Flintkote Co. v. 8 East Frederick Place, LLC (In re Flintkote Co.)

475 B.R. 400
CourtUnited States Bankruptcy Court, D. Delaware
DecidedJuly 6, 2012
DocketNo. 04-11300-JKF
StatusPublished
Cited by2 cases

This text of 475 B.R. 400 (Flintkote Co. v. 8 East Frederick Place, LLC (In re Flintkote Co.)) 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
Flintkote Co. v. 8 East Frederick Place, LLC (In re Flintkote Co.), 475 B.R. 400 (Del. 2012).

Opinion

MEMORANDUM OPINION1

JUDITH K. FITZGERALD, Bankruptcy Judge.

Before the court are two motions for summary judgment filed by Debtors — (1) (Doc. No. 6239) with respect to a motion for relief from stay (Doc. No. 5902)2 filed by 8 East Frederick Place, LLC (hereafter “8 East Frederick”),3 and (2) (Doc. No. [403]*4036240) with respect to Debtors’ objection (Doc. No. 3593) and Supplemental Objection (Doc. No. 5973) to 8 East Frederick’s Claim No. 2242.4 For the reasons which follow, we will grant both of Debtors’ motions for summary judgment, deny 8 East Frederick’s motion for relief from stay, and sustain Debtors’ objection and supplemental objection to 8 East Frederick’s claim.

8 East Frederick asserts that relief from stay should be granted because it intends to seek injunctive relief and not damages from the New Jersey state court. We conclude that 8 East Frederick has not established cause for relief from stay5 and has no cause of action under the environmental statutes it relies on. Those statutes either (1) do not apply or (2) require that 8 East Frederick have incurred cleanup costs for which it seeks contribution, or that regulatory authorities failed to act. 8 East Frederick has incurred no cleanup costs6 and therefore has no cause of action under the environmental statutes. The New Jersey Department of Environmental Protection (“NJDEP”) was and is involved in Debtors’ efforts with respect to the property and, therefore, has not failed to act. Furthermore, the New Jersey Environmental Rights Act (“ERA”) on which 8 East Frederick relies does not provide substantive rights and because 8 East Frederick has no claim or enforcement rights under the environmental statutes upon which it relies it has no cause of action under the ERA. Therefore, 8 East Frederick has not established cause for relief from stay and is not entitled to injunctive relief as a matter of law. It has no claim cognizable in bankruptcy.7

The facts are as follows and are either undisputed or are supported by the evi-dentiary record.

Debtors initially filed a non-substantive objection to claim at Doc. No. 2658 because 8 East Frederick’s proof of claim contained no supporting documentation.8 8 East Frederick filed a response attaching a narrative explanation of its claim. The narrative alleged a contingent right to contribution under the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11, et seq., and several tort-based monetary claims. Id. In light of 8 East Frederick’s supplemental narrative filing, a Consent Order was filed whereby Debtors withdrew their non-substantive objection to claim without prejudice to raising [404]*404further objections. The Consent Order was entered by this court on November 21, 2007. Doc. No. 2839.

Thereafter, on August 29, 2008, Debtors filed a substantive objection to 8 East Frederick’s claim. Doc. No. 3593. That objection was resolved in part pursuant to a Stipulation and Order entered on February 17, 2009. Doc. No. 4045. The Stipulation and Order provided that 8 East Frederick was to withdraw, with prejudice, Economic Loss Claims9 and, within ten days of the Order, was to file an amended claim limited to claims, causes of action, and theories of recovery or liability that were expressly reserved in ¶ 6 of the Stipulation. Paragraph 6 provided that 8 East Frederick did not waive the right to

(i) seek to compel Debtors to conduct remedial investigations;
(ii) seek to compel Debtors to remedi- ' ate;
(iii) seek contribution from Debtors for cleanup and removal costs as defined under the Spill Act and which are actually incurred by 8 East Frederick; and
(iv) refuse to accept a deed restriction or alternative remediation standard.10

Even though 8 East Frederick has never filed the amended proof of claim 111 required by the Stipulation and Order, the parties have pursued the environmental issues reserved by 8 East Frederick.12 In [405]*405the Stipulation and Order, 8 East Frederick reserved claims or causes of action under four New Jersey statutes and two federal statutes:

(1) the New Jersey Environmental Rights Act (“ERA”), N.J.S.A. 2A:35A-1, et seq.;
(2) the New Jersey Spill and Compensation and Control Act (“Spill Act”), N.J.S.A. 58:10-11(f)(2)(a);
(3) the New Jersey Industrial Site Re- . covery Act (“ISRA”), N.J.S.A. 13:IK-6, et seq.;
(4) the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1, et seq.;
(5) the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601, et seq.; and
[406]*406(6) the Federal Water Pollution control Act (“Clean Water Act”), 33 U.S.C. § 1251, et seq.

(1) The Environmental Rights Act (“ERA”).

The ERA does not confer any substantive rights, and its purpose is to limit lawsuits by private litigants to those instances where the government has failed to act. Mayor & Council of Borough of Rockaway v. Klockner & Klockner, 811 F.Supp. 1039, 1054 (D.N.J.1993) (“Rocka-way ”).

“The primary prosecutorial responsibility for enforcing the state’s environmental laws resides in the government, and the [ERA] anticipates private parties’ standing only when the government has failed to properly act.”13 U.S. v. CDMG Realty Co., 875 F.Supp. 1077, 1086 (D.N.J.1995) (re CERCLA), vacated on other grounds, 96 F.3d 706 (3d Cir.1996), citing Superior Air Products Co. v. NL Industries, Inc., 216 N.J.Super. 46, 522 A.2d 1025 (1997).14 In the matter before us, as in CDMG Realty, the NJDEP is involved in the effort to redress the contamination at the subject property and “unless and until the government can be shown to have fallen short in its dedication to full enforcement of the respective statutes and regulations,” 8 East Frederick cannot maintain an action pursuant to the ERA. CDMG, 875 F.Supp. at 1086, citing Allied Corp. v. Frola, 730 F.Supp. 626, 636 (D.N.J.1990). No such evidence has been submitted.

“The primary goal of the [ERA] is to limit lawsuits by private litigants to those instances where the government has not acted.” Rockaway, 811 F.Supp. at 1054.

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Bluebook (online)
475 B.R. 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flintkote-co-v-8-east-frederick-place-llc-in-re-flintkote-co-deb-2012.