Bestwall wins Fourth Circuit decision upholding sanctions against claimants and counsel for violating discovery order
Client(s) Bestwall LLC
Jones Day represented Bestwall LLC, a Georgia-Pacific affiliate, in defeating an appeal by asbestos tort claimants and their counsel of orders holding them in contempt and sanctioning them in Bestwall's ongoing Chapter 11 bankruptcy case in the Western District of North Carolina. The bankruptcy court had granted Bestwall's Bankruptcy Rule 2004 motion and authorized it to issue Personal Injury Questionnaires to claimants to help develop facts for estimating Bestwall's asbestos liability and formulating and confirming a Chapter 11 plan. After the district court dismissed an appeal from the order authorizing that discovery, certain claimants sued in the Southern District of Illinois to enjoin Bestwall from enforcing it. (That court dismissed the case.) After further proceedings, the bankruptcy court held the claimants and their Illinois counsel in contempt and imposed monetary sanctions. The district court granted Bestwall's motions to dismiss both appeals for lack of jurisdiction as not involving final orders appealable as of right. Jones Day briefed and argued the claimants' further appeal to the Fourth Circuit. The Fourth Circuit affirmed the district court's order dismissing the appeal for lack of jurisdiction, in a published opinion by a 2-1 vote. Declining to follow bankruptcy appellate panels from three other circuits, the court held that in bankruptcy, as in civil litigation generally, a party to litigation may not immediately appeal a civil contempt order, and that this rule encompasses the party's counsel when held jointly and severally liable with the party, as here. The order imposing sanctions for violating the bankruptcy court's discovery order did not terminate any procedural unit separate from the broader bankruptcy case. As a result, it was not a final order appealable as of right.
Blair v. Bestwall, LLC, 99 F.4th 679 (4th Cir.)
