Asbestos Settlement Trust v. City of New York

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-12941 May 29, 2007
________________________THOMAS K. KAHN
CLERK
D. C. Docket Nos.
04-02780-CV-T-26-TGW
90-10016-BKC-8G

IN RE:
CELOTEX CORPORATION,
CAREY CANADA INC.,
Debtors.

ASBESTOS SETTLEMENT TRUST,

Appellant,

versus

CITY OF NEW YORK,

Appellee.
_______________________

Appeal from the United States District Court
for the Middle District of Florida
_________________________

(May 29, 2007)
Before BIRCH, CARNES and BRUNETTI,* Circuit Judges.

BRUNETTI, Circuit Judge:

The Asbestos Settlement Trust was uniquely created to resolve and liquidate

thousands of personal injury and property damage claims against The Celotex

Corporation and Carey Canada. This appeal involves one subset of those claims:

asbestos property damage claims by the City of New York that the claims

administrator allowed but the trustees refused to pay. The City of New York and

the trustees dispute the scope of the trustees’ power to overrule the administrator’s

determinations, whether the administrator’s decisions or the trustees’ decisions are

entitled to deference, and ultimately whether the City of New York’s claims must

be paid. The bankruptcy court granted summary judgment in favor of the City of

New York, and the district court affirmed. We affirm in part and reverse and

remand in part.

I

The Celotex Corporation (“Celotex”) was a major manufacturer and

nationwide distributor of building materials containing asbestos. Carey Canada

*
Honorable Melvin Brunetti, Senior United States Circuit Judge for the Ninth Circuit,
sitting by designation.

2
Inc. (“Carey Canada”), a wholly-owned subsidiary of Celotex, mined and

distributed asbestos fiber until it ceased operations in 1986. In October 1990,

Celotex and Carey Canada (collectively “Debtors”) filed petitions for Chapter 11

bankruptcy protection after being named as defendants in thousands of asbestos

personal injury (“PI”) lawsuits filed by individuals and hundreds of asbestos

property damage (“PD”) lawsuits filed by property owners injured by the presence

of asbestos-containing materials in their buildings. In re Celotex Corp., 204 B.R.

586, 589, 604-05 (Bankr. M.D. Fla. 1996) (findings of fact and conclusions of law

supporting confirmation of the plan of reorganization). The City of New York

was one of those PD plaintiffs.

Producing an acceptable and workable Chapter 11 reorganization plan

ultimately required multiple proposals by interested parties, modifications, and

extensive arms-length negotiations, settlements and compromises over the course

of six years. Id. at 597 ¶ 68, 601-02 ¶¶ 118, 120. A major point of contention

involved how to ensure that PI and PD claimants would be paid in substantially

equivalent proportions despite inherent class differences. The number of PD

claims was fixed (approximately 4,800 claims from 125 claimants), but the

number of PI claimants (over 500,000 at last count) continues to expand as new

individuals manifest asbestos-related injuries.

3
 The reorganization plan initially proposed by the Debtors in March 1996

contemplated a segregated and fixed fund for PD claims, with PI claims being paid

out of the remaining assets. The Debtors’ proposal was supported by the Asbestos

Property Damage Claimants Committee; however, other interested groups

challenged the segregated fund as allegedly too large and therefore unfair to PI

claimants, whose fractional recovery against the remaining assets might prove

proportionately smaller than that of PD claimants. After lengthy and unsuccessful

negotiations, the Debtors’ proposed plan was withdrawn. The Bankruptcy Court

denied confirmation, terminated the exclusive period under 11 U.S.C. § 1121(b),

and opened the doors to interested parties to file proposed plans by July 1996. Id.

at 591 ¶¶ 13-15.

Competing reorganization plans were filed by parties on both sides of the

segregated fund dispute, with the Debtors shifting alliances. The Debtors, in

cooperation with those who had opposed the Debtors’ initial proposal

(collectively, the “Plan Proponents”), proposed one plan. The Asbestos Property

Damage Claimants Committee proposed another. Id. at 591 ¶¶ 16-19.

This time the competing factions successfully negotiated their differences.

By agreement, the Committee’s proposed plan was withdrawn and the Plan

Proponents’ plan was modified and re-filed October 7, 1996. Id. at 592 ¶ 21.

4
After subsequent modifications and a hearing on confirmation, the Modified Joint

Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code

for The Celotex Corporation and Carey Canada Inc. (the “Plan”) was confirmed by

bankruptcy court in a written decision issued December 6, 1996. Id. at 616.

Among many other things, the bankruptcy court found: “The settlements and

compromises contained in the Plan are fair, reasonable, equitable and in the best

interest of the Debtors’ creditors and their Estates.” Id. at 602 ¶ 120.

A principal feature of the Plan is the creation of the Asbestos Settlement

Trust (the “Trust”), which was established in accordance with section 524(g) of

the Bankruptcy Code, a provision specifically applicable to Chapter 11

reorganizations involving asbestos tort liabilities. 11 U.S.C. § 524(g)(2)(B)(I).

The Trust is also intended to be a qualified settlement fund under section 468B of

the Internal Revenue Code, 26 U.S.C. § 468B. See Plan arts. 5.1, 7.3; Trust art.

2.2. It was executed under and is governed by Florida law. Trust art. 9.11.

The purposes of the Trust are essentially to receive and manage the Trust

assets (over $1.2 billion), to assume the Debtors’ current and future liabilities from

asbestos PI and PD claims (estimated at over $13 billion), and “to address,

liquidate, resolve, and disallow or allow and pay Asbestos Claims.” In re Celotex,

204 B.R. at 602 ¶ 121; see also 11 U.S.C. § 524(g)(2)(B)(I); Plan art. 5.1; Trust

5
art. 2.2. In contrast to the original proposal of segregated funds, the Trust adopts

more of a hybrid approach by segregating the processing but not the payment of PI

and PD claims. To ensure substantially equal treatment among both classes, all

allowed claims are to be paid out of the Trust as a unified fund, with the

distribution of payments administered by a panel of Trustees. See Plan arts.

4.8(a)(8), 5.1; Trust arts. 2.2, 3.3, 3.4. The claims are processed in the first place,

however, under separate procedures administered by different entities. PI claims

are administered by the Trustees under the Asbestos Personal Injury Claims

Resolution Procedures (“APICRP”). Trust arts. 3.1(c)(viii), 3.3(b)(iii). PD claims

are administered by the Property Damage Claims Administrator (the

“Administrator”) under the Asbestos Property Damage Claims Resolution

Procedures (“APDCRP”). Plan art. 4.8(a)(8); Trust arts. 1.2, 3.3(c). As the

Administrator is but one person, he is charged with the establishment and

supervision of a claims facility (the “PD Facility”) to conduct the day-to-day

processing and disposition of PD claims under the APDCRP. APDCRP

§ IV(A)(35). The APICRP and the APDCRP, collectively known as the Asbestos

Claims Resolution Procedures (“CRP”), are annexed to and incorporated by

reference within the Trust Agreement (collectively, the “Trust Documents”), and

along with the Trust Agreement are in turn incorporated within the Plan

6
(collectively, the “Plan Documents”).1 Plan arts. 1.26, 1.106, 1.143, 1.146; Trust

art. 1.2. In the event of inconsistencies, the Plan controls. See Trust art. 9.13.

The APDCRP set forth, among other things, the legal prerequisites for

allowing or disallowing PD claims, the standard of proof, the documentation

requirements for each category of PD claims, and the procedures for processing,

investigating and officially resolving PD claims, including procedures for

reconsideration and binding arbitration in the event the claimant is unsatisfied by

the PD Facility’s determination. APDCRP § IV(B)-(E). Although generally

“taking into account basic principles and laws of the tort system,” the APDCRP

relax the usual standards of proof by requiring only “Reasonable Evidence” or

“evidence sufficient to present a jury issue under the tort system of one of the

Applicable Jurisdictions.” APDCRP §§ III, IV(A)(37), (B)(1). A major tradeoff is

that allowed claims are not paid in full. Because the Trust’s current and future

liabilities for asbestos claims greatly exceed the Trust assets, the Plan directs the

Trustees to pay all allowed PI and PD claims according to a “Payment

Percentage,” which the Trustees may adjust from time to time to ensure

1
The Trust Agreement and the APDCRP have been amended from time to time since
confirmation. At issue in this appeal are the “Third Amended and Restated Asbestos Property
Damage Claims Resolution Procedures,” Annex C to the “Second Amended and Restated
Asbestos Settlement Trust Agreement.”

7
substantially equal treatment of all present and future claims. See Plan art. 5.1.

Historically, allowed claims have been paid at approximately 11.3 to 12 percent of

the allowed amount.

In the event of disputes under the Plan, the bankruptcy court retains

jurisdiction for the purposes of, among other things, assuring performance of

obligations under the Trust and enforcing and interpreting the terms and

conditions of the Plan Documents. See Plan art. 13.3(c)-(e); see also In re

Celotex, 204 B.R. at 630-32 ¶¶ 68-70.

II

The City of New York is one of 125 PD claimants but the only claimant in

this appeal. In 1999, NYC filed approximately 769 PD claims relating to asbestos

in its public buildings. The PD Facility initially allowed 439 and disallowed 330

of NYC’s claims. Of those initially disallowed, 52 claims were subsequently

allowed by independent arbitrators under the APDCRP provisions for binding

dispute resolution. Thus, of NYC’s 769 original claims, a total of 491 were

allowed and 278 were disallowed under the APDCRP.

When submitted by the Administrator to the Trust for payment, however,

the Trustees agreed to pay only a small fraction of NYC’s 491 allowed claims.

The Trustees refused to pay most, asserting that the Administrator’s claim

8
allowance decisions were, in the Trustees’ judgment, erroneous under the

ADPCRP’s substantive standards. Trustees did not once overrule the

Administrator, however, with regard to NYC’s 278 claims that had been

disallowed.

In September 2000, NYC and the Trustees turned to the bankruptcy court to

resolve their emerging dispute, which largely centered on the Trustees’ authority

to refuse to pay allowed PD claims. In opposing motions, each party sought an

order from the bankruptcy court upholding their respective interpretation of the

Plan Documents, with NYC also requesting an order directing prompt payment of

its allowed claims. The litigation proceeded pursuant to an “Agreed Order”

permitting the Trustees to review some of NYC’s disputed claims and providing

that each party could “present any issues, including claim disputes, to [the

bankruptcy court] on a group basis in the interests of efficiency and judicial

economy.” After further review, the Trustees ultimately paid 73 of NYC’s

allowed claims in an amount exceeding $11 million. But the Trustees continued to

refuse payment of 418 of NYC’s 491 allowed claims, prompting NYC to again

move to compel payment of all allowed PD claims.

In accordance with the Agreed Order, the Trustees presented to the

bankruptcy court demonstrative examples of their various grounds for nonpayment

9
of the disputed claims. The Trustees identified six “Illustrative Claims,” five of

which (numbers 1, 2, 3, 4 and 6) are at issue in this appeal. As noted by the

district court, the Illustrative Claims were “the Trust’s best examples to prove its

litigation position.” Both parties subsequently filed multiple cross motions for

summary judgment.

Addressing the parties’ fundamental dispute regarding the relative powers

of the Administrator and Trustees over the allowance and payment of PD claims,

the bankruptcy court held:

[T]he documents do not provide authority for the Trust to
review the [Administrator’s] allowance of specific Claims. This
conclusion is based on the findings that (1) the Trust Agreement and
the APDCRP specifically delegate to the [Administrator] the power to
determine and allow Claims; (2) the Plan documents do not contain
any procedures to resolve disputes involving Claims that have been
allowed by the [Administrator]; and (3) the absence of a procedure for
the Trust’s review of allowed Claims is consistent with the “low
transaction cost” method of resolving Claims that was fully
negotiated prior to confirmation.
Review by the Trust of determinations by the [Administrator] is
limited to evaluating whether the [Administrator] abused his
discretion. This conclusion is consistent with the overall structure of
the Trust Agreement and the APDCRP, which expressly delegate the
fact-finding function and responsibility for the analysis of Property
Damage Claims to the [Administrator]. The conclusion is also based
on prior decisions of the Court, as well on certain provisions of the
Plan documents that confer limited oversight functions on the Trust.

Accordingly, in considering the Trustees’ theories for nonpayment of the

Illustrative Claims, the bankruptcy court reviewed the Administrator’s – not the

10
Trustees’ – decisions under the APDCRP for an abuse of discretion. Finding

none, the court directed the Trustees to pay the Illustrative Claims and all of

NYC’s allowed claims that were similar. The parties subsequently stipulated that

the bankruptcy court’s judgment would require payment of NYC’s 418 disputed

claims in an amount exceeding $40.7 million plus interest.

Reviewing the bankruptcy court’s decision de novo, the district court

affirmed in total. The Trustees, as representatives of the Trust, now appeal to this

court, which has jurisdiction under 28 U.S.C. § 158(d).

III

“As the second court of review of a bankruptcy court’s judgment, this court

examines independently the bankruptcy court’s factual and legal determinations

and employs the same two review standards used by the district court.” In re Club

Associates, 951 F.2d 1223, 1228 (11th Cir. 1992) (internal quotation marks,

footnote and citation omitted). Specifically, we review a bankruptcy court’s

factual findings for clear error and its legal conclusions de novo. In re Sublett,

895 F.2d 1381, 1383-84 (11th Cir. 1990). Of course, this being a summary

judgment proceeding which by definition involves no findings of fact, only one of

those standards is appropriate: de novo review. In re Optical Techs., Inc., 246

F.3d 1332, 1335 (11th Cir. 2001). In adversary proceedings in bankruptcy cases,

11
we apply the usual and well-known summary judgment standards. See Fed. R.

Civ. P. 56; In re Optical Techs., 246 F.3d at 1334.

IV

Like the bankruptcy and district courts before us, before analyzing the

validity of NYC’s disputed asbestos claims, we must first resolve the more

fundamental issues of the relative powers of the Administrator and the Trustees

over the resolution and payment of PD claims and whether either’s decisions are

entitled to deference. The Trustees claim they possess the discretionary authority

to overrule the Administrator and deny payment of claims they determine to be

invalid under the APDCRP. Accordingly, the Trustees argue that the bankruptcy

court should have reviewed their decisions for an abuse of discretion, not the

Administrator’s decisions which allegedly do not warrant deferential review.

NYC responds that the Trustees’ actions are ultra vires under the Trust and

APDCRP, which properly assign to the Administrator exclusive authority and

discretion to resolve PD claims and to direct payment by the Trustees.

To determine the respective powers of the Trustees and the Administrator,

we must independently interpret the terms of the Plan Documents, especially the

Trust Agreement and the incorporated APDCRP. See Firestone Tire & Rubber

Co. v. Bruch, 489 U.S. 101, 112 (1989) (“As they do with contractual provisions,

12
courts construe terms in trust agreements without deferring to either party’s

interpretation.”). “The extent of [a trustee’s] duties and powers is determined by

the trust instrument and the rules of law which are applicable, and not by his own

interpretation of the instrument or his own belief as to the rules of law.”

Restatement (Second) of Trusts § 201 cmt. b (1959). “From the trust, the trustee

derives the rule of his conduct, the extent and limit of his authority, the measure of

his obligation.” Jones v. First Nat’l Bank in Fort Lauderdale, 226 So.2d 834, 835

(Fla. Dist. Ct. App. 1969); see also Fla. Stat. Ann. § 737.401 (1997). “[T]he

trustee can properly exercise such powers and only such powers as (a) are

conferred upon him in specific words by the terms of the trust, or (b) are necessary

or appropriate to carry out the purposes of the trust and are not forbidden by the

terms of the trust.” Restatement (Second) of Trusts § 186 (1959); see also id.

§ 164. The extent and limit of the Administrator’s powers are similarly

determined by the terms of the Trust Agreement. Plan arts. 1.116, 5.9(b);

APDCRP § IV(A)(34); see also Restatement (Second) of Trusts § 37 (“[T]he

settlor may grant powers to . . . the trustee, a beneficiary, or a third person

otherwise unconnected with the trust.”).

With regard to the particular question of whether the Trustees may be duty

bound to comply with the Administrator’s determinations, the general rule is:

13
 “If under the terms of the trust a person has power to control the
action of the trustee in certain respects, the trustee is under a duty to
act in accordance with the exercise of such power, unless the
attempted exercise of the power violates the terms of the trust or is a
violation of a fiduciary duty to which such person is subject in the
exercise of the power.”

Restatement (Second) of Trusts § 185 (1959); see also Herman v. NationsBank

Trust Co. (Georgia), 126 F.3d 1354, 1370 (11th Cir. 1997) (applying § 185 cmt. b

as “the black letter law of trusts”). The Trustees concede the general proposition

“that a trust instrument can delegate a power of control to a third party”; however,

they contend in this case that the Plan Documents assign no such power to the

Administrator. We disagree.

As discussed below, the Plan Documents establish a clear separation of

powers between the Trustees and the Administrator. The Trust assigns to the

Administrator virtually exclusive authority to implement the APDCRP and to

manage the processing and ultimate allowance or disallowance of PD claims.

Although the power to pay allowed PD claims is reserved to the Trustees, the Plan

Documents grant them no authority to independently review or overrule the

Administrator’s determinations. Instead, the Trustees ordinarily must pay claims

as allowed by the Administrator, whose determinations are binding on the Trust.

A

14
 The Trust Agreement defines the Administrator as “the officer responsible

for implementation of the [APDCRP] and day-to-day processing of [PD Claims].”

Trust art. 1.2. More specifically, the Administrator is responsible for “[t]he

Allowance of PD Claims,” which must be done “exclusively in accordance with

the APDCRP.” Trust art. 3.3(c). The APDCRP are in accord, providing that the

“Administrator . . . is responsible for implementing these APDCRP,” which

“establish the exclusive procedures for evaluating, liquidating, paying and

disposing of Asbestos Property Damage Claims pursuant to the [Plan].” APDCRP

§ I (emphasis added).

The APDCRP do not provide any role for the Trustees. In fact, the Trust

Agreement expressly prohibits the Trustees’ involvement, directing that the

Trustees shall not “interfere with the independence of the [Administrator] in

administering the APDCRP.” Trust art. 3.3(c). The only entity authorized to

assist the Administrator in processing property damage claims under the APDCRP

is the PD Facility, which is “established by the [Administrator] for the disposition

and payment of Claims pursuant to these APDCRP.” APDCRP § IV(A)(35).

Under the APDCRP’s detailed procedures for processing claims, “the

Property Damage Facility shall review the Claim Form to determine whether the

necessary documentation . . . has been submitted” and “will determine whether the

15
Claim will be Allowed,” including the allowed dollar amount. APDCRP

§ IV(E)(2); see also Plan art. 1.10 (defining “Allowed Amount”). The PD Facility

even “may negotiate and compromise Claims.” APDCRP § IV(E)(1). The

APDCRP provide for review beyond the PD Facility’s determination only if a

claim is disallowed in full or in part, in which case the claimant may request

reconsideration and ultimately binding dispute resolution before an independent

arbitrator. APDCRP § IV(E)(3)-(4). At both levels of appeal, the APDCRP

expressly provide for “de novo” review. Id. The APDCRP do not provide for any

further review by any other entities. If at any time in this process a claim is

allowed in full or in part and the claimant accepts that determination (or exhausts

both levels of review), review proceedings under the APDCRP conclude and the

Administrator submits the allowed claim to the Trustees for payment.

Deeming a claim “allowed” is not just a procedural formality; it also affects

the claim’s enforceability. “If the Claimant accepts the determination of the

Property Damage Facility as to the amount of such Claimant’s Allowed Claim,

that decision will be final and binding on both parties and may not be reopened.”

APDCRP § IV(E)(2). Moreover, “[a]n ‘Allowed Claim’ shall be, and be deemed

to be, a judgment against the Trust (as successor for all purposes to the liabilities

of Celotex and Carey Canada in respect of Asbestos Claim), in the Allowed

16
Amount of such Claim,” subject only to “the Payment Percentage applicable

thereto.” APDCRP § IV(A)(5) (emphasis added); accord In re Celotex, 204 B.R.

at 620 ¶ 22. The Plan itself is even more explicit, providing that an “Allowed”

claim “shall constitute a final, non-appealable judgment against the Trust.” Plan

art. 1.9 (emphasis added).

Accordingly, once a claim is allowed by the Administrator and submitted to

the Trustees, there is little for the Trustees to do beyond applying the payment

percentage and paying the claim. See Plan art. 4.2(a)(8) (“Each Asbestos Property

Damage Claim against Celotex shall be addressed (i.e., Allowed or disallowed

and, if Allowed, paid) by the Trust pursuant to and in accordance with the

[APDCRP].”). The Trust Agreement directs that “the Trustees shall promptly pay

both Asbestos Personal Injury Claims and PD Claims under the terms of both the

APICRP and the APDCRP, as applicable.” Trust art. 3.3(a). “Payment of PD

Claims shall be made by the Trustees in the amount determined by the

[Administrator] pursuant to the APDCRP,” subject only to the payment

percentage. Trust arts. 3.3(c), 3.4(a); see also Plan art. 5.1.

Taken together, the Plan, the Trust Agreement, and the APDCRP assign to

the Administrator virtually exclusive authority over the day-to-day processing and

the allowance or disallowance of PD claims under the APDCRP. Additionally,

17
they assign to the Administrator the power to bind the Trust and, correspondingly,

mandate payment by the Trustees in accordance with the Administrator’s

determinations. We construe such terms as effectively granting to the

Administrator the power to control the Trustees’ actions in regard to the payment

of PD claims. See Restatement (Second) of Trusts § 185 (1959) (“If under the

terms of the trust a person has power to control the action of the trustee in certain

respects, the trustee is [ordinarily] under a duty to act in accordance . . . .”).

We reject the Trustees’ contention that the Plan Documents should be read

as granting only advisory powers based on the Administrator’s relationship to the

Trust. Their arguments that the Administrator is a mere trust advisor, not a trust

officer, and is tainted with conflicts of interest are of doubtful merit. See Trust art.

1.2 (defining the Administrator as “the officer responsible for implementation of

the [APDCRP]”); In re Celotex, 204 B.R. at 599 ¶¶ 92-93 (finding this

Administrator “is Disinterested” and that his compensation package “is fair,

reasonable and necessary under the circumstances and will help to ensure the

successful operation of the Trust”).

More fundamentally, however, the Trustees’ arguments are misplaced under

the Plan and applicable principles of trust law. First and foremost, the Plan

Documents’ express terms are controlling regarding the respective powers of the

18
Administrator and the Trustees, including any assignment of power to control the

Trustees’ actions. See Restatement (Second) of Trusts § 185 & cmt. b; see also

Plan art. 13.10; Trust art. 9.9. Because such a power of control is expressly

assigned to the Administrator, his otherwise designated relationship to the trust is

of only collateral relevance. The holder of a power of control “may be a co-

trustee, the settlor, a beneficiary, or a third person otherwise unconnected with the

trust. The relationship of the holder of the power is unimportant, except in so far

as it may be a factor in determining the nature or extent of the power.”

Restatement (Second) of Trusts § 185 cmt. a; see, e.g., Pounds v. Pounds, 703 So.

2d 487, 490 (Fla. Dist. Ct. App. 1997) (upholding a trust provision that expressly

empowered a third party to vote stock held by the trust, regardless of the fact that

he had been removed as a co-trustee due to a conflict of interest, as the trust did

not require that he be a trustee to exercise the power).

With regard to the nature and extent of the Administrator’s power of

control, the Trustees put the cart before the horse in first declaring the

Administrator to be a non-fiduciary and deducing therefrom that the Trust

Agreement cannot be read as assigning any power of control to the Administrator.

In the absence of an express provision, the nature of the Administrator’s

relationship and powers with respect to the trust beneficiaries determines whether

19
he is a fiduciary. See Restatement (Second) of Trusts §§ 164 cmt. h, 185 cmt. c;

see, e.g., United States v. Mitchell, 463 U.S. 206, 224-25 (1982) (inferring a

fiduciary relationship between the United States and Indian allottees based on the

nature of the obligations imposed on the government through statutory and

regulatory provisions, despite the absence of an express “fiduciary” provision).

Here, because the Administrator’s power to allow or disallow claims and to direct

payment by the Trustees is for the benefit of asbestos claimants rather than

himself, the Administrator “is subject to a fiduciary duty in the exercise of the

power” and has “discretion as the exercise of it to the extent to which such

discretion is conferred upon [him] by the terms of the trust.” Restatement

(Second) of Trusts § 185 cmts. c, e; see also Firestone, 489 U.S. at 113 (“[O]ne is

a fiduciary to the extent he exercises any discretionary authority or control.”).

Thus, the Trustees must ordinarily comply with the Administrator’s exercise of his

power of control absent “notice that the [Administrator] is violating his duty as a

fiduciary.” Restatement (Second) of Trusts § 185 cmt. e.

The Trustees correctly point out that the Plan Documents impose procedural

and substantive limitations on the Administrator’s authority to allow claims. See,

e.g., Trust art. 3.3(c) (granting authority to allow claims “in accordance with the

APDCRP”); APDCRP § IV(B) (setting forth the prerequisites to allowing claims).

20
But such provisions are hardly inconsistent with the Administrator’s express

authority to bind the Trust and the Trustees’ ordinary duty to comply with the

Administrator’s directives. These provisions are certainly relevant to our inquiry,

but only in determining the extent of the Administrator’s discretion in the exercise

of his power of control and whether the Administrator has exceeded that authority.

See Restatement (Second) of Trusts §§ 185 cmt. c, 187 cmt. d (setting forth

factors that may be relevant in determining whether there has been an abuse of

discretion, including “the existence or non-existence, the definiteness or

indefiniteness, of an external standard by which the reasonableness of the

[decision maker’s] conduct can be judged”).

B

Turning our attention to the Trustees’ powers, the Trustees have failed to

cite, and we have been unable to find, a single provision in the Plan, the Trust

Agreement, or the APDCRP expressly or impliedly granting the Trustees the broad

supervisory authority over the Administrator they claim to possess. As illustrated

above, the APDCRP set forth the “exclusive procedures” for the allowance or

disallowance of property damage claims, leaving little for the Trustees to do

except pay the allowed claims. The Trust Agreement is consistent, providing the

21
Trustees with broad authority over the Trust generally but only limited authority in

regard to paying PD claims.

The Trust Agreement provides that the Trustees are “fiduciaries to the

Trust” and empowered “to take any and all actions that, in the judgment of the

Trustees, are necessary or proper to fulfill the purposes of the Trust, including,

without limitation, each power expressly granted in this Article 3.1, [and] any

power reasonably incidental thereto.” Trust art. 3.1(a). However, the Trustees’

powers are also “[s]ubject to the limitations set forth in this Trust Agreement.” Id.

Among other things, the Trustees are expressly empowered to “establish,

supervise and administer the Trust in accordance with the CRP and to administer,

amend, supplement or modify the APICRP.” Trust art. 3.1(c)(viii). Similarly, the

Article governing “Claims Administration” directs the Trustees to “administer the

processing and payment of Asbestos Personal Injury Claims in accordance with

the APICRP.” Trust art. 3.3(b)(iii). Noticeably absent from any of these

provisions, however, is any authority to “supervise” or “administer” the APDCRP

or the resolution of PD claims thereunder. Quite the opposite, the Trust

Agreement expressly limits the Trustees’ ability to exercise any such supervisory

authority and commands the Trustees to pay PD claims as allowed by the

Administrator.

22
 “The Trustees shall not interfere with the actions and decisions of the
[Administrator] that are consistent with the APDCRP nor shall the
Trustees interfere with the independence of the [Administrator] in
administering the APDCRP. . . . Payment of PD Claims shall be made
by the Trustees in the amount determined by the [Administrator]
pursuant to the APDCRP.”

Trust art. 3.3(c).

The Trustees point out that the prohibition against interference with the

Administrator’s decisions applies only insofar as they “are consistent with the

APDCRP.” True enough, but to interpret this qualifier as an implied grant of

authority to independently review and overrule the Administrator’s decisions goes

too far. This provision indeed acknowledges that the Administrator does not have

unlimited discretion and implies that the Trustees may have some role if the

Administrator’s actions or decisions are not “consistent with the APDCRP.” This

provision does not, however, contain any affirmative grant of authority to the

Trustees to unilaterally determine that the Administrator has exceeded his

authority or to expropriate the authority to allow or disallow PD claims. The

Trustees’ interpretation would allow the exception to swallow the rule.

Independence from the Trustees’ interference would have little, if any, meaning if

the Trustees had the discretion to review the Administrator’s decisions to

determine whether they may or may not interfere. Effectively, the Trustees would

supplant the Administrator as the decision maker in all cases and contravene the

23
plain meaning of the restriction. See Johannssen v. Dist. No. 1–Pac. Coast Dist.,

MEBA Pension Plan, 292 F.3d 159, 170 (4th Cir. 2002). The extent of the

Trustees’ implied authority to interfere with the Administrator’s decisions must be

far more limited. See discussion infra Part D.

The Trustees’ exclusive authority to pay PD claims also does not imply the

power to independently review those claims. Disbursing trust assets is a classic

example of a trustee’s duty that may be subject to a third party’s control. See

Restatement (Second) of Trusts § 185 cmt. c. Here, the Plan instructs quite simply

that each property damage claim “shall be . . . Allowed or disallowed and, if

Allowed, paid.” Plan art. 4.2(a)(8); see also APDCRP § IV(A)(5) (“allowed for

payment”). Again, property damage claims are “allowed” or “disallowed” only

under the APDCRP, which provide no role for the Trustees. Trust art. 3.3(c);

APDCRP §§ I, IV(A)(5), (A)(21), (E). Also, an “allowed” claim “shall constitute

a final, non-appealable judgment against the Trust.” Plan art. 1.9; accord

APDCRP § IV(A)(5), (E)(2). Finally, “the Trustees shall promptly pay” allowed

PD claims “in the amount determined by the [Administrator] pursuant to the

APDCRP.” Trust art. 3.3(c). The strict procedures established by these provisions

leave the Trustees no leeway to independently reassess PD claims before payment.

Indeed, these provisions make the Trustees’ payment responsibility mandatory, not

24
discretionary. The Trustees’ payment of claims as allowed by the Administrator

“is required by the terms of the trust [and] by the principles of law applicable to

the duties of trustees” – specifically, the Trustees’ duty to comply with the

Administrator’s power of control regarding the allowance of PD claims.

Restatement (Second) of Trusts § 187 cmt. a (1959) (citing id. § 185).

Article 3.4 of the Trust Agreement sets forth the Trustees’ only express

functions in the course of paying allowed claims, none of which include the power

to independently review and overrule the Administrator’s determinations.

Subsections (a) and (b) require the Trustees to determine the fractional recovery

for each allowed claim from the limited Trust assets by calculating and applying

the payment percentage to the allowed amount. See Trust art. 3.4(a), (b). The

Trustees are granted no power, however, to adjust the allowed amount, which is

determined by the Administrator. See Plan art. 1.10; Trust art. 3.3(c); APDCRP §

IV(E)(2).

Subsections (c) and (e) further provide that, subject to certain restrictions,

“[t]he Trustees shall have complete discretion to determine the timing and the

appropriate method for making payments” (e.g., as installments), as well as

“discretion” to alter the order of processing or to temporarily limit or suspend

payments (e.g., in the event of limited liquidity). Trust art. 3.4(c), (e). However,

25
nowhere is it mentioned that the Trustees may entirely refuse to pay allowed

claims. See Trust art. 3.3(a), (c) (providing that the Trustees “shall” pay PD

claims as allowed); see also Restatement (Second) of Trusts § 187 cmt. a

(recognizing that a trustee’s duty may be mandatory even though the trustee has

“discretion as to the time, manner and extent of its exercise”).

Finally, subsection (d) empowers the Trustees to conduct limited audits to

verify information in the course of paying allowed claims. The Trustees’

argument that this provision “contains no such express or implied limitation” is

belied by its express terms: “The Trustees shall conduct random or other audits to

verify information submitted in connection with the CRP in a manner consistent

with the CRP.” Trust art. 3.4(d) (emphasis added). The Plan Documents must be

construed as a whole, with each provision given reasonable meaning and effect.

Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass’n,

117 F.3d 1328, 1338 (11th Cir. 1997) (applying Florida law). We therefore cannot

interpret the Trustees’ narrowly defined audit power as encompassing the far

broader powers they seek to conduct a de novo, substantive review of allowed PD

claims and to entirely refuse payment in their discretion. Such an interpretation

would not only render superfluous the express limitations in Article 3.4; it also

would be inconsistent with the provisions granting virtually exclusive authority to

26
the Administrator to resolve PD claims and bind the Trust, prohibiting interference

by the Trustees, and directing the Trustees to promptly pay PD claims as allowed

by the Administrator. See, e.g., Plan art. 1.9; Trust Art. 3.3(a), (c); APDCRP §§ I,

IV(E).

In determining the extent and limits of the Trustees’ powers with regard to

allowed PD claims, we are also guided by another principle of contract

construction. “The doctrine of expressio unius est exclusio alterius instructs that

when certain matters are mentioned in a contract, other similar matters not

mentioned were intended to be excluded.” Plumbers & Steamfitters Local No. 150

Pension Fund v. Vertex Constr. Co., 932 F.2d 1443, 1449 (11th Cir. 1991); accord

Shumrack v. Broken Sound Club, Inc., 898 So. 2d 1018, 1020 (Fla. Dist. Ct. App.

2005). Here, the Plan Documents repeatedly manifest the drafters’ ability to

clearly and precisely delegate and limit authority over the resolution of asbestos

claims. Notably, the Plan Documents expressly authorize and provide procedures

for two levels of “de novo” review of the PD Facility’s determinations, but only by

individuals other than the Trustees. APDCRP § IV(E)(3)-(4). Also, oversight

authority over the APDCRP is vested in the Administrator, not the Trustees, and a

PD claim “allowed” under the APDCRP is deemed to constitute a “final, non-

appealable judgment.” Plan art. 1.9; Trust art. 3.3(c); APDCRP § IV(A)(5),

27
(E)(2). By contrast, there are no provisions expressly empowering the Trustees to

conduct their own de novo review of and overrule the “judgment” presented to

them for payment, let alone issue their own rulings having similar effect. Instead,

the Plan Documents enumerate only certain narrowly defined duties related to the

Trustees’ payment of claims and otherwise command that “the Trustees shall

promptly pay” allowed PD claims “in the amount determined by the

[Administrator].” Trust art. 3.3(a), (c). The proposition that the Trust Agreement

was intended to imply, through vague and ambiguous provisions, a balance of

power antithetical to that reflected in its express provisions is simply untenable.

C

The Trust’s assignment to the Administrator of the power to issue binding

determinations of PD claims, and the corresponding lack of provisions for the

Trustees’ independent review of those determinations, are consistent with the

purposes of the Trust and the APDCRP. In particular, this system does much to

advance the stated goal of providing a “low transaction cost method” of resolving

and liquidating property damage claims. APDCRP § III. Given the Trust’s

limited resources to process and pay claims, the low transaction cost method is

intended to strike a proper balance between the sometimes conflicting goals of

efficiency and accuracy, while also ensuring that all valid claims are paid in a fair

28
and substantially equivalent manner. See id.; see also In re Celotex, 204 B.R. at

597-98 ¶ 68 (finding that “the Plan is designed and intended, among other things,

to . . . (ii) provide a simple, economical procedure for obtaining and encouraging

the prompt, efficient and equitable resolution of all Asbestos Claims, (iii) provide

fair and equitable compensation to holders of non-asbestos Claims, and (iv)

resolve disputed issues in a complete and fair manner”)

The low transaction cost method is evident in many terms of the Trust

Agreement and the APDCRP. For instance, the Administrator “shall use his best

efforts to complete the processing of all claims within two years of the Effective

Date,” APDCRP § I; there is an “Incentive Bonus” if the Administrator keeps

expenses under 1.5 percent of the allowed amount of claims, Trust art. 8.6(a),

APDCRP § IV(A)(6); the standard of proof is reduced to “Reasonable Evidence,”

or “evidence sufficient to present a jury issue,” APDCRP § IV(A)(37), (B)(1);

given the historical payment percentages of 11.3 to 12 percent, allowed claims are

essentially settled, not litigated, Trust art. 3.4(a); settlement of claims is favored

over more expensive and time consuming – though arguably more accurate –

forms of dispute resolution, while litigation is least favored, Trust art. 3.3(b)(I),

APDCRP § IV(E)(1); and the APDCRP incentivize the final resolution of claims

without further levels of review by providing that claimants shall pay the costs of

29
arbitration unless it results in an award of at least 125 percent of the PD Facility’s

determination, APDCRP § IV(E)(4). The provisions of the Plan Documents

making the Administrator’s determinations final and binding on the Trust, as well

as the corresponding lack of provisions for further review by the Trustees, are also

consistent with this low transaction cost method.

The Trustees nevertheless contend that depriving them of supervisory

authority over the Administrator is inconsistent with the additional Trust purposes

of paying only valid claims and treating all PI and PD claims in a substantially

equivalent manner. See Trust art. 2.2; APDCRP § III. We disagree. The Plan

Documents are designed to achieve these goals through means other than

centralizing all authority over PI and PD claims. For instance, the APICRP and

the APDCRP set forth detailed procedures and standards for determining the

validity of claims. In confirming both sets of CRP along with the Plan, the

bankruptcy court found that they “are fair and reasonable and provide mechanisms

for substantially similar treatment of the holders of Asbestos Claims.” In re

Celotex, 204 B.R. at 613 ¶ 227. Similarly, the Trust Agreement requires parity in

the timing and manner of payments, Trust art. 3.3(a), and uniform application of

the payment percentage, which is expressly intended “[t]o ensure substantially

equivalent treatment” among all claims, Trust art. 3.4(a).

30
 We reject the Trustees’ arguments that the express terms of the Trust

Agreement and the APDCRP are inadequate and that supervisory powers over an

allegedly unruly Administrator must have been granted to the Trustees as

indispensable to ensuring the Trust purpose of paying only valid claims. The

confirmed Plan Documents are “the result of extensive arms’ length negotiations”

among the interested parties and embody “various settlements and compromises.”

In re Celotex, 204 B.R. at 597 ¶ 68, 601 ¶ 118. Even according to the Trustees,

many of the issues they now raise “existed and were known when the Plan was

confirmed” and “[s]ome are created by the structure of the Trust Agreement

itself.” Were such issues intended to be addressed by granting the Trustees

supervisory powers over the Administrator, the Plan Documents should have

expressly so provided. Instead, they make the Administrator’s determinations

final and binding and direct the Trustees to pay claims as allowed. “The Plan

Documents set forth the entire agreement” of the interested parties, and “[n]o

entity shall be bound by any terms . . . other than as expressly provided for

[t]herein.” Plan art. 13.10; accord Trust art. 9.9. To borrow from the bankruptcy

court, the parties “are bound by the agreement that they reached.”

D

31
 Given our interpretation of the Plan Documents thus far, the Trustees are

left with only limited means to block an alleged violation of the APDCRP, as they

have sought to do in this case. We agree with the bankruptcy court’s conclusion

that the Administrator’s actions and decisions in resolving PD claims are subject

to review only for an abuse of his discretion under the APDCRP.

In attempting to arrogate supervisory authority over the Administrator, the

Trustees contend that their decisions to allow or disallow claims under the

APDCRP are entitled to deference and are subject to review by the bankruptcy

court only for an abuse of discretion. We agree with the Trustees’ statement of the

standard of review of claims determinations under the APDCRP. We simply

disagree as to whose decisions are entitled to such deference in this case. The

Trustees’ citation of Firestone does not help their cause. The Court indeed

recognized: “Trust principles make a deferential standard of review appropriate

when a trustee exercises discretionary powers.” Firestone, 489 U.S. at 111 (citing

Restatement (Second) of Trusts § 187 (1959)). But the Court went on to hold:

“Firestone can seek no shelter in these principles of trust law, however, for there is

no evidence that under Firestone’s termination pay plan the administrator has the

power to construe uncertain terms or that eligibility determinations are to be given

deference.” Id. The Trustees are similarly situated. As we have already

32
determined, nothing in the Plan Documents grants the Trustees discretion to

independently determine the validity of PD claims under the APDCRP.

In fact, such authority is reserved to the Administrator, who can seek shelter

in the principles of trust law set forth in Firestone, 489 U.S. at 111. Although

such principles are stated in relation to the powers of a “trustee,” see, e.g.,

Restatement (Second) of Trusts § 187 (1959), they are equally applicable in this

case to the Administrator, whose determinations of PD claims are binding on the

Trust and the Trustees. A third party with authority to control the actions of a

trustee may have discretion and be owed deference with respect to the exercise of

that authority according to the same legal principles that apply to a trustee’s

exercise of discretionary authority. See Restatement (Second) of Trusts § 185 cmt

c (cross-referencing § 187).

As to the Administrator’s entitlement to deference under the Plan

Documents, persuasive is Central States, Southeast & Southwest Areas Pension

Fund v. Central Transport, Inc., 472 U.S. 559 (1985), which held: “The trustees’

determination that the trust documents authorize their access to the records here in

dispute has significant weight, for the trust agreement explicitly provides that ‘any

construction [of the agreement’s provisions] adopted by the Trustees in good faith

shall be binding upon the Union, Employees and Employers.’” Id. at 568

33
(brackets in original; emphasis added). Similarly, in Guy v. Southeastern Iron

Workers’ Welfare Fund, 877 F.2d 37 (11th Cir. 1989), this Court determined that

“the more deferential arbitrary and capricious standard” should be applied to

decisions to deny benefits because the declaration of trust “confer[red] upon the

trustees ‘full and exclusive authority to determine all questions of coverage and

eligibility.’” Id. at 39 (emphasis added). We reach the same conclusion here as to

the Administrator, who has virtually exclusive authority to allow PD claims under

the APDCRP and whose determination “shall constitute a final, non-appealable

judgment against the Trust.” Plan art. 1.9 (emphasis added); see also APDCRP

§ IV(E)(2) (“final and binding on both parties and may not be reopened”). Thus, if

there is to be any review at all, substantial deference generally must be accorded

the Administrator’s determinations.

Of course, even while according the Administrator’s determinations the

proper deference, the Trustees still lack the authority to determine that the

Administrator has in fact abused his discretion or to dictate an appropriate remedy.

Ordinarily, the Trustees have a “duty to comply” with the Administrator’s

determinations by promptly paying allowed PD claims as the Plan Documents

require. Restatement (Second) of Trusts § 185 cmt. b. Moreover, as already

established, the Trustees’ duty to comply with the Administrator’s determinations

34
is ordinarily non-discretionary. See Trust art. 3.3(a), (c) (“shall”); Restatement

(Second) of Trusts § 187 cmt. a (cross-referencing § 185). If the Trustees do

notice an anomaly in the allowance of PD claims, the Trustees have two avenues

open to them under the Plan Documents.

The first is to bring such issues to the Administrator’s attention in

accordance with the Trustees’ duty to consult with the Administrator “on the

implementation and administration of the APDCRP.” Trust art. 3.2(e); see also

Restatement (Second) of Trusts § 185 cmt. e (contemplating an “objection of the

trustee”). Of course, because such consultation must be conducted “without

limiting or abridging Article 3.3(c),” which prohibits the Trustees from interfering

with the Administrator’s independence in administering the APDCRP, the

Trustees must leave it to the Administrator to ultimately decide whether or how to

resolve any perceived errors. Trust arts. 3.2(e), 3.3(c).

If consultation does not result in a satisfactory resolution and the

Administrator insists on the Trustees’ payment of PD claims as allowed, which the

Trustees have reason to believe constitutes an abuse of the Administrator’s

discretion under the APDCRP, the Trustees’ only recourse is to apply to the

bankruptcy court for instructions. See Firestone, 489 U.S. at 112; Restatement

(Second) of Trusts §§ 185 cmt. e, 201 cmt. b. The bankruptcy court retains

35
jurisdiction over the Plan for just such purposes. See Plan art. 13.3(c)-(e)

(reserving jurisdiction in the bankruptcy court to enforce the terms of the Plan

Documents); Trust art. 9.13 (“Any disputes that arise under this Agreement or

under the annexes hereto shall be resolved by the Bankruptcy Court pursuant to

the Plan, except as otherwise provided . . . .”). Moreover, given the express

limitations on the Trustees’ authority respecting allowed PD claims, the Trustees’

limited power to petition the bankruptcy court for relief is all that is “necessary or

proper to fulfill the purposes of the Trust” and to comply the Trustees’ fiduciary

responsibilities. Trust art. 3.1(a); 3.3(c).

We emphasize that in petitioning the bankruptcy court for instructions, the

Trustees must proceed promptly and without undue delay. See Trust art. 8.4

(permitting application “on an expedited basis”). In all their actions, the Trustees

must continue to ensure their own compliance with the Trust Agreement and their

fiduciary duties to all claimants, including their duty to pay PI and PD claimants

without giving preference to or advancing or delaying payments as to either. See

Trust art. 3.3(a). The Trustees’ fiduciary duties extend to the City of New York

and all other claimants with PD claims that have been “allowed,” whether the

Trustees agree with that determination or not, for the Trustees’ opinion is not

controlling. Although the Trustees’ belief that the Administrator has abused his

36
discretion may temporarily relieve them of their ordinary duty to pay allowed PD

claims, it does not relieve them of their ordinary fiduciary duties to the affected

PD claimants. In all cases, the Trustees have a duty either to pay PD claims as

allowed, or, in exceptional cases, to seek promptly the bankruptcy court’s

instructions. See Restatement (Second) of Trusts § 185 cmts. b, e. The Plan

permits nothing less.

V

The bankruptcy court applied the proper abuse of discretion standard of

review and engaged in a thorough review of the Trustees’ objections to the

Illustrative Claims. Upon de novo review, we affirm the great majority of the

bankruptcy court’s judgment requiring payment of the Illustrative Claims and all

similar claims, with one exception.

A

Illustrative Claim 1 involves thermal system insulation (TSI) in the

Manhattan Criminal Court building that was produced using a Carey patent but by

a third-party manufacturer. NYC concedes that under New York law products

liability does not extend to a patent or trademark licensor except “where, for

example, it has had significant involvement in distribution or is capable of

exercising control over quality.” Harrison v. ITT Corp., 603 N.Y.S.2d 826, 826

37
(N.Y. App. Div. 1993); accord Laurin Mar. AB v. Imperial Chem. Indus. PLC,

752 N.Y.S.2d 855 (N.Y. App. Div. 2003); see also Brumbaugh v. CEJJ, Inc., 547

N.Y.S.2d 699, 701 (N.Y. App. Div. 1989). Applying this standard, we conclude

that NYC has failed to submit the requisite “Reasonable Evidence” to present “[a]

legally viable cause of action” under New York law. APDCRP § IV(B)(1)(c); see

also id. § IV(A)(37).

The evidence here includes labels indicating that the TSI in question was

manufactured by Johns-Manville Corporation using a 1930 patent held by The

Philip Carey Manufacturing Company, a predecessor of Celotex. The patent, U.S.

Patent No. 1,782,383 (filed Feb. 19, 1928) (issued Nov. 18, 1930), covers a

manufacturing process whereby emulsified gas is formed within the insulation

mixture prior to molding, supposedly producing a lighter, micro-porous insulation

with increased heat insulation efficiency but without sacrificed mechanical

strength. According to the patent, that process is applicable to a variety of

formulations of insulation, some that do not contain asbestos and some that do,

including the 85% magnesia TSI at issue in Illustrative Claim 1. There is no

evidence in the record, however, that Carey was anything more than a mere

licensor. There is no evidence, for example, that Carey had significant

involvement in Johns-Manville’s manufacturing and distribution process or had

38
the capability – other than as a mere licensor – of exercising control over quality.

See Harrison, 603 N.Y.S.2d at 826.

We are unpersuaded by NYC’s argument that “a patent licensor can always

control whom and under what circumstances he licenses his product, which by

itself should suffice.” Were that sufficient, Harrison would have come out

differently, for the same can be said of any licensor. Although the actual exercise

of control is not required by Harrison, the requisite “capability” of exercising

control must exceed the mere existence of a licensing arrangement, whether it be

pursuant to special terms in the licensing agreement or a more extensive

relationship between the parties. See, e.g., Torres v. Goodyear Tire & Rubber Co.,

786 P.2d 939, 944-45 (Ariz. 1990) (applying strict products liability to a

trademark licensor who was also the parent company of the entities that

“technically accomplished” the research, design, manufacture, distribution, and

sale of the defective product), cited in Harrison, 603 N.Y.S.2d at 826.

Although the bankruptcy court was correct to view the degree of control

issue as a question of fact, the evidence presently in the record is insufficient to

present a viable cause of action under New York law. See Harrison, 603 N.Y.S.2d

at 826 (affirming order granting summary judgment dismissing the complaint); see

also APDCRP § IV(A)(37) (defining “Reasonable Evidence” as “evidence

39
sufficient to present a jury issue under the tort system of one of the Applicable

Jurisdictions”). We therefore reverse the bankruptcy court’s grant of summary

judgment to the City of New York on Illustrative Claim 1 and all similar claims.

We also remand to the bankruptcy court for further proceedings, however.

Although we uphold the Trust’s decision to withhold payment of Illustrative

Claim 1 pending court review, this raises additional issues the bankruptcy court

has yet to consider. For instance, given that Illustrative Claim 1 was selected by

the Trustees and may not be truly representative of NYC’s patent-based claims,

our determination that the record evidence is insufficient as to Illustrative Claim 1

is not necessarily determinative as to all similar patent-based claims. Moreover, as

to those claims that do lack sufficient evidence, including Illustrative Claim 1, it

may be necessary to remand to the Administrator for further processing in order to

preserve NYC’s procedural rights to receive notice of any deficiencies and to

submit additional evidence. See APDCRP § IV(E)(2)-(3). We leave it to the

bankruptcy court to resolve such issues in the first instance.

B

We affirm as to the remaining claims. Specifically, we find the

Administrator did not abuse his discretion in allowing Illustrative Claims 2, 3 and

40
4, and we affirm the bankruptcy court’s judgment directing the Trust to pay these

and all similar claims for the reasons stated by the bankruptcy court.

We similarly affirm as to Illustrative Claim 6 and all similar claims, but

without considering the Trustees’ contention that the bankruptcy court erred in

adopting an even more deferential standard of review – requiring “clear and

convincing evidence that the actions of the arbitrator were fraudulent or collusive”

– for claims allowed after binding dispute resolution under APDCRP § IV(E)(4).

We need only determine that an independent arbitrator’s claim allowance

decisions – which are made after de novo review, and which the Plan does not

distinguish from those made by the Administrator, see Plan art. 1.9 – are entitled

to at least as much deference as we accord the Administrator’s decisions. The

Trustees have preserved no substantive objections to Illustrative Claim 6 beyond

those also asserted in regard to Illustrative Claims 2, 3 and 4, and they have raised

no factual issues related to Illustrative Claim 6 that would require a materially

different analysis. Thus, our disposition of Illustrative Claim 6 is identical under

the same abuse of discretion standard.

C

In summary, as to Illustrative Claims 2, 3, 4 and 6, we affirm the judgment

of the bankruptcy court granting the City of New York’s motion for summary

41
judgment and ordering the Trustees to pay these and all similar claims. As to

Illustrative Claim 1 and all similar claims, however, we reverse and remand for

further proceedings consistent with this opinion.

AFFIRMED in part; REVERSED and REMANDED in part.

42