By Lauraann Wood

Law360 (August 28, 2020, 7:17 PM EDT) -- A lawsuit accusing an American Airlines contractor of making toxic flight crew uniforms shouldn't be put on pause simply because its former parent company filed for bankruptcy, a proposed class of workers argued in Illinois federal court Thursday.

The airline employees told U.S. District Judge John Tharp Jr. that Twin Hill Acquisition Co. launched an improper request to stay their proposed class action over allegedly toxic uniforms in light of its former parent company, Tailored Brands Inc., filing for bankruptcy in Texas.

Twill Hill asked for an automatic stay of the case under Section 362 of the Bankruptcy Code, but that section applies only to bankruptcy debtors, which Twin Hill isn't, the workers argued. Plus, Tailored Brands isn't a party to either Twin Hill's bankruptcy suggestion or the case in general, they said.

"If Twin Hill is entitled to injunctive relief, its remedy lies elsewhere — not in § 362," they told Judge Tharp.

Twin Hill's more appropriate path to relief falls under Section 105 of the Bankruptcy Code, which extends automatic stays to claims against non-debtors, the workers said. And while automatic stays can be granted to non-debtors under extraordinary circumstances, "those circumstances are not present here," they argued.

Twin Hill said in its suggestion of bankruptcy that Judge Tharp should pause the suit because even though Tailored Brands sold the company about a year ago, the stock purchase agreement effectuating the sale contractually binds Tailored Brands to defend and indemnify Twin Hill either at its own expense or the expense of any applicable insurers.

But the airline workers blasted that contention in their response. They said the court could apply any of the varying tests to determine whether he should extend an automatic stay under Section 105,  but "the mere fact that a debtor in bankruptcy owes some form of indemnification to a non-debtor defendant does not trigger the right to the extraordinary relief which Twin Hill is seeking."

"[C]ontrary to its opaque contention, Twin Hill has not established an identity of interest between it and Tailored Brands such that a judgment against Twin Hill will effectively be a judgment against Tailored Brands," they argued.

The employees' lawsuit claimed American Airlines misrepresented the safety of flight crew uniforms it introduced in September 2016 while downplaying their concerns, even after receiving numerous complaints about health issues they experienced from wearing the uniforms.

The uniforms, made by Twin Hill, caused health problems including rashes, headaches, hair loss, breathing problems, thyroid dysfunction, fatigue and chemical sensitivity, according to their suit. They affected flight attendants, pilots and passenger service agents who came in contact with them, it claims.

American backpedaled on the uniforms two months later after receiving thousands of complaints and allowed employees to revert back to their old uniforms. Within a year, the airline announced it would cut ties with Twin Hill and picked another uniform supplier, according to court documents.

Judge Tharp pared the workers' lawsuit down in April, keeping alive certain state-based workers' compensation, fraud and other claims in their second amended complaint. However, his ruling didn't extend to the issue of whether the employees' proposed classes should be certified.

American pushed for dismissal by arguing state workers' compensation laws and regimes provide the exclusive remedy for workplace injuries. But Judge Tharp said there's an exception in some states — such as Connecticut, Iowa, New York, North Carolina, Oklahoma and Texas — for workers who can show their employer was "substantially certain" of the resulting harm.

The judge also said even though American may not have known what chemical or combination of chemicals would trigger proximity reactions, the named plaintiffs in those states can pursue their claims that it knew with "substantial certainty that working in the close confines of an aircraft would generate enough exposure to trigger a reaction for those plaintiffs who had previously experienced and reported proximity reactions."

Counsel for the workers declined to comment Friday, and representatives for Twin Hill didn't immediately respond to a request for comment.

The airline workers are represented by Stewart Weltman of Weltman Law LLC, Warren Burns, Korey Nelson, Charles Gower and Martin Barrie of Burns Charest LLP, and Pasha Vaziri of Vaziri Law LLC.

Twin Hill is represented by Francis Citera and Caitlyn Haller of Greenberg Traurig LLP.

American Airlines is represented by Mark Robertson and Susannah Howard of O'Melveny & Myers LLP and Larry Kaplan and Marnie Holz of KMA Zuckert LLC.

The case is Thor Zurbriggen et al. v. Twin Hill Acquisition Inc. et al., case number 1:17-cv-05648, in the U.S. District Court of the Northern District of Illinois.

--Additional reporting by Linda Chiem and Mike Curley. Editing by Philip Shea.

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