be) challenged by appellees in
these appeals.
The Court recognizes the parties dispute the likely evidentiary value of the 2019 Exhibits.
Admissibility under the Rules of Evidence, however, is not the standard by which the right of
24

public access is measured.
The fact that Garlock is not a member of the press does not rebut the presumption that
Garlock, as a member of the public, has a right of access to judicial records. See Leucadia, Inc.
v. Applied Extrusion Techs., Inc., 998 F.2d 157, 167 (3d Cir. 1993) ("[A]ll persons seeking to
inspect and copy judicial records stand on an equal footing, regardless of their motive for
inspecting such records. Thus, the press has no greater right of access than does the general
public, and more importantly, an intervenor who is also a litigant in a collateral proceeding
enjoys no lesser rights merely because s/he desires to use public documents for his or her own
benefit.").

D.

The Court Exercises Its Discretion to Provide Garlock Access

"The balancing of the factors for and against access is a decision committed to the
discretion of the district court." Goldstein, 260 F.3d at 197 (internal quotation marks omitted).
Here, having concluded that the presumptive public right of access to the 2019 Exhibits is not
rebutted, the Court will grant Garlock access. 15

V.

Garlock Has Shown that the Orders Should Be Modified
Alternatively, even if the 2019 Exhibits are not viewed as judicial records - in which case

I
j

I

Garlock's presumptive right of access to them is not triggered - the Court would still grant
Garlock access to them. This is because to the extent the Rule 2019 Orders operate as
confidentiality orders, Garlock has demonstrated good cause to modify the Orders to permit

15

As the Court is granting Garlock's request for access to all 2019 Exhibits, it is not
necessary to consider Garlock's alternative, narrower request for access to the 2019 Exhibits filed
on behalf of non-objecting parties (to the extent there were any non-objecting parties). Nor is it
necessary for the Court to evaluate whether the First Amendment, in addition to the common law
right of public access, provides another basis for granting Garlock relief.
25

Garlock to access the 2019 Exhibits, subject to certain restrictions.
A court has "supervisory power over its own records." Leap Sys., 638 F.3d at 221.
Despite a "presumption in favor of public accessibility," a court has authority to seal documents

I

J

"when justice so requires," provided the party requesting sealing demonstrates that the "interest
in secrecy outweighs the presumption" of access. !d. at 221-22. Essentially, the 2019 Orders
embody a conclusion that 'justice so requires" the sealing ofthe 2019 Exhibits. Seen in this
light, Garlock's request for access requires the Court to balance competing factors and determine,
as a matter of its discretion, whether to permit Garlock the access it seeks. See Pansy, 23 F.3d at
781. "The party seeking to modify the order of confidentiality must come forward with a reason
to modify the order. Once that is done, the court should then balance the interests, including the
reliance by the original parties to the order, to determine whether good cause still exists for the
order." !d. at 790.
Taking account ofthe factors and balancing test described in Pansy, see id. at 787-91, the
Court concludes that there is good cause to modify the 2019 Order and permit Garlock access to
the 2019 Exhibits. Garlock's purpose in seeking access to the 2019 Exhibits- to permit its
expert in its own bankruptcy to develop or rebut an opinion as to an estimate of Garlock's
aggregate liability for asbestos claims (see D.I. 60)- is a proper purpose for seeking access. As
Garlock sees it:
The 2019 Statements, when combined with the 2019 Exhibits,
contain admissions of exposure to other products that are relevant
to estimating Garlock's asbestos liability in its bankruptcy case.
Garlock can use evidence of asbestos claimants' exposures to other
asbestos-containing products to show that it was not a proximate
cause of the plaintiffs asbestos-related disease. Other exposures
are also relevant to Garlock because they permit Garlock to show

26

.

!
'.···.

that other parties were at fault and allocate liability to them.

(D.I. 52 at 4) The Court finds that, in the context of evaluating an access request, Garlock's
intended use of such information at an estimation proceeding in its own bankruptcy is a proper
purpose. 16 Having found at least one proper purpose, the Court need not decide if Garlock's
other stated purposes- pursuit of a potential RICO (Racketeer Influenced and Corrupt
Organizations, 18 U.S.C. §1961 et seq.) action against asbestos plaintiffs' counsel, as well as
lobbying and legislative reform efforts -are also proper. 17
Another Pansy factor favoring granting Garlock access to 2019 Exhibits is that the
sharing of information among litigants may help promote fairness and efficiency. Garlock may
be able to use the information in the 2019 Exhibits to help the North Carolina Bankruptcy Court
to estimate Garlock's liability more accurately. Also favoring access is that the issues involved
here - going to liabilities arising from a mass tort - are important to the public.
On the other hand, privacy interests of the individuals identified in the 2019 Exhibits

16

This Court is not taking a position as to whether the North Carolina Bankruptcy Court
should permit Garlock to use whatever it learns from the 2019 Exhibits in the manner Garlock
envisions. Issues of the admissibility and weight of any evidence, as well as issues relating to the
timing and reliability of expert disclosures and opinions, are all for the North Carolina Court to
resolve. This Court today decides only that Garlock should be given the access it seeks to the
2019 Exhibits.
17

Various appellees have criticized Garlock's attempted use of, and reliance upon in its
briefing, the Affidavit ofPaul Grant (see, e.g., D.l. 2, Garlock ROA, Tab 54; D.l. 18, Garlock
App., Tab 6, Ex. A), President of Garrison Litigation Management Group, Ltd., the litigation
consulting firm Garlock engaged to manage the defense and resolution of asbestos claims
asserted against it. (See D.l. 17 at 4-6) The Court agrees with Garlock that the affidavit is not
offered for its truth but, instead, to provide background information; its inclusion in the record
here is appropriate to show how Garlock explained to the Bankruptcy Court its need for access to
the 2019 Exhibits. (See D.l. 39 at 1 n.1; see also Op. at 6)
27

I
i

I

1
weigh against disclosure of the 2019 Exhibits to Garlock. The Bankruptcy Court was properly
concerned with issues of privacy and possible identity theft. However, in assessing the weight to
be given to these privacy interests, the Court is mindful that, as appellees concede, no
individual's name or condition ended up on the Exhibits without that individual first contacting
and retaining counsel. (See 6112112 Tr. at 57) Hence, even if not all of these individuals
ultimately become a creditor and file a proof of claim, it is nonetheless true that each individual
authorized an attorney to represent him or her in connection with a potential asbestos-related
claim. Furthermore, the information about each individual in a 2019 Exhibit is the same type of
information that would have to be disclosed in asbestos-related litigation, such as in a complaint
in a tort action. Additionally, as explained further below, the Court is providing Garlock access
to the 2019 Exhibits subject to certain limitations, limitations that are intended to substantially
reduce any threat to privacy interests.
The risk of embarrassment weighs against disclosure, but the Court gives this factor little
weight. This is because, as with the analysis of privacy interests, the restrictions the Court will
impose on Garlock's access lead the Court to conclude that no significant risk of embarrassment
will exist. Finally, that the information sought by Garlock is not related to public health and
safety, and that no public entity or official are involved here, also weigh against providing
Garlock access.
The Court has also considered the reliance interests of those who relied upon the 2019
Orders. These reliance interests have been considered above, as part of the Court's evaluation of
the privacy interests of victims. In further considering reliance, the Court observes that the 2019
Orders contemplated a mechanism for seeking access and, obviously, contemplated that such

28

l
i

I

access might be granted. (See, e.g., 6/12/12 Tr. at 42; Pittsburgh Corning, 2005 WL 6128987, at
*4 (explaining anyone seeking access to 2019 Exhibits is required "simply [to] fil[e] a motion
with this Court telling me why you want it," "show[ing] me how the information is necessary,
relevant, whatever term you wish to choose")) Thus, while victims were right to rely on the 2019
Orders as preventing access without Court approval, they could not have reasonably relied on the
2019 Orders to prevent all access.
As counsel for an appellee argued at the June 2012 hearing, the Bankruptcy Court
carefully "molded" Rule 2019 to the specific complexities ofthis case. (See 6112112 Tr. at 46)
The result was the Rule 2019 Orders, to which none of the appellees objected nor appealed from.
Once the Rule 2019 Orders were entered and the parties began to comply by filing the 2019
Statements and Exhibits, today's result was always a possible outcome.
Accordingly, having considered the Pansy factors, and affording them each the weight
appropriate under the circumstances presented here, the Court concludes that (even if the 2019
Exhibits are not judicial records) Garlock has demonstrated good cause for modification of the
2019 Orders to the extent necessary to provide Garlock access to the exhibits subject to
restrictions discussed below.

VI.

. Reopening Closed Cases and Granting Intervention Are Not Necessary
The Court perceives no need to reopen the closed cases 18 or grant Garlock intervenor

status in order to provide Garlock the access it seeks to the 2019 Exhibits. Regardless of whether
the 2019 Exhibits are deemed judicial records, they are in the physical possession of the

18

Hence, the Court has no occasion to resolve the fee and reporting issues raised by the
United States Trustee.
29

l

Bankruptcy Court. "Every court has supervisory power over its own records and files." Nixon v.

Warner Commc 'ns, Inc., 435 U.S. 589, 598 (1978). The Bankruptcy Court shall exercise its
supervisory power to permit Garlock to access the 2019 Exhibits, subject to the restrictions that
will be set forth in the Court's order.

VII.

Garlock's Motion to Take Judicial Notice
Garlock has filed a motion asking the Court to take judicial notice of certain proposed

legislation at the state and federal levels that was recently introduced. (D.I. 52) The Court will
grant Garlock's motion to take judicial notice of the existence and contents of the proposed
legislation. The fact that these proposals were introduced is not subject to reasonable dispute and
"can be accurately and readily determined from sources whose accuracy cannot reasonably be
questioned." Fed. R. Evid. 201(b); see also Yeboah v. U.S. Dep 't ofJustice, 345 F.3d 216, 222
n.3 (3d Cir. 2003) ("We take judicial notice that several bills are pending in Congress that may
alter the role of the INS in determining eligibility for SIJ proceedings .... "). These legislative
proposals have arguable relevance to issues in this appeal, including at least whether there is
public interest in transparency in asbestos litigation, a factor arguably pertinent to the Pansy
analysis. Because the Court "may take judicial notice at any stage of the proceeding," it is not
necessary formally to supplement the appellate record with Garlock's materials. Fed. R. Evid.
201(d); see also Advisory Committee Notes on Fed. R. Evid. 201(t) ("[J]udicial notice may be
taken at any stage of the proceedings, whether in the trial court or on appeal.").

VIII. Limitations on Garlock's Access and Use
In exercising its discretion, the Court finds it appropriate to impose certain limitations on

Garlock's access to and use ofthe 2019 Exhibits. (See generally 6112/12 Tr. at 91-92)

30

lj

I

(discussing potential limitations with Garlock's counsel) Garlock is to be provided access to the
2019 Exhibits solely for the purpose of using them in connection with the estimation proceedings
in its own bankruptcy case. Garlock may not publicly disclose information contained in the 2019
Exhibits except in an aggregate format that does not identify any individual. Moreover, before
there is any disclosure of the information Garlock divines from the 2019 Exhibits, Garlock must
first propose to the North Carolina Bankruptcy Court an appropriate form of protective order for
that Court to consider. Additionally, Garlock is not seeking retention agreements between
lawyers and potential claimants (see id. at 92) and Garlock shall not be granted access to such
retention agreements. 19 These limitations should largely (if not entirely) prevent identity theft
and the other harms the Bankruptcy Court envisioned might follow from granting Garlock the
access it seeks.
The parties will be directed to submit to the Court a proposed form of order to limit
Garlock's access and use in a manner consistent with this Opinion.

CONCLUSION
The Bankruptcy Court carefully exercised its discretion in the highly complicated,
challenging circumstances presented in this case. It was entirely proper for the Bankruptcy Court
to facilitate the filing of2019 Statements in order to move the cases along and to defer decisions
as to access until a later stage of the proceedings. However, when that later time came, as a

19

With this limitation, the Court finds that Garlock is not being granted access to any
"trade secret," "confidential research," "development," or "commercial information." 11 U.S.C.
§ 107(b)(1).
31

result of Garlock's request, the Bankruptcy Court erred and abused its discretion. Therefore, the
Orders and Opinions with respect to Garlock's request for access to the 2019 Exhibits will be
reversed.
A separate order consistent with this Opinion will be entered. 20

20

1n making these rulings, the Court does not intend to preclude the Court presiding over
Garlock's bankruptcy from imposing any additional restrictions that Court deems appropriate.
32