Jones v. Chemetron Corp.
| Decision Date | 25 January 2000 |
| Docket Number | No. 99-3500,99-3500 |
| Citation | 212 F.3d 199 |
| Parties | (3rd Cir. 2000) PHYLLIS JASKEY JONES; PAMELA JO SWANSINGER; SANDRA JASKEY HUJARSKI; PATRICIA HUJARSKI; JANICE JASKEY BUTVIN; FRANK BUTVIN; ROBERT BUTVIN; BRIAN BUTVIN; SUSAN BUTVIN; WALTER ANIELSKI; ARLENE VANS; YVONNE VANS BEKOSCKE; ANTHONY VANS; GREGORY VANS; CAROL SCHULTZ; MARY SCHAFFER; BRITTANY CULL; AMANDA SCHAFFER; IVAN SCHAFFER; STEPHANIE SCHAFFER; THERESA HUJARSKI ROSS, Appellants v. CHEMETRON CORPORATION Argued: |
| Court | U.S. Court of Appeals — Third Circuit |
Appeal from the United States District Court For the Western District of Pennsylvania D.C. No.: 98-cv-01776 District Judge: Honorable Donald J. Lee
[Copyrighted Material Omitted]
Counsel for Appellants: Deborah J. Papushak, Esquire (argued) William Mitchell, Esquire Armstrong, Mitchell, Damiani & Zaccagnini 1725 The Midland Building 101 Prospect Avenue, West Cleveland, OH 44115-1091
Counsel for Appellee: Micah D. Green, Esquire (argued) Richard Gurbst, Esquire Adam R. Fox, Esquire Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, OH 44114-1304
Before: GREENBERG, ROTH, and ROSENN, Circuit Judges.
This appeal marks the second time this litigation has come before this court. It arises out of a bankruptcy proceeding that began when Chemetron Corporation filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Western District of Pennsylvania in early 1988. The bankruptcy court confirmed Chemetron's bankruptcy reorganization plan on July 12, 1990. On March 2, 1992, Phyllis Jaskey Jones and fourteen other persons filed a state law tort action in the Court of Common Pleas of Cuyahoga County, Ohio ("the Cleveland Action") seeking monetary damages and other relief for injuries allegedly sustained from exposure to radioactive and other toxic and hazardous substances Chemetron deposited at the Bert Avenue dump, a site located in their residential neighborhood of Newburgh Heights, Ohio. The suit was later amended to name a total of twenty-one plaintiffs. Chemetron moved to dismiss that action on the ground that the bankruptcy court had retained jurisdiction over the issues presented when it confirmed the reorganization plan.
The parties agreed to stay the Cleveland Action, and the plaintiffs filed a motion in the bankruptcy court to allow their late-filed claims, or alternatively for an adversarial proceeding to determine that their claims had not been discharged by the bankruptcy confirmation order. At the time they filed their motion, the plaintiffs were scattered across Ohio and as far away as Texas. In support of their motion to permit late-filing, the plaintiffs argued that they had not been provided with sufficient notice of the bankruptcy proceeding, and that they were unaware that their illnesses were the result of Chemetron's conduct at the time Chemetron filed for bankruptcy. In support of their request for a determination of nondischargeability, the plaintiffs contended that their claims had accrued after the confirmation of Chemetron's bankruptcy reorganization plan.
The bankruptcy court agreed that the plaintiffs had received inadequate notice, and permitted the late filing. In re Allegheny Int'l, Inc. (Jones v. Chemetron Corp.), 158 B.R. 356 (Bankr. W.D. Pa. 1993). The United States District Court reversed. 170 B.R. 83 (W.D. Pa. 1994). The appeal came to this court, which ruled that the plaintiffs had received sufficient notice of the bankruptcy proceeding. We remanded to the bankruptcy court, however, to determine whether the plaintiffs should still be permitted to file their claims based on excusable neglect pursuant to Bankruptcy Rule 9006(1). Chemetron Corp. v. Jones, 72 F.3d 341 (3d Cir. 1995), cert. denied, 517 U.S. 1137 (1996) [hereinafter Chemetron I].
On remand, the bankruptcy court held, by opinion and order dated September 14, 1998, that the plaintiffs had failed to demonstrate excusable neglect. Turning to their motion for an adversarial proceeding, the court held that the plaintiffs' claims had accrued prior to the bar date and to the 1990 confirmation of Chemetron's reorganization plan; they therefore were discharged by the court's confirmation order. The district court affirmed by memorandum opinion dated May 18, 1999. This timely appeal followed.1 We affirm in part and reverse in part.
The underlying facts are set forth in this court's prior opinion in this case, and need only be summarized here. Beginning in 1965, appellee Chemetron Corporation ("Chemetron") owned and operated a manufacturing facility on Harvard Avenue in Cuyahoga Heights, Ohio, as well as a nearby landfill on Bert Avenue in Newburgh Heights, Ohio. From 1965 to 1972, Chemetron employed a manufacturing process at the Harvard Avenue facility that utilized depleted uranium. After Chemetron ceased to use this process, it demolished a portion of its Harvard Avenue facility and placed a quantity of rubble from the demolition in the Bert Avenue landfill.2 This rubble was apparently contaminated due to radiation exposure.
Between 1980 and 1988, Chemetron was involved in periodic clean-up efforts at both the Harvard Avenue and Bert Avenue sites at the direction of the Nuclear Regulatory Commission ("NRC"), with some involvement by the federal and Ohio Environmental Protection Agencies. The presence of hazardous materials at the Bert Avenue dump and these efforts to clean up the area received considerable local attention beginning shortly after its discovery in 1980. The local press reported on these cleanup efforts for the next decade. Town meetings were held in which environmental officials explained the situation to area residents. A community watchdog group formed that distributed a questionnaire to everyone in the neighborhood requesting information about contact with the dump and medical conditions suffered. The mayor's office sent out a newsletter in 1980 noting concern about the contamination. As earlyas 1980, another resident in the area filed a lawsuit against Chemetron charging that the presence of hazardous materials at the Bert Avenue dump was responsible for her daughter's health problems.
For the next decade, cleanup efforts persisted, but as this court noted in its earlier decision in this case, these efforts were of "dubious" efficacy. Chemetron I , 72 F.3d at 344. By 1990, local attention swelled again, recognizing that the contamination danger persisted. Although press accounts were at times ambiguous concerning the severity of the danger presented by the Bert Avenue dump, some articles reported that several families in the neighborhood were suffering adverse health effects.
On February 20, 1988, Chemetron filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. Following Bankruptcy Rule 3003(c)(3), the bankruptcy court issued a bar date order, fixing the claims bar date at May 31, 1988. Under bankruptcy law, the bar date is the last day on which existing claims can be filed against the debtor. The bar date order required that actual notice be provided to all persons known to have claims against the debtors. The order required notice to all other claimants by publication in the national editions of the New York Times and Wall Street Journal. Chemetron complied with the order and, in addition, voluntarily published notice in seven other newspapers in areas where it was doing business at the time of the filing. On July 12, 1990, the bankruptcy court confirmed Chemetron's reorganization plan.
Nevertheless, Jones and the other plaintiffs assert in affidavits that they were unaware of the degree of risk posed to their health and safety by the contaminated site until after reading about a 1991 federal lawsuit filed against Chemetron in Cleveland by other local residents. Only then, the plaintiffs assert, did they contact lawyers, who proceeded to gather their medical records, have these records analyzed by physicians, and subsequently report to the plaintiffs that their health problems resulted from the contamination.
In March 1992, almost four years after the claims bar date and twelve years after the first newspaper articles reported on contamination at the sites, Phyllis Jones and ultimately twenty other individuals brought suit against Chemetron, McGean Chemical Co., and McGean-Rohco, Inc., in the Court of Common Pleas of Cuyahoga County, Ohio. The gravamen of the complaint alleged injury from exposure to toxic chemicals as a result of time spent living in or visiting the Bert Avenue area.
Of the twenty-one plaintiffs, one, Ivan Schaffer, was born on August 27, 1992, more than two years after the bankruptcy court confirmed Chemetron's plan of reorganization.
We first discuss the plaintiffs' claim that the bankruptcy court erred in concluding that they failed to demonstrate excusable neglect. Next, we address their argument that the bankruptcy court erred in finding that their claims arose prior to the confirmation of Chemetron's bankruptcy reorganization plan. Finally, we revisit the issue of notice with regard to one of the plaintiffs.
On remand from this court's decision in Chemetron I, the plaintiffs argued that the bankruptcy court should permit them to file their claims late because their failure to file prior to the May 31, 1998 bar date was attributable to excusable neglect.3 The district court affirmed the bankruptcy court's ruling that the plaintiffs failed to demonstrate excusable neglect under the test enunciated in Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 395 (1993).4 It concluded that to allow the plaintiffs to proceed with claims potentially amounting to $36 million four years after Chemetron's bankruptcy petition was filed and two years after its reorganization plan was confirmed "would cause disruption to the bankruptcy process that has already taken place,"...
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