2 ABR 76
HERBERT A. ROSS
U.S. Bankruptcy Judge
_______________________________x
In re Case No. A88-00075-HAR
In Chapter 11
RYAN AIR SERVICE, INC.,
Debtor(s)
_______________________________x
RYAN AIR SERVICE, INC.,
Plaintiff(s),
v. Adv. No. A88-00075-003-HAR
STATE OF ALASKA, DEPARTMENT OF
TRANSPORTATION & PUBLIC
FACILITIES,
Defendant(s). ORDER DENYING PRELIMINARY
INJUNCTION AND DISMISSING
ADVERSARY PROCEEDING WITHOUT
PREJUDICE
_______________________________x
(A). 11TH AMENDMENT - A preliminary injunction hearing was held on September 4 and 5, 1991. At the conclusion, the court made oral findings of facts and conclusions of law on the record indicating it doubted it could enjoin the State of Alaska from conducting a competitive bid for the lease of a parcel on the St. Mary's, Alaska, airport, based upon 11th Amendment constitutional grounds which bar a suit against a state in federal court by one of
2 ABR 77 its citizens the state consents and waives its sovereign immunity.
There is some authority in the 9th Circuit that a court can enjoin a governmental unit in appropriate circumstances without regard to 11 U.S.C. § 106, the section of the bankruptcy code governing waiver of sovereign immunity. See 2 Collier on Bankruptcy ¶¶ 105.02 and 106.01 at 106-3 (1991); In re West Coast Cabinet Works, 92 F.Supp. 636 (S.D. Cal. 1950), aff'd sub nom., California State Bd. of Equalization v. Goggin, 191 F.2d 726 (9th Cir. 1951, cert. denied, 342 U.S. 909 (1952); and, England v. Industrial Commission of Utah (In re Visiting Home Services, Inc.), 643 F.2d 1356 (9th Cir. 1981). Where a plan has been confirmed, however, this authority seems questionable. Since this adversary proceeding will be dismissed on other grounds, I do not reach a conclusion on the 11th Amendment argument.
(B). SUBJECT MATTER JURISDICTION - At the conclusion of the preliminary injunction hearings, the court found that it did not have subject matter jurisdiction. Ryan Air is a reorganized debtor. Its plan was confirmed in July, 1990.
The issue of the State of Alaska's right to put the St. Mary's lease up for competitive bid is remote from the actual workings of the plan (although the loss of the lease may be a business disaster for Ryan). At some point, debtor loses the ear of the bankruptcy court. Cf. Pettibone Corporation v. Easley, 935 F.2d 120, 122-123 (7th Cir. 1991):
Once the bankruptcy court confirms a plan of reorganization, the debtor may go about its business without further supervision or approval. The firm also is without the protection of the bankruptcy court. It may not come running to the bankruptcy judge every time something unpleasant happens. In re Xonics, Inc., 813 F.2d 127, 130-32 (7th Cir.1987); In re Chicago, Rock Island & Pacific R.R., 794 F.2d 1182, 1186-87 (7th Cir.1986). See also Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984); Goodman v. Phillip R. Curtis Enterprises, Inc., 809 F.2d 228, 232-33 (4th Cir.1987); National City Bank v. Coopers & Lybrand, 802 F.2d 990, 994 (8th Cir.1986); In re Gardner, 913 F.2d 1515, 1518-19 (10th Cir.1990). Formerly a ward of the court, the debtor is emancipated by the plan of reorganization. A firm that has emerged from bankruptcy is just like any other defendant in a tort case: it must protect its interests in the way provided by the applicable non-bankruptcy law, here by pleading the statute of limitations in the pending cases.The 9th Circuit, converse to some circuits dealing with mass tort bankruptcies, has indicated a bankruptcy court does not have the power to enjoin actions of a nondebtor postconfirmation. In re American Hardwoods, Inc., 885 F.2d 621 (9th Cir. 1989). See 2 Collier on Bankruptcy ¶ 105.03[4] (1991) re "Postconfirmation Injunctions." American Hardwoods at 626-27 distinguishes In re A.H. Robins Co., 880 F.2d 694 (4th Cir. 1989) limiting such postconfirmation injunctions "to the unusual facts" of Robbins.(C). PRELIMINARY INJUNCTION - Even if the court does have jurisdiction, Ryan Air has not established the probability of success on the merits necessary to get a preliminary injunction. To obtain an injunction the moving party must show: (1) a likelihood of success on the merits; (2) no adequate remedy at law; (3) a balance of equities favoring relief; and, possibly, (4)
Three requirements must be met to find estoppel against a government agency. Municipality of Anchorage v. Schneider, 685 P.2d 94, 97 (Alaska 1984). These requirements are as follows: (1) assertion of a position by conduct or word; (2) reasonable reliance thereon; and (3) resulting prejudice. In addition, estoppel will be enforced only to the extent justice requires. Id. (citations omitted).The evidence did not show, however, that there was any reasonable detrimental reliance by Ryan Air on any representation of the State. Therefore,IT IS ORDERED that Ryan Air's motion for a preliminary injunction is DENIED, and the case is DISMISSED WITHOUT PREJUDICE.
DATED: September 5, 1991 BY ORDER OF THE COURT HERBERT A. ROSS U.S. Bankruptcy Judge
Serve: Roy Longacre, Esq. for plaintiff Carolyn Jones and Brian Bjorkquist, Asst. Attys. Gen'l for defendant M. Gingras, Adv. Case. Mgr.