D. M. Barber, Inc. v. Valverde (In Re D. M. Barber, Inc.)

13 B.R. 962, 5 Collier Bankr. Cas. 2d 150, 1981 Bankr. LEXIS 2987, 110 L.R.R.M. (BNA) 3095, 8 Bankr. Ct. Dec. (CRR) 188
CourtUnited States Bankruptcy Court, N.D. Texas
DecidedSeptember 11, 1981
Docket19-30810
StatusPublished
Cited by20 cases

This text of 13 B.R. 962 (D. M. Barber, Inc. v. Valverde (In Re D. M. Barber, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
D. M. Barber, Inc. v. Valverde (In Re D. M. Barber, Inc.), 13 B.R. 962, 5 Collier Bankr. Cas. 2d 150, 1981 Bankr. LEXIS 2987, 110 L.R.R.M. (BNA) 3095, 8 Bankr. Ct. Dec. (CRR) 188 (Tex. 1981).

Opinion

MEMORANDUM OPINION

JOHN FLOWERS, Bankruptcy Judge.

This case arose out of a complaint filed by the debtor to hold the above-named defendants in contempt and for injunctive relief. At the hearing before the court on March 19,1981 the debtor amended its complaint so as to waive its request for an order of contempt against the defendants and further waived its request for an injunction against the defendants from continuing with the initial stages of the Board’s unfair labor practice proceeding. The debtor instead urged the court to enjoin the Board from holding a compliance proceeding in which the Board would deter *963 mine the dollar amount of contributions owed by the debtor to its employees. At the conclusion of this hearing, the court preliminarily enjoined the defendants from conducting any administrative or judicial proceedings to liquidate the amount of any claimed monetary liability of the debtor.

On April 6, 1981 the Board’s Administrative Law Judge issued an opinion finding that the debtor had violated certain provisions of the National Labor Relations Act. At issue is whether § 362(a)(1) of the Bankruptcy Code automatically enjoins the National Labor Relations Board from proceeding into the “compliance” stage which fixes the amount of the debtor’s liability for having committed an unfair labor practice, and if not whether the court should exercise its discretionary powers to enjoin the Board under § 105 of the Code.

THE AUTOMATIC STAY

A petition filed under the Bankruptcy Code operates as a stay applicable to all entities of the commencement or continuation of a judicial, administrative or other proceeding against the debtor that was or could have been commenced before the commencement of the case under the Code, 11 U.S.C. § 362(a)(1). The filing of a petition however does not operate as a stay of the commencement or continuation of any action or proceeding by a governmental unit to enforce such governmental unit’s police or regulatory powers, 11 U.S.C. § 362(b)(4).

In a recent decision, Volkswagen of America, Inc. v. Dan Hixson Chevrolet Co., 12 B.R. 917 (Bkrtcy.N.D.Tex.1981), I concluded that governmental activities are within the § 362(b)(4) exception so long as the action relates to the enforcement of police or regulatory laws. However where the administrative agency is acting in a quasi-judicial capacity seeking to adjudicate private rights rather than effectuate public policy as defined by regulatory law the (b)(4) exception is inapplicable. “Where the agency’s action concerns only the parties who are immediately affected the debtor is entitled to the same protection under § 362(a)(1) it would receive under the automatic stay if the proceeding were pending instead in a judicial forum.” Volkswagen at 7.

Proceedings before the National Labor Relations Board are commenced by the initiative of aggrieved individual persons and thus have some characteristics of private litigation. However the case law reflects that the proceedings by the Board are not to adjudicate private rights but to effectuate public policy, N.L.R.B. v. Shipbuilding Local 22, 391 U.S. 418, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968); N.L.R.B. v. Williamson-Dickie Mfg. Co., 130 F.2d 260 (5th Cir., 1942).

Consequently I find proceedings before the Board to enforce the provisions of the National Labor Relations Act are proceedings within the § 362(b)(4) exception to the automatic stay, N.L.R.B. v. Evans Plumbing Co., 639 F.2d 291 (5th Cir., 1981). The Board is authorized to fix the liability for violations of the Act, see 29 U.S.C. § 160(c) and 29 C.F.R. § 102.52. As the Board’s authority to fix liability for violation is incident to the exercise of its police and regulatory power, the Board’s “compliance” stage in the proceedings against the debtor also falls within the § 362(b)(4) exception. As the legislative history reflects:

“Thus, where a governmental unit is suing a debtor to prevent or stop violations of fraud, environmental protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay, (emphasis added) House Report No. 95-595, 95th Cong., 2nd Session at 343, U.S.Code Cong. & Admin.News 1978, 5787, 6299.

The exceptions in § 362(b), however, do not go so far as to permit enforcement of a money judgment against the debtor or *964 property of the estate, Evans Plumbing Co., supra, 11 U.S.C. § 362(b)(5). 1

THE DISCRETIONARY STAY

The debtor urges in the alternative that the court exercise its discretionary powers pursuant to § 105 of the Bankruptcy Code to enjoin the Board from fixing the debtor’s liability. The debtor notes that the Fifth Circuit Court of Appeals expressly left this issue unresolved in the Evans decision, see Evans at 293, fn. 3. It is clear that the Bankruptcy Courts may enjoin the Board if such injunction is necessary or appropriate to carry out the provisions of the bankruptcy laws, see § 105(a) of the Bankruptcy Code and 28 U.S.C. § 1481. The debtor contends that the Bankruptcy Court has the authority to liquidate claims against the estate pursuant to § 502 of the Code. Therefore the debtor argues that the granting of an injunction is a necessary or appropriate measure to carry out the provisions of the Bankruptcy Code.

The Supreme Court rejected a similar theory asserted by the trustee in a case arising under the Bankruptcy Act and concluded that the Board, not the referee in bankruptcy nor the court, has been entrusted by Congress with authority to determine what measures will remedy unfair labor practices, Nathanson v. National Labor Relations Board, 344 U.S. 25, 73 S.Ct. 80, 97 L.Ed. 23 (1952). The court notes that the fixing of the back pay is one of the functions confided solely to the Board.

“The computation of the amount due may not be a simple matter.

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Bluebook (online)
13 B.R. 962, 5 Collier Bankr. Cas. 2d 150, 1981 Bankr. LEXIS 2987, 110 L.R.R.M. (BNA) 3095, 8 Bankr. Ct. Dec. (CRR) 188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/d-m-barber-inc-v-valverde-in-re-d-m-barber-inc-txnb-1981.