In Re: Tronox Incorporated
- John Cronan
- 1:21-cv-07785
- U.S. District Court · Southern District of New York
- 10
In re Tronox v. Garretson, Judge Cronan dismissed five bankruptcy appeals for failure to prosecute and affirmed denial of late tort claims.
The six appellants—Joan Turner, Eleanor and Raymond Perrins, Rena Davis-Beal, Manuel Saddler, Verda Carr-McCoy, and Alfonza Smith—were denied permission to pursue the late tort claims or relief from the 2009 claims deadline. The appeals of Turner, the Perrins, Davis-Beal, Saddler, and Carr-McCoy were dismissed for failure to prosecute; Smith’s appeal was reviewed and the Bankruptcy Court’s decision was affirmed. Garretson Resolution Group, Inc., doing business as Epiq Mass Tort and serving as Trustee of The Tronox Incorporated Tort Claims Trust, was the appellee.
What happened
In re: Tronox Incorporated involved six appeals from a bankruptcy court decision denying requests to file late “future tort claims” and to obtain relief from Tronox’s 2009 deadline for filing claims. The claims concerned injuries allegedly related to exposure to harmful substances.
Five appellants—Joan Turner, Eleanor and Raymond Perrins, Rena Davis-Beal, Manuel Saddler, and Verda Carr-McCoy—did not file appeal briefs despite court orders and warnings. Alfonza Smith was the only appellant who filed a brief. The Trust argued that the appeals should not proceed.
Judge John P. Cronan dismissed the five appeals for failure to prosecute and, alternatively, affirmed the bankruptcy court’s decision for all six appeals. The court concluded that none of the appellants had shown sufficient grounds for missing the 2009 deadline, including the required type of excusable neglect.
The detailed version
- In Re: Tronox Incorporated · No. 1:21-cv-07785
- John Cronan
- Mar. 31, 2023
Background
Tronox Incorporated began a Chapter 11 bankruptcy case in 2009. The Bankruptcy Court set August 12, 2009, as the deadline for filing proofs of claim. A reorganization plan later created the Tronox Incorporated Tort Claims Trust to pay allowed tort claims. The plan reserved 6.25% of the Trust’s assets for “future” tort claims.
The Bankruptcy Court later explained that a claim could qualify as a future tort claim if, among other circumstances, exposure occurred on or after the deadline, an injury or disease first appeared after the deadline, or the claimant could show excusable neglect or that eliminating the claim would violate due process. After litigation produced more than $600 million for the Trust in 2015, more than 38,000 new tort claims were filed.
In a March 10, 2021 decision addressing 4,676 purported future claims, the Bankruptcy Court denied the appellants’ requests to file late claims. It placed the claims into categories, including claims barred by statutes of limitations and claims for which the claimant had not shown grounds for relief from the 2009 deadline.
The Appeals
The consolidated appeals were brought by Joan Turner; Eleanor and Raymond Perrins; Rena Davis-Beal; Manuel Saddler; Verda Carr-McCoy; and Alfonza Smith. The District Court ordered the appellants to file briefs and warned that failure to do so could lead to dismissal for failure to prosecute, meaning failure to actively pursue the appeal.
Turner, the Perrins, Davis-Beal, Saddler, and Carr-McCoy did not file briefs. Smith filed the only supporting brief. The Trust filed a response. The District Court reviewed the Bankruptcy Court’s factual findings for clear error and its legal conclusions independently.
Failure to Prosecute
The court held that Turner, Eleanor and Raymond Perrins, Davis-Beal, Saddler, and Carr-McCoy failed to prosecute their appeals. The court therefore dismissed those appeals for failure to prosecute. It did not add a “with prejudice” or “without prejudice” qualification.
Merits
The court also reviewed the Bankruptcy Court’s decision on the merits. It explained that Bankruptcy Rule 9006 permits a deadline to be extended after it has passed when the failure to act resulted from excusable neglect. The Bankruptcy Court had considered factors including the length of the delay, prejudice to claimants who filed on time, lack of investigation or prompt action, mistakes about legal rights, and other explanations for late filing.
The District Court agreed that the Bankruptcy Court correctly concluded that none of the appellants had shown excusable neglect. The court specifically addressed Smith, whose claim was filed more than eight years after the deadline. Smith’s submissions did not explain the relevant factors beyond a lack of actual knowledge, and his appeal brief did not identify why the Bankruptcy Court’s conclusions were wrong. The District Court also said it could not consider arguments or evidence that had not been presented to the Bankruptcy Court.
The Bankruptcy Court had separately stated that issues concerning Smith’s alleged conditions first diagnosed after the deadline were to be resolved by the Trust under its dispute-resolution procedures. The District Court found no error in denying relief to Smith or any other appellant.
Disposition
The District Court affirmed the Bankruptcy Court’s decision. The Clerk was directed to docket the order in each of the six cases, mail a copy to each appellant, and close the cases.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.