Non-Party Certain Matching v. Aldrich Pump LLC

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

CASE NO. 3:23-CV-00144-FDW

NON-PARTY CERTAIN MATCHING )

CLAIMANTS, )

)

Appellant, )

)

v. ) ORDER

)

ALDRICH PUMP LLC, )

)

Appellee. )

)

THIS MATTER is before the Court on the Non-Party Certain Matching Claimants’

(“Appellants”) Motion for Stay Pending Appeal (“Motion to Stay”), filed on March 24, 2023.

(Doc. No. 2). Appellants’ Motion is fully briefed and is now ripe for review. For the reasons set

forth herein, Appellants’ Motion, (Doc. No. 2), is GRANTED.

I. BACKGROUND

On February 22, 2023, the United States Bankruptcy Court for the Western District of

North Carolina (“Bankruptcy Court”) entered its Order Denying Appellant Non-Party Certain

Matching Claimants’ Motion to Proceed Anonymously (“Order Denying Anonymity”). Order

Denying Motion to Proceed Anonymously, AC&S Asbestos Settlement Trust et al. v. Aldrich

Pump LLC and Murray Boiler LLC, Case No. 23-mp-00300 (JCW) (Bankr. W.D.N.C. Feb. 22,

2023), ECF No. 21. Thereafter, Appellants filed the instant Motion to Stay, (Doc. No. 2),

requesting entry of an order staying the effect of the Bankruptcy Court’s Order pending their

appeal of the Order Denying Anonymity Motion.

This case arises from subpoenas served by Aldrich Pump LLC and Murray Boiler

(“Appellees”) on ten asbestos bankruptcy trusts and their New Jersey-based claims processor,

Verus Claims Services LLC (“Verus”). (Doc. No. 2). The subpoenas target the information of

around 12,000 mesothelioma victims who have previously settled their claims against Appellees.

(Id.). On August 19, 2022, Verus filed motions to quash the subpoenas in the United States District

Court for the District of New Jersey, and Appellants joined the motions on September 2, 2022.1

On the same day, Appellants also filed a Motion to Proceed Anonymously.2 On January 4, 2023,

the New Jersey District Court granted Appellees’ Motion to Transfer.3

At the hearing on February 14, 2023, the Bankruptcy Court denied Appellants’ request to

proceed anonymously. Order Denying Motion to Proceed Anonymously, AC&S Asbestos

Settlement Trust et al. v. Aldrich Pump LLC and Murray Boiler LLC, Case No. 23-mp-00300

(JCW) (Bankr. W.D.N.C. Feb. 22, 2023), ECF No. 21. The court additionally directed Appellants

to identify themselves by their full names but stayed the requirement for thirty-one days to allow

them to seek a stay pending appeal from this Court. Id. Appellants appealed the Order Denying

Anonymity on March 7, 2023, (Doc. No. 1), and then filed the present Motion to Stay on March

24, 2023. (Doc. No. 2). On April 7, 2023, Appellee Aldrich Pump filed its Memorandum in

Opposition to Appellants’ Motion, (Doc. No. 3), and on April 14, Appellants filed their Reply,

(Doc. No. 5). Additionally, on April 27, Appellants filed a Notice of Supplemental Authority,

(Doc. No. 6), to which Appellee responded on May 5. (Doc. No. 7).

1 Notice of Motion to Quash Subpoena and to Stay, In re Aldrich Pump LLC, et al., Case No. 3:22-cv-05116-

MAS-TJB (D.N.J. Aug. 19, 2022), ECF No. 5; Notice of Non-Party Certain Matching Claimants’ Joinders and Motion

to Quash, In re Aldrich Pump LLC, et al., Case No. 3:22-cv-05116-MAS-TJB, ECF No. 13.

2 Notice of Non-Party Certain Matching Claimants’ Motion to Proceed Anonymously, In re Aldrich Pump

LLC, et al., Case No. 3:22-cv-05116-MAS-TJB, ECF No. 14.

3 Consent Order Regarding Respondents Aldrich Pump LLC and Murray Boiler LLC’s Motion to Transfer

Subpoena-Related Motions to the Issuing Court, the United States Bankruptcy Court for the Western District of North

Carolina, In re Aldrich Pump LLC, et al., Case No. 3:22-cv-05116-MAS-TJB, ECF No. 48.

II. ANALYSIS

This Court has held that the preliminary injunction standard applies to the issuance of a

stay pending appeal. In Re Kaiser Gypsum Co., Inc. et al., Debtors, No. 3:20-CV-537, 2021 WL

3476138 (W.D.N.C. Aug. 6, 2021). The United States Bankruptcy Court for the Middle District

of North Carolina explained:

In Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365 (2008), the

Supreme Court addressed the appropriate rubric for courts considering whether to

grant a preliminary injunction. The Court stated that “[a] plaintiff seeking a

preliminary injunction must establish that he is likely to succeed on the merits, that

he is likely to suffer irreparable harm in the absence of preliminary relief, that the

balance of equities tips in his favor, and that an injunction is in the public interest.”

Id. at 20.

In re Franklin, No. 19-80661, 2020 WL 603900, at *3 (W.D.N.C Feb. 6, 2020).

“The Fourth Circuit interpreted Winter to require that ‘all four requirements must be

satisfied’ for a court to impose a preliminary injunction.” Id. (quoting Real Truth About Obama,

Inc. v. FEC, 575 F.3d 342, 347 (4th Cir. 2009), vacated on other grounds and remanded, 559 U.S.

1089 (2010), standard reaffirmed in 607 F.3d 355 (4th Cir. 2010)). Thus, “a party requesting a

preliminary injunction in the Fourth Circuit must independently demonstrate every aspect entitling

the party to an injunction, and a court should not balance the four factors.” Id. The decision whether

to grant a stay pending appeal lies within the sound discretion of the court, and “the burden on the

movant seeking the extraordinary relief of a stay is a ‘heavy one.’” Id. (citing In re Gen. Motors

Corp., 409 B.R. 24. 30 (Bankr. S.D.N.Y. 2009)).

In support of their Motion to Stay, Appellants cite the Order Granting Motion to Stay

Pending Appeal in Aldrich Pump, LLC v. Non-Party Certain Matching Claimants, No. 3:23-cv-

99-MOC (W.D.N.C. Apr. 26, 2023), (Doc. No. 6) [hereinafter Aldrich Pump Appeal]. The facts

in the Aldrich Pump Appeal are nearly identical to those in this case. There, the appellants were

approximately 12,000 mesothelioma victims whose personal information was sought as nonparties

through a subpoena served by Aldrich Pump LLC and Murray Boiler on ten asbestos trusts and

their Delaware-based administrator, targeting personal identifying information on the victims who

had settled their claims against the debtor. Id. at 2. The Trusts commenced a miscellaneous

proceeding in the United States District Court for the District of Delaware to quash or modify the

subpoena, joined by their Delaware-based administrator and the appellants. Id. The appellants then

filed a Motion to Proceed Anonymously, which was denied by the United States Bankruptcy Court

for the Western District of North Carolina once transferred from the Delaware District Court. Id.

In their Order Denying Anonymity, the Bankruptcy Court similar directed the appellants to

identify themselves by their full names and stayed the requirement for thirty-one days to allow the

appellants to seek a stay pending appeal. Id. at 3. The appellants appealed the Order Denying

Anonymity and sought a stay of the Order pending their appeal. The decision in the Aldrich Pump

Appeal is both informative and persuasive on Appellant’s Motion in this matter.4 The Court agrees

with the reasoning therein and similarly GRANTS Appellant’s Motion based on the successful

establishment of the four factors to grant a stay pending appeal.

A. Likelihood of Success on the Merits

Appellants have established their appeal is likely to succeed on the merits. Although there

is a general presumption of openness of judicial proceedings, “under appropriate circumstances

anonymity may, as a matter of discretion, be permitted.” James v. Jacobson, 6 F.3d 233, 238 (4th

Cir. 1993). The Fourth Circuit explained that in considering anonymity requests, courts should

consider a number of factors, including:

4 District court opinions do not have precedential value, and as such are not binding authorities, so “they are entitled

only to the weight they generate by the persuasiveness of their reasoning.” Hupman v. Cook, 640 F.2d 497, 501 (4th

Cir. 1981). Thus, while the Aldrich Pump Appeal is not binding, it is a decision from this District Court that presents

similar factual and procedural circumstances to this case.

[W]hether the justification asserted by the requesting party is merely to avoid the

annoyance and criticism that may attend any litigation or is to preserve privacy in

a matter of sensitive and highly personal nature; whether identification poses a risk

of retaliatory physical or mental harm to the requesting party or even more

critically, to innocent non-parties the ages of the persons whose privacy interests

are sought to be protected; whether the action is against a governmental or private

party; and, relatedly, the risk of unfairness to the opposing party from allowing an

action against it to proceed anonymously.

Id. (collecting cases).

Here, Appellants have demonstrated a strong likelihood of success on their Motion for

Anonymity, as “a similar motion to proceed anonymously has already been granted in a parallel

proceeding.” (Aldrich Pump Appeal, No. 3:23-cv-99-MOC, at 4). The United States District Court

for the District of Columbia granted a motion to proceed anonymously that was virtually identical

to the one in this action, and ruled that, “weighed against the minimal apartment interest in

disclosure, movants’ significant and ‘legitimate interest in anonymity’ and in maintaining the

privacy of their personal information are more than sufficient to overcome ‘countervailing interests

in full disclosure.’” Manville Trust Matching Claimants v. Aldrich Pump LLC, No. 1:22-MC-

00080 (D.D.C. Aug. 25, 2022); see also (Aldrich Pump Appeal, at 4).

Furthermore, as in Aldrich Pump Appeal, the issues that will be presented in this case are

of first impression. Judge Cogburn ruled that this factor additionally weighs in favor of granting

the Motion to Stay:

As the Appellants note, while Fourth Circuit authority is clear that “compelling

concerns relating to personal privacy or confidentiality may warrant some degree

of anonymity in judicial proceedings, including the use of a pseudonym,” Doe v.

Public Citizen, 749 F.3d 246, 273 (4th Cir. 2014), the Fourth Circuit has not

addressed this issue in the context of a debtor in a Chapter 11 proceeding seeking

confidential information from potential claimants to create a section 524(g) trust.

As an issue of first impression for the Fourth Circuit, “[t]his factor weighs in favor

of granting a stay because clear precedent form the Court of Appeals does not

dictate the outcome of the substantive issue decided by this court and presented by

the appeal.” United States v. Fourteen Various Firearms, 897 F. Supp. 271, 273

(E.D. Va. 1995) (citing Goldstein v. Miller, 488 F. Supp. 156, 176 (D. Md. 1980)).

(Aldrich Pump Appeal, at 8). Thus, As this identical motion to proceed anonymously has been

granted by another District Court and presents an issue of first impression, the second factor

supports granting the Motion to Stay.

B. Likelihood of Irreparable Harm

Appellants have also shown they would likely face irreparable harm in the absence of a

stay. “It is well established that standing alone, the potential for an appeal to be rendered moot

does not constitute irreparable harm.” Zurich Am. Ins. Co. v. Tessler, No. 03-33532, 2006 WL

983896, at *1 (W.D.N.C. Apr. 12, 2006). However, this Court, like Judge Cogburn, finds that

Appellants would be in a worse position than before if the stay is not granted. See In re Kaiser

Gypsum 2021 WL 3476138 at *2, (holding that appellants failed to establish they would suffer

irreparable harm because they would be in no worse position without the grant of the stay). In the

Aldrich Pump Appeal, Judge Cogburn ruled:

[T]heir appeal will be mooted and their identities as mesothelioma victims, many

of whom have engaged in confidential settlement agreements with the Debtors or

its predecessors, will be placed on the public record. This could violate the

Appellants’ right to privacy, as guaranteed by the Fourteenth Amendment, and

constitutes irreparable harm. See Hirschfield v. Stone, 193 F.R.D. 175, 187

(S.D.N.Y. 2000) (“The harm at issue here – disclosure of confidential information

– is the quintessential type of irreparable harm that cannot be compensated or

undone by money damages.”); see also Sec. Indus. & Fin. Mkts. Ass’n v. Garfield,

469 F. Supp. 2d 25, 41 (D. Conn. 2007) (holding that ‘[i]rreparable harm is defined

as certain and imminent harm for which a monetary award does not adequately

compensate. Thus, only harm shown to be non-compensable in terms of money

damages provides the basis for awarding injunctive relief.’). Granting the stay

maintains the status quo and preserves the Appellants’ right to review on the merits

without first requiring the Appellants to disclose the highly personal information

they are seeking to keep confidential. See In re Charles & Lillian Brown’s Hotel,

Inc., 93 B.R. 49, 53 (Bankr. S.D.N.Y. 1988) (emphasizing the ‘critical role a stay

pending appeal plays, not only in maintaining the status quo, but in preserving the

right to review on the merits.’).

Aldrich Pump Appeal, No. 3:23-cv-99-MOC, at 9.

This case presents the same risk of harm to Appellants. If not granted, the lack of a stay

would mean that Appellants’ identities as mesothelioma victims, many of whom are claimants to

settlement amounts, would be revealed. By granting the stay, this Court will maintain the status

quo and allow the case to be reviewed on the merits without disclosing such information.

C. The Balance of the Equities

“In determining whether the balance of equities tips in favor of the movant, the Court must

balance the likelihood of irreparable harm to [the movant] against the likelihood of substantial

harm to the non-movants.” BDC Capital, Inc. v. Thoburn Limited Partnership, et al., 508 B.R. 633,

640 (Bankr. E.D.Va. 2014). The balance of the equities does tip in favor of the Appellants, as

“[g]ranting the stay will not harm or prejudice the Debtors or any non-moving party.” (Aldrich

Pump Appeal, at 9). Although Appellees claim Appellants have not provided any information in

response to their original subpoenas and Matching Claimants have not consented to the 10%

sampling ruling, (Doc. No. 3, p. 12), there is no need for Appellants to be publicly identified at

this time. If the Motion to Stay is denied, “Appellants’ appeal will be mooted, as they will be

forced to place their names on the public record.” (Aldrich Pump Appeal, at 10) (citing Becker v.

United States, 451 U.S. 1306, 1311 (1981)). Thus, Appellants have shown risk of irreparable harm

to themselves, compared to a lack of prejudice or harm to Appellees, such that the balance of the

equities weighs in Appellants’ favor.

D. The Public Interest

Finally, the public interest factor “requires this Court to ‘consider and balance the goal of

efficient case administration and the right to a meaningful review on appeal.’” In re Kaiser

Gypsum, 2021 WL 3476138, at *2 (citing Patterson v. Mahwah Bergen Retail Grp., Inc., No. 3:21-

CV-167, 2021 WL 2653732, at *11 (E.D.Va. June 28, 2021)). As Judge Cogburn ruled there,

although a stay in this case would not encumber the administration of the underlying bankruptcy

case here, it would obstruct the right to a meaningful review on appeal because the denial of the

stay would likely moot appellate review of the Bankruptcy Court’s Order. Aldrich Pump Appeal,

No. 3:23-cv-99-MOC, at 6. Moreover, denial of the stay would disclose the identities of thousands

of mesothelioma victims, who are “likely recipients of significant confidential settlements,” and

such a disclosure would “increase[] the Appellant’s risk of identity theft and violate[] their right

to privacy.” Id. Thus, the interests of thousands of claimants and their estates further tips the public

interest factor in favor of the Appellants.

I. CONCLUSION

For the reasons stated above, the Court holds that because Appellants have satisfied the

four factors to meet the preliminary injunction standard, a stay is appropriate.

IT IS THEREFORE ORDERED that Appellants’ Motion to Stay Pending Appeal, (Doc.

No. 2), is GRANTED and the Order Denying Anonymity Motion is STAYED pending

Appellants’ appeal.

IT IS SO ORDERED.

July 27, 2023

Frank D. Whitney

United States District Judge * ey