Eddleman v. United States Department of Labor

923 F.2d 782
Court of Appeals for the Tenth Circuit·Decided January 15, 1991·No. No. 88-2793·Published·Cited by 10 cases

Opinion

McKAY, Circuit Judge.

This appeal arises from an attempt by the appellant, United States Department of Labor (“DOL”), to maintain an administrative action against a chapter 11 debtor. The United States Bankruptcy Court for the District of Colorado ruled that DOL’s action was stayed by the automatic stay provision of the Bankruptcy Code, and the district court affirmed. We reverse.

I. Facts

Appellees James and Jane Eddleman owned a mail-hauling business. They did most of their work under a contract with the United States Postal Service. On August 6, 1986, the Eddlemans filed a petition for relief under chapter 11 of the Bankruptcy Code. See generally 11 U.S.C. §§ 1101-1174 (1988). They continued to operate the business as debtors-in-possession.

On May 27, 1987, DOL filed an administrative action against the Eddlemans, alleging pre-petition violations of the Service Contract Act (“SCA”), 41 U.S.C. §§ 351-358 (1988). The SCA requires all federal government contractors to pay certain minimum wages and fringe benefits. See 41 U.S.C. § 351. DOL alleges that the Eddle-mans underpaid workers and failed to keep adequate records of hours worked and wages paid.

As part of the administrative enforcement action, DOL sought to liquidate claims for back wages due the Eddlemans’ employees.1 DOL also sought to include the Eddlemans on an official list of SCA violators. Persons on the list are debarred from contracting with the government for three years. 41 U.S.C. § 354. If debarred under section 354, the Eddlemans stood to lose the benefit of renewal options included in their contract.

The Eddlemans responded by filing this adversary proceeding in bankruptcy court, requesting the court to enforce the automatic stay provision of the Bankruptcy Code against the DOL’s administrative action. See 11 U.S.C. § 362 (1988).2 The Eddlemans sought, and were granted, a “Preliminary Injunction to Enjoin Violation of Automatic Stay.” The Eddlemans also sought damages under 11 U.S.C. § 362(h) (1988) for DOL’s alleged willful violation of the automatic stay.

DOL moved to dismiss, arguing that its administrative action was taken to “enforce [its] police or regulatory power,” and was therefore specifically exempted from the automatic stay provisions by 11 U.S.C. § 362(b)(4) (1988). The bankruptcy court denied the motion to dismiss, holding that the DOL action was not within the “police or regulatory power” exemption, and that any continuation of DOL’s enforcement effort was stayed. The district court affirmed the bankruptcy court’s denial of the motion to dismiss and remanded the case to the bankruptcy court for further proceedings on the issue of damages. From that order, DOL appeals to this circuit.

[784] As a preliminary matter, we must decide whether appellate jurisdiction exists for this appeal. Later, we consider whether the “police or regulatory power” exemption applies to DOL’s enforcement proceeding.

II. Jurisdiction

The jurisdiction of this court over appeals from district courts acting in their bankruptcy appellate capacity is limited to “final decisions, judgments, orders, and decrees.” 28 U.S.C. § 158(d) (1988); In re Kaiser Steel, 911 F.2d 380, 385-86 (10th Cir.1990). The Eddlemans argue that this court lacks jurisdiction to hear this appeal because the district court’s order affirming the bankruptcy court and remanding for further proceedings is not “final” within the meaning of section 158(d). DOL counters that the district court’s order is final because it settles the question of whether the automatic stay applies to DOL’s enforcement proceeding. DOL argues that, without the opportunity to appeal now, it would be effectively denied meaningful appellate review on the automatic stay issue. Alternatively, DOL argues that the lower court order, applying the automatic stay to the DOL proceeding, operates as an injunction over which this court has appellate jurisdiction under 28 U.S.C. § 1292(a)(1).3

DOL’s argument that jurisdiction lies under section 1292 has been foreclosed by this court’s recent decision in Kaiser Steel. In that case we held that section 158(d) is the exclusive basis of circuit court jurisdiction over appeals from orders of district courts acting in their bankruptcy appellate capacity. Section 1292 is therefore unavailable as a basis for appellate jurisdiction. 911 F.2d at 386.

We nonetheless hold that the district court order affirming the bankruptcy court’s application of the automatic stay to DOL's enforcement proceeding is a final order appealable to this court under section 158(d).

A.

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Eddleman v. United States Department of Labor, 923 F.2d 782 (10th Cir. 1991).

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