Wright v. Owens Corning
679 F.3d 101
| 3rd Cir. | 2012Background
- Pleadings involve unknown future claims in Owens Corning bankruptcy and discharge of those claims.
- Wright and West filed a class action for roofing-shingle defects against Owens Corning pre- or post-petition.
- Debtors filed Chapter 11; claims bar date fixed; notices published to unknown claimants.
- Plan and Confirmation Order discharged pre-confirmation claims arising before the Confirmation Date.
- District Court held plaintiffs had claims under the Code and discharged them; the Third Circuit reviews de novo.
- Court extends Grossman’s test to post-petition, pre-confirmation exposure to determine if a claim exists under the Code.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wright and West held Bankruptcy Code claims under Grossman’s test. | Wright held a claim via pre-petition exposure; West’s pre- or pre-confirmation exposure also creates a claim. | Grossman’s test controls; exposure pre-petition or pre-confirmation yields claims that may be discharged. | Yes for Wright; yes for West under retroactive application extended to pre-confirmation exposure. |
| Whether due process was satisfied for unknown claimants with retroactive claims. | Notice by publication suffices for unknown claimants. | Due process may require different notice given Frenville-era expectations. | No for this case; due process not satisfied given Frenville-era notices and late realization of claims. |
| Whether the notices discharge unknown future claims based on the retroactive Grossman’s rule. | Retroactive Grossman’s rule should discharge the claims. | Discharge not appropriate where due process was lacking. | Discharges not granted; remand for further proceedings. |
Key Cases Cited
- Grossman's Inc. v. Jeld-Wen, Inc., 607 F.3d 114 (3d Cir.2010) (establishes the current claim arising rule for unknown future claims)
- Avellino v. M. Frenville Co., 744 F.2d 332 (3d Cir.1984) (accrual test rejected; broad definition of claim adopted later)
- In re Piper Aircraft Corp., 58 F.3d 1573 (11th Cir.1995) (pre-petition relationship extension to post-petition context)