In re W.R. Grace & Co.
Citation: 40 ELR 20001
No. Nos. 08-3697, -3720, (3d Cir., 12/31/2009)
The Third Circuit affirmed a lower court decision denying a mining company's motion to expand a preliminary injunction and enjoin asbestos claims against the state of Montana arising from the company's mining operations. The company filed for Chapter 11 under the Bankruptcy Code in 2001. The same day it filed its Chapter 11 petition, it moved to preliminarily enjoin asbestos-related litigation against it and its non-debtor affiliates. The company's motion was granted. Prior to the company's filing for bankruptcy, the asbestos plaintiffs filed lawsuits against Montana in state court alleging that the state was liable to them for failing to warn them of the risks of asbestos from the mine. The mining company filed a motion in bankruptcy court asking that the preliminary injunction be expanded to include the plaintiffs' claims against the state, but the bankruptcy court properly denied the motion for lack of jurisdiction. A federal bankruptcy court does not have related-to jurisdiction over a third-party lawsuit if that lawsuit would affect the bankruptcy proceeding only through the intervention of yet another lawsuit.