Johns Manville Lawsuit

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UNITED STATES BANKRUPTCY COURT FOR THE

SOUTHERN DISTRICT OF NEW YORK

In re:

In re

JOHNS-MANVILLE CORPORATION,

MANVILLE CORPORATION, MANVILLE

INTERNATIONAL CORPORATION,

MANVILLE EXPORT CORPORATION,

JOHNS-MANVILLE INTERNATIONAL

CORPORATION, MANVILLE SALES

CORPORATION, f/k/a JOHNS-MANVILLE

SALES CORPORATION, successor by merger

to MANVILLE BUILDINGS MATERIALS

CORPORATION, MANVILLE PRODUCTS

CORPORATION and MANVILLE SERVICE

CORPORATION, MANVILLE

INTERNATIONAL CANADA, INC.,

MANVILLE CANADA, INC., MANVILLE

INVESTMENT CORPORATION,

MANVILLE PROPERTIES CORPORATION,

ALLAN-DEANE CORPORATION, KEN-

CARYL RANCH CORPORATION, JOHNS-

MANVILLE IDAHO, INC., MANVILLE

CANADA SERVICE INC.,

SUNBELT CONTRACTORS, INC.,

Case Nos. 82 B 11656,

82 B 11657, 82 B 11660,

82 B 11661, 82 B 11665 through

82 B 11673 inclusive,

82 B 11675, 82 B 11676 (BRL)

Debtors.

John Sword and Barbara Ann Sword, H/W, Adversary No. ___________

John Tanti, Personal Representative for

the Estate of Nicholas Borg, deceased,

Joseph Balzan and Paraskevi Kastani, Personal

Representative for the

Estate of Michael Kastanis,

Plaintiffs,

v.

Manville Personal Injury Settlement Trust and

Claim Resolution Management Corporation

Defendants.

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COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

John Sword and Barbara Ann Sword, H/W, John Tanti, Personal Representative for the

Estate of Nicholas Borg, deceased, Joseph Balzan and Paraskevi Kastani, Personal

Representative for the Estate of Michael Kastanis (collectively, the “Plaintiffs”), by and through

undersigned counsel, as and for their Complaint against Manville Personal Injury Settlement

Trust (“the Trust”) and Claim Resolution Management Corporation (“CRMC” and, collectively

with the Trust, the “Defendants”), respectfully state as follows:

Preliminary Statement

1. Each Plaintiff or their Decedents were occupationally exposed to asbestos dust

and fibres while working inside of the sovereign territory of the United States. Accordingly, by

this Complaint, the Plaintiffs request this Court to declare that the claims they have filed with the

Trust, in accordance with the TCP (as defined below), should properly be categorized and

processed by the Defendants as standard claims and not foreign claims.

2. Plaintiffs further request that the Manville Personal Injury Settlement Trust,

(hereinafter “the Trust”), and Claim Resolution Management Corporation, (hereinafter

“CRMC”), each be enjoined from its practice of classifying, categorizing and processing the

claims of any foreign national, occupationally exposed to asbestos on an active warship of the

United States Navy, as a foreign claim in the future.

PARTIES

3. Plaintiffs John Winston and Barbara Ann Sword are individuals residing at 78

Wasdale Gardens, Estover, Plymouth, Devon PL6 8TN, England.

4. Plaintiff John Tanti, personal representative of the estate of Nicholas Borg, is an

individual residing at 35 Triq tan-Nofs, Siggiewi, Malta.


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5. Plaintiff Joseph Balzan is an individual residing at 10 Znuber Street, Sta. Lucia,

Malta.

6. Plaintiff Paraskevi Kastani, personal representative for the estate of Michael

Kastanis, is an individual residing at 12 Sarandaporou Street, Megara, Greece.

7. Defendant, the Trust, is a legal entity formed in 1988 with an address of 143

Bedford Road, Suite 200, Katonah, NY 10536. A further description of the Trust’s formation,

purpose and activities is set forth below.

8. Upon information and belief, Defendant, CRMC, is an entity wholly owned and

controlled by the Trust, with offices at 3110 Fairview Park Drive, Suite 200 Falls Church, VA

22042-0683, which has and continues to operate and do business in the State of New York and

within the Southern District of New York. It acts as an organization providing various forms of

claims processing services to trusts involved in the administration of various bankruptcies.

JURISDICTION AND VENUE

9. This Court has jurisdiction over this action pursuant to 28 USC § 1334. This is a

core proceeding pursuant to 28 USC §§ 157(b)(1) and (b)(2)(A), (E) and (O). Venue in this

district is proper pursuant to 28 USC §§ 157 (b)(1) and (b)(2)(A), (E) and (O). The statutory

predicates for this proceeding are Sections 541, 542 and 105 of the Bankruptcy Code.

Additionally, relevant provisions of the Confirmation Order and the Trust Agreement (as each

term is defined below) confer upon this Court exclusive jurisdiction to, inter alia, hear and

determine any and all disputes arising out of the Plan, the Trust and the Trust Agreement.

NEED FOR RELIEF REQUESTED

10. Plaintiffs have raised an issue creating a substantial controversy, going to the

question of whether claims, of a limited number of foreign nationals, are being properly treated


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under the provisions of the Trust’s own mandates and the TDP and by the CRMC in response to

directives by the Trust.

11. The request for expeditious relief in this fashion has arisen because repeated,

informal efforts to resolve the issues herein without the need for judicial intervention, have been

unsuccessful. Without being granted the relief requested herein, the Plaintiffs will continue to

suffer immediate and irreparably harm, for which there is no adequate remedy at law.

12. The issues presented herein are by no means procedural in nature. They involve

the fundamental rights of these Plaintiffs and a substantial controversy involving whether their

claims have been properly categorized, processed, and compensated in a fair and equitable

manner by each Defendant.

13. A declaration by this Court will be useful in clarifying and settling the issues once

and for all. It will simultaneously provide relief to all parties going forward and avoid

uncertainty, insecurity, speculation and further controversy.

14. Because of the continuing harm these Plaintiffs have and will continue to suffer,

expeditious resolution of the issues will best serve the interests and justice and preserve their

rights to receive fair and adequate handling and compensation from the Manville Personal Injury

Settlement Trust and CRMC.

FACTUAL ALLEGATIONS

A. The Trust

15. The Trust is an entity formed in November of 1988, in conjunction with the Order

Confirming Debtors’ Second Amended Plan of Reorganization (the “Plan”), entered by this

Court on December 22, 1986, (the “Confirmation Order”), and several appeals thereafter.


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16. Upon information and belief, the Trust is governed by the Second Amended and

Restated Manville Personal Injury Settlement Trust Agreement, dated as of February 26, 2001

(the “Trust Agreement,” a copy of which is annexed hereto as Exhibit A).

17. Pursuant to decretal paragraph 28 of the Confirmation Order, this Court retained

jurisdiction to, inter alia, hear and determine any and all disputes arising out of the Plan, the

Trust and the Trust Agreement.

18. Section 6.13 of the Trust Agreement provides that this Court shall have

“exclusive jurisdiction to heart and resolve any and all matters relating to the powers and

authorities of the Trustees [under the Trust Agreement], any actions or omissions by them, the

operations or activities of the Trust and the interpretation of the Trust Agreement.”

19. The Trust’s purpose is, inter alia, to settle asbestos personal injury claims

resulting from exposure to asbestos-related products mined or manufactured by the Johns-

Manville Corporation and its affiliated entities, on a world-wide basis.

20. Another purpose of the Trust is also to insure that available claim resolution

assets are properly utilized, to insure that fair and just compensation is paid to those who may

have injury claims against the Manville entities for world-wide distribution of asbestos materials.

This would include fair, equal and just categorization and processing of all claims filed with the

Trust.

21. According to the history/mission statement presented by the Trust itself, it

…was created as an independent organization to distribute funds as

equitably as possible while balancing the rights of current

claimants against those of future, unknown Claimants. The Trust’s

mission is to ‘enhance and preserve the Trust estate’ in order to

‘deliver fair, adequate and equitable compensation to (Plaintiffs),

whether known or unknown.’ The Trust was established as a

negotiation based settlement organization pursuant to Plan


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provisions which made it clear that Plaintiffs did not need to

litigate or threaten to litigate in order to negotiate a fair settlement.

22. The Trust operates through the CRMC, which is a wholly owned entity of the

Trust. It was established to provide processing services to various asbestos personal injury trusts,

communicate with counsel on behalf of the Trust, and be a leader in providing multiple other

services to those who are interested in asbestos claims, litigation, and history.

B. The Plaintiffs’ Claims

23. Each Plaintiff has filed a claim for asbestos-related disease or death suffered by

their respective Decedents due to occupational exposures to asbestos, while working within the

bowels of active American navy warships. Those exposures occurred both inside the territorial

waters of the United States and foreign nations. The American warships, on which Plaintiffs and

Decedents worked, were on active duty assignment throughout the world. Thus, they were

protecting and further serving the peace keeping and security interests of the United States on a

world-wide basis. They were being repaired, refurbished, maintained, serviced and outfitted at

various civilian and military shipyards located in England, Malta, and the United States.

24. The specific filed claims are as follows:

a. On or about June 2, 2011, Plaintiff John Sword filed Claim 139077 with the

CRMC. That claim asserts that Mr. Sword contracted malignant mesothelioma as

the direct and proximate result of occupational exposures to asbestos products,

while working as an insulator at, among other places, U.S. warships docked at

shipyards docked at HM Dockyard, Devonport in Plymouth, England. A copy of

Claim 139077 is annexed hereto as Exhibit B.

b. On or about May 19, 2011, Plaintiff John Tanti, as Personal Representative for the

Estate of Nicholas Borg, filed Claim 1388665 with the CRMC. That claim asserts


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that Mr. Borg, a shipyard laborer in Malta who passed away in November 2010,

died of asbestosis; his disease and death each being caused as the direct and

proximate result of occupational exposures to asbestos products while working,

among other places, U.S. warships docked at HM Dockyard, Malta, (later named

Malta Drydocks). A copy of Claim 1388665, as amended as of January 30, 2011,

is annexed hereto as Exhibit C.

c. On or about December 6, 2011, Plaintiff Joseph Balzan filed Claim 1143164 with

the CRMC. That claim asserts that Mr. Balzan died of malignant mesothelioma;

his disease and death each being caused as the direct and proximate result of

occupational exposures to asbestos products while working as a pipefitter,

steamfitter and plumber at, among other places, U.S. warships docked at HM

Dockyard, Malta (later named Malta Drydocks). A copy of Claim 1143164 is

annexed hereto as Exhibit D.

d. On or about August 19, 2011, Plaintiff Paraskevi Kastani, Personal

Representative for the Estate of Michael Kastanis filed Claim 1137420 with the

CRMC. That claim asserts that Mr. Kastanis died as a result of gastrointestinal

cancer, contracted as a result of occupational exposures to asbestos products while

working as a machinist on, among other places, active U.S. warships docked at

Boston Naval Shipyard, in the Commonwealth of Massachusetts, and the U.S.

Naval Base at Pearl Harbor, Hawaii. Upon information and belief he also had

occupational levels of exposure to asbestos dust and fibers while taking training

courses in damage control, while stationed at the Norfolk Naval Shipyard, in the


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Commonwealth of Virginia. A copy of Claim 1137420 is annexed hereto as

Exhibit E.

25. Plaintiffs and Decedents were all occupationally exposed to asbestos dust and

fibers while performing an assigned work task, within the boiler rooms, engine rooms, and other

confined compartments of active United States naval warships.

26. The multiple occupational exposures of Plaintiffs and Decedents to asbestos dust

and fibers, on board these American warships – i.e., on U.S. territory – were a direct and

proximate cause of their respective diseases, injuries, death, and damages.

27. The 2002 Manville Trust Distribution Process (the “TDP,” a copy of which is

annexed hereto as Exhibit F) and the Foreign Claim Evaluation Process, which was approved by

the Trust on September 19, 2009 (the “FCEP,” a copy of which is annexed hereto as Exhibit G),

both promulgated by the Trust as a mechanism for reviewing and classifying claims, require that

the Trust and the CRMC categorize and process the Plaintiffs’ claims as standard, non-foreign

claims, since they and their deceased family members were exposed to asbestos inside United

States territory.

28. Indeed, Section C.1(b) of the TDP contemplates classification of claims as “non-

standard” if the claimants’ asbestos exposure all took place outside the United States or Canada.

29. Notwithstanding the TDP’s mandate, both the Trust and the CRMC have

intentionally chosen to ignore their obligations to “deliver fair, adequate and equitable

compensation to [Plaintiffs], whether known or unknown,” and act in an equitable manner.

Instead the Trust and CRMC have classified and processed the claims of these Plaintiffs in a

discriminatory and legally incorrect manner, so as to avoid living up to its duties and obligations

under the TDP.


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30. Indeed, although Section 1(b) of the FCEP requires the trust to ask the question:

“Did this exposure occur at a U.S. military installation, U.S. Embassy complex or on a U.S.

Military Ship?”, the FCEP blatantly discriminates against non-US citizen claimants who answer

that question in the affirmative. Specifically, if the claimant holds a United States social security

number, an affirmative answer to that question yields an automatic, standard U.S. classification,

regardless of whether that claimant was in fact also exposed to asbestos outside US territory.

FCEP Section 1(d)(1). For foreign nationals, however, the FCEP unfairly imposes a totality of

the circumstances test, a loophole that has been liberally employed by the Trust to deny proper

compensation to the Plaintiffs. FCEP Section 1(d)(2).

31. In the face of both domestic and international law to the contrary, let alone

common sense, the Trust and the CRMC have each taken the position that active naval warships

of the United States Navy, while being repaired, maintained, serviced, or refurbished at both

civilian and military shipyards of other nations and the United States, somehow lost their

sovereignty as territory of this country.

32. Defendants have even gone so far as to deny Plaintiff Kastani classification and

processing as a standard claim, despite her deceased husband having been occupationally

exposed to asbestos dust and fibers, on board active U.S. naval warships while he worked, within

the borders of the United States, at the Boston Naval Shipyard, Naval Base at Pearl Harbor,

Hawaii, as well as during damage control training classes he attended at the U.S. Naval Base at

Norfolk, Virginia.

33. At the time Decedent Kastanis and other Greek nationals were occupationally

exposed to asbestos at Norfolk Naval Shipyard and Pearl Harbor, while training and refitting


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U.S. warships. Any legitimate and non-obstructive interpretation of such occupational exposures

to asbestos exposure would clearly place it within the territorial boundaries of the United States.

34. The Trust and the CRMC have previously classified and processed other foreign

workers, identically exposed to asbestos as these Plaintiffs and Decedents, at the identical

civilian and military shipyards, as standard claims filed by foreign nationals.

35. The Trust, through the CRMC, has actually classified, processed and paid other

foreign workers, identically exposed to asbestos as all Plaintiffs and Decedents herein, both

initial and supplemental compensation, to equalize them with standard claimants who were not

foreign nationals, but now has improperly refused to similarly classify and process the claims

made by Plaintiffs herein. (This paragraph is meant only to direct the attention of the Court to the

inconsistency and discrimination shown in this case, by both the Trust and CRMC, as to

classification and processing of their filed claims. Plaintiffs herein are not contesting any issues

related to valuation of their claims at this juncture).

36. The payments referred to in paragraph 34 above represented a clear recognition

by the Trust and the CRMC that those claims, although filed by foreign nationals who were

exposed at the identical shipyards and under the identical circumstances as Plaintiffs and

Decedents herein, were occupationally exposed to asbestos on board active American warships

being repaired and maintained in shipyards or naval bases in other countries.

37. No subsequent legitimate changes in the TDP or the law can justify the unilateral

decision by the Trust and CRMC to alter the status of persons, such as Plaintiffs herein, to justify

their being categorized and processed as foreign claimants.


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38. The CRMC has advised counsel for these Plaintiffs, on behalf of the Trust, that it

refuses to categorize and process their claims as standard claims, despite the exposures involved

being identical in nature and scope as the foreign nationals discussed above.

COUNT I – DECLARATORY JUDGMENT

39. Plaintiffs incorporate by reference the allegations set forth in each of the

preceding paragraphs as though fully set forth herein with particularity.

40. The complete failure of the Trust and the CRMC to comply with the relevant

provisions of the TDP, regarding the definition of what constitutes a standard claim, the

unwarranted shift in treating these Plaintiffs in a different manner than those referred to above,

their disregard of the decisions of United States and international law provided to them, and their

incredulous decision to define the sites of exposure of Decedent Kastanis as being outside the

U.S., all abundantly demonstrate that the Plaintiffs and others similarly situated are being

discriminated against based solely on their nationality; namely, that they are not U.S. citizens.

41. The misguided and improper efforts of the Trust and the CRMC to preserve assets

of the Trust for American and Canadian nationals is being done in blatant disregard for the rights

of these Plaintiffs.

42. This conduct follows other instances where the Trust has attempted to utilize

tactics, designed to either preclude or inhibit foreign nationals from filing as standard claimants.

(For example, until advised otherwise by its own legal counsel, the Trust previously required that

all standard claimants’ have a social security number when filing their claim. See Exhibits F and

G).

43. The response of the Trust and CRMC to Plaintiffs’ claims herein demonstrates an

incorrect classification of their claims as “foreign claims.” (i.e. based solely upon the national


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origin of each Plaintiff and Decedent, rather than whether they were exposed to asbestos within

the United States at any time).

44. The improper classification and processing of these claims as “foreign claims,”

rather than standard claims filed by foreign nationals, has and will continue to result in an

inappropriate resolution process under the TDP of their claims and those filed by others

identically situated.

45. Such improper action by the Trust and the CRMC has and will continue to

discriminate and prejudice the rights and interests of Plaintiffs.

46. The question of what amount of compensation should be paid to Plaintiffs is an

issue yet to be addressed by the Trust or the CRMC. No claim is made herein against the

Defendants regarding the quantum of damages to which Plaintiffs believe they are entitled.

47. There is no other known provision within the TDP precluding Plaintiffs from

seeking direct relief from this Court for misclassification and improper processing of their claims

as foreign claims.

WHEREFORE, for all of the forgoing arguments and reasons, Plaintiffs respectfully

request that the Court enter judgment in favor of the Plaintiffs declaring that the plaintiffs’

claims be categorized and processed by the Defendants as standard claims, and not foreign

claims

COUNT II – REQUEST FOR INJUNCTIVE RELIEF

48. Plaintiffs incorporate by reference the allegations set forth in each of the

preceding paragraphs as though fully set forth herein with particularity.

49. In the absence of injunctive relief, Plaintiffs will suffer irreparable injury for

which no adequate remedy at law exists.


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50. Accordingly, Plaintiffs request an injunction (i) enjoining and restraining both the

Trust and CRMC from classifying Plaintiffs’ claims as non-standard or foreign claims and

(ii) ordering the Trust and CRMC to process Plaintiffs’ claims as standard claims in accordance

with the TDP.

WHEREFORE, for all of the forgoing arguments and reasons, Plaintiffs respectfully

request that the Court enter judgment in favor of the Plaintiffs enjoining the Defendants from

continuing the policy of classifying and processing the claims of the Plaintiffs, who were

exposed to asbestos dust and fibers on active duty American warships, as non-standard or foreign

claims in the future.

Respectfully submitted,

Dated: February 14, 2012

New York, New York

LAW OFFICES OF MITCHELL S. COHEN

/s/ Mitchell S. Cohen

Mitchell S. Cohen

612 Manor Road

Narberth, PA 19072

(Admitted to Practice in New York and the United

States District Court for the Southern District of New

York)

and

COHEN TAUBER SPIEVACK & WAGNER P.C.

Joseph M. Vann

Andrew L. Buck

420 Lexington Ave., Suite 2400

New York, NY 10170

Tel. No.: (212) 586-5800

Fax No.: (212) 586-5095

Co-Counsel for the Plaintiffs


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