585 B.R. 733
D. Del.2018Background
- Nine asbestos-related bankruptcies (the "Consolidated Cases") required practitioners to file Rule 2019 Statements publicly and to submit voluminous Rule 2019 Exhibits (containing names, addresses, SSNs, medical details) to the Bankruptcy Court clerk on CDs; the Exhibits were not placed on the public docket under longstanding "2019 Orders."
- Honeywell (joined by Ford) moved for unrestricted access to all 2019 Exhibits for any purpose (including fraud investigations and lobbying); multiple TACs and Future Claimants' Representatives opposed access to protect claimants' privacy.
- The Bankruptcy Court granted limited access: only to Honeywell and Ford, for three months, limited to investigating fraud and sharing only aggregate information with the NARCO Trust; retained facilitator, redaction, destruction, and cost-shifting requirements.
- Honeywell and Ford appealed the limitations; TACs/FCRs cross‑appealed arguing for no access at all; the district court consolidated the appeals and reviewed the Bankruptcy Court's Access Decision.
- The district court affirmed: it held § 107(c) of the Bankruptcy Code governs, the Exhibits contain means of identification and sensitive medical information triggering § 107(c) protections, and limited access for a proper purpose (fraud investigation in court‑related proceedings) with tailored safeguards was appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 107 or common law governs access to the 2019 Exhibits | Honeywell: common law right of public access (and § 107) entitles broad access | TACs/FCRs: § 107 governs and permits protection because Exhibits were submitted to the clerk but not publicly docketed | § 107 applies; the Exhibits are "filed with" the court and presumptively public subject to statutory exceptions |
| Whether the 2019 Exhibits fall within § 107(c) (risk of identity theft/unlawful injury) | Honeywell: redactions and Rule 9037 eliminate identity‑theft risk; no evidence of undue risk | TACs/FCRs: Exhibits contain full SSNs, medical records, and other identifiers; disclosure poses undue risk | Held: Exhibits contain identifying and sensitive medical information; § 107(c) protection is warranted (findings not clearly erroneous) |
| Whether the bankruptcy court may consider requestor's purpose and limit use | Honeywell: purpose irrelevant; seeks unlimited access and First Amendment protection for use including lobbying | TACs/FCRs: court may and should evaluate purpose to tailor protections; lobbying is not a proper judicial purpose | Held: Court may consider purpose under § 107(c); fraud investigation in ongoing court‑related proceedings is a proper purpose; lobbying is not |
| Whether the limitations imposed (time limit, recipient limit, aggregation, redaction, cost‑shifting) were proper | Honeywell: restrictions must be narrowly tailored and causally related to risks; three‑month limit and other restrictions overbroad | TACs/FCRs: restrictions are appropriate and consistent with prior rulings (Garlock); costs should fall on requestors | Held: Restrictions were within the bankruptcy court’s discretion and consistent with § 107(c) and precedent; no abuse of discretion |
Key Cases Cited
- In re Garlock Sealing Techs. LLC, 488 B.R. 281 (D. Del. 2013) (limited access to Rule 2019 Exhibits allowed for a proper bankruptcy purpose with protective conditions)
- In re Owens Corning, 560 B.R. 229 (Bankr. D. Del. 2016) (Bankruptcy Court Access Decision granting limited use for fraud investigation)
- In re ACandS, Inc., 462 B.R. 88 (Bankr. D. Del. 2011) (discussion of privacy concerns in 2019 materials and supervisory orders)
- In re Kaiser Aluminum Corp., 327 B.R. 554 (D. Del. 2005) (upholding 2019 Orders balancing access and privacy)
- Nixon v. Warner Commc'ns, Inc., 435 U.S. 589 (1978) (courts have supervisory power over records and access is not absolute)
- In re Cendant Corp., 260 F.3d 183 (3d Cir. 2001) (public access promotes confidence in judicial system; access not absolute)
- Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994) (balancing interests in protective order requests)
- In re Neal, 461 F.3d 1048 (8th Cir. 2006) (statutory interpretation of § 107 and standards for review)
- United States v. Westinghouse Elec. Corp., 638 F.2d 570 (3d Cir. 1980) (recognition of strong privacy interest in medical records)