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United States v. Jones & Laughlin Steel Corp.

Citation: 17 ELR 20004
No. No. 85-3274, 804 F.2d 348/25 ERC 1221/(6th Cir., 11/03/1986)

The court holds that the district court abused its discretion in conditioning its approval of a consent decree to allow a third party that had not asserted an independent claim to receive part of the settlement. The district court conditioned its approval of a consent decree settling an enforcement action against a steel company under the Clean Air Act and Federal Water Pollution Control Act upon amendment of the decree to allow the City of Cleveland to receive part of the settlement for its role in enforcing the decree. The court initially holds that this proceeding falls within the government regulatory power exception to the automatic stay provision under the Bankruptcy Code. This appeal concerns the environmental regulation of the steel company, not the enforcement of a money judgment. The court then holds that the district court's order is immediately appealable under 28 U.S.C. § 1292(a)(1), since it would force the parties to abandon their negotiated settlement and proceed to trial. On the merits, the court holds that the district court's order was an abuse of discretion. Although Cleveland voluntarily monitored the steel company's compliance with a prior decree, the city has no independent basis under the Clean Air Act or any other law to support its claim to $500,000 of the $4 million negotiated civil penalty. Finally, the court holds that the United States is not bound by the statements of an employee of the Environmental Protection Agency that the decree would be modified to earmark $500,000 for the city.

[Briefs in this case are digested at ELR PEND. LIT. 65924.]

Counsel for Plaintiff-Appellant
Peter R. Steenland Jr., Maria A. Iizuka
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2748

Counsel for Defendants-Appellees
James Sennett
Jones, Day, Reavis & Pogue
1700 Huntington Bldg., Cleveland OH 44115
(216) 348-3939

Lee Larson
LTV Steel Co., Law Dep't, LTV Steel Bidg., 25 W. Prospect Ave., Cleveland OH 44115
(216) 622-5000

Before: KENNEDY and MARTIN, Circuit Judges; and PECK, Senior Circuit Judge.