In Re: G-I Holdings ( 2004 )


Menu:
  •                                                                                                                            Opinions of the United
    2004 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    12-6-2004
    In Re: G-I Holdings
    Precedential or Non-Precedential: Non-Precedential
    Docket No. 04-1546
    Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
    Recommended Citation
    "In Re: G-I Holdings " (2004). 2004 Decisions. Paper 98.
    http://digitalcommons.law.villanova.edu/thirdcircuit_2004/98
    This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
    University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova
    University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
    NON-PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No. 04-1546
    IN RE: GI HOLDINGS, INC.
    f/k/a GAF CORPORATION,
    DEBTOR.
    OFFICIAL COMM ITTEE OF ASBESTOS CLAIMANTS,
    Appellant
    v.
    THE BANK OF NEW YORK
    On Appeal from the United States District Court
    for the District of New Jersey
    (D.C. No. 03-CV-04275)
    District Judge: Honorable William G. Bassler
    Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
    November 3, 2004
    Before: ALITO, BARRY, and FUENTES, Circuit Judges.
    (Filed: December 6, 2004)
    OPINION OF THE COURT
    FUENTES, Circuit Judge.
    This appeal grows out of a preliminary injunction issued by the Bankruptcy Court
    for the District of New Jersey in favor of Building Materials Corporation of America
    (“BMCA”), a subsidiary of the debtor G-I Holdings, Inc. The injunction barred the filing
    or prosecution of asbestos claims against BMCA and further prevented BMCA from
    refinancing its credit agreement with the Bank of New York (“BNY”) without first
    providing notice to the Official Committee of Asbestos Claimants (the “Committee”).
    After BM CA in fact gave notice of a proposed refinancing, the Committee sought to
    modify the preliminary injunction by placing certain restrictions on the proposed
    refinancing, including a condition preventing BNY from acquiring new defenses that
    could be asserted against the Committee in the future. The Bankruptcy Court denied the
    Committee’s request, and the District Court affirmed that denial on the grounds of
    ripeness.
    We affirm substantially for the reasons expressed in the thorough and persuasive
    opinion of the District Court. 1 We add the following to underscore our own agreement
    with that decision.2
    1
    We exercise plenary review over whether a claim is ripe for judicial review. See
    Doe v. County of Centre, Pennsylvania, 
    242 F.3d 437
    , 452 (3d Cir. 2001).
    2
    We have considered BNY’s arguments that we lack appellate jurisdiction over the
    District Court’s order and find them unpersuasive. Jurisdiction lies for this appeal
    First, as an initial matter, the Committee’s suggestion that the justiciability
    requirement of ripeness is not relevant or otherwise less important in a proceeding
    involving modification of a preliminary injunction is incorrect. Although it is true that
    injunctive relief is intended to affect future conduct and guard against future injury, a
    federal court must still ensure that the justiciability requirements of Article III, including
    ripeness, are satisfied regardless of the type of relief sought. See Nextel Communications
    of Mid-Atlantic, Inc. v. City of M argate, 
    305 F.3d 188
    , 192 (3d Cir. 2002); Armstrong
    World Indus., Inc. v. Adams, 
    961 F.2d 405
    , 410 (3d Cir. 1992).
    Second, we are unpersuaded by the Committee’s argument that the acquisition of
    possible new defenses by BNY as a result of the refinancing creates a substantial
    controversy between the two parties “of sufficient immediacy and reality” to satisfy
    ripeness concerns. See Peachlum v. City of York, Pennsylvania, 
    333 F.3d 429
    , 434 (3d
    Cir. 2003) (internal citation and quotation omitted). As the District Court noted, whether
    the Committee may bring a claim against BNY, and thereby implicate any defenses BNY
    may acquire as a result of the refinancing, depends on the occurrence of several uncertain
    and contingent intervening events. This chain of hypotheticals presents a controversy too
    pursuant to 
    28 U.S.C. § 1292
    (a)(1) because the District Court’s order refused, on the
    grounds of ripeness, to modify or dissolve a preliminary injunction. The cases cited by
    BNY in support of its contention, In re Kassover, 
    343 F.3d 91
     (2d Cir. 2003), and Conroe
    Office Bldg., Ltd. v. Nichols, 
    21 F.3d 690
     (5th Cir. 1994), are simply not relevant to this
    matter as they did not involve the denial of a request to modify an injunction on
    justiciability grounds. Because we find that jurisdiction exists pursuant to 
    28 U.S.C. § 1292
    (a)(1), we need not decide whether jurisdiction also exists under 
    28 U.S.C. § 158
    (d).
    remote for judicial review.
    Moreover, our conclusion does not change based on the Committee’s attempt to
    recharacterize its request as merely seeking to preserve the status quo, and not as a
    request for a premature adjudication of the merits of defenses that BNY may acquire
    through the refinancing. As the District Court noted, the Committee cannot claim that the
    injury it seeks to avoid is the mere acquisition of defenses by BNY, as opposed to the
    prospect of BNY’s future use of such defenses.3 In any event, to the extent that the
    Committee argues that it would be inequitable to permit BNY to acquire new defenses as
    a result of the refinancing, we note that it would be at least as inequitable to strip BNY of
    possible defenses without considering their validity in the first instance, a matter which is
    not yet ripe.
    Finally, contrary to the Committee’s speculation that the strategic balance may be
    altered by the refinancing, we do not see how the Committee has been “genuinely
    aggrieved” at this point. See Peachlum, 
    333 F.3d at 433-34
    . As the District Court noted,
    any potential harm to the Committee can only occur if and when BNY actually asserts a
    new defense in a suit by the Committee. The possibility that such a defense may actually
    3
    The Committee’s reliance on In re Int’l Power Sec. Corp., 
    170 F.2d 399
     (3d Cir.
    1948), and Breswick & Co. v. Briggs, 
    135 F. Supp. 397
     (S.D.N.Y. 1955), is misplaced.
    The issue in this case is not whether injunctive relief may be granted to prevent a party
    from asserting a defense in pending litigation or to preserve assets pending resolution of
    an ownership dispute. We are faced instead with a threshold issue (ripeness) which must
    be resolved even before reaching such questions.
    be asserted against the Committee, however, is neither imminent nor certain to occur. 4
    We have considered all of the arguments advanced by the Appellant and conclude
    that they are without merit. Accordingly, the judgment of the district court will be
    affirmed.
    4
    To the extent that the Committee relies on a decision of the Bankruptcy Court
    issued after the District Court decision on appeal here, we do not consider it as the
    Bankruptcy Court’s decision is not part of the record on appeal.