Lagrange v. Eagle, Inc., et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IRMA LEE LAGRANGE 	CIVIL ACTION
VERSUS 	NO: 23-628
EAGLE, INC. ET AL. 	SECTION: “J”(5)
ORDER & REASONS
Before the Court is a Contested Motion to Reinstate Stay (Rec. Doc. 151), filed
by Defendant Huntington Ingalls Incorporated (“Avondale”). Plaintiffs oppose the
motion (Rec. Doc. 152), and Defendant Avondale has replied (Rec. Doc. 153). Having
considered the motion and legal memoranda, the record, and the applicable law, the
Court finds that the motion to reinstate the stay should be GRANTED, in accordance
with the reasoning below.
FACTS AND PROCEDURAL BACKGROUND
This 	matter 	arises 	from 	Plaintiff 	Irma 	Lee 	Lagrange’s 	contraction 	of
mesothelioma due to asbestos exposure, which was allegedly caused by laundering
her husband’s work clothes. Mrs. Lagrange’s husband, Allen C. Lagrange, worked at
Avondale’s Bridge City, Louisiana shipyard from 1973 until 1996. Allen was allegedly
exposed to asbestos at the Avondale shipyard through his work as a laborer, welder,
and 	pipefitter, 	which 	created 	dust 	that 	accumulated 	on 	his 	clothes. 	Asbestos
materials were used pursuant to contracts between the United States Government
and Avondale, and between Avondale and subcontractor Hopeman Brothers Inc.
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This action was originally filed by Mrs. Lagrange on December 29, 2022, in the
Civil District Court for the Parish of Orleans, State of Louisiana, and was later
removed to this Court pursuant to federal officer jurisdiction under 28 U.S.C.
§ 1442(a)(1). Five months after removal, Mrs. Lagrange passed away. Nearly eight
months later, Avondale informed the Court of Mrs. Lagrange’s passing, and counsel
for Plaintiff subsequently moved to substitute Mrs. Lagrange’s surviving children as
party plaintiffs.
Immediately relevant to the instant motion, in July of 2024, Defendant
Hopeman Brothers Inc. (“Hopeman”) filed notice of its voluntary petition for Chapter
11 bankruptcy in the United States Bankruptcy Court for the Eastern District of
Virginia. In response, the Court stayed this action as to Hopeman and requested
party briefing on whether the matter should be stayed in its entirety until the
bankruptcy 	proceeding 	against 	Hopeman 	was 	completed. 	Subsequently, 	on
November 22, 2024, the Court granted a stay of the proceedings until March 11, 2025,
at which point the Court planned to reassess whether the stay was still warranted.
However, the Court’s reassessment was not necessary because the parties filed a
consent motion to extend the stay to June 30, 2025. Since the stay expired on June
30, neither party has moved either to lift or extend the stay until Defendant Avondale
filed the instant motion, nor has there been any activity in the case on behalf of
Plaintiffs or Defendant Avondale since that time.
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LEGAL STANDARD
A district court has inherent power to control its own docket, including the
power to stay proceedings. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). However,
this control is “not unbounded,” and a court must “weigh competing interests and
maintain an even balance” before delaying a case premised on resolution of another
legal proceeding. Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 545 (5th Cir. 1983)
(quoting Landis, 299 U.S. at 254–55).
Pursuant to 11 U.S.C. § 362(a)(1), an automatic stay extends to proceedings
against Chapter 11 debtors. As the Fifth Circuit has long clarified, this stay does not
automatically apply to co-defendants of the Chapter 11 debtor: “The stay envisioned
is ‘applicable to all entities,’ § 362(a), but only in the sense that it stays all entities
proceeding against the debtor. To read the ‘all entities’ language as protecting co-
debtors would be inconsistent with the specifically defined scope of the stay ‘against
the debtor,’ § 362(a)(1).” Id. at 544. This automatic applicability to the debtor alone
flows from the purposes of the stay, which are “to protect the debtor’s assets, provide
temporary 	relief 	from 	creditors, 	and further equity 	of 	distribution among the
creditors by forestalling a race to the courthouse.” GATX Aircraft Corp. v. M/V
Courtney Leigh, 768 F.2d 711, 716 (5th Cir. 1985) (citing Wedgeworth, 706 F.2d at
544).
As to actions with other co-defendants, courts may consider a discretionary
stay. See Wedgeworth, 706 F.2d at 545 (citing Landis, 299 U.S. at 254–55). “Section
362 is rarely, however, a valid basis on which to stay actions against non-debtors.”
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Arnold v. Garlock, Inc., 278 F.3d 426, 436 (5th Cir. 2001) (citing id. at 544). Such a
stay is proper only if founded on (1) the balance of party interests, (2) “a clear
inequity” to the remaining co-defendants, and (3) a length “framed to contain
reasonable limits on its duration.” GATX Aircraft Corp., 768 F.2d at 716 (citations
omitted). Specifically, the party seeking a stay bears the burden of justifying a delay
by making “a clear case of hardship or inequity in being required to go forward,” and
the court must “carefully consider the time reasonably expected for resolution of the
‘other 	case’” 	because 	immoderate 	or 	indefinite 	stay 	orders 	are 	reversible.
Wedgeworth, 706 F.2d at 545 (citing Landis, 299 U.S. at 254–55); McKnight v.
Blanchard, 667 F.2d 477, 479 (5th Cir. 1982) (citations omitted).
DISCUSSION
In the Hopeman bankruptcy proceeding, the U.S. Bankruptcy Court for the
Eastern District of Virginia recently entered a Fifth Interim Order Extending the
Automatic Stay to Asbestos-Related Actions Against Non-Debtor Defendants, under
which both Defendant Hopeman and its insurer, Liberty Mutual, also a Defendant in
the instant case, are considered “protected parties.” Based on this order, Avondale
moved this Court to reinstate the stay of these proceedings as to all Defendants “until
the earlier of entry of a final order by the Bankruptcy Court confirming or affirming
the Joint 524(g) Plan or December 19, 2025.” (Rec. Doc. 151-1, at 1).
Avondale argues that the Court should reinstate the stay in this matter until
December 19, 2025, at the latest, based on the factors enumerated by the United
States Supreme Court in Landis v. North American Co. First, Avondale contends that
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a denial of its request to reinstate the stay would result in a hardship because
Avondale has filed a Crossclaim against Liberty Mutual, as insurer of the Hopeman
Interests, based on Mrs. Legrange’s previous assertion that her husband was exposed
to Micarta, which Avondale asserts was a product used by Hopeman and its
subsidiaries. However, based on the most recent order in the Hopeman bankruptcy
proceeding, Liberty Mutual remains a protected party, and therefore, Avondale
cannot pursue its Crossclaim against Liberty Mutual until the Bankruptcy Court
enters a final judgment regarding the Joint 524(g) Plan or December 19, 2025,
whichever is earlier.
Furthermore, because discovery in the instant case is still in the early stages
and a trial date has not yet been set, Avondale maintains that reinstatement of the
stay for a limited duration would not cause any prejudice to Plaintiffs. Finally,
Avondale states that a short stay of “just over a month” would promote judicial
economy because it would reduce the likelihood of “duplicative discovery” should the
stay be lifted as to the Hopeman Interests. (Rec. Doc. 151-1, at 5).
Conversely, Plaintiffs emphasize that the instant matter has been pending for
almost three years, and they claim that Hopeman “is not the primary target” of their
case. (Rec. Doc. 152, at 4). Moreover, Plaintiffs contend that Hopeman is not an
indispensable party and that, therefore, even in Hopeman’s absence, the Court will
be able to “accord[] complete relief among existing parties.” Id. at 4 (quoting Fed. R.
Civ. P. 19(a)(1)(A)). Plaintiffs rely on the Fifth Circuit’s decision in Wedgeworth v.
Fibreboard Corp. to bolster their arguments.
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In Wedgeworth, which was also an asbestos exposure case, an automatic stay
had been issued as to two defendants due to bankruptcy proceedings. Wedgeworth,
706 F.2d at 542. However, the Fifth Circuit concluded that these two defendants were
not “indispensable parties” under either Federal Rule 19 or Louisiana law. Id. at 546.
Furthermore, the court balanced the interests of the plaintiffs against those of the
remaining defendants and reached the conclusion that a stay should not be granted
and that plaintiffs should be permitted to proceed. Id. In balancing the parties’
interests, the Fifth Circuit specifically noted that the “realities of the hardship of a
stay on the plaintiffs, many of whom allege that they are dying from asbestosis, is
substantial,” and “the bankruptcy proceedings are not likely to conclude in the
immediate future.” Wedgeworth, 706 F.2d at 545.
Here, unlike in Wedgeworth, neither of these considerations exists. While the
Court certainly understands and appreciates Plaintiffs’ desire to bring an end to this
litigation, the Court also concludes that the hardship on Plaintiffs is outweighed by
the inequity that Defendant Avondale would suffer if it were prevented from pursuing
its Crossclaim against Liberty Mutual. The fact that the parties have not completed
discovery and there is not yet a scheduling order in this matter further supports this
conclusion. Moreover, in Wedgeworth, the duration of the requested stay was
indefinite and unpredictable, whereas in the instant matter, Defendant Avondale has
requested a stay of less than a month (until the earlier of a final order by the
Bankruptcy Court or December 19, 2025). In this case, balancing the interests of each
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party and the conservation of judicial resources, the Court finds that reinstating the
stay is appropriate.
CONCLUSION
Accordingly,
IT 	IS 	HEREBY 	ORDERED 	that 	Defendant 	Huntington 	Ingalls
Incorporated’s Contested Motion to Reinstate Stay (Rec. Doc. 151) is GRANTED,
and all proceedings in the above-captioned matter are STAYED until the earlier
of a final order by the United States Bankruptcy Court for the Eastern
District of Virginia regarding the Joint 524(g) Plan or December 19, 2025. At
the end of this period, the parties shall proceed in moving this litigation forward.
New Orleans, Louisiana, this 3rd day of December, 2025.
____________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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