In Re: Johns-Manville Corporation

Filing 28

OPINION AND ORDER. The motion for certification is denied. The Clerk is directed to close Docket No. 5 in No. 11 Civ. 1312 and Docket No.4 in No. 11 Civ. 1329. (Signed by Judge John G. Koeltl on 4/15/2011) Filed In Associated Cases: 1:11-cv-01312-JGK, 1:11-cv-01329-JGK(rjm)

United States District Court
Southern District of New York
__________________________________
In re
JOHNS-MANVILLE CORPORATION, ET AL.,
Debtors.
__________________________________

11 Civ. 1312 (JGK)
11 Civ. 1329 (JGK)
OPINION AND ORDER

THE TRAVELERS INDEMNITY COMPANY and
TRAVELERS CASUALTY AND SURETY
COMPANY,
Appellants,
- against COMMON LAW SETTLEMENT COUNSEL, ET
AL.,
Appellees.
__________________________________
COMMON LAW SETTLEMENT COUNSEL,
Appellants,
- against THE TRAVELERS INDEMNITY COMPANY and
TRAVELERS CASUALTY AND SURETY
COMPANY,
Appellees.
__________________________________
JOHN G. KOELTL, District Judge:
This is a motion by Common Law Settlement Counsel 1 to
certify two appeals to the Court of Appeals for the Second
Circuit: (1) an appeal filed by Travelers Indemnity Company and
Travelers Casualty and Surety Company (collectively,

1

The parties that filed this motion and the underlying motion for contempt do
not include all of the Common Law Settlement Counsel involved in the full
case. For ease of reference, "Common Law Settlement Counsel" is used
throughout this order to refer only to the parties who filed those motions.

"Travelers") from a decision and order of the Bankruptcy Court
granting motions to compel Travelers to pay settlement proceeds
now liquidated in the amount of $102,167,212.31; and (2) an
appeal filed by Common Law Settlement Counsel from the
Bankruptcy Court’s denial of a motion for contempt against
Travelers based on Travelers' failure to pay the settlement
amount while it sought to appeal the order.

Common Law

Settlement Counsel argue that the appeals satisfy 28 U.S.C. §
158(d)(2)(A)(i), in that the appeals involve "a matter of public
importance," and section 158(d)(2)(A)(iii), in that
certification "may materially advance the progress of the case
or proceeding in which the appeal is taken," and therefore that
this Court is required to certify these appeals to the Court of
Appeals for the Second Circuit. 2

2

In whole, section 158(d)(2)(A) reads:
(2)(A) The appropriate court of appeals shall have jurisdiction
of appeals described in the first sentence of subsection (a) if
the bankruptcy court, the district court, or the bankruptcy
appellate panel involved, acting on its own motion or on the
request of a party to the judgment, order, or decree described in
such first sentence, or all the appellants and appellees (if any)
acting jointly, certify that —
(i) the judgment, order, or decree involves a question of
law as to which there is no controlling decision of the
court of appeals for the circuit or of the Supreme Court of
the United States, or involves a matter of public
importance;
(ii) the judgment, order, or decree involves a question of
law requiring resolution of conflicting decisions; or
(iii) an immediate appeal from the judgment, order, or
decree may materially advance the progress of the case or
proceeding in which the appeal is taken;

2

The motion for certification is denied.
Common Law Settlement Counsel make no argument as to why
the appeal of the order denying the contempt motion warrants
immediate appeal to the Court of Appeals.

That appeal concerns

solely the Bankruptcy Court’s decision not to hold Travelers in
contempt for its failure to comply with an order requiring it
"to immediately satisfy its payment obligations pursuant to the
Settlement Agreements" while it made a motion (filed within 24
hours of the order) to appeal that order.

In re Johns-Manville

Corp., 440 B.R. 604, 615 (Bankr. S.D.N.Y. 2010).

Common Law

Settlement Counsel do not even attempt to argue that this appeal
would satisfy the requirements of section 158(d)(2).
The appeal of the decision and order requiring the payment
of the settlement proceeds plainly raises a closer question.
However, this decision and order also fails to satisfy the
statutory requirement for an immediate appeal to the Court of
Appeals.

The amount of the settlement is plainly substantial

and the number of potential claims is large, but the issues
involved are solely issues of contract interpretation, namely
whether the Bankruptcy Court correctly interpreted the Common
Law Settlement Agreement to require payment of the settlement
amounts at this stage of the litigation despite Travelers'

and if the court of appeals authorizes the direct appeal of the
judgment, order, or decree.

3

complaint that it remained subject to claims for contribution
and indemnity by Chubb.

This is a private contract dispute that

is not the type of "matter of public importance" that is within
the meaning of section 158(d)(2)(A)(i).

See, e.g., In re Gen.

Motors Corp., 409 B.R. 24, 28-29 (Bankr. S.D.N.Y. 2009) (denying
motion for certification where movants contested "a matter of
statutory interpretation and common law analysis," even though
the issue was "undoubtedly . . . important to the individual
litigants" and the overall bankruptcy case was arguably "a
matter of public importance"); see also 1 Collier on Bankruptcy
¶ 5.06[5][b] (Alan N. Resnick & Henry J. Sommer eds., 16th ed.
2010) ("The bar for certification under this standard should be
set high.").

Rather, that section was intended to expedite

appeals that involve issues of public import that "transcend the
litigants and involve a legal question the resolution of which
will advance the cause of jurisprudence to a degree that is
usually not the case.”

1 Collier on Bankruptcy ¶ 5.06[5][b];

see also Weber v. U.S. Trustee, 484 F.3d 154, 158 (2d Cir. 2007)
("Congress intended [§ 158(d)(2)] to facilitate our provision of
guidance on pure questions of law."). 3

3

Collier does recognize that a court might find a matter to be of public
importance if it could impact a large number of jobs or other vital interests
of the community. But that basis appears to be in tension with Weber's
conclusion that section 158(d)(2)(A) was intended to facilitate the decision
of pure questions of law.

4

The appeal of the decision and order requiring the payment
of settlement proceeds also fails to satisfy the requirement of
section 158(d)(2)(A)(iii) because it would not materially
advance the progress of the litigation.
has issued a final judgment.

The Bankruptcy Court

This is not the case of an

interlocutory appeal where a prompt ruling by the Court of
Appeals will advance the ongoing litigation in the Bankruptcy
Court.

Rather, the only argument for expedition is that the

appeal will be quicker because it need only be heard by one
court — the Court of Appeals.

That argument can be made in

every case where there is an appeal involving a final judgment
of the Bankruptcy Court.

If valid, the argument would eliminate

appeals to the District Court, contrary to the statement by the
Court of Appeals that the normal appellate process should
proceed so that the Court of Appeals is provided with the views
of the District Court to aid in the fair decision of the appeal.
See Weber, 484 F.3d at 160 ("Congress was aware of the dangers
of leapfrogging the district court in the appeals process . . .
[and probably recognized] the salutary effects of allowing some
cases to percolate through the normal channels.").
There is in fact no reason to believe that immediate
certification would expedite the appeals.
be fully briefed before this Court.

The appeals will soon

If the Court certified the

appeals to the Court of Appeals that certification would have to
5

be reviewed by the Court of Appeals, which may well not grant
certification.

~ee~enerally

id.

(discussing standards that the

Court of Appeals applies in determining whether to accept
certification).

In that situation, the certification process

would have lengthened the appellate process rather than advanced
it.

In any event, as the Court of Appeals instructed,

"[Congress] did not wish .

. to privilege speed over other

goals; indeed, speed is not necessarily compatible with our
ultimate objective - answering questions wisely and well."

Id.

at 160.
The motion for certification is denied.

The Clerk is

directed to close Docket No. 5 in No. 11 Civ. 1312 and Docket
No.4 in No. 11 Civ. 1329.
SO ORDERED.

Dated:

New York, New York
April
2011

(<5,

Koeltl
District Judge

6