Case 3:19-md-02885-MCR-GRJ Document 3389 Filed 08/16/22 Page 1 of 8

UNITED STATES DISTRICT COURT

IN RE: 3M COMBAT ARMS Case No. 3:19md2885

This Document Relates to All Cases Judge M. Casey Rodgers

ORDER

This matter is before the Court on an Emergency Motion for Preliminary

Injunction Against 3M Company filed by Plaintiff Richard Valle, see ECF No. 3358,

which 3M opposes, see ECF No. 3370. The motion follows on the heels of a petition

for Chapter 11 bankruptcy filed in the Southern District of Indiana by five of the six

defendants in this MDL—Aearo Technologies LLC, Aearo Holding LLC, Aearo

Intermediate LLC, Aearo LLC, and 3M Occupational Safety LLC (collectively,

“Aearo”). In the bankruptcy court, Aearo has, among other things, requested that

the automatic stay of actions or proceedings against it be extended to 3M Company,

Aearo’s non-debtor parent, and has made clear that its motive for doing so is to

upend this statutorily authorized MDL. See In re Aearo Techs. LLC, Case No.

1:22bk2890, Informational Brief, ECF No. 12 at 56-61. Valle now asks this Court

to enjoin 3M Company from (1) supporting an extension of the automatic stay that

would preclude individual plaintiffs from litigating CAEv2 matters against 3M in

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the MDL or following remand for trial; and (2) relitigating matters in bankruptcy

court that this Court has already adjudicated. Oral argument was heard on August

11, 2022. After careful consideration, Valle’s motion is granted in part and denied

in part.

Valle’s motion is grounded in the All Writs Act, which empowers federal

courts to “issue all writs necessary or appropriate” to safeguard the integrity of

“ongoing proceedings” and “potential future proceedings” before them, and to

“protect or effectuate” their prior orders and judgments. See Klay v. United

Healthgroup, Inc., 376 F.3d 1092, 1099-1100 (11th Cir. 2004); Wesch v. Folsom, 6

F.3d 1465, 1470 (11th Cir. 1993); see also 28 U.S.C. § 1651. A court’s authority to

enjoin certain activities in other forums is broad and “extends, under appropriate

circumstances, to [any] persons who . . . are in a position to frustrate the

implementation of a court order or the proper administration of justice, and

encompasses even those who have not taken any affirmative action to hinder

justice.” United States v. New York Tel. Co., 434 U.S. 159, 174 (1977).

Nevertheless, an All Writs Act injunction is an extraordinary remedy which,

although derived from statute, is “essentially equitable” and, as such, generally is

not available where there are adequate remedies at law. See Klay, 376 F.3d at 1100.

All Writs Act injunctions must be “predicated on the existence of some

underlying proceeding over which the issuing court [already] has jurisdiction[.]” See
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Rohe v. Wells Fargo Bank, N.A., 988 F.3d 1256, 1264 (11th Cir. 2021).1

Accordingly, to obtain an injunction under the Act, the requesting party must “point

to some ongoing proceedings, or some past order or judgment, the integrity of which

is being threatened by someone else’s action or behavior.” See id. For threats to

ongoing proceedings, “a court may enjoin almost any conduct which, left unchecked,

would have the practical effect of diminishing the court’s power to bring the

litigation to a natural conclusion.” See Klay, 376 F.3d at 1102. For threats to prior

orders, a court “has the power to enjoin a party before it from attempting to relitigate

the same issues or related issues precluded by the principles of res judicata and

collateral estoppel in another federal court.” See New York Life Ins. Co. v. Deshotel,

142 F.3d 873, 879 (5th Cir. 1998) (citing Kinnear-Weed Corp. v. Humble Oil &

Refining Co., 441 F.2d 631, 637 (5th Cir. 1971)).

The Court begins with Valle’s request that 3M be enjoined from supporting a

bankruptcy injunction that would preclude individual plaintiffs from continuing to

litigate CAEv2 matters against 3M in the MDL and other forums. There can be no

doubt that if Aearo’s automatic bankruptcy stay is extended to 3M, this Court will

be prevented from guiding this litigation to “its natural conclusion.” See Klay, 376

1
See also Klay v. United Healthgroup, Inc., 376 F.3d 1092, 1099 (11th Cir. 2004) (“The
Act does not create any substantive federal jurisdiction” and is instead a “codification of the federal
courts’ traditional, inherent power to protect the jurisdiction they already have, derived from some
other source.”).
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F.3d at 1102. Except for matters related to the recent bankruptcy filing, the MDL is

now at a complete standstill. Nearly 1,200 cases at various stages of Wave discovery

are sitting idle. Countless scheduled and pending depositions and defense medical

exams have been, or will be, indefinitely cancelled. Roughly 1,500 ripe Daubert

and summary judgment motions are languishing. Multiple appeals pending in the

Eleventh Circuit Court of Appeals are halted. Concurrent litigation in Minnesota

state court likewise is halted. And this is only the beginning. See, the “ultimate

objective” of this entire scheme is a permanent channeling injunction (and a third-

party release of 3M) in the bankruptcy court requiring that all CAEv2 hearing-related

claims be resolved through a bankruptcy claims trust rather than adjudicated in an

Article III court. See In re Aearo, 1:22bk2890, Informational Brief, ECF No. 12 at

61. If successful, hundreds of thousands of individual plaintiffs will be deprived of

their constitutional right to a jury trial while 3M—a fully solvent and highly

profitable Fortune 500 Company that will never actually file a bankruptcy petition

itself—will reap all of the benefits of the bankruptcy system without the attendant

burdens. 2 The unabashed justification for dismantling this MDL is 3M/Aearo’s

2
The Aearo debtors apparently were solvent wholly owned subsidiaries of 3M until the
bankruptcy-eve execution of a funding and indemnity agreement, which left the companies in
severe financial distress due to their newly created exclusive liability for the CAEv2 claims in this
litigation. As the Court reads it, albeit without the benefit of an evidentiary hearing, the funding
and indemnity agreement creates no value other than to mount 3M’s escape from this MDL. In
the agreement, Aearo agrees to take on potentially billions in liability for the CAEv2 claims in
exchange for 3M funding a claims trust that automatically depletes if and only if 3M faces
judgments in the MDL (or state court), artificially tying Aearo’s ability to reorganize with
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dissatisfaction with the MDL system, this Court’s legal rulings, and the multiple jury

verdicts against it in this litigation. See id.

Under these circumstances, the Court readily concludes that it has jurisdiction

to determine whether Aearo’s automatic stay applies to the claims against 3M in this

MDL, see, e.g., Hunt v. Bankers Trust Co., 799 F.2d 1060, 1069 (5th Cir. 1986), and

the authority under the All Writs Act to enjoin actions by 3M in other forums which

threaten the Court’s jurisdiction, see 28 U.S.C. § 1651. Nevertheless—and despite

the Court’s serious concerns over the prospect of a solvent defendant being able to

evade the jurisdiction of an Article III court, leaving over 230,000 plaintiffs in its

wake, based solely on its policy disagreement with a system created by Congress

and its dissatisfaction with the lawfully entered rulings of an Article III court—the

Court declines to exercise that jurisdiction to prohibit 3M from supporting a

bankruptcy court injunction precluding plaintiffs from litigating CAEv2 matters

against 3M.

“[T]he All Writs Act is a residual source of authority to issue writs which are

not otherwise covered by statute.” Klay, 376 F.3d at 1100. Here, the Court’s

jurisdiction to interpret the automatic stay statute, 11 U.S.C. § 362, is concurrent

continued litigation against 3M in the MDL (or state court). While the argument can be made (and
has been) that this is a fairly transparent attempt at manipulation and abuse of the bankruptcy code,
it may be a perfectly legitimate use. This Court trusts that the bankruptcy court judge is well-
equipped to decide the matter based on his knowledge of bankruptcy law and the fact that he will
have a complete evidentiary record.
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with that of the bankruptcy court. 3 However, the bankruptcy court also has even

broader equitable powers to further extend the stay under 11 U.S.C. § 105(a), and

the bankruptcy court judge is presiding over an evidentiary hearing on that matter at

this very moment. Thus, while this Court respects and appreciates the solemn

responsibility of Article III courts to enforce, protect and preserve their jurisdiction,

there are times when those ends are best served by yielding to a court with concurrent

jurisdiction, specialized expertise, and a full evidentiary record. This is one of those

times. The bankruptcy court is well-qualified and aptly suited to determine whether

3M is lawfully using the Bankruptcy Code for a proper restructuring purpose or,

instead, using its subsidiaries’ bankruptcy petition as bad faith subterfuge to defeat

this Court’s jurisdiction and relitigate this Court’s rulings. See, e.g., In re Moog,

159 B.R. 357, 361 (Bankr. S.D. Fla. 1993) (explaining that “if the timing of the filing

[of the bankruptcy petition] is such that the court concludes that the primary, if not

sole purpose, of the filing was litigation tactic, the petition may be dismissed” and

that “frustrating the legitimate processes of a non-bankruptcy forum” is inconsistent

with the congressional intent of the bankruptcy code) (emphasis added). 4

3
See In re Baldwin-United Corp. Litig., 765 F.2d 343 (2d Cir. 1985) (MDL courts have
concurrent jurisdiction to interpret whether a bankruptcy stay applies and to issue injunction in aid
of the MDL court’s jurisdiction but may appropriately decline to exercise that jurisdiction when it
unduly interferes with the bankruptcy court’s ability to carry out its duties).
4
See also In re Karum Grp., Inc., 66 B.R. 436 (Bankr. W.D. Wash.1986) (case dismissed
where debtor filed bankruptcy as a litigation tactic to avoid posting supersedeas bond); In re
Golden Ocala P’ship, 50 B.R. 552 (Bankr. M.D. Fla. 1985) (Chapter 11 not designed to resolve
internal fights between feuding shareholders); In re Ofty Corp., 44 B.R. 479 (Bankr. D. Del.
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Valle’s second request implicates a more specific threat to this Court’s

jurisdiction. Aearo’s written submissions and oral representations to the bankruptcy

court are replete with substantive challenges to this Court’s many legal and

evidentiary rulings in the MDL, and culminate in an outright rejection of traditional

appellate review of those decisions by the Eleventh Circuit Court of Appeals.

According to Aearo, both companies—specifically, “Aearo and 3M”—prefer to

resolve CAEv2 claims on the basis of the “fair and complete evidentiary record”

they plan to create in bankruptcy court. See In re Aearo, 1:22bk2890, Informational

Brief, ECF No. 12 at 61. From this, the threat to this Court’s previously exercised

jurisdiction is undeniable. It cannot and will not be countenanced, and compels

immediate action from this Court by means of an All Writs Act injunction

prohibiting 3M from attacking this Court’s prior orders.

For the avoidance of doubt, the scope of today’s injunction prevents 3M from

“attempting to relitigate the same issues or related issues precluded by the principles

of res judicata and collateral estoppel in” bankruptcy court. See New York Life, 142

F.3d at 879. This includes the relitigation of identical issues that the defendants

1984) (bankruptcy case filed to circumvent liquidation orders in state court dismissed as a bad
faith filing); In re Wally Findlay Galleries (N.Y.) Inc., 36 B.R. 849 (Bankr. S.D.N.Y.
1984) (bankruptcy case dismissed where intent was to relitigate not reorganize); but see In re LTL
Mgmt., LLC, 637 B.R. 396 (Bankr. D.N.J. 2022)(“Texas Two-Step” corporate restructuring and
transfer of liability to a reorganized debtor considered a valid bankruptcy purpose, not merely
aimed at gaining a tactical litigation advantage), appeal docketed, No. 22-2003 (3d Cir. Mar. 10,
2022).
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litigated and lost against a particular plaintiff in this Court. See, e.g., Jack Faucett

Assocs., Inc. v. AT&T, 744 F.2d 118, 124 (D.C. Cir. 1984) (citing S. Pac. Commc’ns

Co. v. AT&T, 740 F.2d 1011, 1014 n.2 (1984)). 3M also is enjoined from supporting,

directly or indirectly, financially or otherwise, any collateral attack on this Court’s

orders by any other parties in any other forum, including Aearo. After nearly three

and a half years of litigation, 3M has had a “full and fair opportunity to litigate” a

myriad of issues that were “critical and necessary” to the Court’s orders and

judgments. See Christo v. Padgett, 223 F.3d 1324, 1339 (11th Cir. 2000)

(articulating standard for collateral estoppel. Today’s injunction enforces the

preclusive effect of all of those orders and judgments. If 3M defies this injunction

by attempting to relitigate (or supporting relitigation of) these matters in the

bankruptcy court, this Court retains jurisdiction to convene contempt proceedings to

enforce compliance. See United States v. Coulton, 594 Fed. App’x 563, 565-66

(11th Cir. 2014).

Based on the foregoing, Valle’s Motion for Preliminary Injunction, ECF No.

3358, is GRANTED IN PART and DENIED IN PART, consistent with this Order.

DONE AND ORDERED this 16th day of August 2022.

M. Casey Rodgers
M. CASEY RODGERS
UNITED STATES DISTRICT JUDGE