MEMORANDUM DECISION GRANTING GRAPHIC PACKAGING INTERNATIONAL’S MOTION FOR AN INJUNCTION
Before the Court is Graphic Packaging International’s (“Graphic”) emergency motion for enforcement of the confirmation orders of the Johns-Manville Corporation (“Manville”) and the Manville Forest Products Corporation (“MFP”). By its motion, Graphic seeks to enjoin the lawsuit of plaintiff, Lynda Berry (“Ms.Berry”),
After a hearing before this Court, held on March 8, 2016, Ms. Berry requested an evidentiary hearing with regard to due process. Tr. Mar. 8, 2016 Hrg. 20:20-23, Mar. 8, 2016, ECF No. 4225 (“Tr.”). This Court ordered supplemental briefing on the matter. Tr. 26:1-7. For the reasons and to the extent stated below, the Court grants Graphic’s motion for an order enjoining Ms. Berry’s state law claims against Graphic as a successor to MFP.
Jurisdiction
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334(a), 28 U.S.C. § 157(a) and the Standing Order of Reference signed by Chief Judge Loretta A. Preska dated January 31, 2012. This is a “core proceeding” under 28 U.S.C. § 157(b)(2)(A), matters concerning the administration of the estate, and § 157(b)(2)(I), proceedings to determine the dischargeability of debt.
As provided in both the MFP and Man-ville Confirmation Orders, paragraphs 10 and 28 respectively, this Court retains jurisdiction to clarify its prior confirmation orders, to enforce its injunctions, and to adjudicate matters having to do with the administration of the confirmed chapter 11 plans of MFP and Manville. See Travelers Indem. Co. v. Bailey,
Background
After over thirty years of handling the ongoing Manville bankruptcy case, this Court is keenly aware that “[fundamentally, the story of asbestos health litigation is the story of Johns-Manville.” In re Johns-Manville Corp.,
Manville was “a diversified manufacturing, mining and forest products company,” and by the 1970s was “the world’s largest miner, processor, manufacturer and supplier of asbestos and asbestos-containing products.” GAF Corp. v. Johns-Manville Corp. (In re Johns-Manville Corp.),
Manville eventually became “the prime supplier of asbestos fiber products,” In re Johns-Manville Corp.,
The term “asbestos” describes “a group of naturally occurring fibrous minerals known for their properties of relative indestructibility and resistance to heat and fire.” John P. Burns et al., Special Project: An Analysis of the Legal, Social, and Political Issues Raised by Asbestos Litigation, 36 Vand. L.Rev. 573, 578 (1983) (footnote omitted), cited in Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp.,
The health risks caused by asbestos were finally given broad acknowledgment on the legal front in 1973, when the United States Court of Appeals for the Fifth Circuit issued its landmark decision in Borel. Borel v. Fibreboard Paper Prod. Corp.,
Since the Fifth Circuit’s decision in Bo-rel, asbestos litigation has grown to gargantuan proportions. Patrick M. Hanlon & Anne Smetak, Asbestos Changes, 62 N.Y.U. Ann. Surv. Am. L. 525, 526-27 (2007). The judiciary has repeatedly called for Congress to create a national scheme to resolve all asbestos claims. See John C. Coffee, Jr., Class Wars: The Dilemma of the Mass Tort Class Action, 95 Colum. L.Rev. 1343, 1389 (1995) (footnotes omitted); see also Amchem Prods. v. Windsor,
Although original asbestos litigation involved an individual plaintiff and asbestos producer, this landscape changed by. the 1980s. After years of litigating individual cases, asbestos producers coalesced into an industry-wide consortium, presenting a unified litigation front. Coffee, supra, at 1364-66. The original asbestos consortium was known as the Asbestos Claims Facility. Id. at 1365 & n.83. The Asbestos Claims Facility evolved into the Center for Claims Resolution (“CCR”) after several of the original members filed for bankruptcy. See id. at 1365 n.83; Amchem,
While asbestos plaintiffs were vigorously suing asbestos defendants, Manville and its insurance firms were disputing which among them should bear the brunt of the mounting asbestos liability. See In re Johns-Manville Corp.,
On August 26, 1982, Manville and twenty of its subsidiaries filed for protection under chapter 11 of the Bankruptcy Code. See In re Manville Forest Prods. Corp.,
MFP was “a timber company that was acquired by Johns-Manville through a hostile tender offer in 1978.” In re Manville Forest Prods. Corp.,
Although MFP “never mined, manufactured or sold asbestos or any asbestos-containing product,” In re Manville Forest
After MFP confirmed its plan of reorganization, it changed its name to Riverwood International Corporation (“Riverwood”). See Olin Corp. v. Riverwood Int’l Corp. (In re Manville Forest Products Corp.),
ARGUMENTS OF THE PARTIES
Ms. Berry now seeks to sue Graphic directly on her asbestos personal injury claims. On August 24, 2015, Ms. Berry filed a petition for damages in Louisiana state court. Ms. Berry seeks to recover against Graphic based on her derivative exposure to asbestos through her husband’s work at the Mill. Berry’s Opp’n 2-3, Ex. 6. Ms. Berry’s husband worked at the Mill from 1961 to 2010, where he was exposed to asbestos and suffered his own asbestos-related injuries as a result. Id. at 5-6. Ms. Berry’s husband filed a claim with the Trust for his injuries and received payment ón his claim. Id. at 18; Tr. 8:1-15; 10:11-14. Ms. Berry was diagnosed with mesothelioma in March of 2015. Berry’s Opp’n 4. She seeks damages for her asbestos-related injuries based on strict liability of the asbestos producers and distributors, which includes Manville, as well as the strict liability and negligence of the employer and premises owner, who, at the time, was MFP. Id. at 18, Ex. 6 (“Petition for Damages”). Ms. Berry’s petition thus includes claims against Manville for asbes
Graphic now seeks the protection of the bankruptcy court. Graphic alleges that Ms. Berry’s.law suit violates both MFP and Manville’s Confirmation Orders, and that her claim should be enjoined by those orders. Graphic’s Mot. 1-2. Graphic argues that Ms. Berry’s only recourse for her asbestos related injuries is to submit a claim to the Manville Trust. Tr. 8:9-19. In opposition, Ms. Berry argues that (1) MFP is not a beneficiary of the Manville confirmation order and channeling injunction; (2) Ms. Berry’s claims against MFP were not discharged, released or enjoined by the MFP Confirmation Order; (3) even if Ms. Berry’s claims were addressed by the MFP or Manville Confirmation Orders, her exposure was continuing, so her claims are not discharged, released, channeled or enjoined by the MFP or Manville Confirmation Orders; and (4) Graphic has waived its right to rely on the bankruptcy discharge or. injunction. See Berry’s Opp’n 1. Ms. Berry admits that any claim she may have for exposure to Manville’s asbestos would be channeled to the Man-ville Trust. Berry’s Opp’n 3, 18. Ms. Berry contends that her' claim against Graphic is not channeled due to the fact it is a claim based on premises liability, which was not included in the Manville Plan or Confirmation Order. Id.; see also Berry’s Suppl. Br. 5, Mar. 29, 2016, ECF No. 4226; Tr. 15:2-11. Ms. Berry further argues that she did not receive due process in the underlying bankruptcy proceedings leading to MFP and Manville’s confirmation orders. Berry’s Suppl. Br. 21-36.
■ As will be explained below, Ms. Berry’s lawsuit against MFP is merely an attempt to side-step the Manville Trust in order to recover more than other similarly situated asbestos victims by suing Manville and its subsidiaries directly. This is not merely unfair to the other victims, it is an attempt to sue on rights she does not have. Were it not for the Manville Trust, Ms. Berry’s claims against MFP would have been discharged and she would not be entitled to any recovery for her asbestos related injuries. As it is, this Court finds that Ms. Berry' holds a future asbestos claim, subject to the injunction in the Manville Plan and Confirmation Order, which channels direct and indirect claims against Manville to the Manville Trust and enjoins all persons holding future asbestos claims from suing Manville and Manville’s subsidiaries.
Discussion
Any direct claim Ms. Berry has against MFP would be a prepetition claim subject to discharge by MFP’s Plan. Pursuant to § 1141(d)(1) of the Bankruptcy Code, and as held by this Court and affirmed on appeal, MFP’s Confirmation Order discharges MFP from all unsecured, pre-con-firmation debts. Riverwood Int’l Corp. v. Olin Corp. (In re Manville Forest Prods. Corp.),
[t]he Debtor is discharged and released from any and all unsecured debts which arose before the date of confirmation of the Plan, including but not limited to any and all Class 3 Claims (as defined in the Plan) ..., and any and all debts of a kind specified [sic] §§ 502(g), 502(h) or 502(i) of the Code whether or not (i) a proof of claim based on such debt is filed under § 501 of the Code; (ii) such claim is allowed under § 502 of the Code; (iii) such claim is listed on the Debtor’s Schedules and Lists heretofore filed herein; or (iv) the holder of such claim has accepted the Plan.
the Debtor shall be deemed discharged from any debt, except as expressly provided in this Plan, which arose before the Confirmation Date ..., whether or not (a) proof of Claim based on such debt has been filed ..., (b) such Claim has been allowed ..., (c) such Claim is listed on any Schedules filed by the Debtor herein, or (d) the holder of such Claim has accepted this Plan.
Graphic’s Mot. Ex. L, at 7. In addition to discharging all unsecured, pre-confirmation debts, MFP’s Confirmation Order enjoins all entities whose debts are discharged from pursuing any litigation to collect such discharged debt from MFP. MFP’s Confirmation Order provides that
[a]ll creditors and equity security holders of the Debtor or other entities whose debts are discharged or whose rights and interests are terminated by the Plan and this Order are individually and collectively permanently restrained and enjoined from instituting or continuing any action or employing any process to collect such debts or pursue such interests as liabilities or obligations of the Debtor or the reorganized Debtor or its successors.
Id. at 6-7. As such, if Ms. Berry holds a pre-confirmation claim against MFP, her claim would be discharged by the MFP Plan and Confirmation Order.
A debt is defined by the Bankruptcy Code to mean a “liability on a claim.” 11 U.S.C. § 101(12). As prior cases have held, “[t]his definition reveals that Congress intended that the meanings of ‘debt’ and ‘claim’ be coextensive.” Riverwood Int’l Corp.,
MFP’s Plan defines a claim synonymously with § 105(5) of the Bankruptcy Code to mean “a right to payment whether or not such right is reduced to judgment, liquidated, unliquidated, fixed or contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” Graphic’s Mot. Ex. L, at 2. The legislative history illustrates that “[b]y this broadest possible definition ... all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case.” H.R.Rep. No. 95-595, at 309 (1978), reprinted in 1978 U.S.C.C.A.N, 5963, 6266. It is well established that “Congress unquestionably expected this definition to have wide scope.” United States v. LTV Corp. (In re Chateaugay Corp.),
Per the Bankruptcy Code, a right to payment includes contingent, un-matured, and unliquidated claims. 11 U.S.C. § 101(5). A claim is contingent where “the debtor’s legal duty to pay does not come into existence until triggered by
WHEN A CLAIM EXISTS UNDER THE BANKRUPTCY CODE
The federal courts have developed several different tests to determine when a prepetition bankruptcy claim arises. The variations of this test are generally classifiable under the “accrual test,” the “conduct test,” and the “prepetition relationship test.” See In re Piper Aircraft Corp.,
The United States Court of Appeals for the Second Circuit appears to use both the relationship test and the fair contemplation test in cases involving regulatory environmental claims and contingent contract claims under the Bankruptcy Code. See Olin Corp. v. Riverwood Int’l (In re Manville Forest Prods.),
Several years later, the Second Circuit was faced with the issue of whether the debtor’s bankruptcy filing relieved it of its obligations under the Coal Act to make continuing payments to fund the health benefit scheme the debtor had once guaranteed to its retirees. LTV Steel Co. v. Shalala (In re Chateaugay Corp.),
In the context of a contingent contract claim, the Second Circuit has also relied on the fair contemplation test. See, e.g., Olin Corp.,
Bankruptcy courts of the Second Circuit have adopted various approaches to determining when a tort claim may be said to arise for purposes of the Bankruptcy Code. Compare In re Agway, Inc.,
Relying on Second Circuit dicta in Baldwin-United, Corporation Litigation, this Court has already adopted, in proceedings in this case, an approach to determine when a claim arises. In that Manville decision, issued in 1986, this Court denied relief from the automatic stay to two claimants seeking to pursue state law indemnification and contribution remedies against Manville. In re Johns-Manville Corp.,
a) Accrual Test
The accrual test, championed by the Third Circuit in Frenville, looks to state law to determine when a claim arises under the Bankruptcy Code. See Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.),
As stated above, this Court has already rejected the Frenville accrual test in proceedings in this case. In re Johns-Manville Corp.,
b) Conduct Test
The conduct test is similar to this Court’s decision in the Manville decision denying relief from the automatic stay. The conduct test looks exclusively to when the acts giving rise to liability occurred. See, e.g., Grady v. A.H. Robins Co.,
c) Prepetition Relationship Test
The conduct test has been criticized by some courts as too broad. See Epstein v. Official Comm. of Unsecured Creditors (In re Piper Aircraft, Corp.),
On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed, reasoning that even the courts relying on the conduct test acknowledge that “focusing solely on prepetition conduct .., would stretch the scope of § 101(5).” Epstein,
an individual has a § 101(5) claim against a debtor manufacturer if (i) events occurring before confirmation create a relationship, such as contact, exposure, impact, or privity, between the claimant and the debtor’s product; and (ii) the basis for liability is the debtor’s prepetition conduct in designing, manufacturing and selling the allegedly defective or dangerous product.
Id. This precise formulation of the prepetition relationship test has been criticized by some. See, e.g., JELD-WEN, Inc. v. Van Brunt (In re Grossman’s Inc.),
The Third Circuit, overruling Frenville, found that future asbestos claimants exposed to asbestos prepetition who did not manifest injury until later still held prepet-ition claims for purposes of the Bankruptcy Code. Id. at 125. The court noted that “[ijrrespective of the title used, there seems to be something approaching a consensus among the courts that a prerequisite for recognizing a ‘claim’ is that the claimant’s exposure to a product giving rise to the ‘claim’ occurred pre-petition, even though the injury manifested after the reorganization.” Id. The Third Circuit ultimately held “that a ‘claim’ arises when an individual is exposed pre-petition to a product or other conduct giving rise to an injury, which underlies a ‘right to payment’ under the Bankruptcy Code.” Id. Despite the trend in case law toward a
MS. BERRY HOLDS A PREPETITION CLAIM
In the context of future asbestos claimants, courts have repeatedly found that prepetition exposure to asbestos giving rise to a post-petition injury manifesting constitutes a prepetition claim in bankruptcy. See, e.g., In re Grossman’s Inc.,
On the agreed upon facts here, this Court finds that if Ms. Berry were to have a claim against MFP at all, her prepetition exposure to asbestos would give rise to a prepetition claim under the Bankruptcy Code. Ms. Berry agrees that “the relevant inquiry is when the injured party was exposed to the product.” Berry’s Opp’n 7. Ms. Berry admits that “[t]he cause of this disease is clear: [she] was exposed— through unprotected contact with Mr. Berry’s clothing — to the asbestos-laden products present throughout the Paper Mill until Mr. Berry’s retirement in 2010.” Id. at 3. Ms. Berry does not dispute that she was first exposed to asbestos prepetition. See Berry’s Suppl. Br. 15-16. Ms. Berry argues instead, that due to the fact she was also exposed to asbestos post-confirmation, her prepetition claim is transformed into a post-petition injury not subject to discharge in MFP’s Plan. Id. at 16, 20. Although Ms. Berry argues a continuing theory of exposure, her papers and her own state court witness admit that there is no way to determine at what point her cumulative exposure to asbestos became sufficient to cause her illness. Id. at 17-19 (citations omitted).
Ms. Berry’s opposition papers attempt to use the inability to pinpoint the precise moment her exposure caused her mesothe-lioma to her advantage, claiming that “[b]ecause all exposures contribute and it is not scientifically plausible to attribute a single exposure or single period of exposure to the causation of mesothelioma,” Graphic’s contentions that the prepetition exposures are to blame are inaccurate. Id. at 20. Even if Graphic had argued the only possible cause of mesothelioma was Ms. Berry’s prepetition exposure, that would not matter. Ms. Berry has admitted there is no way to prove the prepetition exposure did not cause her mesotheli-oma. Id. at 16. Even more significantly, Ms. Berry’s papers acknowledge that her earlier exposures to asbestos were more likely to have contributed to her contraction of mesothelioma, as opposed to the later exposures. See id. at 19-20.
Presented with the typical asbestos case where asbestos exposure is followed by a long latency period prior to manifestation of injury, the Cole court acknowledged that “[t]he difficulties in asbestosis cases arise because, unlike in traditional personal injury cases in which the damage results from a single, identifiable act causing traumatic injury, in asbestosis cases the damage results from a continuous process — a slow development of this hidden disease over the years.” Cole,
Although the Cole court favored an analysis that looked at when the “substantial injury producing exposures” occurred, the Cole court highlighted the fact that the wide recognition of the dangers caused by asbestos in the 1960s and early 1970s brought significant changes that dramatically reduced the possibility of exposure after 1970. “[I]n 1972, the federal government created the National Institute for Occupational Safety and Health. (‘OSHA’), and OSHA promulgated stringent guidelines in this area; manufacturers stopped using asbestos in their products; and insurance companies ceased issuing policies that adequately covered asbestos-related diseases.” Id. at 1067 (footnotes omitted).
The Louisiana Supreme Court buttressed its determination with similar findings made by a Washington appellate court in a similar asbestos case involving the
Similarly, Ms. Berry’s theories of continuing exposure do not change this Court’s conclusion that her repeated pre-petition exposures to asbestos should be treated as a dischargeable pre-petition claim against MFP. Even under a substantial injury producing exposure standard that takes into account a theory of continuing exposure, Ms. Berry’s asbestos claims arose prior to both MFP and Man-ville’s bankruptcy filing in 1982. The reasoning of the Louisiana Supreme Court in the Cole case takes into account the same arguments underpinning Ms. Berry’s continuing exposure theory here. Ms. Berry admits that it is scientifically impossible to prove which set of exposures caused her asbestos injuries, and further states that the earlier exposures were more likely to have caused her injuries. According to the Louisiana Supreme Court, the “substantial injury producing exposures giving rise to plaintiffs’ claims” were more likely to have occurred prior to 1980, especially given the increased federal oversight of asbestos use and the changes in the industry during the 1970s. Cole,
WHETHER MS. BERRY RECEIVED DUE PROCESS
Despite the fact Ms. Berry has a prepetition claim against MFP, establishing the existence of a claim “is only the first step in determining whether [Ms. Berry’s] claims were discharged.” Placid Oil Co. v. Williams (In re Placid Oil Co.),
The Supreme Court has held that due process requires notice reasonably calculated to apprise interested parties of the pendency of the action and the opportunity to object. Mullane v. Central Hanover Bank & Trust Co.,
The Supreme Court has “recognized that, in the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights.” Mullane,
Ms. Berry contends that due to the fact she was indirectly exposed to asbestos through her husband, she was unaware that she may later develop an asbestos injury or that she had a potential claim against MFP. Berry Opp’n 15, 17. Ms. Berry claims that that neither she nor Mr. Berry had “direct notice” of the MFP bankruptcy, and that Ms. Berry was unaware of MFP’s bankruptcy until she was diagnosed with mesothelioma in 2015. Berry’s Suppl. Br. 10-11. Ms. Berry claims it is impossible to provide future, unknown claimants with “adequate due process notice of the need to assert a claim (which they do not [] know that they have).” Berry Opp’n 15. Ms. Berry claims this leaves only one way to provide future unknown claimants with adequate due process and that is through the appointment of a future claims representative. Id. at 17. Ms. Berry claims that MFP disclosure statement did not provide notice that any future asbestos claim she may have would be channeled to the Man-ville Trust. Berry’s Suppl. Br. 11-14. This Court finds Ms. Berry’s assertions to be untenable.
This Court finds that MFP complied with the due process requirements articulated in Mullane, which requires that notice be reasonably calculated to apprise interested parties of the pen-dency of the action and afford them the opportunity to object. Mullane,
The content of MFP’s publication notices were more than sufficient to alert any potential claimant of the conjoined nature of the MFP and Manville bankruptcy proceedings. One of the notices of MFP’s confirmation hearing, published in the New Orleans Times-Pieayune, includes a joint caption for both “Manville Forest Products Corporation,” case number 82-11659, and Manville, case numbers 82-11656 through 82-11676. See Berry’s Suppl. Br. Ex. 23. Another notice for MFP was published with only the Manville case caption, which included case numbers 82-11656 through 82-11676. See id. Ex. 24. The notices explicitly stated that all pre-petition claims arising prior to August 26, 1982 against MFP would be forever barred. Id. The notice advised claimants who had already filed proofs of claim in the Manville case to file amended proofs of claim against MFP specifically. Id. The notice further stated that any amended
In terms of actual notice, Ms. Berry’s papers indicate MFP’s undertook a massive effort to deal with the asbestos crisis at the Mill. Ms. Berry states that prior to MFP’s confirmation, “MFP made it a point of becoming aware of policies and procedures underlying futile attempts to work safely with asbestos,” and in “September, 1981, representatives of [MFP] attended the Asbestos Information Association Meeting and prepared a summary report including discussion of expected safety compliance policies expected from OSHA,” Berry’s Suppl. Br. 10. Ms. Berry’s papers also indicate that MFP’s efforts to remove asbestos from the Mill required “multiple trucks [to] remove even a small portion” of the asbestos. Id. It appears MFP made conspicuous attempts to deal with the removal of asbestos from the Mill.
Although Ms. Berry claims she was unaware of MFP’s bankruptcy filing and of MFP’s potential asbestos liability, at least some of MFP’s employees in Louisiana had actual knowledge by 1983 that any action against MFP could not proceed without Manville and would require consideration of the effect on Manville’s bankruptcy case. See In re Johns-Manville Corp.,
On November 10, 1983, the Bankruptcy Court for the Western District of Louisiana refused to grant relief from the stay and transferred the adversary proceeding to this Court. Id. at 590. The Louisiana Bankruptcy Court noted that MFP and 20 affiliated entities, collectively’ referred to by the Louisiana Bankruptcy Court as “Manville,” had filed petitions for reorganization in the United States Bankruptcy Court for the Southern District of New York. Id. at 588. In discussing the Man-ville bankruptcy filings in New York, the Louisiana Bankruptcy Court found that
[the bankruptcy venue statute] must be construed in light of particular circumstances of Manville’s Chapter 11 proceedings. The New York Bankruptcy Court which is responsible for overseeing the Chapter 11 cases herein has developed a familiarity and expertise with the unique issues raised by the Chapter 11 proceedings. Consequently, the New York Bankruptcy Court is aware that not only must Manville dealwith the difficulty of formulating a plan or plans for an entity of enormous size, but that Manville must also devélop in the plan or plans of reorganization a method which will address the unique issue of providing compensation for asbestos health-related disease and disability to claimants in presently pending lawsuits and future potential claimants. Additionally, the New York Bankruptcy Court has become familiar with the factual and legal complexities of Manville’s Chapter 11 cases and related litigation and with the individual Chapter 11 proceeding of MFP[] in relation to the proceeding as a whole.
Id. at 590. The Louisiana Bankruptcy Court’s ruling makes it clear that MFP’s bankruptcy proceedings were intertwined with Manville’s, and that asbestos liability would play a factor in MFP’s ability to reorganize. Mr. Berry was an employee at the Mill during this time. See Berry’s Suppl. Br. 6 (stating that Graphic caused Mr. Berry’s exposure to asbestos from 1961 to 2010). Mr. Berry filed his claim for asbestos injuries with the Manville Trust. It is hard to imagine that Ms. Berry could have been completely unaware that the Mill filed for bankruptcy, or that MFP’s bankruptcy was linked to Man-ville’s bankruptcy and asbestos litigation.
Notice of the MFP and Manville bankruptcy proceedings is not limited to publication notices or the content of disclosure statements. “From the inception of [the Manville] case, it has been obvious to all concerned that the very purpose of the initiation of these proceedings is to deal in some fashion with claimants exposed to the ravages of asbestos dust who have not as of the filing date manifested symptoms of asbestos disease.” In re Johns-Manville Corp.,
Ms. Berry’s assertions that notice to future claimants is impossible are completely irrelevant here. Berry’s Suppl. Br. 21-22. Ms. Berry arguments are based on a line of reasoning developed in a class action case decided under Federal Rule of Civil Procedure 23. See Berry’s Suppl. Br. 21 (citing Amchem Prods. Inc. v. Windsor,
Not only was the case decided under Rule 23(b)(3) grounds, the Supreme Court in Amchem was not worried about notice to unknown claimants generally speaking. The Supreme Court was specifically considering the mandatory notice of a putative class members’ right to opt-out from the class. MFP was not giving notice to Ms. Berry for the purpose of establishing itself as a representative of all asbestos plaintiffs in a class action. MFP was not giving notice to claimants for purposes of allowing them to opt-out of a certified class. MFP was giving notice of its confirmation hearing and the bar date for claims against it for purposes of discharge. MFP’s right to enjoin future claims is a function of the discharge injunction. The end result of a bankruptcy proceeding is the discharge and injunction of all prepetition claims against the debtor. There is no opting-out by creditors. All prepetition claims that can be discharged under the Bankruptcy Code will be extinguished. Notice in a bankruptcy case is not for the purpose of allowing a creditor to retain the right to sue the debtor at a later time. The discharge created by the Bankruptcy Code permanently enjoins any right to sue on a prepetition claim. The reasoning in Am-chem simply does not apply here.
Ms. Berry’s argument that future asbestos claimants are equivalent to legally incompetent persons, making publication notice insufficient for due process, is without merit. Berry’s Suppl. Br. 24. The Man-ville Trust would not exist if due process for future asbestos claimants were impossible. Moreover, such reasoning would put every discharge in any bankruptcy case at risk of collateral attack by claimants alleging they were unaware they had a claim against the debtor’s bankruptcy estate. Regardless, Ms. Berry’s arguments overlook the point that her interests were adequately represented by a future-claims representative in the Manville case.
MS. BERRY’S CLAIMS ARE CHANNELED AND ENJOINED
Although any claim Ms. Berry has against MFP would be a prepetition claim that was discharged and enjoined by the MFP Plan, the Manville Plan preserves Ms. Berry’s claim by channeling that claim to the Manville Trust. The Manville Plan enjoins Ms. Berry’s claim in order to save it, and then funnels her claim to the Man-ville Trust. See In re Johns-Manville Corp.,
Manville filed for bankruptcy in the first place due to the existence of an as-yet, unknown class of future claimants like Ms. Berry. Of foremost importance here, is that “the very purpose of the initiation of [Manville’s bankruptcy] proceedings [wa]s to deal in some fashion with claimants exposed to the ravages of asbestos dust
The Manville bankruptcy proceedings were particularly concerned with the treatment of the claims of future asbestos claimants. As summarized by the Second Circuit, “[b]ecause future asbestos-related liability was the raison d’etre of the Man-ville reorganization, an important question at the initial stages of the proceedings concerned the representation and treatment of what were termed ‘future asbestos health claimants’.... ” Kane v. JohnsManville Corp.,
The Manville Plan, although concerned with future asbestos claimants, was also designed to treat both present asbestos claimants and future asbestos claimants equally. In re Johns-Manville Corp.,
The Trust was carefully designed to ensure a continuing source of funds would be available to replenish the corpus of the Trust, so that all asbestos victims could be paid. In confirming the Manville Plan, this Court explained that the Manville Trust would receive annual payments of $75 million from Manville for 24 years, a timeframe which was later extended to 27 years, and would “own or have access to up to 80% of Manville’s common stock,” and “have the right to call on up to 20% of the profits of the corporation ... continuing for as long as necessary to satisfy asbestos health claims.” Id. at 621; In re Johns-Manville Corp.,
[t]he effect of the [Manville] Plan is to enable the reorganized Debtors to continue in the operation of their businesses, make payments to the Trust as provided in the Plan, including the profit sharing, and to allow the Trust ownership, of up to eighty percent of the common equity. The Plan is designed to provide the Trust with funding for so long as is necessary to resolve and pay every AH Claim and Other Asbestos Obligation.
In re Johns-Manville Corp.,
The successful reorganization of the Manville debtors depended on “the ability of the Trust to compensate the future asbestos-health claimants.” Id. at 181. In no small part, the success of the Manville Trust depended on the guarantee that “health claims can be asserted only against the Trust and that Manville’s operating entities will be protected from an onslaught of crippling lawsuits that could jeopardize the entire reorganization effort.” Kane v. Johns-Manville Corp.,
applies to all health claimants, both present and future, regardless of whether they technically have dischargeable “claims” under the Code. The Injunction applies to any suit to recover “on or with respect to any Claim, Interest or Other Asbestos Obligation.” “Claim” covers the present claimants, who are categorized as Class-4 unsecured creditors under the Plan and who have dis-chargeable “claims” within the meaning of 11 U.S.C. § 101(4). The future claimants are subject to the Injunction under the rubric of “Other Asbestos Obligation,” which is defined by the Plan as asbestos-related health liability caused by pre-petition exposure to Manville asbestos, regardless of when the individual develops clinicálly observable symptoms. Thus, while the future claimants are not given creditor status under the Plan, they are nevertheless treated identically to the present claimants by virtue of the Injunction, which channels all claims to the Trust.
Kane,
The equitable injunction in the Manville Plan was also intended to “preserve the rights of all asbestos claimants by establishing a corpus of funds from which all can collect. In the absence of the Injunction, the intended beneficiaries of the reorganization will certainly suffer.” In re Johns-Manville Corp.,
The Court finds that Ms. Berry holds an “Other Asbestos Obligation” as defined under the Manville Plan and as interpreted by this Court. Present asbestos claimants were included in the Manville Plan under the definition of an “AH Claim.” See id. at 176 (“The ultimate challenge of these Chapter 11 cases was to formulate a plan of reorganization for the Debtors which would provide for payment to holders of present or known asbestos health related claims (AH Claims), and those persons who had not yet manifested an injury but who would manifest symptoms of asbestos-related illnesses at some future time (‘Other Asbestos Obligations’)”). The term “Other Asbestos Obligation” is meant to capture all future asbestos claimants. See id. The Manville Plan defines Other Asbestos Obligations as
all debts, obligations or liabilities ..., other than AH Claims, for death, personal injuries or personal damages (whether physical, emotional or otherwise) to the extent caused or allegedly caused, directly or indirectly, by exposure to asbestos (alone or as contained in asbestos-containing products) and arising or allegedly arising, directly or indirectly, from acts or omissions prior to the Confirmation Date of one or more of the Debtors including, without limitation, all obligations or liabilities for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and punitive damages ....
Graphic’s Mot. Ex. N, at 55. There can be no argument that Ms. Berry is now suffering from a terrible asbestos disease after being exposed to asbestos beginning in 1973. Berry’s Opp’n 5. She claims she' was exposed to asbestos as a result of her ■ husband’s work at the paper Mill owned by MFP, which was a wholly-owned subsidiary of Manville. Her exposure to asbestos is allegedly due to Manville’s production of the asbestos at the Mill, or as a result of Manville’s ownership of the Mill itself. Graphic’s Mot. 2; Berry’s Opp’n 18. The Manville Trust was established precisely so that future asbestos victims that were exposed to asbestos prior to 1982 and who did not manifest symptoms of any disease until long after confirmation would be able to recover on their claims. As such, Ms. Berry’s claim is channeled to the Manville Trust.
All future asbestos claimants, defined as Other Asbestos Obligation holders, are enjoined from suing Manville and its subsidiaries. The Manville Confirmation Order provides that “[a]ll Persons ... are hereby stayed, restrained and enjoined from taking one or more of the following actions for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any Claim, Interest or Other Asbestos Obligation.... ” Graphic’s Mot. Ex. 0 ¶ 29. A Person need not be a “creditor” of Manville to be enjoined. See Kane,
[hjolders of AH Claims and Other Asbestos Obligations may proceed only against the Trust to satisfy their claims. They must comply with the Claims Resolution Procedures as set out in the Plan. These claimants may not sue Manville, its subsidiaries or affiliates, and may only commence an action against the Trust in accordance with the Claims Resolution Procedures.
In re Johns-Manville Corp.,
The terms of the Manville Plan and the Manville Trust confirm that Ms. Berry’s claim is channeled to the Manville Trust. The Manville Plan provides for release of those parties whose assets are contributed to the Trust assets, requiring all asbestos claimants to proceed against the Trust. Graphic’s Mot. Ex. N at 6. The Manville Plan provides that Manville and the other Debtors are to give certain assets to the Trust, including 24 million shares of Man-ville common stock. Id. In consideration of the assets transferred, the Trust assumed all liabilities for the AH Claims and Other Asbestos Obligations. Id. The Trust Agreement, attached to the Manville Plan and explicitly approved in the confirmation order, explains that the purpose of the Trust is to provide for the payment of Trust Claims, and to use the Trust assets “to deliver fair, adequate and equitable compensation to bona fide Beneficiaries, whether presently known or unknown .... ” Id. Ex. T, at 3. A Trust Claim is defined to mean a claim asserting Trust Liabilities to a Beneficiary. Id. Ex. N, at 59. A Trust Liability means all Other Asbestos Obligations and Allowed AH Claims. Id. A Beneficiary, also a defined term, means a Person holding a Trust Claim. Id. at 48.
The liability for Ms. Berry’s claim was transferred to the Manville Trust as part of the Manville Plan of reorganization. Per the definitions created by the Manville Plan and the purpose of the Manville Trust, Ms. Berry’s only recourse is as a potential beneficiary of the Manville Trust. Under the definitions created by the Man-ville Plan, Ms. Berry is asserting an “Asbestos Obligation,” which is a Trust Liability. Her claim is a claim for personal injuries caused by exposure to asbestos that began prior to MFP’s and Manville’s chapter 11 bankruptcy, through the direct or indirect acts or omissions taken by Manville and its subsidiaries. This is the very definition of an Other Asbestos Obligation, provided for by the Manville chapter 11 Plan. As such, Ms. Berry is a “Beneficiary,” defined by the Manville Plan as a Person holding a Trust Claim. Whether she is a bona fide Beneficiary is not at issue before this Court. As her injuries are included within the sphere of claims delegated to the Manville Trust for administration, she must proceed with her claims against the Trust.
As stated by this Court, due process for the future asbestos claimants was not only met met in the Manville bankruptcy proceedings, ensuring that future claimants would be compensated was the subject of many hours of work by this Court and the lawyers litigating the case. Were it not for the establishment of the Manville Trust, the claims of the future asbestos claimants would most likely have been discharged as contingent claims arising prior to the petition date, with a focus “on the time when the acts giving rise to the alleged liability were performed.... ” In re Johns-Manville Corp.,
the Legal Representative for Future Claimants has been active in the Man-ville reorganization for -over two years. He has been the catalyst for, if not the architect of this Plan. The Legal Representative was endowed upon his appointment with the full panoply of statutory rights and duties of representation available to an official committee under the Code. As this court noted, upon the appointment of the Legal Representative, binding unknown parties in interest to the outcome of judicial procedures in which they have been represented by a trustee, legal representative or guardian ad litem acting as a fiduciary for their interests, is not a novel phenomenon in the law.
In re Johns-Manville Corp.,
The goal of the Plan and the purpose of the Injunction is to preserve the rights and remedies of those parties, who by an accident of their disease cannot even speak in their own interest. The impracticable, if not impossible version of due process envisioned by the Objectors would effectively destroy these rights and remedies. Theories and standards of “due process” are nothing more than the human effort to make the inchoate notions of justice and equity real and tangible to parties who stand before a court of law. The Objectors’ “due process”, which would deny asbestos victims justice and equity, is not a “due process” at all.
In re Johns-Manville Corp.,
Putting aside matters of law, the facts of Ms. Berry’s case do not logically support the conclusion that her claim is not channeled to the Manville Trust. Ms. Berry’s asbestos exposure is allegedly due to her husband’s work at the Mill. Berry’s Opp’n 6. She was exposed to asbestos from the dust and fibers he brought home on his clothes. Id. Mr. Berry later contracted an asbestos-related injury, and submitted a claim to the Manville Trust. Graphic’s Mot. 1; Graphic’s Suppl. Br. 2. The Manville Trust determined he was eligible for recovery under the Trust procedures and reimbursed him on his claim. Graphic’s Mot. 1. Ms. Berry’s exposure was entirely derivative of her husband’s. The Court does not see how she can assert a claim that she is entitled to sue the surviving corporate entities, when her husband was not. There is no logical or rational reason to allow Ms. Berry to subvert the procedures that were designed to preserve the rights of all asbestos claimants, especially when her husband, the indirect source of her exposure, was bound by them.
Instead of agreeing to submit her claims to the Manville Trust, as her husband did, Ms. Berry contends she is entitled to more than all the other future asbestos claimants. Ms. Beny asserts her claims against MFP make her special and unique, and that even though MFP is a subsidiary of Manville, MFP should not be covered by the Manville Plan or injunction. Ms. Ber
Although Ms. Berry claims the definition of subsidiary does not specifically include MFP, subsidiary is defined in the Manville Plan “with respect to any Person [sic] any corporation or other entity of which securities or other ownership interest having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person.” Graphic’s Mot. Ex. N, at 58. This definition clearly includes MFP. As to whether the definition of “subsidiary” should be limited to only derivative claims against such subsidiaries based on Man-ville’s conduct, the language of the Man-ville Plan and Confirmation Orders clearly refute this interpretation.
The Manville Confirmation Order provides that “[a]ll Persons ... are hereby stayed, restrained and enjoined from taking one or more of the following actions for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any Claim, Interest or Other Asbestos Obligation,” including
Commencing, conducting, or continuing in any manner, directly or indirectly, any suit, action or other proceeding ... against or affecting the Debtors, any of the Débtors’ Subsidiaries, ... or any property of any of the foregoing or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing, or any property of any such transferee or successor ....
Graphic’s Mot. Ex. 0, at ¶ 29. This definition clearly enjoins suit against subsidiaries of Manville by any person to collect on any interest, including an Other Asbestos Obligation.
As stated above, the provision of the Manville Plan providing for “Other Asbestos Obligations” is meant to capture all future asbestos claimants. The Manville Plan defines “Other Asbestos Obligations” as
all debts, obligations or liabilities ..., other than AH Claims, for death, personal injuries or personal damages (whether physical, emotional or otherwise) to the extent caused or allegedly caused, directly or indirectly, by exposure to asbestos (alone or as contained in asbestos-containing products) and arising or allegedly arising, directly or indirectly, from acts or omissions prior to the Confirmation Date of one or more of the Debtors....
Graphic’s Mot. Ex. N, at 55. Based on the definition of Other Asbestos Obligations, the Manville Plan and Confirmation Order specifically enjoins the litigation of personal injury suits and suits for damage, caused indirectly or directly by exposure to asbestos, arising “directly or indirectly, from acts or omissions” attributable to Manville. Damages that are directly or indirectly caused by exposure to asbestos and arising from direct or indirect acts of Manville would include acts or
Further, the Second Circuit has previously dismissed arguments by asbestos claimants that the Manville injunction improperly benefits Manville subsidiaries that were not debtors in bankruptcy and as a result should not protect these subsidiaries from asbestos claims. Kane v. Johns-Manville Corp.,
Here, MFP was not a “non-debtor subsidiary.” MFP was a debtor in bankruptcy and, more importantly, it was an original Manville debtor. MFP filed its bankruptcy case as part of the original Manville bankruptcy filing. MFP’s case was jointly administered with the other Manville entities that filed for bankruptcy. See Berry’s Suppl. Br. Exs. 23-24. It was well known that MFP filed bankruptcy along with the other Manville debtors, even in Louisiana. In re Johns-Manville Corp.,
Even if MFP were somehow considered a non-debtor subsidiary of Manville, Man-ville did not use MFP to shield its assets. Instead, MFP’s profits and earnings were accessible by Manville. This Court has previously “made reference to the fact that [MFP] represents a major component of the assets of the Manville companies.” In re Manville Forest Products Corp.,
Manville retained the obligation to fund the Manville Trust pursuant to the terms of the Manville Confirmation Order and Plan. This Court has explained in a deci
The Supreme Court has held that the Manville Confirmation Order is res judica-ta “to the parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose.” Travelers Indem. Co. v. Bailey,
GRAPHIC HAS NOT WAIVED ITS RIGHT TO THE BANKRUPTCY INJUNCTION
The Court must also reject Ms. Berry’s argument that Graphic waived its right to rely on the confirmation orders of MFP and Manville based on separate asbestos litigation against Graphic. Thé discharge injunction provided by the Bankruptcy Code is not extinguished by a debtor’s initial failure to assert the protection of the injunction. This would vitiate the entire purpose of the bankruptcy discharge. The discharge operates to void a judgment of personal liability against the debtor at any time obtained where that judgment is for a dischargeable debt. 11 U.S.C. § 524(a). It is established law that “in 1970 the bankruptcy discharge lost its status as an affirmative defense. Thereafter, judgments establishing the personal liability of debtors on certain prepetition debts were ‘null and void’ and creditors were enjoined from collection.” Lone Star Sec. & Video, Inc. v. Gurrola (In re Gurrola),
Conclusion
For the foregoing reasons, Ms. Berry’s claims against Graphic in her state court action, currently pending in the Fourth Judicial District for the Parish of Ouachita in the State of Louisiana, seeking to recover for any injuries resulting from her exposure to asbestos are hereby enjoined pursuant to MFP’s discharge injunction and the Manville channeling injunction. To the extent Ms. Berry asserts claims in her state court action against Manville or MFP seeking to recover for any injuries resulting from her exposure to asbestos, they too are enjoined pursuant to the discharge injunction. Ms. Berry’s only re
Notes
. Unless, otherwise indicated, all litigation documents cited to herein can be found on docket number 82-11656.
. Manville had two main groups of insurers: those that issued policies in force at the time many asbestos plaintiffs were exposed to asbestos, and those that had issued policies that were in force at a later time, when many of the asbestos plaintiffs were manifesting symptoms. In re Johns-Manville Corp.,
. Both parties refer to this case in their papers. See Berry's Opp’n 19; Graphic’s Reply 8, Mar. 7, 2016, ECF No. 4217. Graphic asserts that the judgment in the case was against Olin Corporation, a corporation that is legally distinct from MFP and Graphic. Graphic’s Reply 8.
. The Second Circuit, without articulating which test it was applying, held that a tort claim for continuing trespass where the initial trespass occurred prepetition and continued postpetition was a prepetition claim that had been discharged. Browning v. MCI, Inc. (In re WorldCom, Inc.),
. In subsequent case law, the Third Circuit summarized its Frenville holding to mean that "the existence of a valid claim depends on: (1) whether the claimant possessed a right to payment; and (2) when that right arose.” Kilbarr Corp. v. Gen. Servs. Admin., Office of Supply & Servs. (In re Remington Rand Corp.),
. In overruling itself, the Third Circuit cited a long list of cases disagreeing with the Fren-ville holding. See In re Grossman’s Inc.,
. In Martin v. Wilks, the Supreme Court addressed the issue of privity and nonlitigants. In noting that a judgment among parties to a lawsuit does not adjudicate the rights of non-litigants, the Supreme Court footnoted two exceptions to the requirement of privity. In addition to the bankruptcy exception, the Supreme Court also noted the exception created for class actions under Federal Rule of Civil Procedure 23, which requires as a prerequisite to a class action that “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). One of the driving considerations in a Rule 23 class action case is the-ability to bind nonliti-gants to the determination of the court, which requires notice and adequate representation of the interests of the class. Ortiz v. Fibreboard Corp.,
. It is undisputed that Graphic is a successor in interest to MFP. Berry's Opp'n 6; see also Graphic's Mot. 6; Graphic’s Suppl. Br. 7.