560 B.R. 229
Bankr. D. Del.2016Background
- Honeywell and Ford moved for access to asbestos claim Rule 2019 Exhibits submitted under Bankruptcy Rule 2019 in multiple mass‑tort bankruptcies, seeking to inspect, copy, and receive the exhibits.
- The Rule 2019 Exhibits (delivered to the clerk, not docketed) contain claimant names/addresses, retention agreements, disease IDs, claim amounts, partial/full SSNs, medical records, and other sensitive material.
- Honeywell says it needs the Exhibits to investigate fraudulent or invalid claims and to provide aggregated information to the NARCO Trust; both movants also discussed using the material for lobbying, though without detail.
- NARCO TAC and various asbestos‑related parties objected; the court treated the TAC as a party in interest with standing under §1109.
- The court recognized a presumption of public access under Bankruptcy Code §107 but found Garlock Sealing precedent (and its implementing protocol) requires limiting use and imposing protective procedures for Rule 2019 Exhibits.
- The court granted limited access: Honeywell and Ford may use the Exhibits to investigate fraud, share only aggregate (non‑identifying) results with NARCO Trust, must comply with the Protocol Order (including appointment of an overseer), destroy materials after three months, and may not use the Exhibits for lobbying.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 2019 Exhibits are subject to public access under §107 | Honeywell/Ford: §107 creates a presumptive public right to access and thus broad access to Exhibits | NARCO TAC: Exhibits contain private, sensitive info; prior orders limited access and required confidential handling | Court: Presumption applies (judicial records), but access may be limited for cause per §107(b)/(c) and Garlock precedent |
| Whether movants stated a proper purpose for modifying confidentiality | Honeywell/Ford: Need Exhibits to investigate fraud and to provide info to NARCO Trust (and generally asserted lobbying) | NARCO TAC: Movants’ purposes vague, lobbying improper; protective orders and privacy interests weigh against disclosure | Court: Fraud investigation and trust review are proper, lobbying is not; movants failed to justify unlimited use |
| Scope of permissible use and disclosure of Exhibits | Honeywell/Ford: Seek broad, potentially indefinite use and production to any entity | NARCO TAC: Access should be tightly limited to court‑authorized purposes and formats | Court: Access limited to fraud investigation, aggregate sharing only, no individual identification, no lobbying, three‑month window, destruction requirement |
| Procedural safeguards and oversight for production | Honeywell/Ford: Proposed broad access; resisted certain proposed overseer | NARCO TAC: Protocol/special master review, limited copying, destruction, affidavit certification | Court: Requires compliance with existing Protocol Order, appoints an overseer (parties to propose candidate), movants bear costs and follow destruction/affidavit rules |
Key Cases Cited
- In re Motions for Access of Garlock Sealing Techs. LLC, 488 B.R. 281 (D. Del. 2013) (holds Rule 2019 Exhibits are judicial records and permits limited access subject to restrictions and a review protocol)
- Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994) (framework for modifying confidentiality orders: movant must show reason and court balances interests)
- In re Cendant Corp., 260 F.3d 183 (3d Cir. 2001) (discusses limits on public access where files could be used for improper purposes)
- LEAP Sys., Inc. v. MoneyTrax, Inc., 638 F.3d 216 (3d Cir. 2011) (affirming sealing portions of judicial records where justice required)
- In re Gitto Global Corp., 422 F.3d 1 (1st Cir. 2005) (recognizes §107 presumption of public access to bankruptcy court filings)