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UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA Charlotte Division __________________________________________ ) In Re: ) ) GARLOCK SEALING TECHNOLOGIES ) LLC, et al.1 ) ) Debtors. ) __________________________________________) Chapter 11 Case No. 10-31607 Jointly Administered

MOTION OF THE OFFICIAL COMMITTEE OF ASBESTOS PERSONAL INJURY CLAIMANTS TO STRIKE FORD MOTOR COMPANYS MOTION FOR ACCESS TO RULE 2019 FILINGS AND TO UNSEAL THE EVIDENCE OF DEMONSTRABLE MISREPRESENTATION The Official Committee of Asbestos Personal Injury Claimants (the Committee), by and through undersigned counsel, respectfully moves this Court for an order striking Ford Motor Companys (Ford) Motion for Access to Rule 2019 Filings and to Unseal the Evidence of Demonstrable Misrepresentation, dated March 14, 2014 [Dkt. No. 3377] (Fords Motion) because this Court lacks subject matter jurisdiction to consider it. Preliminary Statement Fords Motion seeks an order granting access to sealed portions of the record of the estimation proceeding. See Fords Motion at 1.2 So, too, does an appeal noticed by Legal Newsline (the Appeal) and pending in the United States District Court for the Western District of North Carolina (the District Court). The Appeal divests this Court of jurisdiction over the issues presented in the Appeal and also over all other matters related to the Appeal. Although Ford is not a party to the Appeal, Fords Motion unquestionably presents issues that are pending Debtors consist of Garlock Sealing Technologies LLC (Garlock), Garrison Litigation Management Group, Ltd., and The Anchor Packing Company (collectively, the Debtors).
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Fords Motion also requests access to confidential Rule 2019 Exhibits submitted in this case. Id. at 1.

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before the District Court in Legal Newslines Appeal. The Bankruptcy Court therefore lacks subject matter jurisdiction over Fords Motion and should strike it. Jurisdiction and Venue 1. The Bankruptcy Court may exercise adjudicatory authority over this Motion to

Strike pursuant to 28 U.S.C. 157 and 1334 and the District Courts standing Order of Reference for bankruptcy matters. This is a core matter pursuant to 28 U.S.C. 157(b)(1). Venue is proper in this district pursuant to 28 U.S.C. 1409. Background 2. Last July, in the midst of the estimation hearing, Legal Newsline, a third-party

online news outlet, filed in this Court its first motion asserting a public right of access to the hearing on estimation of pending and future mesothelioma claims against Garlock (the Estimation Hearing). Motion of Legal Newsline to Open Proceedings to the Public, dated July 30, 2013 [Dkt. No. 3065] (Legal Newslines First Motion). 3. On July 31, 2013, this Court issued an order denying Legal Newslines First

Motion. Order Denying Motion of Legal Newsline to Open Proceedings to the Public, dated July 31, 2013 [Dkt. No. 3069] (the July 31 Order). 4. On August 13, 2013, Legal Newsline filed its notice of appeal and thereby

commenced the Appeal of the July 31 Order. Notice of Appeal by Legal Newsline, dated August 13, 2013 [Dkt. No. 3080] (the Notice of Appeal). 5. 6. The Appeal is pending in the District Court. On March 3, 2014, Legal Newsline filed its Second Motion in the Bankruptcy

Court, again asserting a public right of access to the Estimation Hearing.

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7.

On March 14, 2014, the Committee filed its Motion to Strike Legal Newslines

Second Motion for lack of subject matter jurisdiction. Motion of the Official Committee of Asbestos Personal Injury Claimants to Strike Legal Newslines Second Motion for Access to the Estimation Hearing [Dkt. No. 3379]. 8. Also on March 14, 2014, Fords Motion was filed in the Bankruptcy Court,

asserting a public right of access to the Estimation Hearing. 9. jurisdiction. 10. The Bankruptcy Court has shortened the response time for the Committees The Committee now moves to strike Fords Motion for lack of subject matter

Motion to Strike Legal Newslines Second Motion and has set that matter down for hearing on March 27, 2014. Order, dated March 18, 2014 [Dkt. No. 3382]. Simultaneously herewith, the Committee has applied to shorten the response time for its instant Motion to Strike Fords Motion so that it, too, may be heard on March 27. The Pendency of Legal Newslines Appeal Divests the Bankruptcy Court of Subject Matter Jurisdiction Over Fords Motion 11. The filing of a notice of appeal divests the trial court of jurisdiction over the

issues involved in that appeal, and confers jurisdiction over those issues upon the appellate court. E.g., Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58-59 (1982); Levin v. Alms & Assocs., Inc., 634 F.3d 260, 263 (4th Cir. 2011). This rule applies with equal force to

bankruptcy cases. In re Legend Radio Grp., Inc., 248 B.R. 281, 284 (W.D. Va. 1999). Thus, when Legal Newsline filed its Notice of Appeal of this Courts Order, this Court was divested of jurisdiction to adjudicate any issues involved in the Appeal. 12. The central issue before the District Court in the Appeal is the same issue that

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right of access to the Estimation Hearing. Specifically, Fords Motion argues that the public has a right of access to certain testimony and exhibits received by the Bankruptcy Court during closed portions of the Estimation Hearing that underlie certain findings made by this Court in its Order Estimating Aggregate Liability. See generally Memorandum of Law in Support of Fords Motion, dated March 14, 2014 [Dkt. No. 3378]. Likewise, Legal Newslines First Motionthe subject of the Appealcontends that the Bankruptcy Court was wrong to close the courtroom for those very same portions of the Estimation Hearing because the public had a right of access to all aspects of the Estimation Hearing. Notice of Appeal at 1. 13. Fords Motion and the Appeal both turn on the presumption that court

proceedings should be open to the public and on whether countervailing interests overcome that presumption with respect to evidence received in closed portions of the Estimation Hearing. See Memorandum of Law in Support of Fords Motion at 11-13; Memorandum of Law in Support of Legal Newslines First Motion at 5-6, dated July 30, 2013 [Dkt. No. 3066]. Central to Fords Motion, then, are the very issues that the Appeal has placed squarely within the exclusive jurisdiction of the District Court. 14. Plainly, the key issues in the Appeal and in Fords Motion are the same. Even if

the issues were not identical, this Court would still lack jurisdiction over Fords Motion, because the Notice of Appeal divested this Court of jurisdiction not only over the issues expressly appealed, but more broadly over all matters relating to the appeal. See Grand Jury

Proceedings Under Seal v. United States, 947 F.2d 1188, 1190 (4th Cir. 1991); In re Whispering Pines Estates, Inc., 369 B.R. 752, 759 (B.A.P. 1st Cir. 2007) ([I]t is imperative that a lower court not exercise jurisdiction over those issues which, although not themselves expressly on appeal, nevertheless so impact the appeal so as to interfere with or effectively circumvent the

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appeal process.); see also Levin, 634 F.3d at 264 (applying rule broadly and concluding that filing notice of appeal involving whether underlying claims were arbitrable divested the trial court of jurisdiction over not only the issue of arbitrability, but over the entire litigation of the underlying claims while the appeal was pending). 15. Fords Motion is, at the very least, a matter related to the appeal. Notably, both

Fords Motion and the Appeal seek the same relief: the public disclosure of evidence that this Court has thus far kept under seal. If this Court were to grant or deny the relief requested in Fords Motion, it would intrude upon the exclusive jurisdiction of the District Court to pass on the same issues and grant or deny the same relief on Legal Newslines Appeal. In order to assure the integrity of the appeal process, it is imperative that the lower court take no action which might in any way interfere with the jurisdiction of the appeal court. In re Kendrick Equipment Corp., 60 B.R. 356, 358 (Bankr. W.D. Va. 1986) (emphasis added). 16. That Ford is not a party to the Appeal does not alter the conclusion that the Court

lacks subject matter jurisdiction over Fords Motion. See In re TFT-LCD (Flat Panel) Antitrust Litig., 2013 WL 6055079, at *1-2 (N.D. Cal. Nov. 13, 2013) (finding no jurisdiction over motion because issues involved in the motion were related to issues involved in an appeal, even though movant was not a party to that appeal).3

In In re TFT-LCD (Flat Panel) Antitrust Litigation, a non-party creditor, LFG, moved the court to release $28.2 million in an escrow account, which represented an attorneys fee that the court awarded in the underlying antitrust litigation. See 2013 WL 6055079, at *1 (N.D. Cal. Nov. 13, 2013). The court denied LFGs motion, finding lack of jurisdiction. See id. at *2. The court reasoned that a pending appeal seeking to reverse the courts attorneys fee awards, divested the court of jurisdiction over the matters being appealed. Id. LFG was not a party to the appeal, but the $28.2 million award that it called into question was one of those undergoing review in the appeal. See id. Because [t]he validity of the attorneys fees award [wa]s directly attacked on appeal albeit by other litigantsthe court recognized that entertaining LFGs motion would alter the questions currently before the [appellate court]. Id. So, too, Fords -5-

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17.

Upon the filing of Legal Newslines Notice of Appeal, this Court was divested of

jurisdiction over all matters related to the appeal. See Grand Jury Proceedings Under Seal, 947 F.2d at 1190. It is irrelevant whether those matters involve the appellant. See In re TFT-LCD (Flat Panel) Antitrust Litigation, 2013 WL 6055079, at *1-2; cf. Taylor v. KeyCorp, 680 F.3d 609, 616 (6th Cir. 2012) (district court had no jurisdiction over non-partys motion to intervene after party to underlying litigation filed a notice to appeal from final judgment thereon); Nicol v. Gulf Fleet Supply Vessels, Inc., 743 F.2d 298, 299 (5th Cir. 1984) (same). 18. Additionally, both Fords Motion and the Appeal assert a public right of access to

the Estimation Hearing, not a right that turns on the identity of the person seeking access. It follows that any ruling by the Bankruptcy Court on the merits of Fords Motion would impermissibly affect the Appeal before the District Court. During the pendency of an appeal, the Court may act to preserve the status quo, but may not take actions that alter any substantial rights on appeal. See In re TFT-LCD (Flat Panel) Antitrust Litig., 2013 WL 6055079, at *1. 19. This Court was divested of subject matter jurisdiction over the issues in Fords

Motion when Legal Newsline filed its Notice of Appeal. If this Court were to consider the merits of Fords Motion, it would encroach upon the exclusive jurisdiction of the District Court to consider those same merits, and related matters, in the posture of the Appeal and would run the risk of issuing a decision in conflict with that of the District Court. Fords Motion is thus out of order, and the Court should strike it. Ford Has Not Given Due Notice of Fords Motion 20. In addition to the jurisdictional flaws, Fords Motion is defective for failure to

give proper notice to potentially affected persons. This defect applies not only to Fords central

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request for access to sealed evidence received in the Estimation Hearing, but also to its request for access to Rule 2019 Exhibits submitted to the clerk but held off the docket in this case. 21. Fords Motion is vague as to the scope of the materials to which Ford seeks

access pursuant to its request to unseal evidence from the Estimation Hearing. Potentially, however, that scope is very broad. The Estimation Hearing generated many types of materials from thousands of claimants, hundreds of law firms, and many other persons whose interests were safeguarded by various confidentiality orders entered by this Court. These orders each contain requirements for providing notice prior to any modification of the orders. See, e.g., Order Authorizing the Debtors to Issue Questionnaire to Holders of Pending Mesothelioma Claims and Governing the Confidentiality of Information Provided in Responses 18, dated June 21, 2011 [Dkt. No. 1390] (Any person who seeks relief from any provision of this Order shall do so by motion in the Bankruptcy Court on notice to the Estimation Parties, any Intervenors, and Mesothelioma Claimants determined by prior order of the Bankruptcy Court to be potentially affected by the relief sought. (emphasis added)). 22. Ford has not made any effort to provide notice to claimants, law firms, trusts, and

other absent persons whose rights and interests stand to be prejudiced by Fords Motion. This Court should thus strike Fords Motion for failure to afford the potentially affected persons notice and an opportunity to be heard. An elementary and fundamental requirement of due process in any proceeding . . . is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Mullane v. Hanover, 339 U.S. 306, 314 (1950). 23. Ford filed Fords Motion on the ECF system and thereby provided notice to

persons registered to receive service by that medium. But the population of persons who

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provided information in reliance on the protective orders that Ford is seeking to override extends far beyond the few entities that have so registered. 24. No doubt, there are practical problems involved in making valid service upon

affected persons insofar as identifying information for many of those persons is not public.4 This does not, however, obviate those persons rights to notice and an opportunity to be heard. If Fords Motion or any similar request ever comes within the proper jurisdiction of this Court, a mechanism should be created for providing valid notice and an opportunity to be heard to such persons without publicly revealing their identities. Because it would be Fords responsibility as the movant to provide these persons with notice, the expense of doing so would be for Fords account.

The names and addresses of law firms that have filed Rule 2019 Statements are available on the public docket. The Certificate of Service attached to Fords Motion, however, indicates that Ford failed to issue notice to those firms. -8-

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CONCLUSION For the foregoing reasons, the Court should strike Fords Motion, and grant such other and further relief as justice may require.

Dated: March 19, 2014

Respectfully submitted, CAPLIN & DRYSDALE, CHARTERED By: /s/ Trevor W. Swett III Trevor W. Swett III James P. Wehner Todd E. Phillips One Thomas Circle, N.W. Washington, DC 20005 Telephone: (202) 862-5000 E-mail: tswett@capdale.com; jwehner@capdale.com; tphillips@capdale.com Elihu Inselbuch 600 Lexington Avenue, 21st Floor New York, NY 10022 Telephone: (212) 379-6000 E-mail: einselbuch@capdale.com Co-Counsel for the Official Committee of Asbestos Personal Injury Claimants

MOON WRIGHT & HOUSTON, PLLC Travis W. Moon 227 West Trade Street, Suite 1800 Charlotte, NC 28202 Telephone: (704) 944-6560 E-mail: tmoon@mwhattorneys.com Co-Counsel for the Official Committee of Asbestos Personal Injury Claimants

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