On April 20, the U.S. Court of Appeals for the Second Circuit issued a unanimous ruling that may terminate much of the litigation triggered by the bankruptcy of Tronox Inc. The Court of Appeals dismissed the appeal for lack of jurisdiction. The case is In re Tronox Inc.
On February 1, 2016, the U.S. District Court for the Southern District of New York granted the motion of Kerr-McGee Corporation to dismiss, with prejudice, the Pennsylvania state court personal injury claims linked to Tronox’s operation of a wood-treatment plant located in Avoca, Pennsylvania. The District Court held that these claims were derivative and duplicative of class claims that were part of a $5.15 billion bankruptcy settlement and were barred by a permanent anti-suit injunction. The Court of Appeals, holding that the District Court did not modify or construe the injunction, its order was therefore not final, and the Court of Appeals had no jurisdiction to hear this case.
The earlier Pennsylvania class action was stayed by the bankruptcy proceedings filed in the Southern District of New York. Kerr-McGee spun off Tronox, and this spin-off left the Tronox debtors with “immense environmental and tort liabilities,” as recognized by the bankruptcy court in its ruling in In re Tronox Inc. The $5 billion settlement included $600 million set aside for the Tort Claims Trust, which included the Avoca Plaintiffs. The injunction entered at the behest of the settling parties meant that this attempt to revive the Pennsylvania litigation cannot proceed.