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York Ctr. Park Dist. v. Krilich

ELR Citation: 25 ELR 20594
Nos. Nos. 93-4029, 94-1062, 40 F.3d 205/(7th Cir., 11/15/1994)

The court vacates and remands a district court judgment that two development companies committed trespass and conversion by dredging and filling wetlands on the border between a private development and a park and by draining water from a park lake. The court holds that the judgment against the two companies must be vacated because the companies were undergoing liquidation in bankruptcy at the time of the trial, and the bankruptcy judge had not released or modified the automatic stay of litigation issued under 11 U.S.C. §362. Also, the district court did not articulate any reason for believing that an exception to the automatic stay permitted it to conduct a trial. The court notes that it need not decide whether a judgment entered in violation of §362 is void or voidable, because the difference between the two formulations does not matter in a direct appeal such as this. The court remands to the district court for a determination of whether plaintiff park district's claim must be retried in light of the fact that the park district failed to file claims against the companies in the bankruptcy proceedings and the companies failed to list the park district as a creditor. The court holds that it lacks jurisdiction over the park district's request for an award of costs against one company, because the park district failed to file a notice of appeal after the district judge rejected its bill of costs.

The court next affirms the district court's judgment that a corporate officer of a third company did not violate §301 of the Federal Water Pollution Control Act (FWPCA) by filling wetlands without a permit. The court holds, however, that the district court erred in holding that the filling activity was authorized in advance by 33 C.F.R. §330.5(a)'s nationwide permit provision. Nationwide permits do not authorize any injury to the property or rights of others, and the district court failed to explain how the officer could use a nationwide permit to justify filling another's land. The court notes that it need not decide whether the district court also erred in using the property line to produce a tract small enough to come within §330.5(a)'s authorization to fill less than one acre of wetlands without notice. Although a remand ordinarily would follow from the district court's failure to resolve disputes about the source of the fill on the lake's eastern shore and about the purpose of the grading operations, the court holds that the jury's verdict makes further proceedings unnecessary. The officer is not responsible under the FWPCA unless he authorized the company's filling activities. Because the jury absolved the officer of liability for trespass and conversion, the jury necessarily found that he had not authorized any destructive intrusion on the park district's land. Finally, the court holds that the district court abused its discretion in denying the officer's petition for costs, because he had prevailed on every claim.

Counsel for Plaintiff
Stuart D. Gordon
Much, Shelist, Freed, Denenberg & Ament
200 N. La Salle St., Ste. 2100, Chicago IL 60601
(312) 346-3100

Counsel for Defendants
Raymond T. Reott, Ellen L. Partridge
Jenner & Block
One IBM Plaza, Chicago IL 60611
(312) 222-9350

Before CUMMINGS, GOODWIN,* and EASTERBROOK, Circuit Judges.