United States District Court Southern District of New York
April 15, 2011
IN RE DEBTORS.
THE TRAVELERS INDEMNITY COMPANY AND TRAVELERS CASUALTY AND SURETY COMPANY, APPELLANTS,
COMMON LAW SETTLEMENT COUNSEL, ET AL., JOHNS-MANVILLE CORPORATION, ET AL.,
COMMON LAW SETTLEMENT COUNSEL, APPELLANTS,
THE TRAVELERS INDEMNITY COMPANY AND TRAVELERS CASUALTY AND SURETY COMPANY, APPELLEES.
The opinion of the court was delivered by: John G. Koeltl, District Judge:
OPINION AND ORDER
This is a motion by Common Law Settlement Counsel*fn1 to certify two appeals to the Court of Appeals for the Second Circuit: (1) an appeal filed by Travelers Indemnity Company and Travelers Casualty and Surety Company (collectively, "Travelers") from a decision and order of the Bankruptcy Court granting motions to compel Travelers to pay settlement proceeds now liquidated in the amount of $102,167,212.31; and (2) an appeal filed by Common Law Settlement Counsel from the Bankruptcy Court's denial of a motion for contempt against Travelers based on Travelers' failure to pay the settlement amount while it sought to appeal the order. Common Law Settlement Counsel argue that the appeals satisfy 28 U.S.C. § 158(d)(2)(A)(i), in that the appeals involve "a matter of public importance," and section 158(d)(2)(A)(iii), in that certification "may materially advance the progress of the case or proceeding in which the appeal is taken," and therefore that this Court is required to certify these appeals to the Court of Appeals for the Second Circuit.*fn2
The motion for certification is denied.
Common Law Settlement Counsel make no argument as to why the appeal of the order denying the contempt motion warrants immediate appeal to the Court of Appeals. That appeal concerns solely the Bankruptcy Court's decision not to hold Travelers in contempt for its failure to comply with an order requiring it "to immediately satisfy its payment obligations pursuant to the Settlement Agreements" while it made a motion (filed within 24 hours of the order) to appeal that order. In re Johns-Manville Corp., 440 B.R. 604, 615 (Bankr. S.D.N.Y. 2010). Common Law Settlement Counsel do not even attempt to argue that this appeal would satisfy the requirements of section 158(d)(2).
The appeal of the decision and order requiring the payment of the settlement proceeds plainly raises a closer question. However, this decision and order also fails to satisfy the statutory requirement for an immediate appeal to the Court of Appeals. The amount of the settlement is plainly substantial and the number of potential claims is large, but the issues involved are solely issues of contract interpretation, namely whether the Bankruptcy Court correctly interpreted the Common Law Settlement Agreement to require payment of the settlement amounts at this stage of the litigation despite Travelers' complaint that it remained subject to claims for contribution and indemnity by Chubb. This is a private contract dispute that is not the type of "matter of public importance" that is within the meaning of section 158(d)(2)(A)(i). See, e.g., In re Gen. Motors Corp., 409 B.R. 24, 28-29 (Bankr. S.D.N.Y. 2009) (denying motion for certification where movants contested "a matter of statutory interpretation and common law analysis," even though the issue was "undoubtedly . . . important to the individual litigants" and the overall bankruptcy case was arguably "a matter of public importance"); see also 1 Collier on Bankruptcy ¶ 5.06[b] (Alan N. Resnick & Henry J. Sommer eds., 16th ed. 2010) ("The bar for certification under this standard should be set high."). Rather, that section was intended to expedite appeals that involve issues of public import that "transcend the litigants and involve a legal question the resolution of which will advance the cause of jurisprudence to a degree that is usually not the case." 1 Collier on Bankruptcy ¶ 5.06[b]; see also Weber v. U.S. Trustee, 484 F.3d 154, 158 (2d Cir. 2007) ("Congress intended [§ 158(d)(2)] to facilitate our provision of guidance on pure questions of law.").*fn3
The appeal of the decision and order requiring the payment of settlement proceeds also fails to satisfy the requirement of section 158(d)(2)(A)(iii) because it would not materially advance the progress of the litigation. The Bankruptcy Court has issued a final judgment. This is not the case of an interlocutory appeal where a prompt ruling by the Court of Appeals will advance the ongoing litigation in the Bankruptcy Court. Rather, the only argument for expedition is that the appeal will be quicker because it need only be heard by one court - the Court of Appeals. That argument can be made in every case where there is an appeal involving a final judgment of the Bankruptcy Court. If valid, the argument would eliminate appeals to the District Court, contrary to the statement by the Court of Appeals that the normal appellate process should proceed so that the Court of Appeals is provided with the views of the District Court to aid in the fair decision of the appeal. See Weber, 484 F.3d at 160 ("Congress was aware of the dangers of leapfrogging the district court in the appeals process . . . [and probably recognized] the salutary effects of allowing some cases to percolate through the normal channels.").
There is in fact no reason to believe that immediate certification would expedite the appeals. The appeals will soon be fully briefed before this Court. If the Court certified the appeals to the Court of Appeals that certification would have to be reviewed by the Court of Appeals, which may well not grant certification. See generally id. (discussing standards that the Court of Appeals applies in determining whether to accept certification). In that situation, the certification process would have lengthened the appellate process rather than advanced it. In any event, as the Court of Appeals instructed, "[Congress] did not wish . . . to privilege speed over other goals; indeed, speed is not necessarily compatible with our ultimate objective - answering questions wisely and well." Id. at 160.
The motion for certification is denied. The Clerk is directed to close Docket No. 5 in No. 11 Civ. 1312 and Docket No. 4 in No. 11 Civ. 1329.