United States v. Nicolet, Inc.
United States Court of Appeals for the Third Circuit
July 12, 1988, Argued ; September 16, 1988, Filed
Nos. 88-1079, 88-1110
[*202] OPINION OF THE COURT
WEIS, Circuit Judge.
After the United States had initiated this action to recover costs expended in the clean-up of a hazardous waste site, defendant petitioned for reorganization under Chapter 11 of the Bankruptcy Code. The district court ruled that the automatic bankruptcy stay did not apply to the government's action, [**2] even though the complaint sought a money judgment for pre-petition derelictions. We agree that the case should proceed to trial and, moreover, concur in the district court's admonition that the government may not enforce any judgment it might obtain. We conclude also that we have appellate jurisdiction under the more relaxed concepts of finality applicable [*203] to bankruptcy proceedings. Accordingly, we will affirm the order of the district court.
Acting under the authority granted it by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9604, the United States filed this suit in the district court against defendant Nicolet on May 30, 1985. The complaint sought reimbursement of environmental response costs expended and to be expended in the future to clean-up an asbestos site in Ambler, Pennsylvania. The Environmental Protection Agency had engaged private contractors to abate the hazard from two waste piles and incurred costs of $ 1 million. The agency seeks reimbursement of this sum and an additional $ 300,000 in future remedial costs.
Although at the time of the clean-up, the affected sites were owned by Nicolet, they had been purchased in 1982 [**3] from a wholly-owned subsidiary of Turner & Newall. Nicolet joined Turner & Newall as a third-party defendant, seeking indemnification or contribution. The United States then amended its complaint to name Turner & Newall as an original defendant.
Some time later, in July 1987, Nicolet filed for reorganization under Chapter 11 of the Bankruptcy Code. The district court, assuming that the proceedings were subject to the automatic stay provisions of the Code, 11 U.S.C. § 362, placed this CERCLA suit in civil suspense. The United States objected to the district court's order and promptly moved for reconsideration. The government argued that its action was a suit by a governmental unit to enforce its police or regulatory power, a proceeding expressly exempt from the automatic stay under 11 U.S.C. § 362(b)(4). The district court agreed and directed that the case be transferred from the suspense file to the trial calendar. United States v. Nicolet, Inc., 81 Bankr. 310 (E.D. Pa. 1988). Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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857 F.2d 202 *; 1988 U.S. App. LEXIS 12653 **; 28 ERC (BNA) 1712; Bankr. L. Rep. (CCH) P72,444; 19 Collier Bankr. Cas. 2d (MB) 1405; 18 Bankr. Ct. Dec. 564; 18 ELR 21411
UNITED STATES OF AMERICA v. NICOLET, INC. and TURNER AND NEWALL, PLC v. TURNER & NEWALL, PLC Nicolet, Inc., Appellant in No. 88-1079 Turner & Newall PLC, Appellant in No. 88-1110
Prior History: [**1] Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 85-3060.
district court, automatic stay, environmental, cases, appeals, bankruptcy proceedings, proceedings, exempt, orders, costs, governmental unit, power to regulate, bankruptcy judge, money judgment, hazardous, lifting, parties, sites, enforcement of a money judgment, automatic stay provision, court of appeals, clean-up, expended
Civil Procedure, Entry of Judgments, Stays of Judgments, General Overview, Appeals, Appellate Jurisdiction, Interlocutory Orders, Bankruptcy Law, Automatic Stay, Relief From Stay, Automatic Stays, Administrative Powers, Judicial Review, Procedural Matters, Judicial Review, Jurisdiction, Collateral Order Doctrine, Final Judgment Rule, Jurisdiction, Jurisdictional Sources, Scope of Stay, Claims Against Debtors, Exceptions to Stay, Police & Regulatory Actions, Environmental Law, Hazardous Wastes & Toxic Substances, CERCLA & Superfund, Governments, Legislation, Interpretation, Appellate Stays, Money Judgments, Labor & Employment Law, Collective Bargaining & Labor Relations, Unfair Labor Practices, Enforcement, Defenses, National Contingency Plan, Potentially Responsible Parties, Operators & Owners, Cost Recovery Actions, Strict Liability