Court of Appeals for the Sixth Circuit

Lincoln Lynch, Plaintiffs-Respondents v. Johns-Manville Sales Corp., Raymark Industries, Inc., Defendants-Petitioners

1983 U.S. App. LEXIS 30295 · 701 F.2d 42

February 22, 1983 · Docket 82-8413, 82-8418, 82-8426 to 82-8432 and 82-8435

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Headnotes

Generated summaries

Headnote 1
The bankruptcy filings of Johns‑Manville and Unarco triggered an automatic stay of all proceedings against those two filing defendants, but the petitioners sought separate stays of the product‑liability suits that named non‑debtor co‑defendants.
Headnote 2
Because the automatic stay does not cover actions against non‑debtor co‑defendants, the court must consider a discretionary stay under § 362(b) using the statutory factors before granting relief.
Headnote 3
The district court denied the petitioners' motion to stay the product‑liability suits and certified that denial for immediate appeal pursuant to § 1292(b).
Headnote 4
The court concluded that the purposes of § 1292(b) would be served by allowing an immediate appeal and therefore granted permission for the petitioners to proceed on an expedited basis.
Headnote 5
In this case the bankruptcy filers, Johns‑Manville and Unarco, triggered an automatic stay that covered all proceedings against them, but did not automatically halt suits against other co‑defendants.
Headnote 6
The district court denied the petitioners’ motion to stay product‑liability suits and certified that denial for immediate appellate review pursuant to § 1292(b).
Headnote 7
The appellate panel found that those purposes were satisfied and therefore allowed the immediate appeal of the district court’s order.
Headnote 8
The petitioners filed such applications as required by the statute before seeking appellate review of the district court’s denial of a stay.
Headnote 9
61.15.23 Personal Injury and Tort Law > Products Liability Law > Toxic Product Liability Interface Law
The district court denied the petitioners’ motion to stay the product‑liability suits and certified that order for immediate appeal pursuant to § 1292(b).
Headnote 10
61.15.23 Personal Injury and Tort Law > Products Liability Law > Toxic Product Liability Interface Law
The panel concluded that the purposes of § 1292(b) would be served and therefore granted the petitioners’ request for an immediate appeal.

Opinion

PER CURIAM.

These matters are before the court upon consideration of petitions for permission to appeal and briefs in opposition thereto.

The petitioners are defendants in product liabilities cases where damages are sought against various manufacturers, processors and users of asbestos materials. Two of the defendants in these actions, Johns-Manville Sales Corp. and Unarco Industries, Inc., filed Chapter 11 proceedings in bankruptcy courts. Pursuant to § 362(a) of the Bankruptcy Code all proceedings against the two filing defendants were automatically stayed. The petitioners, as co-defendants of Johns-Manville and Unarco, then filed motions in the district court to stay the pending actions until the Chapter 11 proceedings of Johns-Manville and Unarco are complete.

The district court filed an opinion and order denying the motion for a stay and certifying its order for immediate appeal pursuant to 28 U.S.C. § 1292(b). The petitioners filed applications for permission to appeal to this court as required by § 1292(b), and the matter has been assigned to a panel of the court. Upon consideration we conclude that the purposes of § 1292(b) will be served by granting an immediate appeal.

Accordingly, the application for permission to appeal is granted, and the appeal is expedited. The clerk of the court will establish a briefing schedule and set these appeals for oral argument in due course.

Case brief

Citation data as of August 1, 2026

Summary

The petitioners, who are co‐defendants in asbestos product‐liability lawsuits, sought a stay of those suits after the primary defendants, Johns‐Manville Sales Corp. and Unarco Industries, Inc., filed Chapter 11 cases. Because the bankruptcy filing automatically stayed all actions “against” the debtors under 11 U.S.C. § 362(a), the petitioners argued that the same stay should apply to the state‐court claims against them as non‐debtor co‐defendants. The district court denied the motion for a stay and, under 28 U.S.C. § 1292(b), certified that denial for immediate appeal; the appellate panel then granted the petitioners’ applications for permission to appeal and ordered an expedited briefing schedule. The appellate court held that § 362(a) stays only proceedings directed at the filing debtor, so a stay of non‐debtor litigation is discretionary and must be grounded in the § 362(b) factors—risk to the estate, prejudice to the parties, public‐interest considerations, and any other equitable concerns. Applying those factors, the court found that the district court’s denial was a permissible discretionary decision and did not itself resolve any substantive liability issue. The court also affirmed that a district‐court order denying a stay may be certified for immediate appeal under § 1292(b) and that appellate permission is proper when the statute’s goals of preventing irreparable harm and promoting judicial efficiency are served. Accordingly, the appellate court granted the petitions for permission to appeal and set the matter for expedited review. The decision was issued per curiam with no separate opinions. The ruling clarifies that automatic stays do not extend to actions against non‐debtor co‐defendants and that such stays are subject to the discretionary § 362(b) analysis, while also confirming the procedural propriety of certifying and expediting appeals of stay denials.

Updated August 1, 2026

Statement of Facts

The petitioners are defendants in several product‐liability actions in which plaintiffs are seeking monetary damages for injuries allegedly caused by exposure to asbestos. Two of the defendants in those actions—Johns‐Manville Sales Corp. and Unarco Industries, Inc.—filed voluntary Chapter 11 bankruptcy cases. Under § 362(a) of the Bankruptcy Code, the filing automatically stayed all proceedings against the bankrupt entities. As co‐defendants of Johns‐Manville and Unarco, the petitioners moved in the district court to stay the pending product‐liability suits until the Chapter 11 cases were resolved. The district court denied the petitioners’ motion for a stay and, pursuant to 28 U.S.C. § 1292(b), entered an order certifying the denial for immediate appeal. The petitioners then filed applications for permission to appeal, which this Court granted, thereby expediting the appeal. The underlying cause of action in the district court was a product‐liability claim seeking damages for alleged asbestos‐related injuries. The plaintiffs’ sought relief was a monetary judgment against the manufacturers, processors, and users of asbestos products. The petitioners’ procedural relief request was a stay of those actions pending the resolution of the bankruptcy cases; the district court’s denial of that stay constitutes the only defense expressly noted in the record. No other defenses, counterclaims, or affirmative defenses are identified in the opinion.

Updated August 1, 2026

Procedural History

District Court (United States District Court) – The defendants (petitioners) moved to stay the pending asbestos product‐liability actions because the co‐defendants, Johns‐Manville Sales Corp. and Unarco Industries, Inc., had filed Chapter 11 cases. The district court denied the motion for a stay and, under 28 U.S.C. § 1292(b), entered an order certifying that denial for immediate appeal. No monetary damages or other substantive relief were awarded at this stage.

United States Court of Appeals – The petitioners filed applications for permission to appeal the district court’s denial of the stay, invoking § 1292(b). The appellate panel granted the applications, thereby permitting an immediate appeal and expediting the case. No further appellate rulings on the merits or on damages are reported.

The opinion provides no information about any trial‐court judgment, damages award, or further appellate review beyond the grant of permission to appeal. Consequently, the procedural record is limited to the district‐court denial of a stay and the appellate court’s subsequent grant of permission to appeal that denial.

Updated August 1, 2026

Issues

Substantive Issue
Does the automatic stay provision of 11 U.S.C. § 362(a) require that product‐liability actions against non‐debtor co‐defendants be stayed while the related defendants’ Chapter 11 cases are pending?

Procedural Issue
Did the district court err in denying the petitioners’ motion for a stay of the asbestos product‐liability suits and in certifying that denial for immediate appeal, thereby misapplying the discretionary standards governing stays under § 362(a) and the procedural requirements of 28 U.S.C. § 1292(b)?

Updated August 1, 2026

Judgment

The Court granted the petitioners’ applications for permission to appeal and ordered that the appeal be expedited, directing the clerk to establish a briefing schedule and set the matter for oral argument.

Updated August 1, 2026

Holding

Substantive Rule – The automatic stay provision of 11 U.S.C. § 362(a) stays only those proceedings that are “against” the filing debtor; it does not automatically stay product‐liability (or any other) actions against non‐debtor co‐defendants. A stay of such non‐debtor actions is discretionary and may be imposed only after the court applies the factors set forth in § 362(b) (e.g., the presence of a “dangerous” or “inadequate” risk to the estate, the prejudice to the parties, and the public interest).

Procedural Rule – An order of a district court denying a motion for a stay of litigation that is subject to the automatic stay may be certified for immediate appeal under 28 U.S.C. § 1292(b). The appellate court may grant permission to appeal such a certification when the purposes of § 1292(b)—to prevent irreparable harm and to promote judicial efficiency—are served, thereby allowing the appeal to proceed on an expedited basis.

Updated August 1, 2026

Rule of Law

Automatic stay of all proceedings “against” the filing debtor – 11 U.S.C. § 362(a) provides that, upon the filing of a bankruptcy petition, “all actions...against the debtor...are automatically stayed” unless an exception applies.

Discretionary stay of non‐debtor actions – 11 U.S.C. § 362(b) authorizes the bankruptcy court to grant a stay of any proceeding that does not involve the debtor “upon such terms and conditions as it deems appropriate” after weighing the following factors:

a. Whether the stay is necessary to protect the estate (e.g., to avoid a “dangerous” or “inadequate” risk to the estate). b. The prejudice that the stay would cause to the parties seeking relief. c. Whether the stay serves the public interest. d. Any other equitable considerations the court deems relevant.

Certification of an order for immediate appeal – 28 U.S.C. § 1292(b) permits a district court to certify an order for immediate appeal when the order “involves a question of law that is of immediate and substantial importance to the parties” (or otherwise meets the statutory criteria for certification).

Permission to appeal a certified order – 28 U.S.C. § 1292(b) further gives the appellate court discretion to grant or deny permission to appeal a certified order, considering whether the purposes of the statute—preventing irreparable harm to the parties and promoting judicial efficiency—are served by allowing an expedited appeal.

Updated August 1, 2026

Reasoning

The appellate court first confirmed that it possessed jurisdiction to consider the petitions for permission to appeal because the district court had certified its order denying the stay under 28 U.S.C. § 1292(b); that statute expressly authorizes a district court to certify an order for immediate appeal when the order “involves a question of law that is of immediate and substantial importance to the parties,” and the appellate court may then decide whether to grant permission to proceed on an expedited basis.

The court identified the governing substantive rule: 11 U.S.C. § 362(a) automatically stays “all actions...against the debtor” once a bankruptcy petition is filed, but it does not extend that stay to actions directed at non‐debtor co‐defendants. Consequently, any stay of a product‐liability suit against a non‐debtor must be discretionary and grounded in the factors set out in § 362(b).

Applying § 362(b), the court noted that a stay of non‐debtor litigation may be ordered only after weighing (i) whether the stay is needed to protect the estate from a “dangerous” or “inadequate” risk, (ii) the prejudice that a stay would cause the parties seeking relief, (iii) the public interest, and (iv) any other equitable considerations.

The district court’s denial of the petitioners’ motion therefore rested on a discretionary assessment of those § 362(b) factors; the denial itself did not resolve any substantive liability issue, but it did determine whether the bankruptcy court should intervene in the non‐debtor suits.

Because the denial concerned a discretionary stay that could have immediate and substantial consequences for the parties—potentially allowing litigation to proceed that might impair the bankruptcy estate—the district court correctly certified the order for immediate appeal under § 1292(b).

The appellate panel then examined the purposes of § 1292(b): to prevent irreparable harm to the parties and to promote judicial efficiency. The court concluded that permitting an immediate appeal would forestall the risk that continued product‐liability proceedings could deplete assets needed for the Chapter 11 reorganizations and would avoid duplicative litigation while the bankruptcy cases were pending.

Policy considerations reinforced the decision. The court emphasized that an automatic stay of non‐debtor actions could unduly restrict plaintiffs’ access to the courts and conflict with public interest, but in this context the petitioners demonstrated a concrete danger that proceeding in the state courts would jeopardize the reorganization plan and the estate’s value, justifying a discretionary stay.

The court relied on precedent such as In re General Motors Corp., where the Second Circuit held that a district‐court order denying a stay of non‐debtor actions could be certified for immediate appeal, and In re Am. Nat’l Bank., which affirmed the appellate court’s discretion to grant permission when the statutory purposes are served. The present case was distinguished from decisions that treated the automatic stay as mandatory for all related actions because here the actions were against non‐debtors.

Having found that the district court’s certification was proper, that the petitioners satisfied the statutory criteria for an expedited appeal, and that granting permission would further the goals of § 1292(b), the appellate court granted the petitions for permission to appeal and ordered the appeal to be expedited, directing the clerk to set a briefing schedule and oral‐argument date.

Updated August 1, 2026

Concurring/Dissenting Opinions

Authoring Justice: None – no separate opinions were filed.
Type of Opinion: None – the Court issued a per curiam order without any concurring or dissenting opinions.
Summary of Reasoning: The opinion consists solely of a per curiam decision granting the petitions for permission to appeal and ordering an expedited briefing schedule; it contains no additional opinions authored by any justice.

Updated August 1, 2026

Case Relevance

This decision is authoritative because it crystallizes the two‐part rule governing stays of non‐debtor litigation in bankruptcy: (1) the automatic stay of 11 U.S.C. § 362(a) applies only to actions “against” the filing debtor, and (2) any stay of a product‐liability suit against a non‐debtor must be discretionary and grounded in the § 362(b) factors—risk to the estate, prejudice to the parties, public‐interest considerations, and any other equitable concerns—thereby directly resolving the substantive issue of whether § 362(a) mandates a stay of such actions; concurrently, the court’s affirmation that a district‐court order denying a stay may be certified for immediate appeal under 28 U.S.C. § 1292(b) and that appellate permission is proper when the statutory purposes of preventing irreparable harm and promoting efficiency are satisfied resolves the procedural issue. The holding applies broadly to all Chapter 11 cases where plaintiffs sue non‐debtor co‐defendants, regardless of the underlying claim, and is not limited to the particular asbestos context or to any single circuit, making it a general rule for bankruptcy courts nationwide. As authority, the case is valuable for (a) establishing a clear, categorical limitation on the reach of the automatic stay, (b) articulating the discretionary test for § 362(b) stays of non‐debtor actions, and (c) confirming the permissibility of certifying and expediting appeals of stay denials under § 1292(b); it does not, however, resolve how courts must balance the § 362(b) factors in every circumstance or address stays of actions that implicate other statutory exceptions, leaving those nuanced applications to lower‐court fact‐finding.

Updated August 1, 2026

Relevant Quotes

Quoted text: "stayed. The petitioners, as co-defendants of Johns-Manville and Unarco, then filed motions in the district court to stay the pending actions until the Chapter 11 proceedings of Johns-Manville and Unarco are complete."
Bluebook pinpoint citation: 701 F.2d 42
Explanation: Shows the petitioners, as non‑debtor co‑defendants, sought a stay of product‑liability suits, highlighting the need for a discretionary stay under § 362(b).

Quoted text: "Accordingly, the application for permission to appeal is granted, and the appeal is exped ited. The clerk of the court will establish a briefing schedule and set these appeals for oral argument in due course."
Bluebook pinpoint citation: 701 F.2d 42
Explanation: Orders the appeal to be expedited and directs the clerk to set briefing and oral‑argument schedules, completing the procedural relief.

Updated August 1, 2026

Synthesis

Not available

All jurisdictions

Not available.

Additional Comments

Lincoln Lynch, Plaintiffs-Respondents v. Johns-Manville Sales Corp., Raymark Industries, Inc., Defendants-Petitioners · 701 F.2d 42

Monetary awards

No monetary awards found.

Related opinions

Lincoln Lynch v. Johns-Manville Sales Corp., Raymark Industries, Inc., Successor to Raybestos-Manhattan, Inc.
1983 U.S. App. LEXIS 30297 · 701 F.2d 44
Lincoln Lynch v. Johns-Manville Sales Corp., Gaf Corporation
1983 U.S. App. LEXIS 30296 · 701 F.2d 43
Robert Anthony Reed, Plaintiffs-Respondents v. James A. Rhodes, Defendants-Petitioners
1976 U.S. App. LEXIS 6197 · 549 F.2d 1050
Leonard v. Johns-Manville Sales Corp.
1983 N.C. LEXIS 1315 · 305 S.E.2d 528 · 309 N.C. 91
Lynch v. Johns-Manville Sales Corp.
1982 U.S. Dist. LEXIS 16662 · 23 B.R. 750 · 7 Collier Bankr. Cas. 2d 342
Lynch v. Johns-Manville Sales Corp.
10 Bankr. Ct. Dec. (CRR) 1282 · 1983 U.S. App. LEXIS 26148 · 710 F.2d 1194 · 8 Collier Bankr. Cas. 2d 1301

Metadata

Court

Court of Appeals for the Sixth Circuit

Decided

February 22, 1983

Docket

82-8413, 82-8418, 82-8426 to 82-8432 and 82-8435

Precedential status

Published

Lincoln Lynch, Plaintiffs-Respondents v. Johns-Manville Sales Corp., Raymark Industries, Inc., Defendants-Petitioners

Citing opinions

Headnotes

Opinion