County of San Mateo, California et al v. Peabody Energy Corp.

Filing 32

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Appellants motion to for a stay pending appeal 4 is DENIED. Signed by District Judge Rodney W. Sippel on 9/20/18. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
In re:

)
)
PEABODY ENERGY CORP., et al., )
)
Reorganized Debtors,
)
______________________________ )
)
COUNTY OF SAN MATEO,
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CITY OF IMPERIAL BEACH,
)
COUNTY OF MARIN,
)
)
Appellants,
)
)
v.
)
)
PEABODY ENERGY CORP.,
)
)
Appellee.
)

Bankruptcy Case No. 16-42529-399

Case No. 4:17 CV 2886 RWS

MEMORANDUM AND ORDER
Debtors Peabody Energy Corporation and its affiliates (PEC) filed for
Chapter 11 bankruptcy protection in 2016 in the United States Bankruptcy Court
for the Eastern District of Missouri. The bankruptcy court set October 11, 2016 as
the deadline for governmental units to assert claims that arose prepetition. On
March 17, 2017, the bankruptcy court entered its order confirming PEC’s Plan of
Reorganization. On April 3, 2017, the Plan went into effect and Reorganized PEC
emerged from bankruptcy. The Plan established a deadline on May 3, 2017 for all
creditors to assert claims against PEC that arose between the filing of the

bankruptcy petition and the Plan’s effective date.
Appellants County of San Mateo, City of Imperial Beach, and County of
Marin are three governmental entities in California. None of the Appellants filed a
claim in PEC’s bankruptcy proceeding. Instead, on June 17, 2018, three months
after PEC’s plan was confirmed, the Appellants each filed a separate, nearly
identical, lawsuit in three separate California state courts. The lawsuits sought
damages and injunctive relief from multiple fossil fuel industry defendants for their
role in contributing to global warming. PEC is a named defendant in these three
lawsuits. The complaints allege that the defendants are responsible for greenhouse
gas emissions between 1965 and 2015. The complaints seek compensatory
damages, equitable relief, punitive damages, attorneys’ fees, disgorgement of
profits, and cost of suit. These lawsuits were removed to federal court.
On July 16, 2017, Reorganized PEC filed a motion in the bankruptcy court
seeking an order enforcing the discharge and injunction provisions of its Chapter
11 Plan. Specifically, PEC asked the bankruptcy court to enjoin Appellants from
prosecuting their causes of action against PEC and require Appellants to dismiss
those actions with prejudice. The bankruptcy court found Appellants’ claims
against PEC had been discharged in bankruptcy. The bankruptcy court granted
Reorganized PEC’s motion, enjoined Appellants from prosecuting the PEC causes
of action, and directed Appellants to dismiss the PEC causes of action with
prejudice. Appellants filed a motion in the bankruptcy court to stay its order
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pending appeal. The bankruptcy court denied the motion to stay on December 5,
2017.
Appellants appealed the bankruptcy judge’s decision to this Court.
Appellants filed a motion to stay the bankruptcy court’s order pending the
resolution of this appeal. A party seeking a stay pending a bankruptcy appeal
must establish that: (1) it is likely to succeed on the merits; (2) it will suffer
irreparable injury unless the stay is granted; (3) no substantive harm will come to
other interested parties; (4) and that the stay will do no harm to the public interest.
In re Ross, 223 B.R. 702, 703 (B.A.P. 8th Cir. 1998). Where the bankruptcy court
has already considered and ruled on the request for a stay pending appeal, the
district court’s appellate role is limited to determining whether the trial court
abused its discretion. In re Stratford Hotel Co., 120 B.R. 515, 516 (E.D. Mo.
1990).
I have reviewed the parties’ papers and the bankruptcy court orders at issue
and find that Appellants have not established that they are likely to succeed on the
merits of their claim. Nor will Appellants suffer irreparable injury unless the stay
is granted. If the bankruptcy court’s decision is reversed on appeal, Appellants
may file for relief in their California lawsuit under Federal Rule of Civil Procedure
60(b). See White v. Nat'l Football League, 756 F.3d 585, 594 (8th Cir. 2014).

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Accordingly,
IT IS HEREBY ORDERED that Appellants’ motion to for a stay pending
appeal [4] is DENIED.

_________________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 20th day of September, 2018.

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