Czyzewski v. Jevic Transportation, Inc. (In re Jevic Holding Corp.)
496 B.R. 151
Bankr. D. Del.2013Background
- Jevic and related debtors faced WARN Act claims for failing to provide 60-day notice before plant closing/mass layoff during bankruptcy filing.
- Sun Capital Partners funded the leveraged buyout in 2006 with debt covenants requiring minimum assets; CIT provided credit with forbearance extensions.
- Debtors actively pursued financing and potential sales (Morris Anderson, Stifel Nicolaus) during 2007–May 2008 to avert workforce reductions.
- Forbearance with CIT extended through May 12, 2008; Jevic announced reorganizational plan and began facility closures.
- Notice was given on May 16, 2008 (received May 19) and bankruptcy filed May 20, 2008; class certified and MSJ briefing completed.
- Court grants MSJ in part (favors class on New Jersey WARN Act and certain federal WARN issues) and denies in part (favors Debtors on Unforeseeable Business Circumstances).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WARN notice satisfied the brief statement requirement and febeleas required for exceptions. | Czyzewski argues notice was vague and insufficient to trigger exceptions. | Jevic contends notice was adequate and the exceptions apply. | Notice adequate to invoke exemptions; proceed to merits. |
| Fal tering Company defense applicability to the federal WARN Act. | Class Plaintiffs contend no valid faltering basis given timing and conditions. | Debtors argue active seeking of capital and good faith justify faltering defense. | Faltering Company defense not available due to timing and lack of contemporaneous actions before notice. |
| Unforeseeable Business Circumstances defense under federal WARN Act. | Unforeseeable shutdown was caused by lender actions not unforeseeable. | Foreseeability should not preclude the defense given lender forbearance dynamics. | Unforeseeable Business Circumstances defense available; no liability under federal WARN Act for the timely notice. |
| New Jersey WARN Act applicability and absence of exceptions. | NJ WARN Act mirrors federal liabilities; no exceptions to 60-day notice. | NJ Act imposes liability with no exceptions; federal defenses do not resolve NJ claims. | NJ WARN Act liability established; no exceptions to save notice under NJ statute. |
| Overall disposition of summary judgment as to WARN Act claims against Debtors. | MSJ should be granted in favor of class on federal and New Jersey claims. | MSJ should be denied for theories not established or for partial defenses. | MSJ granted in part (NJ Act liability confirmed; some federal exception findings upheld) and denied in part. |
Key Cases Cited
- In re Tweeter Opco, LLC, 453 B.R. 534 (Bankr. D. Del. 2011) (required specificity for brief statement in WARN notice to invoke exceptions)
- Alarcon v. Keller Indus., Inc., 27 F.3d 386 (9th Cir. 1994) (caution against mere statutory citation in notice; need factual basis)
- Hotel Employees & Rest. Employees Int'l Union Local 54 v. Elsinore Shore Assocs., 173 F.3d 175 (3d Cir. 1999) (foreseeability and WARN timing considerations in context of industry)
- Roquet v. Arthur Andersen LLP, 398 F.3d 585 (7th Cir. 2005) (reasonableness of business judgment in foreseeability analysis)
- Gross v. Hale-Halsell Co., 554 F.3d 870 (10th Cir. 2009) (causal link between funding termination and layoffs for unforeseeable exception)
- In re APA Transp. Corp. Consol. Litig., 541 F.3d 233 (3d Cir. 2008) (set forth requirements for Faltering Company exception; narrow construction)
- Alden Corrugated Container Corp., 901 F. Supp. 426 (D. Mass. 1995) (discusses foreseeability and warning obligations under WARN context)