Clean Harbors, Inc. v. Arkema, Inc. (In re Safety-Kleen)

331 B.R. 605, 2005 Bankr. LEXIS 2003, 45 Bankr. Ct. Dec. (CRR) 162
CourtUnited States Bankruptcy Court, D. Delaware
DecidedOctober 19, 2005
DocketBankruptcy No. 00-02303(PJW); Adversary No. 05-50474(PJW)
StatusPublished
Cited by4 cases

This text of 331 B.R. 605 (Clean Harbors, Inc. v. Arkema, Inc. (In re Safety-Kleen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clean Harbors, Inc. v. Arkema, Inc. (In re Safety-Kleen), 331 B.R. 605, 2005 Bankr. LEXIS 2003, 45 Bankr. Ct. Dec. (CRR) 162 (Del. 2005).

Opinion

MEMORANDUM OPINION

PETER J. WALSH, Bankruptcy Judge.

In this adversary proceeding defendants Arkema, Inc., (f/k/a Atofina Chemical, Inc., and also f/k/a Elf Atochem North America, Inc.), Helen Kramer Landfill Superfund Site Group, and Ballard, Spahr, Andrews & Ingersoll, LLP, filed a motion (Adv.Doc. # 5) seeking to dismiss Count III of plaintiff Clean Harbors Environmental Services, Inc.’s (“Clean Harbors”) complaint. While the motion is filed pursuant to Federal Rule of Civil Procedure 12(b)(6),1 both parties have furnished substantial documents relating to matters outside the pleadings. Thus, pursuant to Rule 12(b)(6), the motion will be treated as a motion for summary judgment. For the reasons set forth below, the Defendants’ motion will be granted.

BACKGROUND

Introduction

On June 9, 2000, the Debtor, Safety-Kleen Corp., et al., (“Safety-Kleen”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”).2 By order dated June 18, 2002, this Court approved the sale of a major portion of Safety-Kleen’s business to Clean Harbors pursuant to § 363. The current dispute involves whether, with the § 363 transaction, Clean Harbors assumed Safety-Kleen’s obligations to the Defendants.

Count I of the Complaint seeks a declaration that, pursuant to the Sale Order,3 Clean Harbors acquired the business free of such obligations. Following the sale and prior to the filing of this adversary proceeding, the Defendants sought to enforce their claim against Clean Harbors in the United States District Court for the District of New Jersey (the “New Jersey Court”). Count II seeks a declaration that those efforts violated the injunction provision of the Sale Order. Count III seeks to hold the Defendants in contempt for that alleged violation of the injunction provision.4 Presently before this Court is only the Defendants’ motion to dismiss Count [607]*607III of the Complaint. Clean Harbors maintains that the Sale Order is clear on the issues of its non-assumption of the subject liabilities and the effect of the injunction provision. The Defendants assert that they cannot be found in contempt because the Sale Order does not unambiguously bar their pursuit of a claim against Clean Harbors. Indeed, the Debtors assert that in fact Clean Harbors did assume Safety-Kleen’s obligation to them.

The Source of Liability

Prior to the filing of its petition, Safety-Kleen had acquired the business of Rollins Environmental Services (NJ), Inc. (“Rollins”). Rollins had for a number of years operated a waste treatment operation that resulted in the disposal of waste material at a site in New Jersey. That site, later referred to as the Helen Kramer Landfill Superfund Site, drew the attention of the Environmental Protection Agency (“EPA”) and the State of New Jersey Department of Environmental Protection (“DEP”). The EPA and the DEP charged various potentially responsible parties (“PRPs”) with environmental pollution. Those charges resulted in consent decrees among the EPA, the DEP and the PRPs, including Rollins, to remediate the superfund site with the PRPs paying the cost of remediation.

Although the consent decrees created collective liability for the settling PRPs, those documents did not allocate such liability among the PRPs. Rather, the various PRPs entered into separate settlement agreements (the “Settlement Agreements”) among themselves providing for the sharing of the remediation costs. As a result of the Settlement Agreements, Rollins became obligated to the Defendants to provide funds to assist in the remediation work over the course of a number of years. When Safety-Kleen acquired Rollins it became obligated to the Defendants under the terms of the Settlement Agreements.

Safety-Kleen’s Sale To Clean Harbors

During the course of the bankruptcy case, Safety-Kleen filed a motion seeking to sell its environmental services division to Clean Harbors. The proposed sale was subject to a detailed Acquisition Agreement (the “Agreement”) dated February 22, 2002. The Sale Order was entered on June 18, 2002. As a result of the sale, Clean Harbors assumed certain liabilities of Safety-Kleen. As to liabilities not assumed by Clean Harbors the Sale Order enjoins holders of such claims from pursuing recovery against Clean Harbors. The subject adversary proceeding thus involves the dispute as to whether Clean Harbors has assumed Safety-Kleen’s liabilities owing to the Defendants, which liabilities arose out of the Safety-Kleen acquisition of Rollins.

Acting on the belief that Clean Harbors assumed such liabilities, the Defendants filed a motion in the New Jersey Court seeking an order requiring Clean Harbors to pay all monies due from Safety-Kleen under the Settlement Agreements.5 However, the Defendants voluntarily withdrew the New Jersey Court motion, apparently intending to refile it at a later date. This adversary proceeding was filed in this Court by Clean Harbors before the Defendants’ refiled in the New Jersey Court.

Due to the Defendants’ attempts to enforce their obligations in the New Jersey Court, Clean Harbors asserts that the Defendants have violated the injunction provisions of the Sale Order. From this, Clean Harbors alleges that this supposedly [608]*608“clear” violation warrants contempt sanctions.

DISCUSSION

Standard of Review

In determining whether a claim should be dismissed pursuant to Rule 12(b)(6), the Court may look only to the allegations contained in the Complaint and any exhibits attached thereto. City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 259 (3d Cir.1998) (citation omitted). But if matters outside the Complaint are presented to and not excluded by the Court, the motion to dismiss “shall be treated as one for summary judgment and disposed of as provided in Rule 56 .... ” Fed. R. Civ. P. 12(b). The decision to consider evidence outside the Complaint and convert a motion to dismiss to one for summary judgment is within the discretion of the Court. Kulwicki v. Dawson, 969 F.2d 1454, 1462 (3d Cir.1992) (citation omitted).

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P 56(c).6 When deciding a motion for summary judgment, the court views the facts, and all permissible inferences from those facts, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

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Cite This Page — Counsel Stack

Bluebook (online)
331 B.R. 605, 2005 Bankr. LEXIS 2003, 45 Bankr. Ct. Dec. (CRR) 162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clean-harbors-inc-v-arkema-inc-in-re-safety-kleen-deb-2005.