In re W.R. Grace & Co.
In re W.R. Grace & Co.
Opinion of the Court
OPINION
On May 29, 2008, Judge Fitzgerald, once designated as a visiting judge in this district, issued a Memorandum Opinion and Order (the “May 2008 Decision”)
BACKGROUND
In 2001, W.R. Grace & Co., et al. (“Grace”) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. In 2002, Judge Fitzgerald issued a bar date order (D.I. 1960), fixing March 31, 2003, as the deadline to file all present asbestos property damage claims (“Asbestos PD Claims”). Prior to the bar date, AMH filed an individual Asbestos PD proof of claim and two class proofs of claim, one for South Carolina building owners and one for claimants without geographic specification, whose buildings are allegedly contaminated with asbestos.
AMH filed the instant motion to alter or amend the May 2008 Decision denying class certification and to grant discovery on numerosity of the putative class. A healing was held on the motion on April 15, 2015.1 issued an order on May 5, 2015, denying AMH’s discovery request and directing the parties to submit briefs on the class certification issue (D.I. 32560). A second hearing was held on June 15, 2016. AMH seeks to include in its class anyone who has not filed an Asbestos PD Claim by the bar date, either because of neglect, lack of actual notice, or because their claim has not yet accrued.
DISCUSSION
Two issues are before the Court: the first is whether the Plan and the Case Management Order for Class 7A Asbestos PD Claims (“PD CMO”) attached to the plan bar AMH from having its denial of class certification reconsidered. The second is whether AMH has made a satisfactory showing for reconsideration of the May 2008 Decision under the appropriate legal standard.
(a) The Plan and PD CMO
The PD CMO (D.I. 20668-25) was attached to the Plan, but was updated shortly before the Plan became effective in February 2014 (D.I. 31657-24), to account for the passage of time. The original and the updated version are almost identical, with updates to reflect only the change of presiding judge and the resolution of claims within that period.
I.The procedures with respect to Class 7A Asbestos claims filed prior to the March 2003 Bar Date shall be as follows:
A. Unresolved Asbestos PD Bar Date Claims, other than Asbestos PD Claims (i) which have been disallowed and/or expunged, and for which the Holders of such Asbestos PD Claims have filed appeals, which appeals are pending as of the Effective Date; or (ii) as to which class certification has been denied and an appeal from such denial of class certification is pending as of the Effective Date will be adjudicated in accordance with Amended Order Setting Various Deadlines Regarding Objections to Class 7A Asbestos Property Damage (“PD”) Claims ....
B. With respect to-any and all Class 7A Asbestos PD Claims which were filed as of the March 2003 Bar Date and (i) which have been disallowed and/or expunged by the Bankruptcy Court and for which the Holders of such Asbestos PD Claims have filed appeals, which appeals are pending as of the Effective Date; or (ii) as to which class certification has been denied and an appeal from such denial of class certification is pending as of ■the Effective date:
1. The appeals shall proceed to completion.
2. The Anderson Memorial class claims (Nos. 09911 and 09914) shall remain inactive unless and until there is a final, appealable order with respect to the Anderson Memorial individual claim (No. 011008).
3. Claims for.which appeals are successful, resulting in reversal of the Bankruptcy Court order(s) disallowing and expunging the claims ... or denying class certification, shall be remanded to the Bankruptcy Court ...18
Section II of the PD CMO then provides the procedures for Unresolved Class 7A Asbestos PD Claims other than those in Section I, namely those filed after the bar date.
AMH makes three arguments about why the Plan or the PD CMO does not bar its instant motion. First, AMH argues that the PD CMO was never entered by the Court apart from its inclusion in the plans,
In response, Grace argues that, first, even though the PD CMO was not signed, it was effectively entered because the language in the Plan and the Certification Order makes the PD CMO part of the Plan, Therefore, the PD CMO became binding on the parties when the Plan was confirmed and became effective. Grace points to the following language in the Plan and the Confirmation Order for support: (1) Plan § 1.4 provides that “Each of the Plan Documents is an integral part of this Plan and is hereby incorporated by reference and made a part of this Plan”;
Grace’s argument is persuasive. The Plan and the Confirmation Order, in their relevant parts cited above, clearly contemplate the PD CMO as an integral part of the Plan. The Plan, with the PD CMO as an exhibit, was affirmed by the district court and the Third Circuit, became effective in February 2014 and is binding on AMH. Therefore, pursuant to Section II of the PD CMO, AMH should not be permitted to initiate a class action for PD claimants who did not file their claims by the bar date.
Further, Section I.B.2 of the PD CMO specifically discusses AMH’s claims: AMH’s class claims “shall remain inactive unless and until there is a final, appealable order with respect to [AMH’s] individual
(b) Motion to Reconsider
Putting aside whether the PD CMO is part of the Plan that bars AMH from including post-bar date claims in its class, AMH did not offer sufficient evidence or reason for this Court to alter or amend Judge Fitzgerald’s May 2008 Decision denying class certification. AMH’s motion to alter or amend class certification under Fed. R. Civ. P. 23(c)(1)(C) is inherently a motion to reconsider the May 2008 Decision.
Fed. R. Civ. P. 59, as made applicable by Fed. R. Bankr. P. 9023, governs motions for reconsideration. A motion to alter or amend a judgment under Rule 59(e) must be grounded upon: “(1) an intervening change in controlling law; (2) the availability of new evidence ,; or (3) the need to correct clear error of law or to prevent manifest injustice.”
AMH makes a host of arguments about factual and legal errors that Judge Fitzgerald made and subsequent developments after the May 2008 Decision, which allegedly warrant its reconsideration.
The first three arguments rehash prior arguments that were considered and denied by either Judge Fitzgerald, the district court, or the Third Circuit. The last argument is not a sufficiently significant development to warrant reconsideration of the May 2008 Decision. Therefore, AMH’s motion to alter or amend the May 2008 Decision will be denied.
First, AMH argues that, due to the reversal of Frenville,
Second, AMH argues that Judge Fitzgerald made a factual error in believing that there was sufficient notice to PD claimants, whereas, in reality, Grace did not give the claimants actual notice. This exact argument was raised by AMH when it sought leave to appeal the denial of class certification to the district court and the district court already held the bar date notice program to be sufficient and appropriately executed.
Third, AMH argues that PD claimants are treated unequally compared to ZAI claimants, because a ZAI class was certified without a bar date but the PD class was not certified and is subject to the bar date. The Third Circuit, in affirming Grace’s Plan in 2013, already rejected AMH’s argument about unequal treatment. The court held that that the distinction between treatment of AMH Class 7A PD Claims and treatment of ZAI claims was “immaterial,” because ZAI claims are in a different class — Class 7B.
Finally, AMH argues that circumstances have changed now because Grace’s Plan has been confirmed and Judge Fitzgerald’s concern that class certification would “needlessly prolong” the case no longer exists. Notably, this was only a secondary consideration for Judge Fitzgerald.
CONCLUSION
For the reasons set forth above, I conclude that the Case Management Order
An appropriate Order follows.
. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and § 157(a). This contested matter involves a core proceeding pursuant to 28 U.S.C. § 157(b)(1) and (b)(2)(A) and (B).
. In re W.R. Grace & Co., 389 B.R. 373 (Bankr.D.Del. 2008), D.I. 18821.
. Upon Judge Fitzgerald's retirement from the Bench, this case was assigned to the undersigned. By Order dated August 16, 2016 (D.I, 32763), this case, among others, was transferred to Judge Gross. By Order dated August 17, 2016 (D.I. 32764), Judge Gross directed that matters I was holding under advisement at'the time of reassignment would remain with me until disposition.
. AMH’s Mot. to Alter or Amend 13-14, D.I. 31812.
. In re W.R. Grace & Co., 389 B.R. at 376, 378-79.
. In re W.R. Grace & Co., 2008 WL 4234339 (D.Del. Sept. 4, 2008).
. In re W.R. Grace & Co., 398 B.R. 368 (D,Del. 2008).
. In re W.R. Grace & Co., No. 08-4829, Doc. No. 00319944293 (3d Cir. Nov. 5, 2009).
. D.I. 20666. Throughout, I will refer to the page numbers of the Plan itself,
. In re W.R. Grace & Co., 446 B.R. 96 (Bankr.D.Del. 2011), aff'd 475 B.R. 34 (D.Del. 2012), aff'd 729 F.3d 332 (3d Cir. 2013).
. See AMH Mot. for Class Certification 2; AMH Mot. to Alter or Amend 4-5; AMH's Reply Br. for Mot. to Alter or Amend 3-5, D.I. 32503; AMH’s Reply Br. to Grace’s Resp. 2, D.I, 32671. AMH has changed the definition of its proposed class a few times, but, consistent with its explanation in the briefs and at oral argument, it seems to be seeking a class including; (1) “Accrued Claims,” which are supposedly claims that were not filed before the bar date; (2) "Gap Claims,” which are supposedly claims that accrued post-petition, but pre-confirmation; and (3) "Future Claims,” which are supposedly claims that do not accrue until after confirmation.
. For the remainder of this opinion, I will refer solely to pages of the updated PD CMO, D.I. 31657-24,
. Plan 19-20.
. Id. at 24.
. PD CMO 1 (emphasis added).
. Id. at 1-6.
. Id. at 1-2.
. Id. at 2.
. Id. at 2-6.
. Id. at 5 (emphasis added).
. 6/15/16 Tr. 34:20-35:6, 47:3-6, D.I. 32707.
. Plan 41-42.
. Id. at 31 (emphasis added).
. Id. (emphasis added).
. Confirmation Order 9 (emphasis added).
. PD CMO 2.
. Max’s Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999).
. See Smith v. City of Chester, 155 F.R.D. 95, 97 (E.D.Pa. 1994); see also Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231 (3d Cir. 1995) (holding that a motion for reconsideration based upon a new, alternate theory was "a classic attempt at a ‘second bite at the apple' ”).
. Skretvedt v. E.I. DuPont de Nemours & Co., 2009 WL 1649495, at *2 (D.Del. June 12, 2009) (citing Pa. Ins. Guar. Ass’n v. Trabosh, 812 F.Supp. 522, 524 (E.D.Pa. 1992)).
. In addition to AMH’s main arguments, I also considered AMH’s other arguments. First, AMH argues that Judge Fitzgerald mistakenly believed that class membership was limited to those who filed individual claims. This alleged legal error does not warrant reconsideration because AMH already had the opportunity to raise this argument in its original motion for class certification. See AMH’s Final Br. in Supp. of Class Certification for the Worldwide Class 8, D.I. 16530. Second, AMH argues that Grace admitted that class membership is not limited to those who filed individual claims in its brief. To the contrary, AMH misinterpreted Grace’s brief; Grace was distinguishing that position rather than supporting it. See Grace’s Br. in Opp’n to AMH’s Mot. to Reconsider Denial of Mot. for Leave to Appeal 11, In re W.R. Grace & Co., 398 B.R. 368 (D.Del. 2008) (No. 08-110), D.I. 13. Third, AMH argues that Judge Fitzgerald mistakenly believed that AMH’s motion for class certification was untimely because AMH did not file the motion until after it filed the class claims. Regardless of the accuracy of this argument, Judge Fitzgerald based the May 2008 Decision on the merits of numerosity and superiority, not on the (un)timeliness of the motion. Fourth, AMH argues that Judge Fitzgerald’s appointment of a Property Damage Future Claimants Representative evidences a correction of her own previously mistaken belief that there are no such thing as future claims. AMH’s citations to relevant parts of the record do not indicate Judge
. Avellino & Bienes v. M. Frenville Co., Inc. (In re M. Frenville Co., Inc.), 744 F.2d 332, 337 (3d Cir. 1984) (holding that a claim does not arise until a right to payment arises under state law), overruled by Jeld-Wen, Inc. v. Van Brunt (In re Grossman’s Inc.), 607 F.3d 114, 125 (3d Cir. 2010) (holding that a claim arises when an individual is exposed pre-petition to a product or other conduct giving rise to an injury, which underlies a “right to payment,”); see also Wright v. Owens Corning, 679 F.3d 101, 109 (3d Cir. 2012) (expanding Grossman’s determination of when a claim arises to include “post-petition, pre-confirmation exposure to a debtor’s conduct or product. ...”). I have previously addressed this line of cases in In re New Century TRS Holdings, 2013 WL 5231456, at *11-14 (Bankr.D.Del. Sept. 17, 2013).
. See supra note 12.
. In re W.R. Grace & Co., 729 F.3d 332, 340 n. 5 (3d Cir. 2013) (quoting In re PWS Holding Corp., 228 F.3d 224, 248 (3d Cir. 2000)).
. Cal. Dep't of Gen. Servs. v. W.R. Grace & Co. (In re W.R. Grace & Co.), 418 B.R. 511 (D.Del. 2009).
. Id. at 532.
. Judge Fitzgerald wrote, "we note that in the statute of limitations context S[peights] & R[unyan] on behalf of its claimants has repeatedly asserted that until there is actual appreciable injury the statute of limitations does not begin to run. Assuming without deciding, that the proposition is correct, for such a determination, essentially a building by building analysis would have to be made
. See In re W.R. Grace & Co., 398 B.R. 368, 374 (D.Del. 2008). "Notice was provided to property damage claimants, and actual notice was given to '200,000 known asbestos claimants,' ” Id. "Notified property damage claimants included 'all named parties to the handful of property damage cases pending when Grace filed its bankruptcy petition, and all known personal injury and properly damage lawyers.’ ” Id. (quoting Mission Towers v. W.R. Grace, et al., 2007 WL 4333817, at *1 (D.Del. Dec. 6, 2007). "This Court has previously determined that publication notice was appropriate.” Id. (citing Mission Towers, 2007 WL 4333817, at *4).
. See In re W.R. Grace & Co., 729 F.3d at 345.
. See In re W.R. Grace & Co., 389 B.R. at 380. “Additionally, the motion for class certification proposes opt-out election which ... would defeat the purpose of certifying a class in the context of this case.” Id. (emphasis added) “Finally, certification of the class would needlessly prolong this case .... ” Id. (emphasis added).
. Id. at 376 ("With respect to Rule, 23(a), we address only numerosity as we find that to be dispositive.”). AMH also recognizes that nu-merosity was the basis of her ruling. 6/15/16 Tr. 40:1-2 ("[I]t’s clear that her ruling was based on numerosity.... [Tjhat's almost her exact words.”).
. In re W.R. Grace & Co., 389 B.R. at 378.
. See Fed. R. Civ. P, 23(a) and (b).
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