On January 10, 2014, the Bankruptcy Court for the Western District of North Carolina issued a ruling in the In re Garlock Sealing Technologies, LLC, 504 B.R. 71 (Bankr. W.D.N.C. Jan. 10, 2014) matter.  Judge Hodges’ opinion related to the handling of some bankruptcy trust claims associated with asbestos litigation.  Since then, courts have cited the Garlockdecision when addressing bankruptcy disclosure information.  Decisions include the following:   

• On January 30, 2014, the Rhode Island Superior Court issued Sweredoski v. Alfa Laval, Inc., deciding that bankruptcy disclosures were properly discoverable and not protected by privilege or confidentiality. Citing to the Garlock decision, the court noted that statements about bankruptcy information would be relevant to determine a plaintiff’s credibility.

• On September 30, 2014, the Federal District Court for the Eastern District of North Carolina issued Yates v. Air & Liquid Sys. Corp., distinguishing In re Garlock from non-bankruptcy proceedings. The Yates court ruled on a motion for summary judgment, whereas the Garlock court estimated aggregate liability. In making its distinction, the Yates court noted that Garlock was unlike a “typical trial of a personal injury or wrongful death claim, where it would be necessary for the jury to resolve issues of causation in a binary fashion.”  

Furthermore, on July 23, 2014, Judge Hodges’ decision to seal the record in the Garlock proceedings was appealed inLegal Newsline v. Garlock Sealing Technologies LLC. On appeal, the Western District Court of North Carolina determined that the public’s right of access outweighed the parties’ determination that the documents were “confidential,” and remanded the case with instructions to determine suppression on a document by document basis.

It is anticipated that the Garlock decision will be further analyzed in additional reported cases.