Free Motion to Dismiss/Lack of Subject Jurisdiction - District Court of Delaware - Delaware

Case 1:07-cv-00609-RLB

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
In re:
) )
)

W. R. GRACE & CO., et aI.,
Debtors.

MARGARET CHAKARIAN, et aI., AND JOHN DOES 1-1000,
Appellants,
v.

) ) ) ) ) ) ) ) ) )
) ) ) )

07-609 Hon. Ronald L. Buckwalter United States District Judge
No.

Appeal from United States Bankptcy
Court for the District of Delaware

Case No. 01-01139 (Jointly Administered)
Adversary No. A-01-771

Hon. Judith K. Fitzgerald
Chapter 11

W. R. GRACE & CO., et al.
Appellees.

)

MOTION OF W. R. GRACE TO DISMISS APPEAL
Undeterred by this Court's previous dismissal of their appeal regarding the same issue,! the

so-called "Libby Claimants" once again seek to appeal an interlocutory order from the

Bankptcy Court staying certain actions while the Banptcy Court considers the merits of the
Debtors' request to expand a preliminary injunction. In dismissing the previous appeal, this
Court rightly rejected each of the arguments the Libby Claimants now attempt to re-argue in
support of their appeaL. First, contrary to the Libby Claimants' assertion that this Court never

addressed their section 1292 argument (Libby Claimants' Br. at 2), this Court specifically
rejected the Libby Claimants' assertion that jurisdiction over this appeal is governed by 28

See Memorandum and Order, Libby Claimants v. WR. Grace, Civ. No. 06-26 (D. DeL. May 10, 2006).
Reported as WR. Grace & Co. v. Libby Claimants (In re WR. Grace & Co.), 2006 WL 1313190 (D. DeL.

2006).

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U.S.c. § 1292.2 Section 1292 of the Judicial Code governs appeals from district courts to the

courts of appeals, 28 U.S.C. § 158 governs appeals from bankptcy courts to district courts.

Second, this Court rejected the Libby Claimants' argument that a temporary stay is the
equivalent of an injunction.3 In any event, the Libby Claimants' argument misses the point: even
if the Stay Order was characterized as an injunction rather than a stay, the Libby Claimants

would still not have a right to appeal under 28 U.S.C. § 158(a).

Given this Court's previous dismissal of the Libby Claimants' appeal of the same issue for
failure to meet the requirements of28 U.S.C. § 158(a)(3), it is striking that they make no attempt
to justify an appeal under that section. Rather, the Libby Claimants merely state the following in
a footnote:

To the extent that this Court determines that this appeal is from an interlocutory order that requires a motion for leave to appeal under
28 U.S.c. § 158(a), the Libby Claimants request that the Court

deem the notice of appeal as a motion for leave to appeal pursuant to Fed.R.Bank.P. 8003(c) and consider this appeaL.

Libby Claimants' Br. at 2, n. 9. Again, the Libby Claimants have not even attempted to meet
their burden of demonstrating cause for granting leave to appeal under 28 U.S.c. § 158(a)(3).

The fact that a notice of appeal may be considered as a motion for leave to appeal does not
relieve the Libby Claimants from meeting their burden of demonstrating cause for this Court to
grant an appeal -- particularly when this Court has already denied such a request.

For the reasons discussed below and in this Court's May 10, 2006 order, the Stay Order is
not "final" for purposes of appeal under 28 U.S.c. § 158, nor is it appropriately the subject of an
interlocutory

appeaL. Accordingly, this Court should dismiss the AppeaL.

2
3

See 4/25/06 Hr'g Tr. (Dist. Crt. App. D.l. 27) at 12:1-9.

See id. at 4:17-5:13.

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BACKGROUND

On April 2, 2001 (the "Petition Date"), the Debtors filed their voluntary petitions for

relief under chapter 11 of the Bankptcy Code. On the same day, the Debtors also filed an
adversary complaint seeking to stay asbestos-related litigation against various affiliates of the
Debtors and third parties (the "Affiliated Entities") whose purported asbestos liability was solely
derivative of the Debtors' liability.4

A temporary restraining order was entered on the Petition Date enJoining the
commencement or prosecution of asbestos actions against the Affiliated Entities. On May 3,
2001, the Bankptcy Court issued a preliminary injunction barrng the prosecution of currently

pending actions against the Affiiated Entities. On January 22, 2002, the Court entered an order
expanding the scope of the preliminary injunction to include certain additional Affiliated Entities

and to reinstate the bar against commencement of new actions against Affliated Entities arising

from alleged exposure to asbestos whether indirectly or directly caused by the Debtors (the
"Injunction").

5

A. The 2006 Stay Order

The State of Montana has been named as a defendant in vanous separate actions
involving the Debtors' Montana mining operations (the "Montana Actions"). On June 9, 2005,

the State of Montana filed a motion seeking relief from the automatic stay in order to join the
Debtors as third-party defendants in the Montana Actions (the "Lift Stay Motion").

6 The Lift

4
5

(Adv. Pro. D.l. 1)

(Adv. Pro. D.l. 87).
Motion of State of Montana for Relief

6

from the Automatic Stay (Bank. Case D.l. 8582).

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Stay Motion was opposed by the Debtors, the Asbestos Property Damage Committee, the

Asbestos Personal Injury Committee, and the Unsecured Creditors' Committee.
On August 22, 2005, the Debtors filed a motion to expand the Injunction to include

actions against the State (the "Montana Injunction Motion").? Concurrent with the Montana
Injunction Motion, the Debtors filed a related motion for leave to file an amended complaint in

the adversary proceeding, naming the plaintiffs in the Montana actions as defendants (the
"Motion to Amend").8

On December 19, 2005, the Bankptcy Court heard arguments on the Montana
Injunction Motion, the Motion to Amend, and the Lift Stay Motion. At the conclusion of the
hearing, the Bankruptcy Court indicated that it would take the Montana Injunction Motion and

the Motion to Amend under advisement. The Bankptcy Court also indicated that pending its
ruling on the Montana Injunction Motion and the Motion to Amend, the Montana Actions and all

other similar actions that have been or may be brought against the State that arise from alleged
exposure to asbestos indirectly or directly caused by the Debtors shall be temporarily stayed.

On January 17, 2006, the Bankruptcy Court memorialized its oral ruling by entering its

Modified Order Regarding Debtors' Motion to Expand Its Preliminary Injunction to Include
Actions Against the State of

Montana (the "2006 Stay Order"), which provided the following:

ORDERED that pending the Court's ruling on the Injunction Motion and the Motion to Amend, the Montana Actions and all other similar actions that have been or may be brought against the
State that arise from alleged exposure to asbestos indirectly or directly caused by the Debtors shall be temporarily stayed, so as to preserve the status quo pending resolution.
7

Debtors' Motion to Expand Its Preliminary Injunction to Include Actions Against the State of Montana (Adv.
Pro. D.l. 359).

8

Plaintiffs' Motion for Leave to Amend Complaint (Adv. Pro. D.l. 360).

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The court notes that I orally ordered a stay of discovery in the

Montana suits until I can address the injunction on the merits. I
did not (and was not asked to) enter a TRO.
(Adv. Pro. D.L 376).
B. Libbv Claimants' Appeal of

the 2006 Stay Order

The Libby Claimants appealed the 2006 Stay Order to this Court, arguing (as they do yet
again in this appeal) that the order was reviewable as a preliminary injunction under Section
1292(b)(2). Each of

the Libby Claimants' jurisdictional arguments were rejected by this Court.

First, this Court held that appeals from the banptcy court to the district court are governed by
Section 158, not Section 1292:

MR. LANDAU: I do think that the first question before you really is, you know, what is your basis for hearing this appeal, and the other side has suggested that it's 1292, which is the basis -THE COURT: No, I don't agree with that at all.

MR. LANDAU: Okay
THE COURT: So, you don't have to argue that.

MR. LANDAU: Okay. Fair enough.

THE COURT: I don't read it--

MR. LANDAU: So, then we are really in the world of 158, and

you do have authority under 158(a)(3) to hear -- to exercise
jurisdiction over interlocutory (orders).

THE COURT: Yes.

4/25/06 Hr'g Tr. (Dist. Crt. App. D.L 27) at 12:1-15. This Court further rejected the Libby
Claimant's argument that a temporary stay is the equivalent of an injunction:

MR. COHN: That this appeal is properly before this Court. What we are dealing with is an injunction. The judge stayed all activity in the State Court litigation in Montana. So, we are as dead out

there as we would be if she gave us a piece of paper that was
headed preliminary injunction.

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THE COURT: Yes, but it's really hard to call it an injunction.
What it is is a stay, and it does create a problem for you, there is no doubt about that, and the basis for appealing it to me would be if I thought it was, you know, unduly burdensome to you in some way I

would certainly listen to the arguments here and try to fashion a
remedy.

MR. COHN: 1--

THE COURT: But, I don't think it's a -- I don't think it's an
injunction. So, that having been said, let's talk about the practicality

in effect. She has put a stay on here, and hasn't set a date as to
when this -- she is going to resolve the underlying issue --

MR. COHN: Correct, Your Honor, and-THE COURT: -- in the underlying case.
4/25/06 Hr'g Tr. (Dist. Crt. App. D.L 27) at 4:17-5:13.

Accordingly, this Court entered an order dismissing the Libby Claimants' appeal because
it failed to meet the requirements for an interlocutory appeal under 28 U.S.C. § 158(a)(3):

This Court believes, generally, that the conditions necessary for the Court to
entertain this interlocutory appeal are not present in this case. However, the Court thinks the indefinite nature of the Bankptcy Court's stay order may present an exceptional circumstance. Therefore, the Court exercises its jurisdiction under 28 U.S.C. § 158(a)(3) for the limited purpose of addressing the indefiniteness of the Bankptcy Court's stay order. A time frame in which the Bankptcy Court wil
render its decision on the Debtors' motion to expand the preliminary injunction to include actions against the State of Montana would be appropriate in light of the indefinite stay order presently in place. However, the Bankptcy Court is, in the first instance, best suited to determine that time frame.

In re WR. Grace & Co., 2006 WL 1313190 (D. DeL. May 10, 2006). However, this Court
exercised its jurisdiction for the narrow purpose of directing the Bankptcy Court to advise the

parties as to when it expected to render a decision. See id. ("The matter is REMANDED to the
Bankptcy Court so that it can advise the parties of a specific date on or before which it expects
to render its decision on Debtors' motion to expand the preliminary injunction.").

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C. The Current Stay Order

On March 26, 2007, the Debtors filed a motion to expand the Injunction to include

actions against Burlington Northern Santa Fe Railroad ("BNSF"). BNSF is another party in
Montana against which the Libby Claimants are pursuing actions relating to the Debtors'

Montana mining operations (the "BNSF Injunction Motion").9 On April 26, 2007, the
Bankptcy Court issued a decision denying the Montana Injunction Motion.1O The Debtors and
the State of Montana subsequently filed motions for reconsideration (the "Reconsideration
11

Motions").

On May 21, 2007, the Court heard arguments on the BNSF Injunction Motion and the
Reconsideration Motions (collectively, the "Injunction Motions"). As a result of those

arguments, the Court took the Injunction Motions under advisement. The Bankptcy Court

indicated that while the Injunction Motions are under advisement, the status quo should be
maintained and the temporary stay previously entered on January 17, 2006 should effectively be
continued. On August 29, 2007, the Bankptcy Court entered its Amended Order Regarding

Motions to Expand Preliminary Injunction (the "Stay Order"), which provided the following:

ORDERED that pending the Court's ruling on the Injunction Motions, all actions commenced against the State of Montana and/or BNSF that arise out of alleged exposure to asbestos indirectly or directly caused by the Debtors (the "Montana

Actions"), shall be temporarily stayed pending the Court's ruling on the
Injunction Motions

9

Debtors' Motion to Expand the Preliminary Injunction to Include Actions Against BNSF dated March 26,2007 (Adv. Pro. 398).

10 (Adv. Pro. D.l. 419). Reported as WR. Grace & Co. v. Chakarian (In re WR. Grace & Co.), 366 B.R. 295
(Bank. D. DeL. 2007).

II See Debtors' Motion to Alter and Amend the Court's Order Denying Its Request to Expand the Preliminary
Injunction to Include Actions Against the State of Montana (Adv. Pro. D.l. 427); State of

Montana's Motion for

Reconsideration of Court's Opinion and order Denying Debtors' Motion for Expansion of Preliminary

Injunction (Adv. Pro. D.l. 426).

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(Adv. Pro. D.L 466). The Libby Claimants now appeal entry of the Stay Order temporarily
enjoining them from prosecuting their tort claims against the State of Montana and BNSF while
the Bankruptcy Court considers the Injunction Motions under advisement.

ARGUMENT
A. This Appeal is Governed by 28 U.S.C. § 158

Once again, the Libby Claimants attempt to circumvent 28 U.S.C. § 158 by asserting that
"(t)his Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 1292(a)(1), which provides

this Court with jursdiction of appeals from interlocutory orders 'granting, continuing,
modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions. '"

Libby Claimants' Br. at 2. And yet again, the Libby Claimants' jurisdictional analysis is flawed
from the outset. In relevant statutory text not quoted by the Libby Claimants, 28 U.S.C.

§ 1292( a)(l) grants "the courts of appeals" jurisdiction over certain appeals from "(i)nterlocutory

orders of the district courts of the United States." That is the beginning and the end of the
matter: this Court, even when sitting in an appellate capacity in bankptcy, is not one of the
"courts of appeals," and the Bankptcy Court is not one of the "district courts of the United
States."

Contrary to the Libby Claimants' assertion, this Court's jurisdiction over this appeal is
governed not by 28 U.S.C. § 1292, but instead by 28 U.S.C. § 158. See 28 U.S.C. § 158(a).12

Tellingly, § 158(a) does not contain a provision analogous to § 1292(a)(1), which grants the
12 See generally Connecticut Nat 'I Bank v. Germain, 503 U.S. 249, 252 (1992) ("Bankptcy appeals are governed

for the most part by § 158," except when taken from a district court to a court of appeals, in which case § 1292
also applies); In re Resorts lntl, Inc., 372 F.3d 154, 160 (3d Cir. 2004) ("The District Court had jurisdiction to

review the Bankptcy Court's order under 28 V.S.C. § 158. We (the court of appeals) have jurisdiction under
28 U.S.C. § 1292(b)."); Landon v. Hunt, 977 F.2d 829, 830 (3d Cir. 1992) ("The district court jurisdiction is

from 28 U.S.c. § 158(a). Our (court of appeals) jurisdiction is from 28 U.S.c. § 158(d), and 28 V.S.C. §§ 1291
and 1292."); In re Pruitt, 910 F.2d 1160, 1164 (3d Cir. 1990) ("Appeals from orders of a bankptcy judge are

governed by 28 U.S.c. § l58(a).")

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courts of appeals jurisdiction over interlocutory appeals from district court orders granting
injunctions. Rather, with the exception of appeals from interlocutory orders under § 1121(d)not applicable here-§ 158( a) grants district courts jurisdiction over interlocutory orders of the
bankptcy courts only "with leave of

the (district) court." See, e.g., In re Enron Corp., 316 RR.

767, 770 (S.D.N.Y. 2004) ("This Court may not consider this appeal unless (1) the order being

appealed from is final or (2) the Court grants leave to appeal an interlocutory order."). In other
words, there is no appeal as of

right to the district court under § 158(a) from a bankptcy court

order granting an injunction, whereas there is an appeal as of right to the court of appeals under
§ 1292(a)(1) from a district court order granting an injunction.13

Rather than attempt to meet the requirements for an appeal under 28 U.S.C. § 158(a), the

Libby Claimants argue at length that the Bankptcy Court's temporary stay order is the
functional equivalent of an injunction. See Libby Claimants' Br. at 1-2, 12-16. As this Court
has held, such a stay order is not an injunction.14 Moreover, the Libby Claimants' argument

misses the point. Even if the Stay Order were characterized as an "injunction" rather than a

"stay," the Libby Claimants stil would not have an appeal as of right to this Court under
§ 158(a). As in previous briefs, the Libby Claimants base their contrary position entirely on two
cases: (1) In re Professional Ins. Mgmt., 285 F.3d 268 (3d Cir. 2002), and (2) In re Reliance

Acceptance Group, Inc., 235 RR. 548, 553 (D. Del 1999). Neither case provides any basis for
this Court to ignore the plain language of the relevant statutes.

13 See, e.g., In re Kassover, 343 F.3d 91, 95 (2d Cir. 2003) ("Congress has expressly vested discretion in district

courts to decline to hear (an) appeal" from a bankptcy court order granting an injunction); In re Quigley Co., 323 B.R. 70,76-79 (S.D.N.Y. 2005) (denying leave to appeal an injunction under § 158(a)(3)).
14 See 4/25/06 Hr'g Tr. (Dist. Crt. App. D.l. 27) at 4: i 7-5: 13.

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The Third Circuit in Professional Insurance held that a bankptcy court turnover order
is final and hence appealable as of right. See 285 F.3d at 280-82. In a footnote, the court then

stated that "the District Court, sitting as an appellate court, was authorized to hear the appeal
from the Bankptcy Court as an appealable injunctive order under 28 U.S.C. § 1292(a)." Id. at

282 n.16. Because the Court had already concluded that the order was final, that statement is
manifestly dicta, and unsupported dicta at that: the Third Circuit provided no authority for its

startling and anti-textual suggestion that 28 U.S.C. § 1292(a) independently governs appeals

from bankptcy courts to district courts. Under settled Third Circuit law, of course, such

unexamined dicta is not controlling.1s Indeed, to follow the dicta from the footnote in
Professional Insurance would be to reject the long line of Third Circuit cases, noted above,
recognizing that appeals from the bankptcy court to the district court are governed by § 158(a),

while bankptcy appeals from the district court to the court of appeals are governed by
§§ 158(d), 1291, and 1292.

The Delaware District Court in Reliance Acceptance, for its part, began by
acknowledging that "28 U.S.C. § 158(a) governs the (district) court's jurisdiction to review
orders of the bankptcy court." 235 RR. at 553. The court then cited § 158(c)(2), which

provides that "(a)n appeal under subsection (a) ... of this section shall be taken in the same
manner as appeals in civil proceedings generally are taken to the courts of appeals from the
district courts...." The latter provision, the court suggested, implicitly incorporates § 1292(a)

into § 158, apparently on the theory that the "manner" of

taking an appeal from the district court

is See, e.g., Patel v. Sun Co., 141 F.3d 447,462 n.l 1 (3d Cir. 1998) ("As dictum, there are many reasons why we

should not give it weight here: (1) it may not have been as fully considered as it would have been if it were essential to the outcome; (2) sloughing it off in a new opinion wil not affect the analytic structure of the original opinion; and (3) the dictum may lack refinement because it was not honed through the fires of an
adversary presentation:").

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to the court of appeals includes the grounds for taking such an appeaL. That suggestion, for
which the court provided no support, is meritless. The "manner" for taking an appeal refers to
the procedures for taking an appeal, not the grounds for taking an appeaL. Were the law

otherwise, then § 158(a) would be superfluous because the bankptcy statute would simply
incorporate wholesale the grounds for appealability set forth in 28 U.S.C. §§ 1291 and 1292.

For this reason, district courts look to 28 U.S.C. § l292(b) for guidance in deciding

whether to grant leave to appeal an interlocutory order under 28 U.S.C. § 158(a)(3). See, e.g.,
Enron, 316 RR. at 771; In re Delaware & Hudson Ry. Co., 96 RR. 469, 473 (D. DeL. 1989).
Needless to say, such "guidance" would be unnecessary if § 1292 by its own terms

independently governed appeals from the bankptcy court to the district court. "It would make
1 ittle sense for the bankptcy appeal statute to group preliminary injunctions with other

interlocutory orders but intend for 'leave to appeal' these injunctions to be granted as of right
simply because Section 1292 treats interlocutory injunctions differently from other interlocutory

orders." Quigley, 323 B.R. at 76-77. Indeed, where a distrct court declines, in the exercise of
its discretion, to hear an appeal of a banptcy court order granting or denying an injunction,

that decision is not appealable to the court of appeals. See, e.g., Kassover, 343 F.3d at 93-96.
B. There Is No Basis To Grant Appeal of

This Interlocutory Order

The Libby Claimants do not even try to argue that the Bankptcy Court's order
"temporarily" stay(ing)" their state-court actions while it decides whether to enjoin those actions
is either (1) a "finaljudgment(J, order(J, (or) decree(J," 28 U.S.C. 158(a)(1), or (2) worthy of

an

interlocutory appeal "with leave ofthe court," 28 U.S.C. § 158(a)(3).

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Pursuant to 28 U.S.C. § 158(a)(1), district courts have jurisdiction to hear appeals from
"final judgments, orders and decrees" of

bankptcy courts. An order is considered "final" when

it resolves the issues before the court leaving no related issues for later determination.16 As this

Court recognized in its order dismissing the Libby Claimants' attempt to appeal the 2006 Stay
Order, the Stay Order is interlocutory. See In re WR. Grace & Co., 2006 WL 1313190 (D. DeL.

2006) ("The Court believes, generally, that the conditions necessary for the Court to entertain

this interlocutory appeal are not present in this case."). The Stay Order did not resolve any
issues before the Banptcy Court because it serves the limited purpose of preserving the status

quo while the Bankptcy Court considers the Injunction Motions. The Third Circuit repeatedly

has held such stay orders normally are not final appealable orders because they merely delay
proceedings in the suit. 17

Although the Stay Order is interlocutory and not appealable under 28 U.S.C. § 158(a)(1),

§ 158(a)(3) provides district courts with the discretion to grant parties leave to appeal from

"interlocutory orders and decrees." 28 U.S.C. § 158(a)(3). Parties seeking to appeal an
interlocutory order under 28 U.S.C. § 158(a) must obtain leave of

the district court. The Libby

Claimants have failed to request leave to appeal the Stay Order. Despite being aware that this

Court dismissed their appeal of the same issue, the Libby Claimants request that the Court treat

their notice of appeal as a motion for leave to appeal pursuant to Fed.R.Bank.P. 8003(c). As in

16 See In re G-I Holdings, Inc., 318 B.R. 66,73 (D. N.J. 2004) ("A decision in a bankptcy matter is final when

'nothing remains for the (lower) court to do."') (quoting In re West Electronics Inc., 852 F.2d 79, 81 (3d Cir.
1988)); In re Delaware and Hudson Ry. Co., 129 B.R. 388, 393 (D. DeL. 1991) ("Generally, a final order is one

which finally resolves a discrete set of issues, leaving no related issues for later determnation.").

17 See, e.g., CTF Hotel Holdings, Inc. v. Marriott Intl, Inc., 381 F.3d 13 1 (3d Cir. 2004), Marcus v. Township of Abington, 38 F.3d 1367, 1370 (3d Cir. 1994); Schall v. Joyce, 885 F.2d 101, 104 (3d Cir. 1989); Cheyney State College Faculty v. Hufstedler, 703 F.2d 732, 735 (3d Cir. 1983); see also Hoots v. Pennsylvania, 587 F.2d 1340, 1346-47 (3d Cir. 1978) (noting that mere delay does not render an order final for purposes of appeal).

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the prior appeal, the Libby Claimants make no attempt to demonstrate the requirements for leave

to appeaL. Accordingly, the appeal should be dismissed even if this Court were to consider the
Libby Claimants' notice of appeal as a motion for leave to appeaL.
In determining whether to grant leave to appeal an interlocutory order, courts within the
Third Circuit employ the standards set forth in 28 U.S.C. § 1292(b) governing interlocutory

appeals from district courts to the circuit courts of appeals.

18 A court entertains an appeal of an

interlocutory order under § 1292(b) only when the appellant establishes exceptional
circumstances justifying a departre from the basic policy of postponing review until after entry
of a final judgment. 1 9 In addition to the requirement of demonstrating exceptional circumstance,

under § 1292(b) an interlocutory appeal wil be granted only when the order at issue: (a) involves

a controlling question of law upon which there is (b) substantial grounds for difference of
opinion, and (c) when an immediate appeal from the order may materially advance the ultimate
termination of

the litigation. See Edison Bros. Stores, Inc., 1996 WL 363806, *3; Delaware and

Hudson Ry. Co., 96 B.R. at 472.

In the present case, the Appeal should be denied under 28 U.S.C. § 158 because the
Libby Claimants have not -- and cannot -- demonstrate an exceptional circumstance for an appeal

ofthe Stay Order, nor can they demonstrate the requirements of § 1292(b). First, the Stay Order
18 See In re Edison Bros. Stores, Inc., 1996 WL 363806, *3 (D. DeL. 1996)

19 See Id. ("Although the concept of finality is accorded some measure of flexibility in the context of § 158(a)(1) appeals, apparently the same standard does not apply in the context of § 158(a)(3) interlocutory appeals. Thus,
an appellant must establish that 'exceptional circumstances justify a departre from the basic policy of

postponing review until after the entry of final judgment. ''') (quoting In re Delaware and Hudson Ry. Co., 96

B.R. 469, 472-73 (D. DeL. 1989)); Dal-Tie Intern., Inc. v. Color Tie, Inc., 203 B.R. 554, 557 ( D. DeL.

1996) ("Additionally, a court wil entertain an appeal under section 1292(b) only when an appellant
demonstrates that" exceptional circumstances justify departure from the basic policy of postponing review until
after the entry of final judgment. ")

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does not affect the merits of any actions -- it merely delays litigation pending the Bankptcy

Court's decision on the Injunction Motions. Second, because the Bankptcy Court did not
address the merits of the Injunction Motions, the appeal does not involve a controlling question

of law for which there are substantial grounds for difference of opinion. Rather, the Bankptcy Court simply gave itself some "breathing room" to decide the underlying issue without undue
time pressure. As this Court has recognized, it is "entirely appropriate" for the Bankptcy Court
to issue such an order.2o Finally, immediate appeal wil not materially advance ultimate

termination of the litigation because the merits of the Injunction Motions would stil need to be
decided even if the Libby Claimants prevailed on their AppeaL. The Bankptcy Court can be

expected to rule on that underlying issue at any time and stated that it "will attempt to get an
opinion out very promptly."21 The Libby Claimants simply cannot establish that an immediate
appeal ofthe temporary stay is either prudent or practicaL.

20 4/25/06 Hr' g Tr. (Dist. Crt. App. D.l. 27) at 11:7- 11.

21 7/23/07 Hr'g Tr.(Bank. Case D.l. 16445) at 98:1.

14
91 100-001\DOCS_DE:132791. 1

Case 1:07-cv-00609-RLB

Document 7

Filed 11/13/2007

Page 15 of 15

WHEREFORE, for the foregoing reasons, the Debtors respectfully request that this Court
dismiss the Appeal for lack of jurisdiction under 28 U .S.C. § 158( a)

(1 ) and decline to grant

appeal of an interlocutory order under 28 U.S.C. § 158(a)(3).

Dated: November 13, 2007
KIRKLAND & ELLIS LLP David M. Bernick, P.C.
Janet S. Baer

Salvatore F. Bianca 200 East Randolph Drive Chicago, Ilinois 60601
Telephone: (312) 861-2000

Facsimile: (312) 861-2200
- and -

PAitSKl, SiNG, YO~NG & JONES
Laura D ViS Jones (Bar No. 2436)
James E. O'Neil (Bar No. 4042)

\~ili '-,

Timothy P. Cairns (Bar No. 4228) 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801)
Telephone: (302) 652-4100

Facsimile: (302) 652-4400
Co-Counsel for the Debtors and Debtors in Possession

15
91 100-001\DOCS_DE: 132791. 1

Case 1:07-cv-00609-RLB

Document 7-2

Filed 11/13/2007

Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
In re:
) ) ) ) ) ) )

W. R. GRACE & CO., et aI.,
Debtors.

07-609 Hon. Ronald L. Buckwalter United States District Judge
No.

MARGARET CHAKARIAN, et aI., AND JOHN DOES 1-1000,
Appellants,
v.

) ) ) ) ) )
) ) ) ) )

Appeal from United States Bankrptcy Court for the District of Delaware
Case No. 01-01139 (Jointly Administered)
Adversary No. A-01-771

Hon. Judith K. Fitzgerald
Chapter 11

W. R. GRACE & CO., et aI.
Appellees.

CERTIFICATE OF SERVICE
I, Timothy P. Cairns, hereby certify that on the 13th day of November, 2007, I

caused a copy of the following document to be served on the individuals on the attached service
list in the manner indicated:

MOTION OF W.R. GRACE TO DISMISS APPEAL

Timotly P. Cairns (Bar No. 4228)

(j~ ii! '~

91100-001\DOCS_DE:12S703.86

Case 1:07-cv-00609-RLB

Document 7-2

Filed 11/13/2007

Page 2 of 4

W. R. Grace & Co. et al. Appeal Service List Case No. 07-cv-00609
Document Number: 132779

Mark T. Hurford, Esquire Campbell & Levine, LLC 800 N. King Street, 3rd Floor Wilmington, DE 19801
Hand Delivery

15 - Hand Delivery 14 - First Class Mail

(Counsel to Debtors and Debtors in Possession) Laura Davis Jones, Esquire
James E. O'Neil, Esquire

Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor Wilmington, DE 19801
Hand Delivery Vito L DiMaio
Parcels, Inc.

(Counsel to The Chase Manattan Bank) Mark D. Collins, Esquire Deborah E. Spivack, Esquire Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19801
Hand Delivery (Counsel to Property Damage Claimants) Michael B. Joseph, Esquire

10th & King Streets Wilmington, DE 19801
Hand Delivery (Counsel to Official Committee of Unsecured Creditors) Michael R. Lastowski, Esquire Duane, Morrs & Heckscher LLP 1100 North Market Street, Suite 1200

Theodore J. Tacconell, Esquire Ferry & Joseph, P.A. 824 Market Street, Suite 904 P.O. Box 1351 Wilmington, DE 19899
Hand Delivery (United States Trustee) David Klauder, Esquire Office of the United States Trustee 844 King Street, Room 2311 Wilmington, DE 19801 Hand Delivery (Counsel to Equity Committee)
Teresa K. D. Currer, Esquire

Wilmington, DE 19801-1246
Hand Delivery (Counsel to DIP Lender) Steven M. Yoder, Esquire The Bayard Firm 222 Delaware Avenue, Suite 900 Wilmington, DE 19801 Hand Delivery (Counsel to Maryland Casualty Company) Jeffrey C. Wisler, Esquire Connolly Bove Lodge & Hutz LLP
1220 Market Street, 10th Floor

Klett Rooney Lieber & Schorling
1 000 West Street, Suite 1410

P.O. Box 1397 Wilmington, DE 19801
Hand Delivery (Counsel to Libby Plaintiffs) Adam G. Landis, Esquire
Kerr Mumford, Esquire

Wilmington, DE 19801
Hand Delivery (Counsel to Personal Injury Claimants)

Landis Rath & Cobb LLP 919 North Market Street, Suite 600 Wilmington, DE 19801

Case 1:07-cv-00609-RLB

Document 7-2

Filed 11/13/2007

Page 3 of 4

Hand Delivery Ellen W. Slights Assistant United States Attorney The Nemours Building
1007 Orange Street, Suite 700

First Class Mail
(Counsel to Libby Plaintiffs) Jon L. Heberling, Esquire John F. Lacey, Esquire McGarvey, Heberling, Sullvan & McGarey, P .C. 745 South Main Kalispell, MT 59904

P.O. Box 2046 Wilmington, DE 19899
Hand Delivery

Montana) (Counsel to the State of Francis A. Monaco, Jr., Esquire Kevin Mangan, Esquire Womble, Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801

First Class Mail
(Counsel to Debtors)

David M. Bernick, P.C. Janet S. Baer, Esquire Kirkland & Ells LLP 200 East Randolph Drive
Chicago,IL 60601

Hand Delivery (Counsel for BNSF Railway Company) Evelyn Meltzer, Esquire Pepper Hamilton LLP
Hercules Plaza, Suite 5100

First Class Mail
(Debtors) Mark Shelnitz W. R. Grace & Co. 7500 Grace Drive Columbia, MD 21044

1313 Market Street P.O. Box 1709 Wilmington, DE 19899
Hand Delivery (Counsel for Royal Indemnity Company) Ian Connor Bifferato, Esquire Bifferato, Gentilotti & Biden 1308 Delaware Avenue P.O. Box 2165

First Class Mail (Counsel to Official Committee of
Unsecured Creditors)
Lewis Krger, Esquire

Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038-4982

Wilmington, DE 19899
Hand Delivery (Counsel to David T. Austern, Future Claimant's Representative)

First Class Mail
(Counsel to Personal Injury Claimants) Elihu Inselbuch, Esquire Rita Tobin, Esquire
Caplin & Drysdale, Charered
375 Park Avenue, 35th Floor

John C. Philips, Jr., Esquire Philips, Goldman & Spence, P.A. 1200 North Broom Street Wilmington, DE 19806

New York, NY 10152

Case 1:07-cv-00609-RLB

Document 7-2

Filed 11/13/2007

Page 4 of 4

First Class Mail
(Counsel to Property Damage Claimants) Scott L. Baena, Esquire Bilzin Sumberg Dunn Baena Price & Axelrod LLP First Union Financial Center 200 South Biscayne Blvd, Suite 2500
Miami, FL 33131

First Class Mail
(Counsel to Libby Claimants) Daniel C. Cohn, Esquire
Chrstopher M. Candon, Esquire

Cohn & Whitesell LLP 101 Arch Street Boston, MA 02110

First Class Mail First Class Mail
(Counsel to Equity Committee) Philip Bentley, Esquire Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036

First Class Mail
(Counsel to Personal Injury Claimants) Peter Van N. Lockwood, Esquire Nathan D. Finch, Esquire Caplin & Drysdale, Chartered One Thomas Circle, N.W. Washington, DC 20005

(Counsel to David T. Austern, Future Claimant's Representative) Roger Frankel, Esquire Richard H. Wyron, Esquire Orrck Herrngton & Sutcliffe LLP Columbia Center 1152 15th Street, N.W. Washington, DC 20005-1706

First Class Mail
Montana) Dale R. Cockrell, Esquire
(Counsel for State of

Chrstensen, Moore, Cockrell, Cummings

First Class Mail (Counsel to Official Committee of
Unsecured Creditors) Wiliam S. Katchen, Esquire Duane Morrs LLP
744 Broad Street, Suite 1200
Newark, NJ 07102-3889

& Azelberg, P.C. P.O. Box 7370 Kalispell, MT 59903

First Class Mail
(Counsel to BNSF Railway Company) Edward C. Toole, Jr., Esquire

Ane Mare Aaronson, Esquire
3000 Two Logan Square 18th & Arch Streets Philadelphia, P A 19103

First Class Mail
(Counsel to D IP Lender)

David S. Heller, Esquire J. Douglas Bacon, Esquire Latham & Watkins Sears Tower, Suite 5800 233 South Wacker Drive Chicago, IL 60606