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U.S. v. MOGLIA

June 2, 2004.

UNITED STATES OF AMERICA, and PEOPLE OF THE STATE OF ILLINOIS, Plaintiffs; V. ALEX D. MOGLIA, not individually, but as Chapter 7 Trustee for the Estate of Outboard Marine Corp. and its related debtor entities, Defendant


The opinion of the court was delivered by: CHARLES NORGLE, District Judge

OPINION AND ORDER

Before the court is Trustee's Motion for Certification, brought pursuant to 28 U.S.C. § 1292(b). For the following reasons, the motion is granted.

I. BACKGROUND

  On July 16, 2002, the United States and the State of Illinois (collectively "the Governments") filed a First Amended Complaint against Alex D. Moglia, not individually but as Chapter 7 Trustee ("the Trustee") for the Estate of Outboard Marine Corporation and its related debtor entities ("the Estate"). The Complaint seeks, inter alia, injunctive relief to enforce against the Estate alleged regulatory obligations of the debtor, Outboard Marine Corporation, pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq. ("RCRA") and injunctive relief to enforce compliance with a Consent Decree entered pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9606 ("CERCLA").

  The Trustee filed a motion to dismiss the Complaint, brought pursuant to Federal Rule of Civil Procedure 12(b)(6), claiming: (1) that the Estate cannot be forced to comply with RCRA because the Complaint in essence seeks a monetary claim, and (2) that the Governments are not entitled to injunctive relief as the Estate no longer owns the facility, which was abandoned pursuant 11 U.S.C. § 554 and approved by a Settlement Agreement in the bankruptcy court. As to the first contention, the Governments argued that the Complaint sought injunctive relief, which is not a dischargeable claim for bankruptcy purposes. As to the second contention, the Governments argued that abandonment of the property was irrelevant as section 7003 of the RCRA allows suit to be brought against "any person (including any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage, or disposal facility) who has contributed or who is contributing to such handling, storage, treatment, transportation or disposal. . . ." 42 U.S.C. § 6973(a). According to the Governments' arguments, Outboard Marine Corporation was a "past or present owner" under section 7003 of the RCRA, and whether it continued to own the property was irrelevant. The Governments argued that the Trustee, as representative of the Estate, cannot be separated from Outboard Marine Corporation, because under general bankruptcy law the Trustee "stands in the shoes" of the debtor. Further, the Governments argued that section 554 of the Bankruptcy Code, 11 U.S.C, § 554, refers only to abandonment of property and not abandonment of any liability that may attach as a result of past property ownership.

  On September 23, 2003, the court denied the motion to dismiss, holding that the Complaint put the Trustee on notice that the Governments were seeking injunctive relief, and cited AM Int'l., Inc. v. Datacard Corp., 106 F.3d 1342, 1348 (7th Cir. 1997), which held that claims for injunctive relief under the RCRA do not fall within the definition of a claim under the Bankruptcy Code, 11 U.S.C. § 101(5). See Minute Order of of September 23, 2003.

  The Trustee filed the instant motion for certification pursuant to 28 U.S.C. § 1292(b), which is fully briefed and before the court. The Trustee seeks to have the following legal question certified for interlocutory appeal: Whether a Chapter 7 trustee may be directed under the RCRA to expend funds of a Chapter 7 estate to clean up real property contaminated by the debtor pre-petition, when the real property has been abandoned pursuant to 11 U.S.C. § 554 and is no longer property of the bankruptcy estate.

  II. DISCUSSION

 A. Standard of Decision

  The movant seeking the grant of a motion to certify an interlocutory order for immediate appeal pursuant to 28 U.S.C. § 1292(b) bears a heavy burden, as only "exceptional circumstances justify a departure from the basic policy of postponing appellate review until after the entry of final judgment." Fisons Limited v. United States, 458 F.2d 1241, 1248 (7th Cir.1972), cert. denied 405 U.S. 1041 (1972). The statutory text of 28 U.S.C. § 1292(b) provides, inter alia:
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.
"There are four statutory criteria for the grant of a section 1292(b) petition to guide the district court: there must be a question of law, it must be controlling, it must be contestable, and its resolution must promise to speed up the litigation." Ahrenholz v. Bd. of Trustees of the Univ. of Ill., 219 F.3d 674, 675 (7th Cir. 2000) (emphasis in original). "There is also a nonstatutory requirement: the petition must be filed in the district court within a reasonable time after the order sought to be appealed." Id. at 675-76 (citing Richardson Electronics, Ltd. v. Panache Broadcasting of Pennsylvania, Inc., 202 F.3d 957, 958 (7th Cir. 2000)). All of these criteria must be satisfied in order to certify an interlocutory order for immediate appeal. See id. at 676 ("The criteria are conjunctive, not disjunctive."): see also In re Hamilton. 122 F.3d 13, 14 (7th Cir. 1997) (emphasizing proper standard of decision under 28 U.S.C. § 1292(b)).

 B. Analysis of 28 U.S.C. § 1292(b) Criteria

  1. Question of Law

  The first statutory criterion under § 1292(b) is that there must be a question of law. In Ahrenholz, the Seventh Circuit provided a definition of "question of law," stating that a "`question of law' as used in section 1292(b) has reference to a question of the meaning of a statutory or constitutional provision, regulation, or common law doctrine" 219 F.3d at 676, The Seventh Circuit then emphasized that the framers of § 1292(b) intended the term "question of law" to refer to "`pure' question[s] of law rather than merely to an issue that might be free from a factual contest." Id. at 676-77. The Seventh Circuit referred to orders denying immunity defenses as the paradigmatic example of such a "question of law." Id. at 677 (citing Johnson v. Jones, 515 U.S. 304, 317 (1995)).

  With regard to the instant opinion, the court finds that Trustee presents such a paradigmatic example of such a "question of law." The legal question of whether a Chapter 7 trustee may be directed under the RCRA to expend funds of a Chapter 7 estate to clean up abandoned real property contaminated by the debtor ...


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