551 B.R. 104
S.D.N.Y.2016Background
- Parra developed asbestosis after exposure as an insulator in the 1960s–70s and sued Marsh and others in 2009.
- Marsh sought to enforce the 1986 Manville Orders’ release and channeling injunction in Marsh’s bankruptcy context.
- The 1986 Insurance Settlement Order created the Manville Trust and a channeling injunction barring Marsh Claims.
- The 1986 Orders were affirmed, creating a channeling injunction that purportedly enjoined third-party claims related to Marsh’s services for Manville.
- Travelers pursued state-law actions against insurers; a Clarifying Order narrowed the injunction’s scope, later analyzed by Bailey (Supreme Court) and Chubb on due process and jurisdiction.
- Parra argued the 1986 Orders did not bind his in personam claim against Marsh and that due process required more than the FCR’s representation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Marsh may enforce the 1986 Orders via contested matter | Parra | Marsh | Yes; correct procedural vehicle as contested matter |
| Whether Parra’s claims are barred by the 1986 Orders as ‘related to’ Marsh’s services to Manville | Parra | Marsh | Yes; claims fall within the injunction scope |
| Whether Parra received due process notice/representation for the 1986 Orders | Parra | Marsh | Remanded for due process analysis under Chubb |
| Whether the FCR represented Parra for in personam claims against Marsh | Parra | Marsh | Remanded to determine scope and adequacy of representation |
| What remedy or scope of remand is appropriate given due process concerns | Parra | Marsh | Remand to develop record and apply Chubb principles; consider prejudice |
Key Cases Cited
- Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (U.S. 2009) (final 1986 Orders not collaterally attackable; limits of scope)
- Chubb Indem. Ins. Co. v. Travelers, 600 F.3d 135 (2d Cir. 2010) (due process and notice in channeling injunction context)
- In re Johns-Manville Corp., Manville III, 517 F.3d 58 (2d Cir. 2008) (limits of bankruptcy jurisdiction to enjoin non-debtor claims)
- Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (U.S. 2009) (see Bailey for comprehensive related-to analysis)
- Quigley Co., Inc. v. United States, 676 F.3d 45 (2d Cir. 2012) (in rem vs in personam jurisdiction and notice considerations)
- WestPoint Stevens, Inc. v. American Int'l Group, 600 F.3d 231 (2d Cir. 2010) (modulates scope of bankruptcy injunction and due process)