ELR Citation: ELR 20687
No(s). 99-CV-0624E(F) (W.D.N.Y. May 9, 2002)

The court grants in part and denies in part a steel company's and city's motions for injunctions against one another in a case involving the parties' liability for cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The company filed suit against the city claiming that the city had contaminated the company's property and violated an easement agreement between the parties. The company further alleged that the city violated CERCLA when it used hazardous waste materials to construct an embankment. The company then filed for bankruptcy. The city filed a motion for an injunction against the asset protection plan being used by the company, claiming that it failed to provide for the city's environmental counterclaims against the company. The company filed a motion for injunction based on its bankruptcy petition, arguing that the automatic stay provision in the Bankruptcy Code protected it from the city's claims. The court first holds, however, that the legislative history of the automatic stay provision states that where a governmental unit is suing a debtor to prevent or stop violation of environmental protection or similar police or regulatory laws, the action is not stayed under the automatic stay. Thus, the company's motion for an injunction is denied insofar as it seeks to stay the city's motion for an injunction requiring it to abate environmental nuisance on the property. Additionally, the city argued that it is entitled to an injunction on its counterclaims against the company on the basis that the company is liquidating its assets and will have insufficient funds to satisfy the city's claims if the city prevails at trial. The court, however, is unwilling to issue such an injunction without conducting an evidentiary hearing.

Counsel for Plaintiffs
John A. Ragosta
Dewey Ballantine
1775 Pennsylvania Ave. NW, Washington DC 20006
(202) 862-1000

Counsel for Defendants
John Keske
Buffalo Urban Renewal Agency
City Hall
Buffalo NY 14202
(716) 851-5052

Elfvin, J.