Bankruptcy Court Grants Asbestos Defendants Limited Access to Bankrupt Trust Exhibits U.S. Bankruptcy Court for the District of Delaware, November 8, 2016
Honeywell International, Inc. who was joined by Ford Motor Company moved for an order authorizing “any entity . . . to access, inspect, copy and receive copies of … any and all of the 2019 Exhibits filed with the Court in compliance with the 2019 Order or Bankruptcy Rule 2019.” In other words, Honeywell and Ford were seeking an order allowing it access to the statements and exhibits which asbestos claimants submitted in the captioned cases pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). The North American Refractories Company Asbestos Personal Injury Settlement Trust Advisory Committee (NARCO TAC), among others, objected to this motion.
The actual Rule 2019 Exhibits include the following: (1) the names and addresses of the clients of the submitting attorney; (2) exemplars or actual copies of the relevant retention agreements; (3) identification of disease; (4) claim amounts if liquidated; (5) sometimes full or partial social security numbers; (6) sometimes medical records, with information including full or partial social security numbers; family histories (including causes of death of family members), results of physical examinations, chest x-rays, and lung function tests, and other similarly sensitive medical information; and (7) sometimes other records that the law firm maintained in connection with or commingled with the required information.
In its moving papers, Honeywell argued for access to these exhibits so they could ensure that the purpose of the NARCO trust, which is to promptly pay holders of “valid” claims, is fulfilled, and that Honeywell appropriately compensates asbestos plaintiffs in the tort system, to the extent such plaintiffs have valid claims. In addition, Honeywell intends to produce the 2019 Exhibits to the NARCO Trust to be used in connection with the NARCO Trust’s own review of claims that it receives from asbestos claimants. Honeywell argued they have a very real and timely need to access the 2019 Exhibits and use them in furtherance of its efforts to ferret out invalid or fraudulent asbestos claims. Lastly, both Honeywell and Ford both made it clear that they also intend to use the Rule 2019 Exhibits for lobbying purposes. However, neither movant provided the court with additional details as to these lobbying efforts.
This court reasoned that Honeywell and Ford were both seeking limitless access of these exhibits from the court for use outside judicial proceedings and found no precedent for this. In the Third Circuit, access to court records has been denied where court files could potentially become a vehicle for improper purposes. [Citation Omitted]. The court could not find any Third Circuit case law holding or otherwise considering whether lobbying is a proper purpose under Rule 2019.
For these reasons, on November 8,2016, the court granted limited access to the use of the Rule 2019 Exhibits by Honeywell and Ford, and specifically held they may not be used for “lobbying efforts.”. Honeywell and Ford may use the Rule 2019 Exhibits to investigate fraud in the claims process and may share the information with the NARCO Trust in an aggregate format. In other words, Honeywell and Ford may not share the identity of individuals by name or other identifying means with the NARCO Trust. Honeywell and Ford were granted three months to complete their work and must comply with a Protocol Order which requires the destruction of the Rule 2019 Exhibits at the conclusion of the work. Honeywell’s and Ford’s efforts will be at their expense and the court will appoint a party to oversee the production of the Rule 2019 Exhibits.