In Re Farmland Industries, Inc.
639 F.3d 402
| 8th Cir. | 2011Background
- GAF Holdings, LLC formed in 1999 to purchase Farmland Industries’ Coffeyville refinery assets.
- Farmland filed Chapter 11; bankruptcy court approved sale procedures for Coffeyville assets, including a bid process.
- GAF bid for Coffeyville assets was rejected as nonqualifying due to defects in the bid format and missing materials.
- Sale of Coffeyville assets to CRLLC (formed by Pegasus) was approved; GAF did not object to the sale order.
- GAF filed a Rule 60(b) motion to set aside the sale order; the court denied it and GAF did not appeal; later amendments reaffirmed sale terms.
- GAF filed in 2007 a complaint in bankruptcy court alleging intentional interference and civil conspiracy; the court dismissed for lack of standing and because of collateral attack concerns; BAP remanded for lack of subject-matter jurisdiction; this court held the bankruptcy court had subject-matter jurisdiction but ultimately affirmed the dismissal for lack of standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GAF has Article III standing to sue. | GAF asserts injury from loss of bid opportunity due to appellees’ actions. | Appellees contend GAF’s claimed injury is not traceable to them and that GAF had no standing to challenge non-appealable sale orders. | GAF lacks standing. |
| Whether GAF’s claims amount to fraud on the court. | GAF argues inherent power to address fraud on the court supports standing. | GAF has not alleged no adequate remedy at law and seeks money damages inconsistent with fraud-on-the-court relief. | Fraud-on-the-court claim not pleaded; no standing under that theory. |
| Whether the bankruptcy court had subject-matter jurisdiction to hear GAF’s state-law claims. | Subject-matter jurisdiction exists when claims are related to bankruptcy. | Court has limitations; third-party claims fall outside core proceedings. | Court possessed related-to-bankruptcy jurisdiction, remand affirmed; dismissal on standing grounds remains. |
| Whether GAF’s complaint is barred as an impermissible collateral attack on sale orders. | Compliance with Rule 60(b) does not foreclose broader challenges. | Collateral attack on sale orders is improper and impermissible. | Collateral attack barred; dismissal affirmed on standing grounds. |
Key Cases Cited
- Gray v. City of Valley Park, 567 F.3d 976 (8th Cir. 2009) (standing requirements apply to bankruptcy proceedings)
- In re Res. Tech. Corp., 624 F.3d 376 (7th Cir. 2010) (Article III standing in bankruptcy contexts)
- Universal Oil Prods. Co. v. Root Ref. Co., 328 U.S. 575 (S. Ct. 1946) (inherent power to address fraud on the court; need no adequate remedy at law)
- Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir. 2009) (standing standards; application to bankruptcy matters)
- Superior Seafoods, Inc. v. Tyson Foods, Inc., 620 F.3d 873 (8th Cir. 2010) (fraud-on-the-court and remedies; need for adequate remedy at law)
- In re Lasowski, 575 F.3d 815 (8th Cir. 2009) (second-review standard; de novo review of bankruptcy court conclusions of law)