Memorandum of Decision Re: Discharge of Environmental Cleanup Costs

DO NOT PUBLISH This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
Decisions
IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re WILLIAM and MARY LOU SWEET,                                                 No. 94-12913        Debtor. ___________________________/
Memorandum of Decision
     The debtors filed their Chapter 13 petition in late 1994 and their plan was confirmed, without objection, on March 20, 1995. Now before the court is the debtors' objection to the claim of the California Integrated Waste Management Board for over $2 million for "potential clean up costs" relating to a property which the debtors had once leased but no longer had any interest in when they filed their bankruptcy petition.      The Board readily concedes that in this circuit a claim for clean up costs relating to prepetition contamination are not entitled to priority. In re Dant & Russell, Inc., 853 F.2d 700, 709 (9th Cir.1994); In re Hanna, 168 B.R. 386, 389 (9th Cir.BAP 1994). However, its argument is based on the sophistry that its claim is for "injunctive relief" and not a claim for money, even though the injunctive relief may require the payment of money. The Board's argument is exactly the sort of "linguistic gymnastics" rejected by the Supreme Court in Ohio v. Kovacs, 469 U.S. 274, 282 (1984). The Court in that case held that where there is no suggestion that the debtor can respond in any other way than the payment of money, an obligation to pay for environmental cleanup is an ordinary claim, even if it arises pursuant to an injunction.      Those cases cited by the Board, most notably In re Chateaguay Corp., 944 F.2d 997 (2nd Cir. 1991) and In re Wall Tube & Metal Products Co., 831 F.2d 118 (6th Cir.1987), are easily distinguishable in that they dealt with cases where the property was currently owned by the debtor in bankruptcy. Moreover, the Ninth Circuit has not adopted the reasoning of those cases. See In re Jensen, 995 F.2d 925, 930-31 (9th Cir.1993). That case also holds that a debt for environmental clean up is dischargeable.      In this case the debtors no longer have an interest in the property, so they cannot do anything to clean it up. Any obligation they may have to pay for clean up, whether it be by virtue of a judgment for money or an injunction, is nothing more than a claim for money. The Board concedes as much when, after disingenuously arguing that it is not asserting a claim, it asks the court to "order Debtors . . . to . . . use all available resources, monetary or otherwise . . . to comply with [the administrative] order."      Lastly, the court notes that the plan in this case has been confirmed. Pursuant to section 1327 of the Bankruptcy Code, all creditors are bound by the plan. Pursuant to section 1330, confirmation can be revoked only for fraud. Having failed to object to confirmation, and having no apparent grounds for revocation, the Board cannot pretend that the plan does not exist or that it is not bound by it.      For the foregoing reasons, the debtors' objection to the Board's claim will be sustained. Counsel for the debtors shall submit an appropriate form of order.
Dated: September 21, 1995                                                                                                  _______________________                                                                                                                                                    Alan Jaroslovsky                                                                                                                                                    U.S. Bankruptcy