ELR Citation: ELR 20504
No(s). 88-3019 (11th Cir. Jan 11, 1989)

The court holds that proofs of claim for contribution filed in a Chapter 11 bankruptcy in connection with hazardous waste response costs are contingent and will be disallowed, and application of the Bankruptcy Code's disallowance provision does not impermissably contravene the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Defendants in cases arising out of dioxin contamination in Missouri allege that the Chapter 11 debtors are jointly and severally liable to them as waste transporters for any damages that might be awarded against them in the Missouri litigation. The bankruptcy court disallowed the claims, and the district court affirmed. This court agrees, holding that the proofs of claim state contingent claims for contribution and reimbursement excluded under 11 U.S.C. §502(e)(1)(B). All are claims for reimbursement or contribution under CERCLA §113(f)(1), and all are contingent since no judgments against the claimants have been entered in the underlying litigation. The court then holds that disallowance of the claims does not contravene congressional policy reflected in CERCLA §113(f)(1). The goal of §113(f)(1) is to encourage private-party settlements and cleanups. Section 502(e)(1)(B) does not inhibit this goal, since those seeking contribution will have to incur expenses associated with a cleanup prior to stating an allowable claim to a bankrupt's estate.

Counsel for Plaintiffs-Appellants
Benjamin Ackerly
Hunton & Williams
707 E. Main St., P.O. Box 1535, Richmond VA 23212
(804) 788-8200

Counsel for Defendants-Appellees
Steven D. Busey
Smith & Hulsey
1800 Florida National Bank Bldg., P.O. Box 53315, Jacksonville FL 32201-3315
(904) 359-7700

Before ANDERSON and COX, Circuit Judges, and TUTTLE, Senior Circuit Judge.