Bankruptcy No. 00-22876 (JKF) Re: D.I. 8488 Case No. 03-35592 (JKF) Re: D.I. 2817 Bankruptcy No. 02-20198 (JKF) Re: D.I. 7246
The opinion of the court was delivered by: Nora Barry Fischer United States District Judge
Presently before the Court are three separate appeals initiated by Appellant Garlock Sealing Technologies, LLC ("Garlock") in the above captioned matters. Garlock appeals from the Honorable Judith K. Fitzgerald's Memorandum Opinion and Order issued on October 7, 2011 denying Garlock's motions to access records in twelve Chapter 11 bankruptcies. See In re ACandS ("ACandS"), 462 B.R. 88 (D. Del. 2011). The consolidated opinion and order resolved motions filed by Garlock in nine bankruptcy cases in the United States Bankruptcy Court for the District of Delaware and three bankruptcies in the United States Bankruptcy Court for the Western District of Pennsylvania. Id. This procedural nuance is possible because Judge Fitzgerald is assigned to hear bankruptcy cases in both Bankruptcy Courts. Garlock has filed twelve separate appeals of Judge Fitzgerald's rulings, including three appeals pending before this Court ("WDPA appeals") and nine appeals in the United States District Court for the District of Delaware ("DOD appeals"). Garlock admits that its appeals are identical in that they all challenge the same rulings by the Bankruptcy Court and raise the same arguments on appeal. See DOD, Civ. A. No. 11-1130, Docket No. 9.*fn1 Indeed, the substance of its briefing in the two fora appears virtually indistinguishable, aside from required changes to the case caption and parties in each case. Garlock's appeals focus on its desire to access Rule 2019 statements filed by creditor committees and law firms in the bankruptcy cases. Thus, the parties with an actual interest in the 12 appeals include Garlock, law firms and creditor committees, while the 12 debtors have more of a tangential interest in avoiding Garlock's attempts to intervene in their respective cases. For the reasons that follow, the Court will exercise its discretion and STAY these proceedings pending disposition of the DOD appeals.
On October 12, 2011, Garlock filed its notices of appeal of the aforementioned rulings of the Bankruptcy Court in all twelve bankruptcy cases. Its appeals were docketed on different dates. The WDPA appeals were docketed as follows: In re: Pittsburgh Corning, Civil Action No. 11-1406 on November 3, 2011; In re: North American Refractories, Civil Action No. 11-1452 on November 10, 2011; and In re: Mid-Valley, Inc., Civil Action No. 11-1439 on November 10, 2011. All three appeals were assigned to the undersigned as related cases. It appears that the DOD appeals were all filed on November 16, 2011. See DOD, In re: Owens Corning, Civ. A. No. 11-1130; In re: Armstrong World Industries, et al., Civ. A. No. 11-1131; In re: W.R. Grace & Co., Civ. A. No. 11-1132; In re: USG Corp. et al., Civ. A. No. 11-1133; In re: United States Mineral Products Company, Civ. A. No. 11-1134; In re: Kaiser Aluminum Corp. , Civ. A. No. 11-1135; In re: ACandS Inc., Civ. A. No. 11-1136; In re: Combustion Engineering Inc., Civ. A. No. 11-1137; In re: Flintkote Company, Civ. A. No. 11-1138.
Shortly after the WDPA appeals were filed, this Court entered identical briefing schedules in each of the three cases, and quickly entered an order extending the briefing schedule upon request of the parties in all of the cases. See WDPA, Civ. A. Nos. 11-1406, Docket Nos. 4, 8;11-1439, Docket Nos. 3, 6;11-1452, Docket Nos. 3, 6. Meanwhile, in Delaware, Garlock filed motions in the DOD appeals to consolidate the cases and expedite the appeals, including the entry of an identical briefing schedule to that issued by this Court. See DOD, Civ. A. No. 11-1130, Docket No. 9. In that motion, Garlock admits that: [t]he Opinions and Orders appealed from in Delaware and the W.D. Pa. are identical in all respects, and, thus, so are the issues to be presented on appeal. There is also substantial overlap of the parties in these Appeals and the W.D. Pa. Appeals. Therefore, Garlock believes that the parties will present substantially similar arguments to this Court and the W.D. Pa. District Court.
Id. Garlock succeeded in its request for consolidation of the DOD appeals as the DOD appeals were all assigned to the Honorable Leonard P. Stark and he then acceded to Garlock's request and entered the requested briefing schedule. See DOD, Civ. A. No. 11-1330, Docket No. 16.
The briefing with respect to the WDPA and DOD appeals concluded on January 27, 2012. See WDPA,Civ. A. Nos. 11-1406, 11-1439, 11-1459; DOD, Civ. A. No. 11-1130. The parties to the WDPA appeals have not taken any further action in these cases. See WDPA,Civ. A. Nos. 11-1406, 11-1439, 11-1459. However, despite the closing of the initial briefing, Garlock has continued to actively litigate the DOD appeals. See DOD, Civ. A. No. 11-1130. To this end, Garlock filed a motion requesting oral argument on February 1, 2012. DOD, Civ. A. No. 11-1130, Docket No. 42. Judge Stark convened a status conference on February 15, 2012 to consider this request and, during the conference, questioned counsel about the status of the WDPA appeals. DOD, Civ. A. No. 11-1130, Docket No. 49 at 7-9. In response, Garlock's counsel admitted that it had not sought oral argument in the WDPA appeals even though the cases followed identical scheduling orders. Id. at 9. After hearing the parties' respective positions, Judge Stark set the DOD appeals for oral argument. DOD, Civ. A. No. 11-1130,Docket Nos. 50, 51, 55.
Subsequent to this ruling, Garlock filed a motion in the DOD appeals requesting the Court to take judicial notice of certain matters which were outside the appellate record. DOD, Civ. A. No. 11-1130, Docket No. 52. That motion was fully briefed by the parties in the DOD appeals. DOD, Civ. A. No. 11-1130, Docket Nos. 52, 54, 57. Oral argument was then held on June 12, 2012 before the Bankruptcy Court on the DOD appeals and the motion for judicial notice. DOD, Civ. A. No. 11-1130, Text Minute Entry, 6/12/12. As noted, the three WDPA appeals presently before this Court have remained stagnant during this period of active litigation in Delaware.
District courts have broad power to stay proceedings. Bechtel Corp. v. Local 215, Laborers' Int'l Union, 544 F.2d 1207, 1215 (3d Cir. 1976). A court's power to stay proceedings "is incidental to the power inherent in every court to control the disposition of causes on its docket with economy of time and effort for itself, for counsel and for litigants." See Bechtel, 544 F.2d at 1215 (quoting Landis v. North Amer. Co., 299 U.S. 248, 254-55 (1936)); see also Gunduz v. U.S. Citizenship and Immigration Servs, Civ. No. 07-780, 2007 WL 4343246, at *1 (W.D. Pa. December 11, 2007) (Ambrose, C.J.) (citing Landis and Bechtel). Several courts have recognized that the power to stay may be invoked by the court sua sponte. See e.g., Tatum v. Chrysler Group, LLC, Civ. A. No. 10-4269, 2011 WL 6303290, at *3 (D.N.J. Dec. 16, 2011) ("the Court stays the action sua sponte for purposes of avoiding potentially duplicative litigation and discovery."); First Nonprofit Ins. Co. v. Alexander, Civ. A. No. 09-465, 2009 WL 2256473, at *4 (ED.Pa. Jul. 27, 2009) (citation omitted) ("the Court may order such a stay sua sponte"); Jackson v. Van Kampen Series Fund, Inc., 2007 WL 1532090, at *2 (S.D.Ill. May 24, 2007) ("The Court sua sponte will stay these proceedings"). In deciding whether to stay litigation in favor of litigation in another federal court, "the general principle is to avoid duplicative litigation." Colorado River Water Cons. Dist. v. United States, 424 U.S. 800, 817 (1976). As such, "a district court may properly consider the 'conservation of judicial resources and comprehensive disposition of litigation,' and attempt to avoid duplicating a proceeding already pending in a federal district court." Complaint of Bankers Trust Co. v. Chatterjee, 636 F.2d 37, 40 (3d Cir. 1980) (quoting Kerotest Mfg Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 183, 72 S.Ct. 219, 221, 96 L.Ed. 200 (1952), quoted in Colorado River, 424 U.S. at 817)). In determining whether a stay is appropriate, a court must weigh the competing interests of the parties to the litigation and address whether any party is prejudiced by the stay order. See Landis, 299 U.S. at 254-55; Cheyney State College Faculty v. Hufstedler, 703 F.2d 732, 737-38 (3d Cir. 1983).
The Court first finds that the WDPA and DOD appeals are duplicative, consistent with the aforementioned precedent. In its motions filed in the Bankruptcy Courts, Garlock challenged the procedure Judge Fitzgerald employs in administering large mass-tort bankruptcies whereby Rule 2019 Statements submitted by law firms and creditor committees are not filed on the Bankruptcy Courts' CM/ECF Systems but instead are held by the Clerks of Courts on a compact disc and available only upon approval of the Bankruptcy Court. See In re ACandS, 462 B.R. at 96-98. Garlock filed motions seeking access to the Rule 2019 Statements in each of the 12 bankruptcies now on appeal. See id. Judge Fitzgerald found that the issues raised by Garlock's motions were similar enough such that she held two joint motion hearings and analyzed the issues presented by all of the parties in a single, consolidated opinion. Id. After these rulings were appealed, Judge Stark consolidated the nine DOD appeals and, although a consolidation order was not issued as to the WDPA appeals, this Court intends to address the issues in a consolidated fashion as well. Beyond the view of the three separate Courts, Garlock admits that its appeals raise identical issues. See ...