Sassman v. United Airlines, 2001-AIR-7 (ALJ Jan. 23, 2003)

U.S. Department of Labor

Office of Administrative Law Judges 36 E. 7th Street, Suite 2525 Cincinnati, OH 45202 (513) 684-3252 (513) 684-6108 (FAX)

Issue Date: 23 January 2003
Case No.: 2001-AIR-0007

In the Matter of:

MARK S. SASSMAN, SR.,
    Complainant

    v.

UNITED AIRLINES,
    Respondent

   This matter comes before me at this time for consideration of Respondent's Suggestion of Bankruptcy and its request that this proceeding be stayed pursuant to the automatic stay provisions of the Bankruptcy Code 11 U.S.C. § 362(a).

   Mark S. Sassman, the Complainant, on January 3, 2001, filed a complaint alleging that he was discriminated against in violation of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. § 42121. The matter was investigated and on September 4, 2001, the Secretary of Labor, acting through her agent, the Regional Administrator for the Occupational Health and Safety Administration, Region V, found that there was no reasonable cause to believe that United Airlines violated 49 U.S.C. § 42121(a). The Complainant appealed and the matter was referred to the Office of Administrative Law Judges. A formal hearing was held in Indianapolis, Indiana, commencing on December 4, 2002 and concluding on December 6, 2002. At the conclusion of the hearing, a briefing schedule was set with the final brief, the Complainant's rebuttal brief, due on or before April 10, 2003. On December 17, 2002, M. Andrew McGuire, attorney for United Airlines, Inc., filed Respondent's Suggestion of Bankruptcy in which he states that on December 9, 2002, the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, entered an Order for Relief under Chapter 11 of Title 11 of the United States Code, in the case of United Airlines, Inc., Case No. 02-48210. The Respondent states that pursuant to 11 U.S.C. § 362(a), the instant proceeding must be stayed.

   In response, the Complainant, by counsel Richard L. Darst, filed Complainant's Response to Respondent's Suggestion of Bankruptcy, arguing that the filing of a petition in bankruptcy by an airline does not stay the proceedings under the Aviation Investment and Reform Act for the 21st Century (AIR 21), and in support thereof cites Bodine v. International Total Services, 2001-AIR-4. The Complainant also states that "Respondent United does not move for a stay of the AIR proceedings, and even if it did so move, such a motion would have to be denied."

   The Respondent has submitted a reply, stating that this case does not fall within the exceptions set forth in 11 U.S.C. § 362(b)(4). The Respondent argues that the filing of a motion to stay proceedings is not required under the bankruptcy code and that reliance on Bodine is misplaced.

   The filing of a motion as implied in the Complainant's response is not required in order to invoke the automatic stay provisions of 11 U.S.C. § 362(a), which states in pertinent part:

    (a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title ... operates as a stay, applicable to all entities of ... the commencement or continuation of a judicial or administrative proceeding that was commenced prior to the commencement of the bankruptcy proceeding.

Exceptions to the automatic stay provisions are listed at 11 U.S.C. § 362(b). The pertinent exception is found at § 363(b)(4), which provides for an exception to the "... continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power."

   In Bodine, the U.S. Department of Labor Occupational Safety and Health Administration issued a Finding and Preliminary Order in favor of the Complainant on July 11, 2001. The Respondent appealed on August 20, 2001, after the expiration of the thirty-day statutory period allowed for appeals. On September 11, 2001, the Complainant filed a motion to dismiss the Respondent's appeal as untimely. On September 14, 2001, the Respondent submitted a notice of stay based on its having filed for bankruptcy. The Administrative Law Judge found that the stay provisions of § 362(a) were inapplicable because by the time the Respondent had filed its notice of stay on September 14th, the Secretary's initial finding had become final and was nonappealable. The Judge found that the notice of stay was moot because there was no matter within the jurisdiction of the office to stay pursuant to the automatic stay provision of the Bankruptcy Act.

   In In re Revere Copper and Brass, Inc., et al. v. Revere Copper Products, Inc., 32 B.R. 725 (S.D.N.Y. 1983), it was held that corporations pursuing a citizen's suit under the Clean Air Act were not "governmental units" notwithstanding the fact that they may have been acting as "private attorney generals seeking to enforce the environmental laws." 32 B.R. at 727. The Court concluded that:

Document: Sassman Order Staying Proceedings.wpd Created by: RHILLYARD on 1/23/03 9:45:29 AM

Clearly, both the statutory language and the legislative history of [Section 362(b)(4)] demonstrate that the term ‘governmental unit' in the bankruptcy code refers exclusively to actual governmental groups and not to organizations acting in a governmental capacity. The exception to the automatic stay for governmental units was intended to allow state, federal or foreign entities to continue to proceed or to commence actions against debtors.

See also, In re Colin, Hochstin Co., 41 B.R. 322 (Bankr. S.D.N.Y. 1984), where the Court held that the New York Stock Exchange and its enforcement division are not governmental units exempt from the automatic stay provision even though they act in the national public interest to protect investors and the public in the securities market.

   Conversely, in Nelson v. Walker Freight Lines, Inc., 87-STA-24 (Sec'y July 26, 1988), the Secretary of Labor held that the automatic stay provisions did not apply to the proceedings where the complaint was found to have merit and the Department's notice of appearance stated that if any litigation ensued, the Department would be represented by the Regional Solicitor from the Denver, Colorado office.

   The instant case does not involve an action or proceeding by a governmental unit but is an action by a private citizen against United Airlines. It involves an appeal of a decision by the Secretary of Labor in favor of United Airlines. The Government is not involved in the Complainant's appeal.

   For the reasons given above, I find that this proceeding is subject to the automatic stay provisions of 11 U.S.C. § 362(a). The automatic stay continues until the bankruptcy case is closed, dismissed, or discharge is granted or denied, or until the bankruptcy court grants some relief from the stay. See, Haubold v. KTL, Inc., ARB Case No. 00-065 (August 10, 2000).

   It is, therefore,

   ORDERED that further proceedings in this case are stayed pending conclusion of the bankruptcy proceedings or until the bankruptcy court grants some relief from the stay.

      Robert L. Hillyard
      Administrative Law Judge