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2-19-20905
Bankr. W.D.N.Y.
Mar 11, 2025
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Background

  • Two Abuse Survivors, through the Pfau Law Firm, filed a motion in the Diocese of Rochester Chapter 11 bankruptcy seeking relief from the automatic stay to allow their state court lawsuits against certain Catholic parishes and schools (not the Diocese or insurer CNA) to proceed.
  • CNA (Continental Insurance Company) filed an emergency motion to seal the lift stay motion and responses, alleging the Pfau motion contained "hostile, violent, and intimidating language."
  • The United States Trustee and Pfau opposed CNA’s sealing request, arguing CNA failed to meet the legal burden for sealing under the Bankruptcy Code.
  • The content and tone of the lift stay motion, rather than its legal merits, were the focus of CNA’s sealing request.
  • CNA also asked the court to admonish all counsel to avoid inciting language and reserved rights to seek further injunctions if the requested relief was not granted.
  • Judge Warren evaluated whether the Pfau motion met the standard for sealing under 11 U.S.C. § 107(b) or (c), specifically if contents were "scandalous," "defamatory," or posed an "undue risk of unlawful injury."

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Should the lift stay motion be sealed for containing hostile and dangerous rhetoric? CNA argued motion included violent, intimidating language risking safety of CNA’s representatives. Pfau and UST argued language was not scandalous or defamatory and did not warrant sealing. Denied; language did not meet the legal standard for sealing.
Does the motion include "scandalous" or "defamatory" matter justifying sealing under § 107(b)(2)? CNA claimed it included unfair, harmful accusations and mischaracterizations. Opponents argued accusations were relevant to relief sought and not grossly offensive or untrue on face. Denied; allegations were neither scandalous nor defamatory as defined by law.
Should the court protect individuals from "undue risk of unlawful injury" under § 107(c)(1)? CNA said language could spur violence against representatives/attorneys. No identifying information about individuals presented; speculation not enough for sealing. Denied; insufficient evidence to show undue risk.
Should the court admonish or restrain counsel's speech in the case? CNA requested admonishment to prevent unprofessional or inciting language. Opposing counsel argued tone, not substance, was at issue; no disparaging or unprofessional remarks made. Denied; court found no grounds for admonishment or restraint on counsel’s speech.

Key Cases Cited

  • In re Anthracite Cap., Inc., 492 B.R. 162 (Bankr. S.D.N.Y. 2014) (sets standard for sealing court records under § 107)
  • Joy v. North, 692 F.2d 880 (2d Cir. 1982) (speculative and conclusory arguments insufficient to override public access to court records)
  • In re Food Mgmt. Grp., LLC, 359 B.R. 543 (Bankr. S.D.N.Y. 2007) (defines 'scandalous' and 'defamatory' matter under § 107)
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Case Details

Case Name: The Diocese of Rochester
Court Name: United States Bankruptcy Court, W.D. New York
Date Published: Mar 11, 2025
Citation: 2-19-20905
Docket Number: 2-19-20905
Court Abbreviation: Bankr. W.D.N.Y.
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    The Diocese of Rochester, 2-19-20905