                                                  NOT PRECEDENTIAL
                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               _____________

                                  No. 12-2807
                                 _____________

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

                           Garlock Sealing Technologies, LLC,
                                                          Appellant
                                _______________

                  On Appeal from the United States District Court
                             for the District of Delaware
                               (D.C. No. 11-cv-00199)
                    District Judge: Hon. Ronald L. Buckwalter
                                  _______________

                                     Argued
                                  June 17, 2013

             Before: AMBRO, FISHER and JORDAN, Circuit Judges.

                               (Filed: July 24, 2013)
                                 _______________

Garland S. Cassada [ARGUED]
Susan M. Huber
Richard C. Worf, Jr.
Robinson Bradshaw & Hinson
101 N. Tryon Street - #1900
Charlotte, NC 28246

Brett D. Fallon
Eric J. Monzo
Morris James
500 Delaware Avenue - #1500
Wilmington, DE 19801
       Counsel for Appellant
Ann C. Cordo
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street – 18th Fl.
Wilmington, DE 19801

John Donley [ARGUED]
Lisa G. Esayian
Adam C. Paul
Kirkland & Ellis
300 N. LaSalle Street
Chicago, IL 60654

Roger J. Higgins
111 E. Wacker Drive - #2800
Chicago, IL 60601

Laura D. Jones
Kathleen P. Makowski
James E. O‟Neill, III
Pachulski Stang Ziehl & Jones
919 N. Market Street – 17th Fl.
Wilmington, DE 19801

Christophen Landau
Kirkland & Ellis
655 15th Street NW - #1200
Washington, DC 20005
      Counsel for Appellee W.R. Grace & Co.

Mark T. Hurford
Campbell & Levine
222 Delaware Avenue - #1620
Wilmington, DE 19801

Peter V. Lockwood [ARGUED]
Caplin & Drysdale
One Thomas Circle, NW - #1100
Washington, DC 20005
      Counsel for Appellee Official Committee of Asbestos Personal Injury
                                   _______________

                                  OPINION OF THE COURT
                                      _______________

                                           2
JORDAN, Circuit Judge.

       Garlock Sealing Technologies, LLC (“Garlock”) appeals the June 11, 2012 order

of the United States District Court for the District of Delaware affirming the Bankruptcy

Court‟s confirmation of the plan of reorganization of W.R. Grace & Co. (“Grace”) and

denying Garlock‟s objections to that plan. Because we conclude that Garlock does not

have standing to object, we will affirm.

I.     Background

       For more than a century, Grace has manufactured and sold specialty chemicals and

construction materials. Previously, many of those products and materials included

asbestos, and, beginning in the 1970s, Grace began to face personal injury lawsuits

alleging harm from asbestos exposure. By 2001, Grace was involved in more than

65,000 asbestos-related lawsuits, which threatened its financial viability and prompted

the company to file for Chapter 11 bankruptcy protection. After almost a decade of

bankruptcy proceedings, Grace and several of its creditors‟ committees submitted a joint

plan for reorganization (the “Joint Plan” or the “Plan”) on February 27, 2009. The

central pillars of the Joint Plan are two trusts – a personal injury trust and a property

damage trust – that will assume all of Grace‟s current and future asbestos liabilities. The

Joint Plan also provides for an injunction under 11 U.S.C. § 524(g), which channels all

asbestos-related claims against Grace (and certain protected third parties) to the trusts.

By permitting those injunctions, § 524(g) allows companies like Grace to emerge from

bankruptcy free of asbestos liability, but only if the injunctions satisfy certain


                                              3
prerequisites, including that they be “fair and equitable” to future claimants. See 11

U.S.C. § 524(g)(4)(B)(ii). Under the trust distribution procedures proposed by Grace‟s

Joint Plan, asbestos personal injury claimants will receive between 25% and 35% of the

liquidated value of their claims.

       Garlock is a manufacturer of engineered industrial products, and it formerly used

some of Grace‟s asbestos-containing materials in its products. As a result, the two

companies were named as codefendants in thousands of personal injury lawsuits in the

decades prior to Grace‟s bankruptcy, and they stipulated during the Chapter 11

proceedings that there would “likely” be future plaintiffs with claims against both

companies. (J.A. at 500908.) Garlock says that, because of the prospect of joint liability

with Grace, it has contribution rights against Grace and setoff rights against plaintiffs that

obtain recovery from Grace. Garlock did not, however, file a proof of claim against

Grace in the bankruptcy proceeding, and there is no evidence that it has ever asserted

such rights in the past. In June 2010, Garlock also filed for bankruptcy, and it remains in

Chapter 11 proceedings.

       During Grace‟s confirmation hearing, numerous parties, including Garlock,

objected to confirmation of the Joint Plan on the basis that it did not comply with the

requirements of § 524(g). The Plan was amended to address many of those objections,

and on January 31, 2011, the Bankruptcy Court overruled the remaining objections and

entered an order confirming the Joint Plan. In re W.R. Grace & Co., 446 B.R. 96, 102-03

(Bankr. D. Del. 2011). Specifically as to Garlock, the Court explained in its

memorandum opinion that Garlock had “not established party in interest standing in

                                              4
Grace‟s bankruptcy case,” and therefore did not have standing to object to the Joint Plan.

Id. at 123. The District Court agreed with the Bankruptcy Court, concluding on appeal

that Garlock lacked bankruptcy standing because it “has not articulated how it has

suffered any injury.” In re W.R. Grace & Co., 475 B.R. 34, 183 (D. Del. 2012). More

particularly, the Court noted that Garlock “introduced no evidence that it ever actually

impled Grace or sought contribution and/or set-off” during the decades prior to Grace‟s

bankruptcy, nor had it shown that it had suffered a judgment during the bankruptcy that

entitled it to contribution or setoff. Id. at 178-79. Furthermore, the District Court

emphasized that Garlock had since “filed its own bankruptcy petition” seeking a

reorganization using § 524(g), thereby “shield[ing] [itself] from additional liability and

ongoing litigation.” Id. at 178, 180. The District Court therefore affirmed the

Bankruptcy Court‟s decision that Garlock lacked standing. Nonetheless, at the request of

the parties, the Court also addressed the merits of Garlock‟s objections and concluded

that, even if Garlock did have standing, its objections could be overruled on substantive

grounds. Id. at 196. This timely appeal followed.




                                             5
II.    Discussion 1

       Under the Bankruptcy Code, any “party in interest, including the debtor, the

trustee, a creditors‟ committee, an equity security holders‟ committee, a creditor, an

equity security holder, or an[] indenture trustee,” has standing to “raise and … be heard

on any issue” in a bankruptcy case. 11 U.S.C. § 1109(b). That list of parties in interest is

not exclusive, and it “has been construed to create a broad right of participation in

Chapter 11 cases” that includes “anyone who has a legally protected interest that could be

affected by a bankruptcy proceeding.” In re Global Indus. Techs., Inc., 645 F.3d 201,

210 (3d Cir. 2011) (en banc). Nonetheless, “Article III standing and standing under the

Bankruptcy Code are effectively coextensive.” Id. at 211. A party objecting to the

confirmation of a plan for reorganization under Chapter 11 must therefore “meet the

requirements for standing that litigants in all federal cases face under Article III of the

Constitution.” Id. at 210.

       Those requirements include that the party has suffered an injury in fact. Although

any “specific, identifiable trifle of injury” will do, id. (internal quotation marks omitted),

       1
          The Bankruptcy Court had jurisdiction pursuant to 28 U.S.C. §§ 157(a) and
1334(b). The District Court had appellate jurisdiction over the Bankruptcy Court‟s
decision under 28 U.S.C. § 158(a). We have jurisdiction over this appeal pursuant to 28
U.S.C. §§ 158(d) and 1291. We exercise “plenary review of an order from a district court
sitting as an appellate court in review of a bankruptcy court.” In re Exide Techs., 607
F.3d 957, 961-62 (3d Cir. 2010). Under that standard, “[w]e review the District Court‟s
conclusions of law de novo, its factual findings for clear error, and its exercise of
discretion for abuse thereof.” In re Combustion Eng’g, Inc., 391 F.3d 190, 214 n.19 (3d
Cir. 2004). Under the clearly erroneous standard, we must uphold the Bankruptcy
Court‟s factual findings unless we are “left with the definite and firm conviction that a
mistake has been committed.” In re CellNet Data Sys., Inc., 327 F.3d 242, 244 (3d Cir.
2003).

                                               6
Article III requires that there be some “invasion of a legally protected interest that is (a)

concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical,”

Reilly v. Ceridian Corp., 664 F.3d 38, 41 (3d Cir. 2011) (quoting Danvers Motor Co. v.

Ford Motor Co., 432 F.3d 286, 290-91 (3d Cir. 2005)) (internal quotation marks

omitted). “Allegations of possible future injury are not sufficient to satisfy” that

standard, but a threatened injury may suffice, provided it is “certainly impending, and

[will] proceed with a high degree of immediacy, so as to reduce the possibility of

deciding a case in which no injury would have occurred at all.” Id. at 42 (quoting Lujan

v. Defenders of Wildlife, 504 U.S. 555, 564 n.2 (1992); Whitmore v. Arkansas, 495 U.S.

149, 158 (1990)) (citations and internal quotation marks omitted). A party “lacks

standing if his „injury‟ stems from an indefinite risk of future harms inflicted by unknown

third parties.” Id. (citing Lujan, 504 U.S. at 564).

       Garlock argues that it has suffered an injury in fact because it has rights to

contribution and setoff that will be harmed by the Joint Plan. It says that “there will

undoubtedly be” future cases brought against it and Grace jointly, that those cases will

give rise to contribution and setoff rights, and that it will be unable to fully enforce those

rights because the personal injury trust will pay only 25% to 35% of the value of Grace‟s

liabilities. (Garlock‟s Opening Br. at 13-14.) In other words, Garlock claims that the

Plan threatens to diminish contribution payments and setoff amounts it may receive from

Grace in future cases. Garlock concedes, however, that there is no evidence that it has

ever sought contribution or setoff in the past due to Grace‟s liability, and it does not

assert that it has any current claims against Grace. Rather, it explains that it resolved

                                               7
prior cases “against the backdrop of” those rights, making it unnecessary to actually

assert contribution or setoff claims. (Id. at 17.)

       But that explanation does not address the absence of any contribution and setoff

claims arising from cases brought against Garlock after Grace entered bankruptcy. Once

Grace filed for Chapter 11 protection, all actions against the company were subject to an

automatic stay under 11 U.S.C. § 362. Therefore, between 2001 and 2010 (when Garlock

also entered bankruptcy), plaintiffs with joint claims against Grace and Garlock were able

to recover only from Garlock. Yet Garlock concedes that there is no evidence that it ever

“suffered a judgment for which Grace owes it contribution during Grace‟s bankruptcy.”

(Garlock‟s Opening Br. at 21.) It explains that deficiency by suggesting that it either was

“successful in avoiding liability altogether,” or had “settled common cases.” (Id. at 21-

22.) No matter how it tries to account for the fact, however, it remains a fact that,

although new claims against Grace were stayed for almost a decade, Garlock never had a

basis for asserting contribution or setoff rights during that period.

       Garlock‟s alleged future injury can thus only be called speculative, and it fails to

satisfy Article III‟s requirements for standing. In order for the Joint Plan to threaten

Garlock‟s contribution and setoff rights, Garlock must have a basis for asserting those

rights. That there may be future plaintiffs with claims against both Grace and Garlock –

which is by no means a certainty2 – does not by itself provide that foundation, as those



       2
         Notwithstanding the parties‟ earlier stipulation that there will “likely” be future
plaintiffs with claims against both companies, there is no evidence that such claims are
“imminent” or “impending.”

                                               8
claims must also produce verdicts or settlements that entitle Garlock to contribution or

setoff. Garlock has presented no evidence that any of the “thousands” of joint claims

brought in the past have entitled it to enforce any such rights. 3 Far from being “certainly

impending,” see Reilly, 664 F.3d at 42, Garlock‟s alleged injury is therefore contingent

on the occurrence of events that may never happen, and indeed may never have happened

previously, making it more “conjectural or hypothetical” than “actual or imminent.” 4 Id.

As the Supreme Court has made clear, such “[a]llegations of possible future injury do not

satisfy the requirements of Article III.” Whitmore, 495 U.S. at 158. Accordingly, the




       3
          That evidentiary deficit sets Garlock apart from other of Grace‟s codefendants.
For example, the State of Montana has been named as a codefendant alongside Grace in
many asbestos cases, and it presented evidence of a contribution claim against Grace
arising from a $43 million settlement it reached with numerous asbestos claimants while
Grace was under bankruptcy protection.
       4
           Our holding in Global Industrial Technologies does not suggest otherwise, as
Garlock contends. In that case, we considered whether several insurance companies had
standing to object to a plan that assigned their policies to a § 524(g) trust. 645 F.3d at
205-06, 209. Although the plan did not “materially alter the quantum of liability that the
insurers would be called to absorb,” it triggered an “explosion of new claims [and]
creat[ed] an entirely new set of administrative costs” for the insurers. Id. at 212, 214.
We therefore held that “even if [the insurers‟] ultimate liability is contingent, the harm …
from the [p]lan is hardly too speculative for [the insurers] to be parties in interest.” Id.
Here, however, there has been no allegation of any explosion of new claims against
Garlock, and the claims that have been brought against it are due to its own asbestos
liability, not to the Joint Plan. In fact, the alleged harm in the two cases is entirely
different – the insurance companies complained that the plan at issue increased the
number of claims against it, whereas Garlock complains that the Joint Plan may reduce
future contribution payments and setoff amounts. Garlock‟s situation is therefore readily
distinguishable from the circumstances in Global Industrial Technologies.

                                              9
Bankruptcy Court and District Court correctly determined that Garlock lacks bankruptcy

standing. 5

III.   Conclusion

       Because Garlock failed to demonstrate an injury in fact as required by Article III

and the Bankruptcy Code, we will affirm the ruling denying its standing to object to the

Joint Plan.




       5
        Because we conclude that Garlock lacks bankruptcy standing, it also lacks
bankruptcy appellate standing, which is “more limited than standing under Article III.”
In re PWS Holding Corp., 228 F.3d 224, 248 (3d Cir. 2000).

                                            10
