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State v. Better Brite Plating, Inc.

ELR Citation: 22 ELR 21211
Nos. No. 90-0280, 483 N.W.2d 574/168 Wis. 2d 363, (Wis., 05/19/1992) Modified & remanded

The court overrules a state appellate court decision holding that two bankruptcy trustees may be personally liable for violating Wisconsin's hazardous waste act after being appointed trustees in a liquidation proceeding. The state alleged that the trustees had allowed hazardous waste to be stored for more than 90 days without obtaining a license from the Department of Natural Resources. The court holds that the state's courts lack jurisdiction in cases where trustees are sued personally for actions taken in their official capacities and within the scope of their authority. The court acknowledges that a trustee may be held personally liable for breaching its fiduciary duty or for acting outside of its scope of authority. The court, however, notes that state courts do not have jurisdiction over breach of fiduciary cases. Further, in examining the historical purpose of 28 U.S.C. §959 and relevant case law, the court holds that where a trustee's acts do not constitute carrying on business connected to the property in trust, the trustee may be sued in state court only with leave of the appointing court. Additionally, the court declines to address the preemption issue.

[The court of appeals decision is published at 21 ELR 20669 and briefs in that case are published at ELR PEND. LIT. 66132.]

Counsel for Plaintiff-Respondent-Petitioner
Robert Hunter, Ass't Attorney General
114 East State Capitol, PO Box 7857, Madison WI 53707
(608) 266-1221

Counsel for Defendant-Co-Appellant
Joseph Niebler
Niebler & Muren
PO Box Drawer 825, Brookfield WI 53008
(414) 784-6630

Counsel for Defendant-Appellant
David J. Matyas
366 Main Ave., DePere WI 54115
(414) 336-2333