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In re Taylor

ELR Citation: 47 ELR 20077
Nos. No. 15-02730-5, (Bankr. E.D.N.C., 05/31/2017) (Humrickhouse, C.J.)

A federal bankruptcy court issued a supplementary opinion to clarify its prior ruling that environmental groups' claims for declaratory and injunctive relief under the CWA and RCRA would not be "debts" as defined by the Bankruptcy Code. The case arose after environmental groups filed a CWA and RCRA citizen suit against a swine farm, alleging that it was improperly discharging swine waste or effluent into a creek. The farm subsequently filed for bankruptcy, and the lawsuit was stayed. Because only claims that give rise to a payment can be discharged in bankruptcy, the groups sought a summary judgment that the declaratory and injunctive relief they seek are not debts. The court ruled in the groups' favor. It is well established that RCRA does not allow recovery of cleanup costs. Therefore, any injunctive relief awarded in favor of the groups requiring the farm to comply with RCRA does not include a right to payment and is not a claim in the farm's bankruptcy case. Likewise, the CWA also does not allow plaintiffs in a citizen suit to recover cleanup costs, and any injunctive order requiring compliance with the CWA is not a claim under the Bankruptcy Code. Note that it is currently unknown whether the farm will ultimately be liable.