Free Motion for Leave to Appeal - District Court of Delaware - Delaware

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
In re:
Chapter 11

R. GRACE & CO. et al.
Debtors.

Case No. 01- 01139

(JKF)

Jointly Administered

R. GRACE & CO.

et a!.

Plaintiffs

Adversary No. A- 01- 77l

MARGARET CHAKARIAN
JOHN DOES 1- 1000

et aI.

and

Defendants.

MOTION OF LIBBY CLAIMANTS FOR LEAVE TO APPEAL ORDER ENJOINING ACTIONS AGAINST BNSF
Claimants injured by exposure to
' operations in Lincoln

County, Montana (the " Libby

Claimants

), I by and through their counsel , Cohn Whitesell &
9 158(a)(3)

Goldberg LLP and Landis Rath & Cobb LLP , hereby move , pursuant to 28 U.S. C.

and Fed. R. Bankr. P. 8003(a), for leave to appeal the Bankruptcy Court' s Memorandum Opinion

and Order Expanding the Preliminary Injunction to Include Actions Against Burlington Northern
and Sante Fe Railroad (Adv. Proc. D. l.

498), both entered on April 14 , 2008 (collectively, the
' notice of appeal

Order ). This Motion

wherein they assert that the Order is appealable as of right pursuant to 28 D.
28 D.
C. 9 l292(a)(1). In support of

C. 9 158(a)(1) or

, the Libby Claimants state:

I As identified in the Amended and Restated Verified
Rath & Cobb LLP Pursuant to Fed. R. Bankr. P. 2019 (Bankr. Case 0. 1. 17337), as it may be amended and restated from time to time.

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Back2Tound

The suffering of the people of Libby, Montana due to asbestos disease from exposure to

Libby asbestos
chronicled. 2 Through

CARD Clinic ) in Libby,

Montana , Dr. Alan C. Whitehouse and Dr. C. Brad Black have diagnosed at least 1 500 patients
with asbestos related disease due to

Montana. 3 The

200 of these 1

500 patients.

Since the

CARD Clinic opened in 2000 , more than 65 patients have died of cancer or respiratory failure
related to asbestos disease. 5 Most of those deaths have occurred since Grace filed its Chapter
case on April 2 ,

2001. 6

Currently

, and over

100 patients are severely limited , with short life
care. 8

But the devastating disease in Libby, said to be 10 times more deadly than more common
types of asbestosis ,

was not caused by Grace

BNSF" )

also

engaged in tortious conduct injuring the
actions against this railroad company are premised on common
claims relating to BNSF' s operations on BNSF' s property by BNSF
Litigation
). The cases against

' state court

BNSF

asbestos hazard arising from BNSF' s operations- including asbestos contamination on BNSF'
2 (Adversary Proc. 0.
3(

1. 417 ,

pJ.

, Ex. C , ~2.
~7.

(rd

6 Since the Chapter II
7( 8(

Montana have died of asbestos related disease. (

, Ex. 0 , ~4.

, Ex. C , ~7.

9 Along with its predecessors

, the Great Northern Railway Company, the Burlington Northern Railroad Company,

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property and transport of asbestos by BNSF- yet failed to meet industrial hygiene standards to
protect its employees and Libby residents in neighboring areas.

Libby Claimants continue to suffer and die , without medical coverage for end stage care.
The Grace Libby Medical Program does not pay for nursing home care or 24- hour home care for

patients with asbestos disease. The affidavits of

hour home

care , and of those who are currently performing it , show enormous suffering and terrible stress.
For the Libby Claimants ,

especially those on oxygen , these services are critical as

unable to care for themselves , leaving exhausted family members to bear the burden , with no
help from Grace.

Grace has not only failed to provide the care that the Libby Claimants need and deserve

but has sought to hinder and delay them from obtaining
BNSF and other recognized wrongdoers with no special relationship to Grace or its Chapter
case. Grace

s attempt to extend to BNSF the preliminary injunction that Grace obtained early on

its bankruptcy case to enjoin asbestos-related claims against insurers and other affiliates of Grace

(the " Preliminary Injunction

) goes

Injunction , and far beyond the typical case where the debtor in a mass tort case seeks to enjoin

suits against its insurers and affiliates to
contradiction to the consistent teachings of the Third Circuit-most recently in

Rather ,

in direct

In re Combustion

Engineering, Inc. , 391 F. 3d 190 (3d Cir. 2004)- Grace seeks to shield a non- debtor party from

on- going litigation that cannot , as a matter of law , have a direct impact on Grace

s estate. In

Combustion Engineering and two

, the Third

bankruptcy court did not have jurisdiction to enjoin litigation among non- debtor parties merely

and The Burlington Northern & Santa Fe Railway Company.
10

1. 363 ,

Ex. A- , Adversary Proc. 0. 1. 417 , Ex.

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because the defendant claimed a right of contribution or indemnity against the debtor - as BNSF
does here.

On March 31 , 2008 , the Bankruptcy Court

controlling Third Circuit precedent when it denied requests by Grace and the State of Montana
(the " State ) to reconsider

include the Libby Claimants ' independent actions against the State (the " State

Litigation ). In

that decision (the " State Injunction Denial Order ), II the Bankruptcy Court correctly concluded
that " related- to subject matter

injunction to include the (State Litigation)." State Injunction

12 Just two

weeks later , however ,

on April 14 ,

2008 , and despite Grace s complete failure to

that the BNSF Litigation is distinguishable in any me aningful way from the State Litigation , the

Bankruptcy Court failed to
concluding that
expansion of the Preliminary

, erroneously

subsequent proceedings wherein the Bankruptcy Court granted a stay pending appeal of the State
Injunction Denial Order , 13
Circuit precedent that the

14 This disagreement

explains both the granting of a stay pending appeal
determination that the appellant was

s express

not likely to succeed on appeal (the effect of

II Order Denying Debtors ' Motion to Expand the
Montana (Adversary Proc. 0. 1. 420) and Memorandum and Opinion (Adversary Proc. 0.1. 419), both entered on 2007 , and Order Denying Motions to Reconsider 1. 484) and Memorandum Opinion (Adversary Proc. 0. 1. 483), both entered on March 31 2008. Grace and the with respect to the State Injunction Denial 1. 490 , 492). 2008 , Grace
April 16 ,

submitted a motion for

1. 495).

, 2008 ,

the Libby Claimants

submitted their opposition (Adversary Proc. 0. 1. 505).
12

13 The

R. Grace & Co. v. Chakarian (In re W. R. Grace & Co. , 366 B. R. 295 (Bankr. O. Del. 2007).

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leave in place an injunction that the Court
also the Court' s attempt to shoe- horn the BNSF Litigation into the tiny exception left open by the

Third Circuit to its rule that litigation

debtors may not be enjoined based on the

defendant' s assertion of contribution or indemnity claims

Motion , the Libby Claimants appeal to this Court to faithfully apply the Third Circuit precedent

requiring that they be left free to pursue their non-bankruptcy litigation against BNSF.
Procedural Historv

On April 2 , 2001 (the " Petition Date ), Grace filed petitions for relief under Chapter

of the Code. On
Preliminary Injunction.
2001
16 and

, Grace filed an adversary

inter alia

the

, 2001 entered the Preliminary Injunction sought by Grace.

2002 , the Bankruptcy Court entered an order modifying the Preliminary Injunction to expand

its scope to include certain additional affiliates of Grace.
On March 26 ,

2007 , Grace filed a motion to expand the Preliminary Injunction to include

the BNSF Litigation (the " BNSF Injunction Motion ). 19 Until the filing
Motion , the BNSF Litigation proceeded uninterrupted by and without involvement of Grace for
nearly six years.

On May 21 , 2007 , the Bankruptcy Court heard oral argument on the BNSF Injunction

Motion. Upon hearing all of the arguments , the Bankruptcy Court announced that it would take
the matter under

temporary stay "

of the

14
15
16

, ~ 3.

17 (

(ld
1. 87.

18

19 Debtors

' Motion to Expand the Preliminary Injunction to Include Actions Against BNSF. (Adversary Proc. 0.

398.

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pending its ruling. 20 The Libby Claimants appealed. 21 This Court , expressing concern about the

indefinite duration of the " temporary stay, " set a deadline of April 15 , 2008 for the Bankruptcy
Court to rule on the BNSF Injunction Motion.

R. Grace & Co. v. Libby

R. Grace & Co. , 2008 WL 205310 (D. Del. 2008). The day before the deadline expired , the

Bankruptcy Court entered the Order expanding the Preliminary Injunction to include the BNSF
Litigation. It is from this Order that the Libby Claimants now seek leave to

Anwment
The Order is an injunction and , as such , is immediately reviewable by this Court pursuant
to 28 U.S. C.
9 l58(a)(1) or 28 U.
c. 9 l292(a)(1).

22 If this Court concludes that the Order is an
9

interlocutory order that requires leave to appeal under 28 U.S. c.

granted because
interlocutory appeal have been met.

The Order is Appealable as of Rieht to this Court
As an injunction , the Order is appealable by the Libby Claimants to this Court as of right
pursuant to 28 U .

C. 9 1

See Connecticut

Nat'l Bank v. Germain , 503 U. S. 249 , 253 (1992).

58(c)(2) makes Section l292(a)(1)

applicable to the appellate process
l58(a)(3), l58(c)(2) and
approved by the Third Circuit Court of

See In re Prof!

, 246 B. R.

47 ,

59

20 (Bankr. Case O. I. 15948
21 ~istrict

, p. 94: I.)

22 The Libby

609.
See
Case No. 06-

~istrict Crt. 0. 1. 5 , 15; Case No. 07- 609 , ~istrict Crt. 0. 1. 6, 11. In those cases , however , the Libby Claimants were challenging the entry of " temporary stays " as improperly entered Claimants maintain that their arguments in those cases were correct , this Court did not agree. R. Grace & Co. v. Libby Claimants (In re W. R. Grace & Co. , 2006 WL R. Grace & Co. v. Libby Claimants (In re W. R. Grace & Co. , 2008 WL 205310 (D. Del. 2008). In this case , there is no dispute that the Order is a preliminary injunction.

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(D. N.J. 2000),

vacated and remanded on other grounds , 285 F. 3d 268 , 282 n. 16 (3d Cir. 2002)

(approval of District Court' s analysis of appellate jurisdiction);
Mortgage Investors Group, L.P. , 2006 WL 3308585 ,
Acceptance Group, Inc. , 235 B. R. 548 , 553 (D. Del.

Honig v. Broege (In re Midstate
*3- 4 (D. N. J.
2006);

In re Reliance

D' Avella, Jr. v. City of

(In re Bertoli) , 1987 WL 8196 , *4 (D. N.J. 1987).
In

Profl

, the district court

pursuant to Sections l58(c)(2) and l292(a)(1), without the need to resort to
leave to appeal , because " an

injunction , whether permanent or preliminary, is appealable.

Prof!
analysis ,

, 246 B.R. at
explaining: " (W)e

agree that the District Court , sitting as an

, was

authorized to hear the appeal from the Bankruptcy Court as an appealable injunctive order under
28 U.

C. 9 l292(a)(1). . . .
Similarly, in

Prof! Ins.

, 285 F. 3d at 282 n. 16.

Midstate Mortgage , the district court recently affirmed that
Thus

makes Section l292(a) applicable to the

where the orders entered in the bankruptcy court are in the form of injunctive relief, the district
court , sitting as an appellate court , is authorized under Section 292(a) to hear the appeal without
the need to resort to discretion to grant leave to appeal."

Midstate Mortgage , 2006 WL 3308585

*3-

Likewise , this Court has also concluded that bankruptcy injunctions are appealable as of
right pursuant to 28 U.
c. 9 l292(a)(1).

Reliance Acceptance , 235 B. R. at 553. In

Reliance
this

Acceptance , which involved an appeal to this Court

s injunction ,

Court explained the interplay of the jurisdictional statutes:
28 U.
C. 9 l58(a) governs the court

s jurisdiction to review orders of the

bankruptcy court. It

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appeals " with

leave of the court , from interlocutory orders and decrees , of
Section l58(c)(2)

bankruptcy judges bankruptcy judges under

provides that " (aJn appeal under subsection (a) ... of this section shall be

taken in the
taken to the courts of appeals from the district courts....
28 U.
C. 9 l292(a) governs appeals from the

party from pursuing injunction for purposes of
l292(a)(1).

of appeals and provides that a party has an appeal as of right to the court of appeals from a district court Carson v. American Brands, Inc. , 450 U. S. 79 (1981). Cf. 11 Wright & Miller, Federal Practice and Procedure 9 3923 (" An order that prohibits a
c. 9

Consequently, the court looks to sections l58(c)(2) and l292(a) to find the defendants have a right to appeal to this court at this time the Court' s preliminary injunction order.
Reliance Acceptance , 235 B. R.
at 553. Similar analysis

Bertoli

case.

Bertoli 1987 WL 8196 ,

*4.

, the court found that an
. Looking to
an appeal

bankruptcy preliminary injunction was subject to an immediate appeal.

l58(a), l58(c), and l292(a)(1), the court
of right and that the court is duty bound to hear and decide the issues presented.
Carol Gerard v. W. R.

See also

Grace & Co. (In re W. R.

Grace & Co.

, Civil Action
23 ("

1549:

Memorandum Opinion , pp. 1- 2

(D. Del. July 16 2003) (Wolin ,

1.)

the court has jurisdiction

over this case pursuant to 28 U.

c. 9
24

interlocutory orders with respect to injunctions.
2004).

vacated by 115 Fed. Appx.

565 (3d Cir.

23 (Adversary
24 In

1. 154.

Gerard (an appeal originating out of the same

, raising similar

jurisdictional issues, in which both Grace and the Libby Claimants participated), Grace argued in its brief before this
Court that 28 U.s.e. 9 1292(a)(
court injunctions. Gerard , Civil Action No. 02- 1549: Action No. 02- 1549: Memorandum Opinion , pp. 1Brief of Appellees. The district court agreed.

Gerard , Civil

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The Third Circuit is not alone in finding that bankruptcy court injunctions are appealable

as of right. The Ninth Circuit Court of Appeals
constitutes an appealable final decision.

Solidus Networks, Inc. v. Excel Innovations, Inc. (In
Excel Innovations ,

re Excel Innovations, Inc. , 502 F. 3d 1086 , 1092 (9th Cir. 2007). In
Circuit held:

the Ninth

The injunction is in
another proceeding to avoid disruption of the debtor s reorganization. We have held that a
automatic stay
jurisdiction.

Crocker Nat' l Bank v. Am. Mariner Indus., Inc. ( In re Am. Mariner Indus., Inc. , 734 F. 2d 426 , 429 (9th Cir. 1984), overruled on

other grounds bv United Sav. Ass n v. Timbers of Inwood Forest Assocs., Ltd. , 484 U.S. 365 , 108 S. Ct. 626 , 98 L.Edold 740 reason to treat the instant injunction differently. See Gruntz v. County of

Los Angeles ( In re 202 F. 3d 1074 , 1082 (9th Cir. 2000) (en banc) (" The automatic stay is an injunction issuing from the authority of
the bankruptcy court. ). Moreover ,
bankruptcy court

although the

preliminary, "

nothing in the

record
proceedings on the injunction.

See Shugrue v. Air Line Pilots Ass n, Int'
139 B.R. 772 , 778 (S.

(In re Ionosphere Clubs, Inc.

Y.

(WJhere the bankruptcy court contemplates no further
from the outcome of appealable order.
. Thus ,

preliminary '
, the

injunction , but
, apart

without explicitly stating so , the Ninth Circuit determined that 28 U.

C. 9 158(a)(1)

governs appeals from bankruptcy court

Excel Innovations analysis applies

equally to the present appeal: (1) the Preliminary Injunction is nothing more that extension of the
automatic stay for Grace s benefit ,

(2) the Third Circuit has

granting or denying relief from the
appellate jurisdiction

see In re Amatex Corp. , 755 Fold 1034 (3d Cir.

In re Comer , 716

2d 168 (3d Cir.

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proceedings on the Preliminary Injunction as it relates to BNSF.
Order is appealable to this Court as of right.

Excel Innovations ,

the

Courts outside of the Third and Ninth Circuits have similarly concluded that bankruptcy
court orders regarding injunctions are appealable as of right.

See Official Comm. of Unsecured
, 252 B. R.
296 ,

Creditors of Indust. Ceramics, Inc. v. Indus.

301- 02 (W.

2000) (recognizing that preliminary injunctions issued by bankruptcy court are appealable as of
right to district court , but finding that order on appeal was not an injunction);
La Habra Products,

Inc. v. Patio Indus. (In re Patio Indus. , 220 B.R. 672 , 676 (C.D. Cal. 1996)

of right under section 1292(a)(l) for review of
Servo v. Ernst &

Internal Revenue
, 135 B. R. 517 520- 21 (S.

Ohio

the application of Section 1292(

injunctions appealable " as of

but see In re Quigley Co.,

, 323 B.R. 70 , 76-

(S.

Y. 2005).

Any ambiguity in the jurisdictional
court injunctions to no less a

injunctions are subject to at the hands of the courts of appeals. Injunctions issued by bankruptcy

courts are just as serious as injunctions issued by district
consequences. Certainly, " (aJs a policy matter , the rulings of a non- Article
should not be more
court.
III

bankruptcy court

Clark v. Sanders (In re Reserve

190 B.R. 287 , 290 (E. D. Tex.

Accordingly, just as the district

Prof!
Excel Innovations ,

Midstate Mortgage
and other courts that

Reliance Acceptance , and

Bertoli) , the Ninth Circuit in

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have found that bankruptcy court orders
Court should similarly conclude that the Order is appealable as of right.

, this

II.

If this Court Concludes that the Order is Not the Libby Claimants as of Right, Leave to Proceed with an Interlocutorv Appeal should be Granted under 28 U. c. &

158(a)(3)

If this Court
right , leave to proceed
C. 9

158(a)(3). This Court has jurisdiction to hear appeals of interlocutory orders through exercise of
its discretion to grant a party
C. 9

provides no standard to assess whether leave to appeal is appropriate , courts in the Third Circuit

have imported the criteria of 28 U.

c. 9 1292(b) - governing appeals of

from district courts - to determine whether to accept an appeal from an
bankruptcy court.

See Official Bondholders
832 ,

Entm t Group, Inc. , 209 B. R.

837 (D. Del.

In re Delaware & Hudson Ry. Co. , 96

R. 469 , 472 (D. Del. 1989). Under 28 U. C. 9 1292(b), a court will entertain an appeal of an

interlocutory order only after the appellant demonstrates that " exceptional circumstances justify

a departure from the basic policy of postponing review until after the entry of final judgment."
Delaware & Hudson , 96 B.R. at 473. In addition to
circumstance , an interlocutory appeal should be allowed if: " (1) a controlling question of law is
involved; (2) the question is one where there is a

and (3) an immediate appeal would materially advance the ultimate termination of the litigation.
Marvel Entm , 209 B. R.
at 837.

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Exceptional Circumstances Exist for Grantine Leave to Appeal
There is no shortage of exceptional circumstances in this case for allowing the appeal to

proceed immediately. Apart from the fact that the
to rule on Grace s preliminary injunction request - imposing a " temporary stay " during most of

that period - the Bankruptcy Court (1) failed to follow
for establishing bankruptcy court jurisdiction to enjoin litigation among non- debtor third parties

and (2) wrongly concluded that the

were

In reaching both of these erroneous conclusions , the Bankruptcy Court
, allegations , and claims without an

improperly relied upon
hearing.

Moreover ,

an appeal from an

represents an exceptional circumstance and is clearly the policy consideration that allows district
court orders to be directly appealable to the court of appeals (see pp. 10- 11).

The Bankruptcy Court Failed to Follow Controlling

Third Circuit Precedent A Bankruptcy Court
review of an interlocutory order under 28 U.S. c. 9 158(a)(3).
, constitutes cause for

Marvel Entm , 209 B.R. at 837.

In this case , for the same reasons that the Bankruptcy Court ruled in the State Injunction

Order that it
jurisdiction to issue the Order enjoining the BNSF Litigation.

, the

The jurisdiction of bankruptcy courts is grounded in and limited by
91334(b); 28 US. C. 9

the district courts shall have

original but not exclusive jurisdiction of all civil proceedings arising under title 11 , or arising in
or related to cases under title 11."

, Section l57(a) permits the district court to refer " any

or all proceedings arising under title

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bankruptcy judges for the district."

Celotex Corp. v. Edwards , 514 U.S. 300 , 307 (1995). In the

present case

, since the claims of the Libby
s Chapter 11 case ,
to

Bankruptcy Code nor in Grace

the sole issue for the Bankruptcy Court was

whether those claims are " related

" the Chapter
Pacor,

Courts have universally adopted the test first articulated by the Third Circuit in

Inc. v. Higgins , 743 F.2d 984 , 994 (3d Cir. 1984), for determining whether related- to jurisdiction
exists:

A matter is
outcome of that estate being administered in bankruptcy. related to bankruptcy if
liabilities , options or
. Moreover , an action is
s rights

and in any way
bankruptcy estate.

Applying this standard ,

the Third Circuit held that related- to

jurisdiction did not

personal injury litigation between non- debtor parties , neither of them related to the
debtor , stating:

At best , (the personal injury lawsuit) is a mere precursor to the potential third party claim for indemnification by Pacor against Manville. Yet the outcome of the (the personal injury lawsuit) would in no way bind Manville , in that it could not determine any rights , liabilities , or course of action of the debtor. Since Manville is not a party to the (the personal injury lawsuit), it could not be bound by res judicata or collateral estoppel.

. at 995. Accordingly, the Third Circuit concluded:
there would be no automatic creation of liability

against Manville on

account of a judgment against Pacor. Pacor is not a contractual guarantor
of Manville , nor has Manville agreed to indemnify Pacor ,

and thus a

judgment in the

automatic liability on the
Manville s possible liability would be
party impleader action.

. There would

administration of the estate , until such time as Pacor may choose to pursue
its third party claim.

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. at 995- 96 (emphasis added). Since the Chapter

automatically

by the litigation , the litigation could not affect the estate in any way and thus was not related to
the debtor
s Chapter 11 case.

Pacor has been expressly approved by the United States Supreme Court.

Celotex 514
Pac or in

S. at 308. And the Third Circuit has confirmed the on- going vitality of
Engineering , 391 F. 3d at 225, and

Combustion

In re Federal- Mogul Global, Inc. , 282 B.R. 301 (D. Del.),
cert denied sub nom Daimler Chrysler Corp. v.

mandamus denied , 300 F. 3d 368 (3d Cir. 2002),

Official Comm. of Asbestos Claimants , 537 US.
In

Combustion Engineering , a prepackaged Chapter

, the plan provided for all

asbestos claims-including claims against non- debtor affiliates Basic , Inc. and ABB Lummus
Global , Inc.
to be channeled to a post-confirmation trust created under Section 524(g) of the

Bankruptcy Code. The plan provided for all three entities , along with their respective parent
companies , to make substantial contributions of cash and other assets to the post-confirmation
trust. Fulfilling a

, the bankruptcy court entered an injunction

under Section 105 barring the assertion of asbestos claims against Basic and Lummus. After a
thorough analysis of

Pacor

and

Federal- Mogul , the Third Circuit held that related-to jurisdiction

cannot be extended to claims of asbestos plaintiffs against the non- debtors (Basic and Lummus) simply because of their corporate affiliation with the debtor or because the substantial financial
contributions to the plan by the non-debtor affiliates depended on a channeling injunction in their
favor.

Combustion Engineering , 391 F. 3d at 225- 27. Accordingly, the court considered

other factors advanced by the debtor as grounds for related- to jurisdiction: a unity of interest
based on the debtor s obligations of indemnity or contribution to the non- debtor affiliates , and

the existence of shared insurance between the debtor and the affiliates.

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The

Combustion Engineering

court rejected the debtor

s assertion that the non- debtor

affiliates ' potential rights of contribution or
jurisdiction.

. at 230- 32.

In so

s contention
sufficient basis for

that common production sites between the debtor and affiliates provided " a
the kind of ' unity of interest' that could give rise to ' related
to '

jurisdiction.

. at 232. In the

BNSF Litigation , of course , BNSF is not even in the

Rather , liability in BNSF is predicated on BNSF' s own negligent conduct in operating its own

business on its own property. But even if the fact that BNSF
be shoe- horned

s product could

into the concept of a " common production site " between Grace and BNSF
makes it crystal clear that this factor does not

Combustion Engineering
interest" that could confer jurisdiction.

represent a " unity

of

Combustion Engineering , 391 F. 3d at 231- 32.

This aspect of

Combustion Engineering was not new , but simply an
Pacor
and

principles long settled under

Federal- Mogul.

As the court in

Combustion Engineering

observed Pacor rejected related- to jurisdiction even though the non- debtor s exposure to liability

resulted from sale of

, and

Federal- Mogul

found no

jurisdiction even though the non- debtors ' exposure to liability resulted from
debtor
s products into their own.

Combustion Engineering ,

391 F. 3d at 231- 32.

The

continued:
In both cases the unity of

product was insufficient to give rise to " related to " jurisdiction when the thirdparty claim would not directly result in liability for the debtor.
Id. at 232.

The District Court' s decision in

Federal- Mogul explains why a claim

debtor who merely asserts a right of contribution or indemnity does not directly result in liability

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for the debtor. In

Federal- Mogul , non- debtors Chrysler ,

Ford and other auto

codefendants with the debtors in thousands of

Friction Products Litigation) sought to transfer those cases to the Delaware
arguing that the tort
related to " the debtors ' Chapter 11 case so as to

bankruptcy jurisdiction.

Applying

Pacor , District Court

related- to

bankruptcy

jurisdiction (does) not extend to a

debtors unless that dispute ,

by itself

creates at least the logical possibility that the estate will be affected.

Federal- Mogul , 282 B.R.

at 309. The debtor , although a putative indemnitor , had no cause for concern that common facts

would be litigated against the non- debtors , because no factual determination could be binding on
the debtor
s estate.

. at 306. An

given an opportunity to be heard and defend , but since the automatic stay prevents the debtor
from being required to defend , the debtor cannot be bound:
Implicit in

Pacor rationale is that a debtor may not be prejudiced by its failure to defend a lawsuit against a third- party common- law indemnitee without de facto

depriving the debtor of the benefit of the automatic stay of litigation against it.
. at n. 3. Accordingly:

The Court sees no justification to take the
debtor codefendants of the debtor in

No asset of the estate is threatened nor is any re-ordering of creditors in the offing. recovery by indeed very substantial claims , against the debtors in the future.
Pacor . A
judgment against them will not bind the debtors.

when the movants appear as creditors of the estate and the facts underlying the

liability are adjudicated in the context of the bankruptcy, that the Friction Product Claims will affect the estate.

. at 311 (emphasis added). The District Court' s denial of jurisdiction was upheld by the Third
Circuit , which concluded:

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Any indemnification claims that the have not yet accrued and would require another lawsuit before they could have an impact on Federal- Mogul's bankruptcy proceeding. . . .
Federal- Mogul , 300 F. 3d at 382.
Before

Combustion Engineering , it was

Pacor

and

Federal- Mogul on the basis that those decisions involved attempts to remove litigation to the

bankruptcy court , rather than attempts to enjoin such litigation. But in
the Third Circuit applied the exact

Combustion Engineering
to jurisdiction to the injunction

situation. As the Bankruptcy Court properly

, it

is now clear that related- to jurisdiction must exist for litigation to be enjoined by the bankruptcy
court , just the same as it must exist for

Injunction Denial Order at p. 6.
In the State Injunction Denial Order , the Bankruptcy Court correctly
Pacor Federal- Mogul , and

Combustion Engineering required the conclusion that the Bankruptcy

Court lacked jurisdiction to enjoin the State Litigation. As stated by the Bankruptcy Court:

While
jurisdiction , the two
Engineering, Inc. , 391 F. 3d 190 224- 25 (3d Cir. 2004). Section

relatedIn re Combustion

Bankruptcy Code) " does not provide an independent source of federal subject matter jurisdiction. . at 225. Therefore , this court must establish subject matter jurisdiction before considering the merits of a 91 Injunction Denial Order at p. 6.
(In Federal- Mogul ) (t)he bankruptcy court accurately reiterated the holding of the potential impact on Pacor stating that jurisdiction exists debtor s estate would have been direct with no joinder of issue necessary for judgment against the non- debtor to affect assets re- prioritize creditors and thwart the bankruptcy court' s administration of the Federal- Mogul Global, estate. State Injunction Denial Order at p. 8 (citing

Inc. , 282 B. R. at 307).

The position (of)
claims in

Pacor

and

Federal- Mogul. Before any effect on the Debtors can be

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realized , the State of Montana must first be found liable in state court and then
pursue its claim for indemnification

Denial Order at p. 9.

Montana law prohibits the State of Montana from litigating or establishing a factual basis (i. e. percentage of comparative fault) against Debtors for either contribution or indemnity during the course of the (State judgment against the State of Montana will not bind Debtors. An intervening
adjudication is necessary to affect the estate. State Injunction Denial Order at
1O.

In (the State Litigation), it is the actions of the State of Montana , not Debtors which are the basis of the claims. State Injunction Denial Order at p.
Here... however ,
as in

Pacor

and

Federal- Mogul ,

the (State Litigation) will

not be binding on the estate and will not have a direct impact on the without additional intervening adjudication. State Injunction Denial Order at
p. 11.

Grounded as it is in controlling Third Circuit precedent , the foregoing analysis is unassailable.
Based on the Bankruptcy Court' s reasoning, the Bankruptcy Court lacked subject matter

jurisdiction to enjoin the BNSF Litigation just as surely as it lacked
State Litigation. Just as the State Litigation concerns
s own tortious conduct , the BNSF

Litigation concerns BNSF' s own conduct in operating its railroad.

enter against BNSF , BNSF would need to return to the Bankruptcy Court to seek allowance of a

claim for indemnity or contribution against
the State in the

Pacor case and just like

BNSF itself has

Bankruptcy Court' s reasoning in the State Injunction Denial Order is equally

BNSF Litigation. 2s Absent demonstration by Grace that the BNSF Litigation is
in any meaningful way from the State Litigation (and from the situation in

Pacor

and

Federal-

25 Motion of BNSF for
the Preliminary Injunction ,
Opposition to the Debtors '
or In the Alternative

, for Relief From the

Motion to Expand

(Adversary Proc. 0.1. 438 , Ex. , pp. 4-

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Mogul ), the Order must be reversed as the Bankruptcy Court lacked jurisdiction over the BNSF
Litigation.

In the Order , the Bankruptcy Court
BNSF Litigation exists because of (a) BNSF' s
alleged indemnification or contribution claims

and (b) the insurers ' alleged indemnification claims ,

whether related to insurance

which BNSF claims to be an

Grace in which BNSF is the sole

s analysis ,

these

allegations do not suffice to confer jurisdiction. In order to satisfy the requirements

Pacor and

Federal- Mogul for subject matter jurisdiction to exist , Grace would have needed to establish that

a judgment against BNSF in the BNSF
pursuant to an indemnity contract. Yet Grace has
evidentiary record whatsoever.
Concerning BNSF' s alleged indemnity, Grace

Litigation to proceed " could potentially subject the Debtors to additional indemnity claims.
Grace admits that BNSF failed to file any claim for indemnification or contribution prior to the

bar date (deadline) for filing proofs of claim in this case. 27

While both Grace

alleged the existence of various contracts that may give rise to an indemnity obligation , Grace
only produced 12 of the alleged
contention rather than by the terms

, Grace has attempted to

contained therein cover claims against BNSF for the independent torts that are the subject of the

BNSF Litigation.

, it was

26 BNSF

does not concede that BNSF has valid contractual

27 BNSF

indemnification rights " or " common law indemnification rights " against Grace. Indeed , Grace indicates that it does not believe that BNSF will ultimately be successful in its claims against (Grace) ....
, ~~ 18- 19.

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impossible for the Bankruptcy Court to decide. Perhaps the alleged contracts cannot be read to

indemnify BNSF for its own

, especially in light of the rule disfavoring

construction of indemnity provisions to cover an indemnitee
v. Seckinger

s own negligence. In

United States
a contractual

397 U. S. 203 , 211 (1970), the

provision should not be construed to permit an indemnitee to recover for his own
unless the court is firmly
various parties. This principle ,

though variously articulated , is accepted with virtual unanimity
Several other courts ,

among American jurisdictions.

including the Court of

Third Circuit , have interpreted this rule to require that indemnification for an indemnitee s own

negligence must be stated in " unequivocal terms.

See Jacobs Constructors v. NPS Energy

Servs. , 264 F. 3d 365 371 (3d Cir. 2001) (applying Pennsylvania law). Thus , it is apparent that if

BNSF were to assert a contractual indemnity claim against Grace , Grace would contest the claim

on at
contractual language does not provide for Grace to indemnify BNSF

, (b) the

from BNSF's own conduct
Seckinger requires that

which is the basis for liability asserted in the BNSF Litigation , and (c)

indemnity language , if at all ambiguous , be construed not to provide indemnification against the
indemnitee s own conduct.
Grace offers no argument to distinguish the instant matter from

Pacor Federal- Mogul

and

Combustion Engineering

Indeed ,

no such

The BNSF Litigation is

proceeding against BNSF , not Grace. If the Libby

then BNSF may recover from Grace only by successfully proving a claim in Grace
case. The claims allowance proceeding would be hotly

s Chapter 11

certainly, Grace s liability will not be direct and

Pacor

and

Federal-

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Mogul.

At most ,

any BNSF indemnity agreements- if extant at all , and if they

properly introduced and received into

agreements submitted by Chrysler in the

Federal- Mogul case , as to which the District

stated that " the

question whether this purported indemnity

bind the (debtors) is open and one not
subject matter jurisdiction on this tenuous support." . at 311 (quoting

In re Asbestos Litig.

271 B. R. 118 , 124 (S. D. W. Va. 2001)). The

To the extent that the

validity of an indemnity agreement is in doubt, the directness between the third-party action and
a judicial ruling that will affect the estate is attenuated.
Federal- Mogul 282 B. R. at 311- 12.

Similarly, the insurers ' claims of indemnity do not establish related- to jurisdiction. First

no evidence was introduced or received into evidence of any basis for BNSF to assert a claim
against any insurer of Grace based on the claims asserted against BNSF in the BNSF
Second , no evidence was introduced or received into evidence of any agreement whereby Grace

agreed to indemnify any insurer for claims asserted by BNSF. Third , Grace admits that BNSF is
not covered by any of Grace

s insurance policies (including any that were settled
, according to Grace ,

agreements including a Grace indemnity of the

Grace

obtained separate policies for BNSF and BNSF was not named as an additional insured under
any of its policies.
the existence of

28 In a subsequent pleading, however , Grace acknowledges BNSF' s claim of
, but denies being

locate any such

themselves. 29 Accordingly, there is no basis whatsoever to conclude that Grace s insurers have

contingent indemnity claims against Grace arising from the BNSF Litigation, let alone that such
claims are direct and
Pacor
and

Federal- Mogul.

In sum ,

none of

28 BNSF , ~ 36 , n.25. 29 Debtors ' Reply in Support of their Motion to Expand the Preliminary Injunction to Include Actions Against BNSF

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BNSF' s indemnification " avenues " that the Bankruptcy Court considered have any support in the

record for concluding that property of the estate could be
Just as the Bankruptcy Court
jurisdiction to enjoin the BNSF Litigation.
, it lacks

The Bankruptcy Court Wrongly Concluded that the Requirements for the Issuance of a Preliminary Iniunction were Established
In addition to incorrectly deciding that subject matter jurisdiction exists over the BNSF
Litigation , the Bankruptcy Court wrongly concluded that the requirements for the issuance of an

injunction were

In particular ,

the Bankruptcy

identity of interest between Grace and BNSF , (b) Grace would be subj
estoppel and the sub- issue of " record

taint" if the BNSF Litigation proceeded , and (

to Grace outweighed the continued suffering of the Libby Claimants.
In the Order

, the

interest. But no such identity of
interest , observing that BNSF is " wholly unrelated to and not an affiliate of the
(BNSF Litigation has) been filed against BNSF alleging

activities as opposed to activities of the Debtors. 30 The only ground cited by the
Court for an identity of interest- namely,

that BNSF will blame Grace for the Libby Claimants

injuries -establishes the

As to the

record taint

" it is clear

Pacor and

Federal- Mogul that since even a judgment in a third party action will not bind Grace a fortiori

there can be no collateral estoppel , and certainly no " record taint" with any effect on Grace. It is

30

, n. 16. (Adversary Proc. 0. 1. 424 See Response of BNSF to Debtors ' Motion to Expand the BNSF ~ 6 (Adversary Proc. 0.1. 413).

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worth recalling in

Pacor , where the third party litigation

brought against a distributor of Johns- Manville asbestos , the Third Circuit
lawsuit could have " no conceivable effect" on the Johns- Manville bankruptcy estate even though

the same purported threat of " record taint" as the
against Johns- Manville. 32 In addition as explained by the Bankruptcy Court itself in the State

Injunction Denial Order 33 in this case the law of Montana fully protects Grace from any " record
taint" or collateral estoppel effect of the BNSF Litigation.

Plumb v. Fourth Judicial Dist. Court

927 P.2d 1011 (Mont.

party
703( c )(ii),

violates substantiative due process. Mont. Code Ann. Section 27 -

may be no

Faulconbridge v. State, 142 P. 2d

777 ,

792 (Mont. 2006), holds that there may be no evidence of

comparative causation against an empty chair non- party.
In addition to lacking a legal basis ,

the Bankruptcy Court' s determination of the danger

of record taint was not supported by the record. Grace introduced no evidence that record taint is
a danger. Indeed , no further record
situation. In 1999

, a jury
Finstad v. W. R. Grace & Co. , 8 P. 3d
778 (Mont. 2000). The proof met

Grace appealed and lost.

Montana s high standard for punitive damages , that Grace s actions were intentional , reckless
and/or malicious , within the meaning of Mont. Code Ann. Section 27- 221. On

Finstad , the jury was entitled to find that Grace had lied to the workers , lied to the union , lied to

31 Order at pp. 21-

32 Indeed
bankruptcy.

22.
Corp.
26 B. R.

, the first reported
Johns- Manville Corp. v. Asbestos Litig. Group (In re Johns- Manville 1983).
10.

Manville 420 , 436 (Bankr.

33 State Injunction

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local doctors , and obstructed medical studies; and that Grace chose not to protect the workers

their families and the community, or even to disclose the asbestos hazard to them.
record , it is difficult to see how any further " record taint" against Grace could be possible.

With respect to the balancing of harms , the Bankruptcy Court
answers the Libby Claimants ' assertion that they are severely harmed by the BNSF Injunction
because " it allows sick and dying claimants to continue to suffer without compensation. "
In

shocking non-sequitur , the Banlauptcy Court explains that she permitted the parties to propose a

procedure to preserve testimony under Fed. R. Civ. P.
Libby Claimants '

motion to take preservation depositions , imposing the impossible requirement

of obtaining a doctor

s certification that the victim would die within six months , ignoring the

Libby Claimants '

pleas that the slow strangulation caused by asbestos disease does not permit a

medical prediction that death will occur within a given six-month period and that an

asbestos victim who is struggling for each breath may be too ill to testify. 34
Court'
s disregard for the suffering of the

The Bankruptcy

, in the context of the

Order , legal error in applying the balancing of harms standard for issuance of an injunction.
In sum ,

the

s failure to apply Third Circuit

subject matter jurisdiction to enjoin third- party litigation , especially when viewed in combination

with the other
evidentiary support for the injunction sought by Grace and failure to consider the suffering of the
Libby Claimants , establish exceptional circumstances that should impel this Court to grant leave

for the Libby Claimants to appeal from the Order.

34 Transcript of 8/23/04

Hearing 0.1. 6266 , Adversary Proc. 0. 1. 266 , 267 , and 268.

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The Appeal Involves a Controlling Question of Law for Which
There is Substantial Grounds for Difference of Opinion

An order involves a controlling question of law "' , on appeal , a determination that the
decision contained error would lead to reversal.
R. 378 ,
Patrick v. Dell Financial Services, Inc. ,

366
Pa.

385 (M. D. Pa. 2007) ( quoting

In re Sandenhill,

, 304 B. R.

692 ,

694 (E. D.

2004)).
legally.

, either practically or

Bradburn Parent Teacher Store, Inc. v. 3M , 2005 WL 1819969 , at *3 (E. D. Pa. 2005)

quoting Katz v. Carte Blanche Corp. 496 F.2d 747 , 755 (3d Cir. 1974)).

There is little doubt that the erroneous exercise of subject matter jurisdiction or improper
issuance of an injunction involves a controlling question of law.

See Patrick , 366 B.R. at 386

Whether a court has jurisdiction speaks directly to its power to adjudicate a particular claim.

If this Court
issuance of an injunction has not been met , the Order will be reversed. Given that the

contrary to long-established Third
Court' s own State Injunction Denial Order , there is substantial ground for a difference of opinion
from the Bankruptcy Court' s holding in the Order.

Granting Leave to Appeal Will Materially Advance the Ultimate Termination of the Litieation
An immediate appeal of this issue will advance the termination of the BNSF Litigation by

permitting the lawsuits to reach trial or settlement without further interruption.

permitting the appeal will only further the delay the termination of the BNSF
adversary proceeding in which Grace has obtained the Preliminary Injunction will terminate on

the effective date of any confirmed Chapter
under Section 1141

, to be replaced by the discharge injunction

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parties that are permitted under Section 524(g) of the Bankruptcy Code.

permit an injunction against the BNSF Litigation.

c. 9 524(g)(4)(ii). It is

(and Grace does not argue otherwise) that the Libby Claimants cannot be barred from pursuing
the BNSF Litigation once Grace s plan takes effect. There is no legitimate interest
the inevitable BNSF Litigation.

Conclusion
For the foregoing reasons , if this Court should conclude that the Order is not

to this Court as of right (and , in any event , as an alternative to a determination that the Order is

appealable as of right), this Court should enter an order granting the Libby
appeal pursuant to 28 U.
C. 9 158(a)(3).

Dated: April 24 , 2008

LANDIS RA TH & COBB LLP

Adam G. Landis (No. 3407) Kerri K. Mumford (No. 4186) 919 Market Street , Suite 600 O. Box 2087 Wilmington , DE 467- 4400 Telephone: (302) 467-4450 Facsimile: (302)
- and -

Daniel C. Cohn Christopher M. Candon COHN WHITESELL & GOLDBERG LLP 101 Arch Street Boston , MA 02110 951- 2505 Telephone: (617) Facsimile: (617) 951- 0679 Counsel for the Libby Claimants

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UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE APPEAL TRANSMITTAL SHEET
01-771 Case Number: _____________________ BK AP If AP, related BK Case Number: ______________________ 01-1139

Title of Order Appealed: Order Expanding the Preliminary Injunction ____________________________________________________________________________________ Docket Number: _________ 498 Date Entered: __________________ 4/14/08 Item Transmitted: Notice of Appeal Amended Notice of Appeal Docket Number: _________ 509 Motion for Leave to Appeal Cross Appeal 4/24/08 Date Filed: _____________________

*Appellant/Cross Appellant: *Appellee/Cross Appellee BNSF Railway Company Libby Claimants _______________________________________ _________________________________________ Counsel for Appellant: Counsel for Appellee: Evelyn Meltzer, Esq Kerri Mumford _______________________________________________ _________________________________________________ _______________________________________________ _________________________________________________ Pepper Hamilton LLP 919 Market St., Suite 600 1313 Market St PO Box 2087 _______________________________________________ _________________________________________________ PO Box 1709 Wilmington, DE 19801 _______________________________________________ _________________________________________________
_______________________________________________
*If additional room is needed, please attach a separate sheet.

Wilmington, DE 19899 _________________________________________________

Filing Fee paid?

Yes

No Yes No

IFP Motion Filed by Appellant?

Have Additional Appeals to the Same Order been Filed? Yes No Yes If so, has District Court assigned a Civil Action Number? No Civil Action # ____________ Additional Notes: ________________________________________________________________________________

5/6/08 ___________________________ Date
08-27 Bankruptcy Court Appeal (BAP) Number: _____________________ 7/6/06

Lori M. Coster By: ________________________________ Deputy Clerk
FOR USE BY U.S. BANKRUPTCY COURT

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
In re:
Chapter 11

R. GRACE & CO. et ai.
Debtors.

Case No. 01- 01139 (JKF)

Jointly Administered

R. GRACE & CO. et ai.

Plaintiffs

Adversary No. A- 01- 771

MARGARET CHAKARIAN et ai. and
JOHN DOES 1- 1000

Defendants.

AFFIDAVIT OF SERVICE
STATE OF DELAWARE
) SS

NEW CASTLE COUNTY

Linda M. Rogers , being duly sworn according to law , deposes and says that she is employed by the law firm of Landis Rath & Cobb LLP , attorneys for the Libby Claimants in the above-referenced cases , and on the 24th day of April , 2008 , she caused a copy of the following:

MOTION OF LIBBY CLAIMANTS FOR LEAVE TO APPEAL ORDER ENJOINING ACTIONS AGAINST BNSF
to be served upon the parties on the attached list via first class mail or in the manner as indicated.

tL
Linda M. Rogers

(Ji

4-/
, 2008.

SWORN TO AND SUBSCRIBED before me this

~otary P

t)llde~?
JHY A.

NOTARY PUBLIC STATE OF DELAWARE
My Commission Expires March 5 , 2010

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R. Grace & Co.,

et af.

v. Margaret Chakarian,

et ai.,

and John Does 1- 1000

Mark Shelnitz R. Grace & Co.
7500 Grace Drive

Adv. Pro. No. 01- 771 Service List

Columbia , MD 21044 (Debtors and Debtors in Possession)

David M. Bernick , P.
Janet S. Baer , Esq.

HAND DELIVERY
Laura Davis Jones , Esq. James E. O' Neill , Esq. Pachulski Stang Ziehl & Jones LLP 919 North Market Street , 17th Floor O. Box 8705 Wilmington , DE 19899 (Counsel to Debtors and Debtors in Possession)

Lori Sinanyan , Esq. Kirkland & Ellis LLP 200 East Randolph Drive Chicago , IL (Counsel to W. R. Grace & Co. et at.)

Lewis Kruger , Esq. Kenneth Pasquale , Esq. Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038- 4982 (Counsel to Official Committee of Unsecured Creditors)

HAND DELIVERY
Michael R. Lastowski , Esq. Richard W. Riley, Esq. Duane Morris LLP 1100 North Market Street, Suite 1200 Wilmington , DE 19801(Counsel to Official Committee of Unsecured CredItors)

1246

HAND DELIVERY
Michael B. Joseph , Esq. Ferry, Joseph & Pearce , P. 824 Market Street , Suite 904
O. Box 1351

Wilmington , DE 19899 (Counsel to Official Committee of Asbestos Property
Damage Claimants)

Scott L. Baena , Esq. Bilzin Sumberg Baena Price & Axelrod LLP First Union Financial Center 200 South Biscayne Blvd. , Suite 2500 Miami , FL 33131 (Counsel to Official Committee of Asbestos Property Damage Claimants)

HAND DELIVERY
Marla Rosoff Eskin , Esq. Mark T. Hurford , Esq. Campbell & Levine , LLC 800 North King Street , Suite 300 Wilmington , DE 19801 (Counsel to the Official Committee of Asbestos Personal Injury Claimants)

Peter Van N. Lockwood , Esq.
Nathan D. Finch , Esq. Caplin & Drysdale , Chartered One Thomas Circle , N.

Washington , DC 20005 (Counsel to the Official Committee of Asbestos Personal Injury Claimants)

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Elihu Inselbuch , Esq. Caplin & Drysdale , Chartered 375 Park Avenue , 35th Floor New York , NY 10152- 3500 (Counsel to the Official Committee of Asbestos Personal Injury Claimants)

HAND DELIVERY
Frank J. Perch , Esq. Office of the United States Trustee 844 King Street Suite 2311 Wilmington , DE 19801 (United States Trustee)

HAND DELIVERY
Teresa K.D. Currier , Esq. Buchanan Ingersoll & Rooney PC 1000 West Street , Suite Wilmington , DE 19801
(Counsel to Equity Committee)

Philip Bentley, Esq. Thomas M. Mayer , Esq. Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York , NY 10036 (Counsel to Equity Committee)

John C. Phillips , Jr. , Esq. Phillips, Goldman & Spence , P. 1200 North Broom Street Wilmington , DE
(Counsel to David T. Austern , Future Claimants

Representative)

Richard H. Wyron , Esq. Orrick , Herrington & Sutcliffe , LLP 3050 K Street , NW Suite 300 Washington , DC 20007 (Counsel to David T. Austem , Future Claimants Representative)

HAND DELIVERY
Edward B. Rosenthal , Esq. Rosenthal , Monhait , & Goddess , P. 919 Market Street Mellon Bank Center , Suite 1401 Wilmington , DE (Counsel to Continental Casualty Company)

Brian H. Mukherjee , Esq. Goodwin Procter LLP Exchange Place Boston , MA 02109 (Counsel to CNA Financial Corporation)

HAND DELIVERY
Elizabeth DeCristofaro , Esq.

Ford Marrin Esposito Witmeyer & Gieser , L.L.P. Wall Street Plaza , 23rd Floor New York , NY 10005- 1875 (Counsel to Continental Casualty Company)

Ian Connor Bifferato , Esq. Garvan F. McDaniel , Esq. Chad J. Toms , Esq. Bifferato Gentilotti LLC 800 North King Street , First Floor Wilmington , DE (Counsel to Royal Indemnity Company)

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Carl 1. Pernicone , Esq. Wilson , Elser , Moskowitz , Edelman & Dicker LLP
150 East 42nd Street

New York , NY 10017- 5639 (Counsel to Royal Indemnity Company)

Daniel C. Cohn , Esq. Cohn Whitesell & Goldberg LLP 101 Arch Street Boston , MA 02110 (Counsel to Libby Plaintiffs)

HAND DELIVERY
Evelyn J. Meltzer , Esq. Pepper Hamilton LLP Hercules Plaza , Suite 5100 13 13 Market Street
PO Box 1709

Wilmington , DE 19899- 1709 (Counsel to BNSF Railway Company)

Edward C. Toole , Jr. , Esq. Anne Marie Aaronson , Esq. Pepper Hamilton LLP 3000 Two Logan Square 18th & Arch Streets Philadelphia , PA 19103 (Counsel to BNSF Railway Company)

HAND DELIVERY
Mark J. Phillips , Esq. Jeffrey C. Wisler, Esq.

Connolly Bove Lodge & Hutz LLP The Nemours Building 1007 N. Orange Street O. Box 2207 Wilmington , DE (Counsel to Maryland Casualty Company)

Edward J. Longosz , II , Esq. Laura G. Stover , Esq. Eckert Seamans Cherin & MelIott , LLC 1747 Pennsylvania Avenue , N. , Suite 1200 Washington , DC 20006 (Counsel to Maryland Casualty Company)

HAND DELIVERY
Steven M. Yoder , Esq. The Bayard Firm 222 Delaware Avenue , Suite 900
O. Box 25130 Wilmington , DE 19899
(Counsel to DIP Lender)

J. Douglas Bacon , Esq. Latham & Watkins LLP Sears Tower , Suite 5800 Chicago , IL 60606 (Counsel to DIP Lender)

HAND DELIVERY
David S. Rosenbloom , Esq. McDermott , Will & Emery 227 West Monroe Street Chicago , IL 60606- 5096 (Counsel to National Medical Care , Inc.

David E. Wilks , Esq. Buchanan Ingersoll PC The Nemours Building 1007 N. Orange Street , Suite 1110 Wilmington , DE (Counsel to Gamma Holding, NV)

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HAND DELIVERY
Kathleen M. Miller , Esq. Smith , Katzenstein & Furlow LLP The Corporate Plaza
800 Delaware A venue

Gary Smolker

Wilmington , DE (Counsel to the Allen Plaintiffs)

Alice Smolker 4720 Lincoln Blvd. , Suite 280 Marina del Rey, CA 90292- 6977

HAND DELIVERY
Steven K. Kortanek , Esq. Klehr Harrison Harvey Branzburg & Ellers LLP 919 Market St. , Suite 1000 Wilmington , DE (Counsel to Carol Gerard)

Brian Parker , Esq. 36 South Charles Street
Charles Center South

Suite 2200 Baltimore , MD 21201 (Counsel to Carol Gerard)

HAND DELIVERY
Thomas D. Walsh , Esq. McCarter & English , LLP

919 Market St. , Suite 1800 Wilmington , DE (Counsel to James and Julie Holland)

Michael S. Etkin , Esq. Lowenstein Sandler P. 65 Livingston Avenue Roseland , NJ 07068 (Counsel to Keri Evans)

David K. Foust , Esq. 3030 W. Grand Boulevard
10th Floor

HAND DELIVERY
Francis A. Monaco, Jr. , Esq. Kevin J. Mangan , Esq.

Detroit , MI 48202 (Counsel to the State of Michigan , Department of Corrections)

Womble Carlyle Sandridge & Rice , PLLC
222 Delaware Avenue , Ste. 1501

Wilmington , DE (Counsel to the State of Montana)

HAND DELIVERY
Mark D. Collins , Esq.
Deborah E. Spivack , Esq.

HAND DELIVERY
Bernard G. Conaway, Esq. Fox Rothschild LLP 919 Market Street , Suite 1300 Wilmington , DE (Counsel to the Lanier Law Firm Asbestos Claimants)

Richards , Layton & Finger , P. One Rodney Square 920 N. King Street
O. Box 551

Wilmington , DE 19899 (Counsel to The Chase Manhattan Bank)

Case 1:08-mc-00090-RLB
HAND DELIVERY
Daniel B. Butz , Esq. Gregory T. Donilon , Esq. William H. Sudell , Jr. , Esq. Morris , Nichols , Arsht & Tunnell 1201 N. Market Street

Document 1-3

Filed 05/06/2008

Page 6 of 6

Robert J. Sidman , Esq.

O. Box 1347 Wilmington , DE 19899 (Counsel to The Scotts Co.

Tiffany Strelow Cobb , Esq. Sater , Seymour and Pease LLP 52 East Gay Street O. Box 1008 Columbus OH 43216 (Counsel to The Scotts Co.
V orys ,

HAND DELIVERY
Greenberg Traurig, LLP The Nemours Building 1007 North Orange Street , Suite 1200 Wilmington , DE (Counsel to ExxonMobile)

HAND DELIVERY
Ellen W. Slights
Assistant U. S. Attorney

The Nemours Building 1007 Orange Street , Suite 700 Wilmington , DE

Dale R. Cockrell , Esq. Christensen , Moore , Cockrell , Cummings & Axelberg, P.

O. Box 7370 Kalispell , MT 59904 (Counsel to the State of Montana)