On November 8, 2016, Judge Kevin Gross of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) that affects nine different bankruptcy cases. The Opinion was issued in response to the request of Honeywell and Ford for access to asbestos claimants’ Rule 2019 exhibits. A copy of the Opinion is available here.
Before diving deep into this Opinion and these cases, it is worthwhile to review In re Motions for Access of Garlock Sealing Techs. LLC, 488 B.R. 281 (D. Del. 2013). The Garlock Sealing opinion is cited extensively by Judge Gross, and is the controlling precedent in Delaware for this issue. In that case, the District Court limited the use to which the movants could use the requested information, allowing it to be used solely in the Garlock Sealing bankruptcy proceeding. Opinion at *10. In this case, the requested documentation included: The Rule 2019 Exhibits include the following:
(1) the names and addresses of the clients of the submitting attorney; (2) exemplars or actual copies of the relevant retention agreements; (3) identification of disease; (4) claim amounts if liquidated; (5) sometimes full or partial social security numbers; (6) sometimes medical records, with information including full or partial social security numbers; family histories (including causes of death of family members), results of physical examinations, chest x‐rays, and lung function tests, and other similarly sensitive medical information; and (7) sometimes other records that the law firm maintained in connection with or commingled with the required information.
Opinion at *6. Honeywell and Ford indicated in their papers and during the hearing on their motion that they want access to the Rule 2019 Exhibits, as well as to retain the information indefinitely, to "ferret out invalid or fraudulent asbestos claims". What came across in oral argument is that an important purpose for both Honeywell and Ford in seeking the Rule 2019 Exhibits is to aid in their lobbying efforts. Opinion at *12. While Honeywell and Ford sought limitless access to use the information outside of bankruptcy, Judge Gross was not sympathetic, putting significant limitations on their use of the information. Judge Gross ruled that the information
“may not be used for "lobbying efforts." Honeywell and Ford may use the Rule 2019 Exhibits to investigate fraud in the claims process and may share the information with the NARCO Trust in an aggregate format. In other words, Honeywell and Ford may not share the identity of individuals by name or other identifying means with the NARCO Trust. Honeywell and Ford are granted three months to complete their work and must comply with the Protocol Order which requires the destruction of the Rule 2019 Exhibits at the conclusion of the work. Honeywell's and Ford's efforts will be at their expense. In addition, the Court will appoint a party to oversee the production of the Rule 2019 Exhibits.
Opinion at *15. While Judge Gross did find that “the presumption of public access applies” to the 2019 Exhibits, Opinion at *13, he did cited to Garlock Sealing in deciding that they did not adequately state a proper purpose. Opinion at *14.
In summary, while a court may give you the information you request, it may also limit it in such a manner that the information is no longer worth the expense incurred in obtaining it. Prior to making these types of requests, it is important to determine what the controlling precedent says on the issue. In the Delaware Bankruptcy Court, the judges read the entirety of cited opinions, so it is vital that briefs distinguish them, or rely upon them, appropriately.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
