Free Memorandum and Order - District Court of Delaware - Delaware

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U IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re:
W.R. GRACE & CO., et. al.,
Debtors.

ZONOLITE ATTIC INSULATION :
PROPERTY DAMAGE CLAIMANT S, :
Appellants : CASE NO. 07-MC-0005 (RIB)
v. Bankruptcy Case No. Ol-1139
W.R. GRACE & CO., et al.,
Appellees. :

MEMORANDQM A ND O,R_I!ER
BUCKWALTER, S. J. March 26, 2007
The Zonolite Attic Insulation Property Damage Claimants (ZAI Claim ants) seek
to appeal the Banlrruptcy Court’s order of December 14, 2006, docket number 14015. Because
the order is interlocutory, the appeal has been filed pursuant to 28 U.S.C. § 158(a)(3) and Fed. R.
Bankr. P. 8003.
Both parties agreed at oral argument that this court should apply the familiar 28
U.S.C. § 1292(b) standards; namely, permit the appeal where the interlocutory order "involves a
controlling question of law as to which there is a substantial ground for difference of opinion and
that an immediate appeal nom the order may materially advance the ultimate termination ofthe
litigation. Debtor argues in its brief that ZAI Claimants must prove exceptional circumstances as
well; that is, something out of the ordinary must exist to depart from the usual policy of

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` ` postponing review until after the entry of iinal judgment. The order in this case is a standard
interlocutory one. While not in the order itself} the court in pages 52-53 of this opinion states:
While the determination made herein may prove to be fatal to the property
damage claims, several different theories of liability were proposed in the
individual proofs of claim and may still need to be addressed. A status
conference will be scheduled to discuss the form of an order regarding
disposition of the proofs of claims; that is, which are subject to dismissal
based upon the findings herein and what claims, if any, may still remain.
Given the nature of this opinion and order, the ZAI Claimants feel that
To the extent the Bankruptcy Court’s Memorandum Opinion and Order
may be read to undermine the viability of some aspects ofthe ZAI claims,
they may significantly impede any progress toward achieving consensual
resolution among the key constituencies in the Debtors’ bankruptcy.
But this certainly falls short of exceptional circumstances to warrant review of an
interlocutory order. Moreover, ZAI Claimants have not pointed out a controlling question of
law.
First, ZAI argues that the court disregarded the summary judgment standard, but
my reading of the court’s opinion is that the standards were not only enunciated in the opinion
but followed by the court.
Secondly, and perhaps the single most important argument as to why an appeal
should be granted is that the court’s decision involved a controlling question of law as to which
there is substantial ground for difference of opinion.
It is the Clairnants’ position that there is extensive precedent establishing that the
definitive issue is whether the building is contaminated by asbestos iibers. The court discussed
this issue under 2. No Safe Threshold Argument beginning at page 18 of the opinion and framed
claimant’s position as follows: "Claimants argue that the substantial and unreasonable risk of
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` ' harm is the release of toxic substances into the environment alone, regardless of the levels
released and thus that the ZAI product is unsat`e."
Debtor’s position is: "that Greenville, and other cases cited herein, do not hold
that a plaintiff may recover damages without proof that the product creates an unreasonable risk
of ha:rm."
The problem with ZAI Clain1ar1ts’ argument is that they cannot point to any case
that states that the release of toxic substances alone, regardless of levels, is sufficient. Qggf
Qgrgenville v. yy .R. Qace Q Qc., 827 F.2d 975 (4“‘ Cir. 1987) is the case chiefly cited in support
of ZAI’s position. My reading of this case suggests that the Bankruptcy Court’s opinion did not
involve a question of law where there is substantial gound for disagreement. Greenville, in
footnote 2, indeed suggests that the testimony, contrary to Grace’s contention in that case could
reasonably support a jury finding that the levels of contamination posed significant health risks
for building occupants. The opinion simply does not stand for the proposition that ZAI
Claimants argue.
Failing to show exceptional circumstances and to meet the 28 U.S.C. § 1292(b)
standards result in the following order:
AND NOW, this 26** day of March, 2007, it is hereby ORDERED that
C1aimant’s motion for leave to appeal Bankruptcy Cou1·t‘s order entered December 14, 2006 is
DENIED.
BY THE COURT:
J
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