United States District Court, D. Delaware
In re W.R GRACE & CO., et al., Debtors.
In re W.R. GRACE & CO., et al, Appellees. ANDERSON MEMORIAL HOSPITAL, Appellant, BAP. No. 16-44
LEONARD P. STARK UNITED STATES DISTRICT JUDGE
reviewed the papers submitted in connection with Appellees
W.R. Grace & Co. et al.'s ("Appellees" or
"Grace") Motion to Dismiss (see D.I. 17,
19, 20) Appellant Anderson Memorial Hospital's
("Appellant" or "AMH") appeal of the
Bankruptcy Court's: (a) May 29, 2008 order ("2008
Order") denying Appellant's motion for class
certification; and (b) August 25, 2016 order ("2016
Order") denying Appellant's motion to alter or amend
the 2008 Order denying class certification (see D.I.
1, 4, 6); IT IS HEREBY ORDERED that, for the reasons that
follow, Appellees' Motion to Dismiss (D.I. 17) is
a South Carolina hospital. Grace manufactures chemicals and
1992, AMH filed a nationwide class action lawsuit against
Grace in South Carolina state court. The lawsuit alleged that
Appellant and other putative class members had suffered
asbestos-related property damage arising from Appellees'
asbestos-containing building materials.
2001, while the state court litigation was ongoing, Grace
filed for Chapter 11 protection in the U.S. Bankruptcy Court
for the District of Delaware. In the course of the
bankruptcy, AMH filed three proofs of claim against Grace:
(1) a worldwide putative class claim, (2) a statewide
putative class claim, and (3) an individual claim.
eventually moved for class certification. In the 2008 Order,
the Bankruptcy Court denied the motion. AMH's request for
leave to appeal the 2008 Order was denied by this Court and
its effort to appeal this Court's decision was dismissed
by the Court of Appeals for lack of jurisdiction.
later filed a proposed Plan of Reorganization
("Plan"), which included procedures for the
treatment of property damage claims, including AMH's
claims. Appellant challenged the Plan on several grounds but
not on the grounds it seeks to press on appeal now (i.e.,
that the Plan places AMH's class action claims on
"inactive" status until after AMH proceeds with its
individual claim against Grace). The Bankruptcy Court, this
Court and the Third Circuit rejected all of those challenges.
See In re W. R. Grace & Co., 446 B.R. 96, 107-08
(Bankr. D. Del. 2011); In re W. R. Grace & Co.,
475 B.R. 34, 139-41 (D. Del. 2012); In re W. R. Grace
& Co., 729 F.3d 322, 344, 346, 350 (3d Cir. 2013).
Appellees exited bankruptcy on February 3, 2014, when the
Plan became effective. (D.I. 17 at 6)
than pursue its individual property damage claim according to
the procedures outlined in the Plan, AMH filed a motion to
alter or amend the 2008 Order denying class certification.
The Bankruptcy Court issued the 2016 Order denying the
motion. (Id. Tab I, Bankr. D. Del. No. 01-01139,
D.I. 32771) AMH then noticed its appeal to this Court, which
Grace has moved to dismiss.
Court agrees with Grace that it must dismiss this appeal
because it is an interlocutory appeal and AMH has neither
sought - nor could meet its burden to obtain - permissive
review of the Bankruptcy Court's interlocutory order.
Orders granting or denying class certification are
"inherently interlocutory, " Coopers &
Lybrand v. Livesay, 437 U.S. 463, 470, (1978), and not
immediately reviewable under 28 U.S.C. § 1291, which
provides for appeals from 'final decisions, "'
Microsoft Corp. v. Baker, 137 S.Ct. 1702, 1706
(2017). The 2008 Order is plainly interlocutory, as this
Court already held in denying Appellant's earlier attempt
to appeal it (at a time when even Appellant recognized that a
class certification order is interlocutory). The 2016 Order,
labeled by AMH as a "motion to alter or amend, "
cannot have transformed an inherently interlocutory order
into a final order - otherwise, any interlocutory order could
be so (easily) transformed, entirely undermining the final
order rule. See, e.g., Blanco v. United States, 775
F.2d 53, 56 (2d Cir. 1985) ("If the 1979 order was not
final and appealable, orders refusing to reconsider it
likewise could not have been."); Kramer v.
Scientific Control Corp., 534 F.2d 1085, 1087 (3d Cir.
1976) (dismissing appeal from denial of motion for
reconsideration of class action certification).
not met its burden to show that interlocutory appeal is
warranted, for reasons including the absence of a controlling
question of law and of any exceptional circumstances. See
In re AE Liquidation, Inc., 451 B.R. 343, 346 (D. Del.
2011). Appellant's invocation of the "collateral
order" doctrine articulated in Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541 (1949) (see
D.I. 19 at 14-17), is also unavailing. The Supreme Court has
expressly held that "[a]n order passing on a request for
class certification does not fall" within the
Cohen doctrine. Coopers, 437 U.S. at 469
(stating "collateral-order doctrine is not applicable to
the kind of order involved in this case").
Court further agrees with Grace that a separate, independent
ground for dismissing this appeal is that it is barred by the
confirmed Plan. The Plan requires AMH to litigate its
individual claim to final judgment before it can appeal the
denial of class certification. AMH has not yet litigated its
individual claim. Therefore, its appeal of the denial of
class certification is premature - and an improper collateral
attack on the Plan - and must, for this reason as well, be
denied. See In re Szostek, 886 F.2d 1405, 1408 (3d
Cir. 1989) ("[A] confirmation order is res
judicata as to all issues decided or which could have
been decided at the hearing on confirmation.").
AMH's appeal is DISMISSED. The Clerk of
Court is directed to CLOSE this case.