Chateaugay Corp., In re, 246

• Decision Date: 17 December 1990
• Docket Number: No. 246,D,246
• Citation: 922 F.2d 86
• Parties: , 13 Employee Benefits Ca 1283 In re CHATEAUGAY CORPORATION, Reomar, Inc., The LTV Corporation, et al., Debtors. LTV STEEL COMPANY, INC., BCNR Mining Corporation, Nemacolin Mines Corporation, and Tuscaloosa Energy Corporation, Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellee, Joseph P. Connors, Sr., Donald E. Pierce, Jr., William Miller, William B. Jordan and Paul R. Dean as trustees of the United Mine Workers of America 1974 Benefit Plan and Trust, Defendants-Appellants. ocket 90-5020.
• Court: U.S. Court of Appeals — Second Circuit

Page 86

922 F.2d 86

21 Bankr.Ct.Dec. 355, 13 Employee Benefits Ca 1283

In re CHATEAUGAY CORPORATION, Reomar, Inc., The LTV

Corporation, et al., Debtors.

LTV STEEL COMPANY, INC., BCNR Mining Corporation, Nemacolin

Mines Corporation, and Tuscaloosa Energy

Corporation, Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellee, Joseph P. Connors, Sr., Donald E. Pierce, Jr., William

Miller, William B. Jordan and Paul R. Dean as

trustees of the United Mine Workers of

America 1974 Benefit Plan and

Trust, Defendants-Appellants.

No. 246, Docket 90-5020.

United States Court of Appeals, Second Circuit.

Argued Sept. 19, 1990.

Decided Dec. 17, 1990.

William F. Hanrahan, Groom and Nordberg, Washington, D.C. (Michael Devorkin, John J. Rieck, Jr., Doar, Devorkin & Rieck, New York City, David W. Allen, Gen. Counsel, United Mine Workers of America, Washington, D.C., of counsel), for defendants-appellants.

Sharon Katz, Davis Polk & Wardwell (Karen E. Wagner, Davis Polk & Wardwell, Kaye, Scholer, Fierman, Hays & Handler, New York City, of counsel), for plaintiffs-appellees.

Before OAKES, Chief Judge, MESKILL, Circuit Judge, and RESTANI, ^* Judge.

MESKILL, Circuit Judge:

This is an appeal from an order of the United States District Court for the Southern District of New York, Kram, J., affirming orders of the bankruptcy court granting partial summary judgment in favor of plaintiffs-appellees LTV Steel Company, Inc., and LTV Corporation subsidiaries BCNR Mining Corporation, Nemacolin Mines Corporation and Tuscaloosa Energy Corporation (collectively "LTV"). The United States Bankruptcy Court for the Southern District of New York, Lifland, C.J., previously held that LTV is not liable for the continued payment of retiree benefits after the expiration of the collective bargaining agreement. That court also determined that the United Mine Workers of America 1974 Benefit Plan and Trust (Benefit Trust) is responsible for the provision of retiree benefits under the terms of the National Bituminous Coal Wage Agreement of 1984 (Wage Agreement). The questions presented on appeal are whether section 1114 of the Retiree Benefits Bankruptcy Protection Act of 1988, Pub.L. No. 100-334, 102 Stat. 610 (1988) (codified in part at 11 U.S.C. Secs. 1114, 1129 (1990) ("Bankruptcy Protection Act" or the "Act"), applies to LTV and what party, LTV or the Benefit Trust, is required to provide benefits to LTV's retirees.

We dismiss for lack of jurisdiction. Appellants have thirty days in which to obtain

certification of the judgment of the bankruptcy court in accordance with Bankruptcy Rule 7054(a). Upon proper certification and notification to this Court, this appeal will be reinstated and returned to this panel for consideration of the merits without further argument or briefs.

BACKGROUND Facts

In July 1986, LTV sought protection under Chapter 11 of the Bankruptcy Code. 11 U.S.C. Sec. 1101 et seq. In that same year the three mining subsidiaries closed their doors with no intention of reopening. Since that time, LTV has been operating as debtor-in-possession under the Bankruptcy Code.

LTV's mine employees were paid pursuant to the collectively bargained Wage Agreement which included terms providing for retiree benefits. These terms included provisions for funding the Benefit Trust. Established by the 1974 Wage Agreement, the Benefit Trust provides health and life insurance benefits to employees retiring after January 1, 1976. Successive Wage Agreements in 1978, 1981 and 1984 perpetuated the Benefit Trust which was funded by employer contributions as specified in the Wage Agreement. The Wage Agreement required LTV to continue paying retiree benefits and contributing to the Benefit Trust for either the term of the Wage Agreement or until LTV was no longer in business.

Immediately after declaring bankruptcy, LTV ceased benefit payments to all retirees, claiming such payments were not permitted under the terms of the Bankruptcy Code. LTV subsequently petitioned the bankruptcy court for an order permitting payment of the benefits retroactive to July 1986. That order was granted and LTV recommenced payment of retiree benefits.

The Wage Agreement was scheduled to expire on January 31, 1988. In November and again in December 1987, LTV informed the Benefit Trust of the impending expiration of the Wage Agreement, that LTV would cease payment of retiree benefits on the date of expiration and that the Benefit Trust was responsible for paying the retiree benefits on February 1, 1988. The Benefit Trust responded that it would not pay benefits to LTV retirees. Despite the expiration of the Wage Agreement, LTV continued to pay the retiree benefits.

Legislative Environment

In 1986, Congress was spurred into action by the cessation of benefits for approximately 79,000 LTV retirees when LTV filed for bankruptcy. Congress enacted temporary legislation requiring restoration of the benefits, and giving retiree benefit payments the status of administrative expenses, thereby permitting the payments during the reorganization. This temporary legislation was renewed and extended several times, but ultimately expired on October 15, 1987. On June 16, 1988 Congress passed the Bankruptcy Protection Act, applicable to bankruptcy cases commenced on or after June 16, 1988, which requires a trustee in bankruptcy to continue paying retiree benefits throughout reorganization under the plan and at the levels maintained prior to filing for bankruptcy. Section 3 of the Act revives the stopgap legislation that expired on October 15, 1987 and states, in pertinent part:

(a)(1) Subject to paragraphs (2), (3), (4), and (5), and notwithstanding title 11 of the United States Code [this title] the trustee shall pay benefits to retired former employees under a plan, fund, or program maintained or established by the debtor prior to filing a petition (through the purchase of insurance or otherwise) for the purpose of providing medical, surgical, or hospital care benefits, or benefits in the event of sickness, accident, disability, or death.

....

(c) This section is effective with respect to cases commenced under chapter 11, of title 11, United States Code [this chapter], in which a plan for reorganization has not been confirmed by the court and in which any such benefit is still being paid on October 2, 1986, and in cases that become subject to chapter 11, title 11, United States Code, after October Bankruptcy Protection Act, Sec. 3, Pub.L. 100-334, 102 Stat. 610, 613 (1988). Pursuant to section 3, the trustee in bankruptcy must continue to pay the retiree benefits throughout the reorganization unless the plan is modified through one of the methods specified in the statute.

2, 1986 and before the date of the enactment of the Retiree Benefits Protection Act of 1988 [June 16, 1988].

Procedural History

This adversary proceeding was filed in the United States Bankruptcy Court for the Southern District of New York on June 23, 1988. LTV sought a declaratory judgment that (1) LTV is not responsible for payment of the retiree benefits after the expiration of the collectively bargained Wage Agreement and the Benefit Trust is obligated to pay those retiree benefits, and (2) that the Benefit Trust is liable to LTV for benefits paid by LTV after the expiration of the Wage Agreement.

The United States Bankruptcy Court for the Southern District of New York, Lifland, C.J., entered partial summary judgment for LTV in two orders dated August 1 and August 4, 1988. The Benefit Trust filed a motion for leave to appeal. On September 13, 1988, the United States District Court for the Southern District of New York, Knapp, J., heard argument on the finality of the bankruptcy court orders. Judge Knapp determined that if the parties stipulated to and obtained a dismissal of pending counterclaims, the orders would be final and appealable. An order adjudging the bankruptcy court orders to be final was entered on October 17, 1988.

The appeal subsequently was assigned to Judge Kram, and the merits of the appeal were heard. After oral argument, Judge Kram held that the Retiree Benefits Bankruptcy Protection Act did not require LTV to continue paying retiree benefits after the expiration of the Wage Agreement and found the Benefit Trust liable for payment of the benefits. An order affirming the orders of the bankruptcy court was entered on March 6, 1990. In re Chateaugay, 111 B.R. 399 (Bkrtcy.S.D.N.Y.1990). This appeal followed.

The Benefit Trust contends that the district court erred when it found that the Bankruptcy Protection Act did not require LTV to continue paying retiree benefits and seeks a judgment making LTV responsible for funding the benefits for its retirees. LTV asserts that we lack jurisdiction to hear this appeal because the bankruptcy court's orders were interlocutory.

DISCUSSION

The United States District Court for the Southern District of New York, Knapp, J., on October 17, 1988, entered an order finding the bankruptcy court orders of August 1 and August 4, 1988 final for purposes of appeal within the meaning of 28 U.S.C. Sec. 158. The orders lacked the certification of finality from the bankruptcy court required pursuant to Bankruptcy Rule 7054, which incorporates Rule 54(b) of the Federal Rules of Civil Procedure. Thus, as will be made clear, the bankruptcy court orders are interlocutory, contrary to the findings of the district court.

We are obligated to determine the jurisdictional basis of every matter before us. Pursuant to 28 U.S.C. Sec. 158(d), the relevant appellate jurisdictional statute in bankruptcy proceedings, the courts of appeals have jurisdiction "of appeals from all final decisions, judgments, orders, and decrees entered under subsections (a) and (b) of this section." 28 U.S.C. Sec. 158(d) (1988). In contrast, the district courts have jurisdiction to hear appeals from "final judgments, orders, and decrees, and, with leave of the court, from interlocutory...