Court Opinion

ID: 3013598
Source: CourtListenerOpinion
Date Created: 2015-10-13 21:57:35.021907+00
Date Added: 2024-06-11T11:25:35.607907
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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Precedential or Non-Precedential: Non-Precedential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

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Recommended Citation
"In Re: G-I Holdings " (2004). 2004 Decisions. Paper 98.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/98

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                                               NON-PRECEDENTIAL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.