In re: BESTWALL LLC, f/k/a Georgia-Pacific LLC v. Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 21-2263
_____________
In re: BESTWALL LLC, f/k/a Georgia-Pacific LLC,
Appellant
_______________
BESTWALL LLC,
Appellant
v.
ARMSTRONG WORLD INDUSTRIES, INC. ASBESTOS
PERSONAL INJURY SETTLEMENT TRUST; CELOTEX
ASBESTOS SETTLEMENT TRUST; FLINTKOTE
ASBESTOS TRUST; PITTSBURGH CORNING
CORPORATION PERSONAL INJURY SETTLEMENT
TRUST; WRG ASBESTOS PI TRUST; FEDERAL-MOGUL
ASBESTOS PERSONAL INJURY TRUST; BABCOCK &
WILCOX COMPANY ASBESTOS PI TRUST; UNITED
STATES GYPSUM ASBESTOS PERSONAL INJURY
SETTLEMENT TRUST; OWENS CORNING /
FIBREBOARD ASBESTOS PERSONAL INJURY TRUST;
AND DII INDUSTRIES, LLC ASBESTOS PI TRUST; et al.,
Appellees
_______________

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On Appeal from the United States District Court
For the District of Delaware
(D.C. No. 1-21-mc-0141)
District Judge: Honorable Colm F. Connolly
_______________
Argued
March 15, 2022
Before: JORDAN, KRAUSE, and PORTER, Circuit Judges
(Filed August 24, 2022)
_______________
Garland S. Cassada
Richard C. Worf, Jr.
Robinson Bradshaw & Hinson
101 North Tryon Street – Suite 1900
Charlotte, NC 28246
Noel J. Francisco [ARGUED]
C. Kevin Marshall
Jones Day
51 Louisiana Avenue NW
Washington, DC 20001
Gregory M. Gordon
Jones Day
2727 North Harwood Street – Suite 600
Dallas, TX 75201

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Chad S.C. Stover
Barnes & Thornburg
1000 North West Street – Suite 1500
Wilmington, DE 19801
Counsel for Bestwall LLC
Beth E. Moskow-Schnoll [ARGUED]
Ballard Spahr
919 North Market Street – 11th Fl.
Wilmington, DE 19801
Burt M. Rublin
Ballard Spahr
1735 Market Street – 51st Fl.
Philadelphia, PA 19103
Counsel for Armstrong World Industries, Inc. Asbestos
Personal Injury Settlement Trust; Celotex Asbestos
Settlement Trust; DII Industries, LLC Asbestos PI
Trust; Flintkote Asbestos Trust; Pittsburgh Corning
Corporation Personal Injury Settlement Trust; WRG
Asbestos PI Trust; Federal-Mogul Asbestos Personal
Injury Trust; Babcock & Wilcox Company Asbestos PI
Trust; United States Gypsum Asbestos Personal Injury
Settlement Trust; and Owens Corning / Fibreboard
Asbestos Personal Injury Trust
Daniel K. Hogan [ARGUED]
Hogan McDaniel
1311 Delaware Avenue
Wilmington, DE 19806
Counsel for Matching Claimants
_______________

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OPINION
_______________
JORDAN, Circuit Judge.
As part of its bankruptcy proceedings in North Carolina,
Bestwall LLC wanted access to data owned by ten trusts
created to process asbestos-related claims against other
companies. That data is held by the trusts’ claims processing
agent, which is located in Delaware and opposed Bestwall’s
request. The Bankruptcy Court sided with Bestwall and
authorized the issuance of subpoenas. Once Bestwall served
those subpoenas, however, the trusts spoke up. They asked the
U.S. District Court for the District of Delaware to quash the
subpoenas, repeating the same arguments that had been made
in the Bankruptcy Court by their claims processing agent.
Certain asbestos claimants whose information was in the
database also joined in the motion to quash. The arguments
presented by the trusts and the claimants were evidently more
persuasive to the District Court than they had been to the
Bankruptcy Court, as the District Court quashed the
subpoenas.
Bestwall has now appealed that order and rightly
invoked the doctrine of collateral estoppel. We will therefore
reverse and remand with instructions to enforce the subpoenas
as originally ordered.
I. BACKGROUND
In November 2017, Bestwall filed for Chapter 11
bankruptcy relief in the U.S. Bankruptcy Court for the Western
District of North Carolina. In re Bestwall LLC, 606 B.R. 243,

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246 (Bankr. W.D.N.C. 2019). Facing asbestos-related mass
tort liabilities, Bestwall wants to establish a settlement trust, as
authorized by 11 U.S.C. § 524(g).1 Id. According to
Bestwall’s proposed plan of reorganization, it would fund a $1
billion trust to pay current and future asbestos claims. The
bankruptcy proceedings stalled, however, because of a dispute
over how Bestwall’s liabilities should be calculated. The
court-appointed representatives of individuals with current and
future asbestos claims argued that liability for future claims
should be based on the settlements of past asbestos claims
against Bestwall. Bestwall responded that those historical
settlements are poor indicators of its true liability. It said then,
and still contends, that asbestos claimants routinely “double-
dip,” taking money from multiple mass tort defendants and
thus repeatedly recovering for the same injury. That approach,
Bestwall argues, has resulted in artificially inflated settlements.
To prove its theory, Bestwall wants to inspect the
claimant data from other asbestos settlement trusts, so that it
can compare the list of individuals who have filed claims
against those trusts with the list of those who have filed claims
against it. To that end, it made a motion in the North Carolina
1 That statute “allows a company [in Chapter 11
bankruptcy proceedings] to set up a trust that will assume its
asbestos liabilities” and “authorizes an injunction to channel
all asbestos-related claims to such a trust.” In re W.R. Grace
& Co., 729 F.3d 311, 315 (3d Cir. 2013) (citing 11 U.S.C.
§ 524(g)(1)-(2)). Once the injunction goes into effect, any
asbestos-related claims that would have been brought against
the debtor must instead proceed against the trust. 11 U.S.C.
§ 524(g)(3)-(4).

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Bankruptcy Court in July 2020 seeking subpoenas for that data,
pursuant to Bankruptcy Rule 2004 (the “Rule 2004 Motion”).2
The primary target of the subpoenas was an entity called the
Delaware Claims Processing Facility (the “Facility”), a
Delaware limited liability company that possesses the claimant
data of, and administers legal claims against, ten asbestos
settlement trusts doing business in Delaware (the “Trusts”).3 It
is, in short, the claims processing agent for the Trusts.
Those Trusts were all established by corporate debtors-
in-possession that, like Bestwall, sought to resolve their
asbestos liabilities in bankruptcy.4 The Trusts exist to process
2 Bankruptcy Rule 2004 permits issuance of an “order
[for] the examination of any entity[,]” if the information sought
is relevant “to the acts, conduct, or property or to the liabilities
and financial condition of the debtor, or to any matter which
may affect the administration of the debtor’s estate, or to the
debtor’s right to a discharge.” Fed. R. Bankr. P. 2004(a)-(b).
3 Bestwall’s motion primarily sought information from
the Facility, but it also sought permission to subpoena the
Trusts directly, if necessary. In addition, Bestwall successfully
requested authority to issue a subpoena directed at the Manville
Personal Injury Settlement Trust, but that trust is not based in
Delaware and is not a party to this appeal.
4 The ten Trusts are: the Armstrong World Industries,
Inc. Asbestos Personal Injury Settlement Trust; the Celotex
Asbestos Settlement Trust; the DII Industries, LLC Asbestos
PI Trust; the Flintkote Asbestos Trust; the Pittsburgh Corning
Corporation Personal Injury Settlement Trust; the WRG
Asbestos PI Trust; the Federal-Mogul Asbestos Personal Injury

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and pay out asbestos claims, which requires them to collect
detailed information about each claimant’s identity, family,
finances, and medical history. The Trusts are obligated, under
their founding documents, to keep that claimant information
confidential, and they may disclose it only under certain
narrow circumstances.
Seven of the ten Trusts eventually formed the Facility
to administer and process asbestos claims on their behalf.5 All
ten Trusts have “claims processing agreements” with the
Facility that make them its “clients” (J.A. at 443-44, 447), and
they entrust it to collect the claimants’ confidential information
so it can process the claims. Although the claimant data
belongs to the Trusts, the Facility considers itself the
“custodian” or “steward” of the data in its possession. (J.A. at
445, 447.) Like the Trusts, it takes the confidentiality of that
data seriously. According to its Chief Operating Officer,
“[p]rotecting the security of these sensitive data is [the
Facility’s] highest operational priority.” (J.A. at 445.) To that
end, the Facility has made significant investments in data
Trust; the Babcock & Wilcox Company Asbestos PI Trust; the
United States Gypsum Asbestos Personal Injury Settlement
Trust; and the Owens Corning / Fibreboard Asbestos Personal
Injury Trust.
5 The DII Industries, LLC Asbestos PI Trust; the
Federal-Mogul Asbestos Personal Injury Trust; and the
Flintkote Asbestos Trust are not members of the Facility,
although one of Flintkote’s trustees sits on the Facility’s board
of directors.

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security, and it does not commingle information from one
Trust with that of another.
When Bestwall filed its Rule 2004 Motion, it served
copies on both the Facility and the Trusts.6 Only the Facility
appeared and expressed any objections. It represented that the
Trusts were “duty bound” to protect the claimant data sought
by Bestwall and hence “exercised their ownership of and
control over their claims data to protect such data from
improper disclosure[.]” (J.A. at 132-33.) But the Facility also
asserted that it was the one who received the claimants’
information and that it had its own obligations to preserve the
data’s confidentiality. It asked the North Carolina Bankruptcy
Court to deny the Rule 2004 Motion as overly broad and
intruding on confidential information or, in the alternative, to
order that any production of claimant data be limited to “a
random sample of up to 10% of the 15,000 claimants[,]” and
be anonymized before being produced to Bestwall or its expert.
(J.A. at 154-60, 166.) The Facility noted that its objection
“should not be construed to limit or waive any objections the
6 The Trusts do not dispute that each of them was served
with the Rule 2004 Motion and a notice of hearing. Although
the District Court in Delaware stated, when ruling on the
motion to quash now at issue, that “Bestwall served the 2004
Motion on the [Facility], but not on any of the Trusts” (J.A. at
9), the record reflects otherwise. The Motion was in fact
served on each of the Trusts (see J.A. at 296-97, 302 (affidavit
attesting that a copy of the Motion and the notice of hearing
were “served … via First Class U.S. Mail upon” a list of
entities that includes every Trust)), and the Trusts do not deny
that.

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individual … Trusts (or the individual claimants) might have
to such subpoenas.” (J.A. at 136 n.6.) And yet, despite being
given notice of the effort to access their information, none of
the Trusts appeared in the Bankruptcy Court to object to the
Rule 2004 Motion. They were, it seems, content to let the
Facility do the talking for them.
Following extensive briefing, record development, and
a two-day hearing that included argument from the Facility, the
North Carolina Bankruptcy Court granted the Rule 2004
Motion. In its order (the “Rule 2004 Order”), it authorized
Bestwall to serve subpoenas on the Facility “with respect to”
the Trusts and to serve subpoenas on the Trusts themselves, “if
necessary to effectuate this Order.” (J.A. at 51-52.) It also
imposed several measures to protect the confidentiality of the
data, including a requirement of post-production
anonymization by Bestwall’s expert. While it did not adopt the
Facility’s requested restrictions of random sampling and pre-
production anonymization, it did establish procedures for
“Matching Claimants” to file motions to quash.7
Bestwall proceeded to serve the subpoenas in Delaware
on the Facility and each of the Trusts. Two weeks later, the
Trusts – but not the Facility – moved in the District Court in
Delaware to quash or modify the subpoenas. They made the
same arguments about overbreadth and confidentiality that the
Facility had made in the North Carolina Bankruptcy Court, and
7 A “Matching Claimant” was defined in the Rule 2004
Order as (and is used herein to mean) any claimant who
appeared in both the Trusts’ and Bestwall’s databases and was
represented by counsel in submitting a claim.

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they generally requested the same conditions on any
production of claimant data – namely, random sampling and
pre-production anonymization. Shortly afterward, several law
firms claiming to represent more than 10,000 unidentified
Matching Claimants joined in the Trusts’ motion.
The District Court granted the motion to quash.8 It
observed that Bestwall’s request for claimant data bore many
similarities to the request made in a previous case, In re Owens
Corning, 560 B.R. 229 (Bankr. D. Del. 2016), in which the
bankruptcy court in the District of Delaware had placed
conditions on access to asbestos-related claimant data. The
Court found that “Bestwall ha[d] demonstrated a legitimate
purpose in requesting the Claimant data” and that “the
protections set in place by the [North Carolina] Bankruptcy
Court will go a long way toward protecting Trust Claimants’
sensitive data[,]” but it nonetheless held that “additional
safeguards” were necessary to match the ones granted in In re
Owens Corning, including the “appointment of an independent
facilitator to oversee production.” (J.A. at 21.) It quashed the
subpoenas “without prejudice to [Bestwall’s] right to seek
reissuance of the subpoenas seeking a narrower document
production that is consistent with the protections afforded by
[In re Owens Corning].” (J.A. at 22.) In response to a motion
from the Trusts to clarify the scope of its order, the District
Court issued a second order adopting the Trusts’ position that
any subpoenas needed to include random sampling and pre-
production anonymization, in addition to the In re Owens
8 The District Court also denied a motion from Bestwall
to transfer the proceedings back to the North Carolina
Bankruptcy Court.

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Corning protections. Bestwall timely appealed the District
Court’s orders.9
II. DISCUSSION
Bestwall argues, among other things, that the District
Court committed legal error by not applying collateral
estoppel, or, as it is also called, the doctrine of issue preclusion,
to hold the Trusts and the Matching Claimants to the outcome
of the subpoena litigation in the North Carolina Bankruptcy
Court. In particular, Bestwall points out that the Facility –
which guards the confidentiality of claimant data on behalf of
the Trusts – actively opposed the Rule 2004 Motion in the
bankruptcy proceedings. Because of that, says Bestwall, the
Trusts and the Matching Claimants should not have been
permitted to reassert the same arguments in the District Court
that were rejected in the earlier proceedings. On the record
here, we agree.
A. Jurisdiction and Standard of Review
The District Court had jurisdiction over the motion to
quash. See Fed. R. Civ. P. 45(d)(3). We have jurisdiction over
final decisions of the District Court. 28 U.S.C. § 1291.
9 While this appeal was pending, Bestwall obtained and
served new, more limited subpoenas on the Facility and the
Trusts, and the Trusts and the Matching Claimants again
moved to quash. Those developments do not moot this appeal,
however, as Bestwall maintains its desire to enforce its original
subpoenas, which, if enforced, entitle it to more information
than would the revised subpoenas.

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Although a discovery order is typically not final, and hence not
appealable, we deem it final when the appellant would have no
other avenue for obtaining review because the order in question
was issued by a court other than the one adjudicating the
underlying case. In re Madden, 151 F.3d 125, 127 (3d Cir.
1998). The District Court’s order here fits that bill. Appeals
from Bestwall’s bankruptcy proceedings will eventually go to
the Fourth Circuit, which lacks jurisdiction to review the
District Court’s order quashing the subpoenas, so Bestwall’s
only “means … to obtain appellate review” of that order lies
with us. Id.10
The Matching Claimants nonetheless contend the order
was not final because it quashed the subpoenas without
prejudice to Bestwall’s right to seek enforcement of different,
narrower subpoenas. But, as the very statement of that
argument confirms, the District Court granted the motion to
quash with prejudice to Bestwall’s right to enforce the
originally issued subpoenas. We therefore have jurisdiction to
hear Bestwall’s appeal.
We review for abuse of discretion the District Court’s
decision to quash the subpoenas. Wedgewood Vill. Pharmacy,
Inc. v. United States, 421 F.3d 263, 268 n.5 (3d Cir. 2005).
Such a decision will be disturbed only if it “rests upon a clearly
erroneous finding of fact, an errant conclusion of law[,] or an
improper application of law to fact.” Id. (quoting NLRB v.
Frazier, 966 F.2d 812, 815 (3d Cir. 1992)). “Application of
10 Appeals from the U.S. District Court for the District
of Delaware necessarily come to our Court. 28 U.S.C. §§ 41,
1294(1).

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collateral estoppel is a question of law,” over which we
exercise plenary review. Szehinskyj v. Att’y Gen., 432 F.3d
253, 255 (3d Cir. 2005).
B. The Arguments Are Not Forfeited
Before turning to the question of collateral estoppel, we
first consider the Trusts’ and the Matching Claimants’
assertion that Bestwall forfeited any right to address that issue
by failing to raise it in the District Court.11 As a court of
review, we generally decline to consider arguments that were
not first presented to the court whose ruling is before us. Simko
v. U.S. Steel Corp., 992 F.3d 198, 205 (3d Cir. 2021), cert.
denied, 142 S. Ct. 760 (2022). But preserving an argument
“does not demand the incantation of particular words; rather, it
requires that the lower court be fairly put on notice as to the
substance of the issue.” Nelson v. Adams USA, Inc., 529 U.S.
460, 469 (2000). Although Bestwall did not use the words
“issue preclusion” or “collateral estoppel” in opposing the
motion to quash, its arguments in the District Court
nonetheless advanced the same preclusion theory it pursues
before us, namely, that the North Carolina Bankruptcy Court’s
ruling is legally binding on the Trusts and the Matching
Claimants.
11 The parties briefed this issue as concerning a
“waiver” rather than a “forfeiture,” but failing to raise an
argument is a forfeiture. See United States v. Olano, 507 U.S.
725, 733 (1993) (“Whereas forfeiture is the failure to make the
timely assertion of a right, waiver is the ‘intentional
relinquishment or abandonment of a known right.’” (quoting
Johnson v. Zerbst, 304 U.S. 458, 464 (1938))).

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In the District Court, Bestwall contended that the
Facility is “the claims administration and processing agent” for
the Trusts, “was an active participant in [the North Carolina
Bankruptcy Court] litigation,” and “raised … identical
objections” in that court as the Trusts were again pressing in
the District Court. (J.A. at 314.) Bestwall explicitly and
repeatedly argued that the Rule 2004 Order was “binding on
the [Trusts]”; that the Trusts “were on notice of the [Rule 2004
Motion] since its filing”; and that the Trusts’ “efforts to
collaterally attack [the Rule 2004 Order] should be rejected.”
(J.A. at 315, 321; see also J.A. at 322-23.) Those assertions
were sufficient to put the District Court and the parties on
notice of the substance of Bestwall’s claim that the Trusts were
bound by the outcome of the Rule 2004 Motion, and indeed,
both the District Court and the Trusts understood Bestwall’s
argument to be that the motion to quash was “an improper
collateral attack” on the Rule 2004 Order. (J.A. at 16, 451.)
The Matching Claimants, too, were on notice of
Bestwall’s position that the motion to quash was an improper
effort to relitigate the Rule 2004 Motion. In fact, Bestwall
objected to the joinder in the motion to quash by one group of
claimants – a group that had also participated in the North
Carolina Bankruptcy Court proceedings – on the grounds that
the joinder was “yet another collateral attack” on the Rule 2004
Order because the claimants had “had every opportunity to
object to the [Rule 2004] Motion[.]” (D.I. 18 at 2.) And, in
any event, none of the Matching Claimants joined in the
motion to quash until it was fully briefed and under
consideration, so they cannot fairly complain that Bestwall did
not preemptively direct its arguments at them. The collateral
estoppel issue is rightly before us.

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C. The Rule 2004 Order Has Preclusive Effect
On the merits, Bestwall argues that issue preclusion bars
the Trusts and the Matching Claimants from relitigating the
Rule 2004 Motion because the Facility had already represented
their interests before the North Carolina Bankruptcy Court and
had come up short. Collateral estoppel prohibits a party from
relitigating an issue when: “(1) the identical issue was decided
in a prior adjudication; (2) there was a final judgment on the
merits; (3) the party against whom the bar is asserted was a
party or in privity with a party to the prior adjudication; and (4)
the party against whom the bar is asserted had a full and fair
opportunity to litigate the issue in question.” Doe v. Hesketh,
828 F.3d 159, 171 (3d Cir. 2016).12
Here, the first two elements are clearly met. As to the
first element, the disputes in the District Court and the North
Carolina Bankruptcy Court turned on the same issues: whether
the subpoenas were appropriate and, if so, whether any
conditions should be placed on their enforcement. Both courts’
orders addressed the same dataset and the same requested
conditions of production – random sampling and pre-
production anonymization. See Raytech Corp. v. White, 54
F.3d 187, 191 (3d Cir. 1995) (“To defeat a finding of identity
of the issues … the difference in the applicable legal standards
must be ‘substantial.’”).
12 We apply the federal law of preclusion when, as here,
the court that reached the original judgment was a federal
court. Doe v. Hesketh, 828 F.3d 1559, 171 (3d Cir. 2016).

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And as to the second element, the Bankruptcy Court’s
judgment on those issues was final. The Matching Claimants
argue that the Rule 2004 Order was not final because it
expressly permitted them to follow certain procedures in filing
motions to quash the subpoenas. But there was nothing
“avowedly tentative” about the Rule 2004 Order. (Matching
Claimants Answering Br. at 22-23 (quoting Lummus Co. v.
Commonwealth Oil Refin. Co., 297 F.2d 80, 89 (2d Cir.
1961)).) We have refused to apply an “unduly rigid” “concept
of ‘finality[,]’” and we accordingly treat an order as final for
preclusion purposes as long as it is “sufficiently firm to be
accorded conclusive effect.” Henglein v. Colt Indus.
Operating Corp., 260 F.3d 201, 209-10 (3d Cir. 2001) (quoting
Restatement (Second) of Judgments § 13 (1982)); In re
Docteroff, 133 F.3d 210, 216 (3d Cir. 1997) (same). The North
Carolina Bankruptcy Court’s ruling conclusively determined
whether the Rule 2004 subpoenas were appropriate and under
what conditions they should be enforced. See supra Section
II.A. That the Bankruptcy Court also included detailed
procedures for the implementation of its order is no reason to
treat the order as non-final.13
13 Moreover, the North Carolina Bankruptcy Court’s
provision of a route for the Matching Claimants to challenge
the subpoenas – without prejudging the merits of any such
challenge – is also consistent with the principle that questions
of preclusion are addressed by the court being asked to
relitigate previously decided issues. See Daewoo Elecs. Am.
Inc. v. Opta Corp., 875 F.3d 1241, 1244 (9th Cir. 2017) (noting
that “the second court must apply preclusion principles”
(emphasis added)); Midway Motor Lodge of Elk Grove v.
Innkeepers’ Telemanagement & Equip. Corp., 54 F.3d 406,
409 (7th Cir. 1995) (“In the law of preclusion … the court

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This case turns on the third and fourth elements of
collateral estoppel – whether the Trusts and the Matching
Claimants were in privity with the Facility, and whether they
had a full and fair opportunity to litigate the motion for
issuance of the subpoenas. The Matching Claimants do not
dispute that those two elements have been satisfied, so we are
left to consider only the arguments made by the Trusts.14 See
Beazer E., Inc. v. Mead Corp., 412 F.3d 429, 437 n.11 (3d Cir.
2005) (appellee who “fail[s] to respond to an appellant’s
argument in favor of reversal” forfeits “any objections not
obvious to the court to specific points urged by the [appellant]”
(second alteration in original) (quotation omitted)); In re
Incident Aboard D/B Ocean King, 758 F.2d 1063, 1071 n.9
(5th Cir. 1985) (“treat[ing] the failure to respond to [an
appellant]’s arguments as a concession” that the assertions are
true).
rendering the first judgment does not get to determine that
judgment’s effect; the second court is entitled to make its own
decision[.]”).
14 Bestwall argues that the Matching Claimants are
“bound by the Rule 2004 Order and barred from relitigating it”
because of their “relationship to the Trusts (and thus the
Facility, as to its work for its Trust clients).” (Opening Br. at
34-36.) We understand that to be, in effect, a privity-plus-
privity argument – that collateral estoppel applies to the
Matching Claimants because they were in privity with the
Trusts, which in turn were in privity with the Facility. We do
not address that argument because the Matching Claimants
make no effort to contest it. The point is conceded.

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As to the third element, it is true that the Trusts were not
themselves parties to the litigation over the Rule 2004 Motion.
They were served with the Motion and do not claim they were
unaware of it, but they did not participate in the proceedings.
“[T]here is generally a bar against applying collateral estoppel
to those who were not parties in the prior litigation[,]” but that
bar does not apply if the nonparty was in privity with a party.
Nationwide Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571
F.3d 299, 310 (3d Cir. 2009). Bestwall accordingly argues that
the Trusts were indeed in privity with the Facility and that the
Facility was a party to the bankruptcy proceedings.
Privity exists when a nonparty to the prior action was
“adequately represented by someone with the same interests
who was a party to the suit.” Taylor v. Sturgell, 553 U.S. 880,
894 (2008) (alteration and internal quotation marks omitted).
“Under th[at] ‘adequate representation’ exception” to the
principle that issue preclusion cannot be used against
nonparties, “the interests of the party and nonparty must be
squarely aligned and there must be either an understanding that
the party is acting in a representative capacity or special
procedural protections must have been in place in the original
action to ensure the due process rights of nonparties who might
face” preclusion. Nationwide, 571 F.3d at 313.
The exception applies here. First, the interests of the
Facility and the Trusts were, and still are, squarely aligned.
Both sought to fulfill their duties to protect the confidentiality
of the same data, which one possesses and the other owns.
Each made the same objections and arguments and sought the
very same conditions on production of the data. And seven of
the Trusts are members of the Facility, with a trustee of an

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eighth serving on the Facility’s board, which further confirms
that the Facility and the Trusts have the very same interests.
Second, the record reflects an understanding that the
Facility was acting in a representative capacity with respect to
the claimant data. In opposing the Rule 2004 Motion, the
Facility held itself out as an entity formed “to administer and
process asbestos-related personal injury claims on behalf of”
the Trusts and as the “steward” of the Trusts’ information, and
it characterized the Trusts as its “clients.” (J.A. at 442-44,
447.) It explained that, although the Trusts owned the claimant
data, it received all the claimant submissions, took all
necessary precautions to fulfill the Trusts’ obligation to keep
the data confidential, responded to subpoenas on the Trusts’
behalf, and took the lead on negotiating confidentiality
restrictions on subpoenas to be served on the Trusts. The
Facility also sometimes blurred the distinction between itself
and the Trusts. (See J.A. at 309 (claiming that Bestwall was
“ignor[ing] the trusts’ concerns about invasiveness of this
disclosure” (emphasis added)). Compare J.A. at 152 (referring
to “any data produced by the Trusts”), with J.A. at 154 (saying
that the Facility “would be amenable to producing [certain]
data”).) And, as the District Court noted, the Facility’s
opposition to the Rule 2004 Motion “was consistent with its
duty under its [agreements] with the Trusts to use its best
efforts” to ensure the confidentiality of their claimant data.
(J.A. at 10.) It is therefore entirely fair to conclude that the
Facility participated in the bankruptcy proceedings as a
representative of the Trusts.
The Trusts seek to forestall that conclusion by claiming
that the Facility, in opposing the Rule 2004 Motion, “told
Bestwall it was not representing the Trusts in the Bankruptcy

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Proceeding[.]” (Trusts Answering Br. at 26.) Their assertion
overstates the Facility’s position, which was that, “if the
[Bankruptcy] Court grants the Motion, the Debtor [, i.e.,
Bestwall,] should subpoena the individual … Trusts, not [the
Facility], and this Objection should not be construed to limit or
waive any objections the individual … Trusts … might have to
such subpoenas.” (J.A. at 136 n.6.) That statement does not
mean that the Facility was not representing the Trusts’
interests, nor does it undermine the fact that the Facility’s
interests were completely aligned with the Trusts’ and that it
adequately represented those interests. If anything, the
Facility’s effort to forestall later objections to the Trusts
renewing an attack on the subpoenas is just another example of
the Facility speaking for the Trusts.
In addition, the North Carolina Bankruptcy Court
proceedings included appropriate protections for the Trusts’
due process rights. We have observed that “prior notice” to a
nonparty “greatly strengthens any argument for preclusion.”
Nationwide, 571 F.3d at 313 n.19. The Trusts were given
advance notice of the Rule 2004 Motion and had ample
opportunity to present their arguments directly, rather than
through the Facility. They knew that Bestwall sought
subpoenas for their claimant data, and that those subpoenas
might well be directed at them. The Trusts could have raised
all their objections in the North Carolina Bankruptcy Court,
just as they later did in the District Court. They are thus not
ill-used by the recognition that their interests were adequately
represented by the Facility before the Bankruptcy Court. In
short, they were in privity with the Facility.
As to the fourth element – whether the Trusts had a full
and fair opportunity to contest the Rule 2004 Motion – the

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notice that the Trusts received informed them of Bestwall’s
desire to examine their data and alerted them to their right to
respond to the Motion orally or in writing. They did indeed
have a full and fair opportunity to litigate in the North Carolina
Bankruptcy Court the very issues they later raised in the
District Court. On this record, it is hard to avoid the impression
that the Trusts chose to let the Facility carry the fight in the first
instance and to keep themselves in reserve for a rearguard
action. While perhaps prudent in battlefield strategy, such an
approach in litigation risks issue preclusion, and that risk has
been realized here.15
The Matching Claimants, for their part, argue only that
issue preclusion cannot apply to them because Rule 45 entitles
them to challenge the subpoenas in the district court “for the
district where compliance is required[.]” Fed. R. Civ. P.
15 Applying issue preclusion to the Trusts does not, as
the Trusts suggest, disregard the legal distinction between a
limited liability company and its members. Our holding that
the Facility was acting on the Trusts’ behalf in opposing
Bestwall’s Rule 2004 Motion before the North Carolina
Bankruptcy Court, and was thus in privity with them, in no way
implies that the Facility is just an alter ego of the Trusts, see
Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d
1221, 1241 n.11 (10th Cir. 2017) (“Numerous … circuits have
found privity between related corporations without a
concomitant finding of alter-ego status or an otherwise
controlling relationship.” (citing, inter alia, Lubrizol Corp. v.
Exxon Corp., 929 F.2d 960, 966 (3d Cir. 1991))), nor does the
conclusion that the other elements of issue preclusion have
been met.

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45(d)(3)(A); see also Fed. R. Bankr. P. 9016 (extending Rule
45 to bankruptcy cases). That the proper venue for a motion to
quash lies in a particular district, however, does not change the
fact that collateral estoppel can be a valid response to such a
motion. Where, as here, the movant or its privy has already
litigated the relevant issues elsewhere, collateral estoppel is a
legitimate consequence. See In re Subpoena Duces Tecum
Issued to CFTC, 439 F.3d 740, 746 (D.C. Cir. 2006)
(recognizing a “right to raise collateral estoppel as a ground to
quash or modify a subpoena”); see also In re Application of
Am. Tobacco Co., 880 F.2d 1520, 1527 (2d Cir. 1989)
(holding, under New York preclusion principles, that “an
attack on a subpoena” is barred “in federal court” where the
subpoena has already been litigated in state court). The
drafters of Rule 45 contemplated exactly that, saying it may not
be appropriate for the court asked to enforce a subpoena to
resolve a motion to quash if the issuing court “has already ruled
on issues presented by the motion[.]” Fed. R. Civ. P. 45(f)
advisory committee’s note to 2013 amendment. In that
instance, transferring the motion to the issuing court, pursuant
to Rule 45(f), “may be warranted[.]” Id.
Allowing litigants to invoke issue preclusion on a
motion to quash is also consistent with the doctrine’s “dual
purposes” of “protect[ing] litigants from the burden of
relitigating an identical issue with the same party or his privy”
and “promot[ing] judicial economy by preventing needless
litigation.” In re Subpoena, 439 F.3d at 746 (quoting Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979)). On this
record, Rule 45(d) poses no obstacle to Bestwall’s right to
invoke collateral estoppel as a counter to arguments previously
litigated in the North Carolina Bankruptcy Court.

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III. CONCLUSION
For the foregoing reasons, we will reverse and remand
with instructions to enforce the original subpoenas issued by
the North Carolina Bankruptcy Court.

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