IN THE MATTER OF: HALO WIRELESS, INCORPORATED, Debtor. HALO WIRELESS, INCORPORATED, Appellant v. ALENCO COMMUNICATIONS INCORPORATED; ALMA COMMUNICATIONS COMPANY; BPS TELEPHONE COMPANY; BELLSOUTH TELECOMMUNICATIONS, L.L.C., doing business as AT&T Alabama; BIG BEND TELEPHONE COMPANY, INCORPORATED; BLUE RIDGE TELEPHONE COMPANY; BRAZORIA TELEPHONE COMPANY; CAMDEN TELEPHONE & TELEGRAPH COMPANY, INCORPORATED; CHARITON VALLEY TELECOM CORPORATION; CHARITON VALLEY TELEPHONE CORPORATION; CHOCTAW TELEPHONE COMPANY; CITIZENS TELEPHONE COMPANY OF HIGGINSVILLE, MISSOURI; CONCORD TELEPHONE EXCHANGE, INCORPORATED; CRAW-KAN TELEPHONE COOPERATIVE, INCORPORATED; EASTEX TELEPHONE COOPERATIVE, INCORPORATED; ELECTRA TELEPHONE COMPANY, INCORPORATED; ELLINGTON TELEPHONE COMPANY; FARBER TELEPHONE COMPANY; FIDELITY COMMUNICATION SERVICES I, INCORPORATED; FIDELITY COMMUNICATION SERVICES II, INCORPORATED; FIDELITY TELEPHONE COMPANY; FIVE AREA TELEPHONE COOPERATIVE, INCORPORATED; GANADO TELEPHONE COMPANY; GOODMAN TELEPHONE COMPANY; GRANBY TELEPHONE COMPANY; GRAND RIVER MUTUAL TELEPHONE COMPANY; GREEN HILLS AREA CELLULAR; GREEN HILLS TELEPHONE CORPORATION; HILL COUNTRY TELEPHONE COOPERATIVE, INCORPORATED; HOLWAY TELEPHONE COMPANY; HUMPHREYS COUNTY TELEPHONE COMPANY; IAMO TELEPHONE COMPANY; ILLINOIS BELL TELEPHONE COMPANY, doing business as AT&T Illinois; INDIANA BELL TELEPHONE COMPANY, INC., doing business as AT&T Indiana; INDUSTRY TELEPHONE COMPANY; K.L.M. TELEPHONE COMPANY; KINGDOM TELEPHONE COMPANY; LAKE LIVINGSTON TELEPHONE COMPANY, INCORPORATED; LATHROP TELEPHONE COMPANY; LE-RU TELEPHONE COMPANY; LIVINGSTON TELEPHONE COMPANY; MARK TWAIN COMMUNICATION COMPANY; MARK TWAIN RURAL TELEPHONE COMPANY; MCDONALD COUNTY TELEPHONE COMPANY; MICHIGAN BELL TELEPHONE COMPANY, doing business as AT&T Michigan; MID-
No. 12-40122
United States
June 18, 2012
JOLLY, BENAVIDES, and DENNIS, Circuit Judges.
Appeal from the United States Bankruptcy Court for the Eastern District of Texas.
Before JOLLY, BENAVIDES, and DENNIS, Circuit Judges.
BENAVIDES, Circuit Judge:
This case involves disputes between Halo Wireless, Inc. and the Texas and Missouri Telephone Companies (“TMT Companies“), TDS Communications Corp., and the AT&T Companies.1 The local telephone companies initiated twenty separate suits against Halo before ten state public utility commissions (“PUCs“).2 Halo filed for bankruptcy as a result of this collective action. The telephone companies requested that the bankruptcy court determine that the various PUC actions are not subject to the automatic stay provided by the Bankruptcy Code at
pursuant to
I. FACTUAL AND PROCEDURAL BACKGROUND
Halo states that it is a small telecommunications company that provides wireless phone and data service to its customers pursuant to a license from the Federal Communications Commission (“FCC“). According to Halo, it provides wireless Commercial Mobile Radio Service (“CMRS“), as defined by Section 332(d)(1)
Starting with the TMT Companies in May 2011, the Appellees have all filed actions against Halo in state PUCs. The TMT Companies claim that Halo is not a CMRS carrier, and that it was improperly using the TMT Companies’ networks without an interconnection agreement (“ICA“) or payment of access fees. The TDS Companies allege that Halo has used service to Transcom (which
Halo calls a “customer,” but the TDS Companies allege is a related entity) to avoid state regulation and the payment of access charges to the TDS Companies. The AT&T companies all claim that Halo is violating its ICAs with them, and they have asked the PUCs to determine that Halo‘s traffic is not wireless. As summarized by the bankruptcy court, “[t]he complainants contend that the debtor is involved in an arbitrage scheme and that the debtor owes them fees under applicable law and regulations. And more generally, that the debtor is subject to the authority of the Public Utility Commission[s]. The debtor contends that it is regulated by the FCC, not the Public Utility Commissions and denies that it is engaged in an arbitrage scheme.”
Because of the numerous suits filed against Halo by the Appellees, Halo filed a voluntary petition under Chapter 11 of the Bankruptcy Code on August 8, 2011. Halo also removed the various PUC actions to federal court, pursuant to
The bankruptcy court held an initial hearing on September 30, 2011 to consider the Appellees’ motions, and it then made its findings of fact and conclusions of law on the record on October 7, 2011. The bankruptcy court found that “[i]t is the nature of the action[, not] the identity of the parties which initially precipitat[e] the action[,] that determines whether Section 362(b)(4) applies.” Despite the fact that the PUC actions had been initiated by private parties, because they were all state regulatory proceedings, the court ruled that they were excepted from the automatic stay under
day, Halo filed notices of appeal.4 The bankruptcy court
II. STANDARD OF REVIEW
“When directly reviewing an order of the bankruptcy court, we apply the same standard of review that would have been used by the district court. Findings of fact are reviewed for clear error, and conclusions of law are reviewed de novo.” Drive Fin. Servs., L.P. v. Jordan, 521 F.3d 343, 346 (5th Cir. 2008) (citing Fed. R. Bankr. P. 8013).
III. ANALYSIS
Normally, when a party declares Chapter 11 bankruptcy, an automatic stay is imposed on any other pending or future actions against the party. Under the Bankruptcy Code,
[e]xcept 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, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced
before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title[.]
As noted in the text of
the commencement or continuation of an action or proceeding by a governmental unit . . . to enforce such governmental unit‘s or organization‘s police and regulatory power, including the enforcement of a judgment other than a money judgment, obtained in an action or proceeding by the governmental unit to enforce such governmental unit‘s or organization‘s police or regulatory power.
United States; State; Commonwealth; District; Territory; municipality; foreign
regulatory power. . . . However, . . . anything beyond the mere entry of a money judgment against a debtor is prohibited by the automatic stay.” (citations omitted)).5
To determine whether proceedings fall within the police or regulatory power exception to the automatic stay, “courts have applied two ‘related, and somewhat overlapping’ tests: the pecuniary purpose test and the public policy test.” Nortel, 669 F.3d at 139 (quoting Lockyer v. Mirant Corp., 398 F.3d 1098, 1108 (9th Cir. 2005)); see also Chao v. Hosp. Staffing Servs., Inc., 270 F.3d 374, 385 (6th Cir. 2001); In re Spookyworld, Inc., 346 F.3d 1, 9 (1st Cir. 2003); Chao v. Mike & Charlie‘s Inc., No. H-05-1780, 2006 WL 18467, at *1 (S.D. Tex. Jan. 4, 2006).
“The pecuniary purpose test asks whether the government primarily seeks to protect a pecuniary governmental interest in the debtor‘s property, as opposed to protecting the public safety and health.” Nortel, 669 F.3d at 139-40. “The public policy test asks whether the government is effectuating public policy rather than adjudicating private rights.” Id. at 140. Thus, “[i]f the purpose of the law is to promote public safety and welfare or to effectuate public policy, then the exception to the automatic stay applies. If, on the other hand, the purpose of the law is to protect the government‘s pecuniary interest in the debtor‘s property or primarily to adjudicate private rights, then the exception is inapplicable.” Id.; see also Lockyer, 398 F.3d at 1109; Eddleman v. U.S. Dep‘t of Labor, 923 F.2d 782, 791 (10th Cir. 1991), overruled in part on other grounds by Temex Energy, Inc. v. Underwood, Wilson, Berry, Stein & Johnson, 968 F.2d 1003, 1005 n.3 (10th Cir. 1992); In re Gandy, 327 B.R. 796, 803 (Bankr. S.D. Tex. 2005). The pecuniary purpose and public policy tests both “contemplate that the bankruptcy court, after assessing the totality of the circumstances, [will] determine whether the particular regulatory proceeding at issue is designed primarily to protect the public safety and welfare, or represents a governmental attempt to recover from property of the debtor estate, whether on its own claim, or on the nongovernmental debts of private parties.” McMullen, 386 F.3d at 325; see also Hosp. Staffing, 270 F.3d at 389 (stating that the tests “are designed to
sort out cases in which the government is bringing suit in furtherance of either its own or certain private parties’ interest in obtaining a pecuniary advantage over other creditors“).
There are two main issues of contention between Halo and the Appellee telephone companies on appeal: (a) whether the PUC proceedings are being “continued by” a governmental unit, (b) and whether those proceedings are in furtherance of the states’ police and regulatory powers.
A. “Continued by”
Halo argues that none of the PUC proceedings should be exempted from the automatic stay because an action must be prosecuted by and in the name of a governmental unit in order to be excepted
The Appellees respond that the bankruptcy court‘s ruling was correct because the private party-initiated proceedings are essentially identical to proceedings initiated by PUCs. Therefore, these actions should be excepted in the same manner as those instituted by the state. The Appellees also argue that Halo focuses on only one part of the statutory language when it states that an action must be initiated by the government, because the exception applies to “the commencement or continuation of an action or proceeding by a governmental unit . . . to enforce such governmental unit‘s or organization‘s police and regulatory power.”
they are ongoing, and they thus fall within the exception to the automatic stay. In support of their argument, the Appellees point to cases where a complaint was initially filed by a private party, but then prosecuted or continued by a state agency.
Halo waxes hyperbolic when it states that “every reported case that has applied the exception to the automatic stay has involved an independent proceeding advanced by a governmental unit that sued or prosecuted the debtor to enforce the governmental unit‘s own police or regulatory powers.” While most cases do involve actions pursued by a governmental unit in its own name, the circumstances vary. As the Appellees make clear, many cases are initiated by the filing of a complaint by a private party. This is especially true in actions seeking to vindicate workers’ rights. See, e.g., NLRB v. Evans Plumbing, 639 F.2d 291, 292 (5th Cir. Unit B 1981) (two employees filed a charge of unfair labor practices with the National Labor Relations Board, and the charge was set for a hearing when the employer filed for bankruptcy; the hearing was held, and the NLRB then filed a petition in this Court to enforce its decision ordering the employer to reinstate the employees with backpay, which petition the Court granted).6 Courts have recognized that though these actions may have similarities to private litigation, they also promote the public interest by
enforcing state laws and regulations. See, e.g., In re D. M. Barber, Inc., 13 B.R. 962, 963 (Bankr. N.D. Tex. 1981) (“Proceedings before the National Labor Relations Board are commenced by the initiative of aggrieved individual persons and thus have some characteristics of private litigation. However the case law reflects that the proceedings by the Board are not to adjudicate private rights but to effectuate public policy.” (citations omitted)).
There are some cases in which courts have ruled that an action must be brought by the governmental unit in order for it to be exempt from the automatic stay under
(stating that though the U.K. Pensions Regulator is a governmental entity, and though it initiated a regulatory procedure, it “is not a party to the pending bankruptcy proceedings . . . [and] did not file a claim and therefore cannot assert the police power exception“); Gandy, 327 B.R. at 802 (stating that “the court must determine whether the plaintiff in the state court action is a ‘governmental unit‘” (emphasis added)); City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991) (”
The court in Reyes relied in part on United States International Trade Commission v. Jaffe, 433 B.R. 538 (E.D. Va. 2010), in making its decision. In Jaffe, a proceeding before the International Trade Commission (“ITC“) was initiated by a private party‘s complaint, but the court found it “noteworthy that the filing of the complaint does not initiate a formal ITC § 337 investigation; rather, the action simply results in a ‘preinstitution proceeding,’ in which the ITC ‘examine[s] the complaint for sufficiency and compliance,’ and performs a preliminary investigation.” Id. at 541 (quoting 19 C.F.R. § 210.8). Once the ITC does the preinvestigation and determines that a complaint was properly filed, it institutes an investigation and provides official notice by publication. Id. The matter is then referred to an administrative
met the two requirements of
Similarly, in McMullen, a couple filed a complaint against a realtor with the Massachusetts Division of Registration for Real Estate Agents after the realtor had declared bankruptcy. 386 F.3d at 323. The court held that submitting a complaint after the filing of bankruptcy, which the Division then investigated, was excepted from the stay, notwithstanding the fact that the action was initiated by a private party. Id. at 327-28.
While the court in Jaffe took pains to point out the discretion the government agency had in allowing an action to proceed, other courts have held that actions brought by private parties are excepted from the automatic stay without going into such an analysis. For instance, in Alpern v. Lieb, 11 F.3d 689 (7th Cir. 1993), the Seventh Circuit held that a proceeding to impose sanctions under Rule 11 was exempt from the automatic stay. The court stated:
[t]he Rule 11 sanction is meted out by a governmental unit, the court, though typically sought by a private individual or organization—a nongovernmental litigant, the opponent of the litigant to be sanctioned. There is no anomaly, given the long history of private enforcement of penal and regulatory law. The private enforcer, sometimes called a ‘private attorney general,’ can be viewed as an agent of the ‘governmental unit,’ the federal judiciary, that promulgated Rule 11 in order to punish unprofessional behavior.
Id. at 690. In In re Berg, 230 F.3d 1165 (9th Cir. 2000), the Ninth Circuit held that an award of attorneys’ fees imposed as a sanction for unprofessional conduct was exempted from the automatic stay. The court stated that “it is clear that the purpose of such sanctions is to effectuate public policy, not to protect private rights or the government‘s interest in the sanctioned person‘s property.” Id. at 1168. Both the Seventh and Ninth Circuits focused on the fact that the
sanctions at issue would help to promote the public policy of the state, in the same way that the Jaffe court found that “ITC § 337 investigations plainly evidence an objective purpose of protecting the public interest at each stage of the ITC investigation.” 433 B.R. at 545.9
In this case, the bankruptcy court did not make any findings as to the specific procedures in each state PUC, which
regulatory commission might take itself, and that in some instances, a “governmental unit” actually becomes a party to the action.
Perhaps more importantly, as the Appellees note, the statutory language directs that “the commencement or continuation of an action or proceeding by a governmental unit” is excepted from the automatic stay.
B. The State‘s Police and Regulatory Power
Halo next argues that the various PUC proceedings are private contract actions brought by the telephone company Appellees in their own pecuniary interest, so they do not meet the second statutory requirement that an excepted action be intended “to enforce such governmental unit‘s or organization‘s police and regulatory power.”
According to the Appellees, the bankruptcy court‘s order does effectuate the policies of the Bankruptcy Code because it prevents Halo from using bankruptcy to frustrate governmental functions and to avoid the states’ police and regulatory powers. The telephone companies argue that the order protects important state regulatory powers, as well as public policies underlying telecommunications statutes, regulations, and tariffs, including maintaining the
proper balance of federal and state authority in telecommunications law. In addition, the Appellees note that since ICAs must be approved by the state commissions, they are not merely private contract disputes, but rather are an aspect of the states’ regulation and enforcement of intra-state telecommunications. Finally, the Appellees state that the fact
Halo may be correct that some of the claims made by the Appellees in the PUCs will ultimately need to be decided by a federal court. However, as this Court has noted before, the FTA envisions a “carefully crafted federal-state balance” that “erects a scheme of ‘cooperative federalism.‘” Budget Prepay, Inc. v. AT&T Corp., 605 F.3d 273, 281 (5th Cir. 2010) (quoting Core Commc‘ns, Inc. v. Verizon Pa., Inc., 493 F.3d 333, 335 (3d Cir. 2007)). Under this arrangement, “responsibility for complex regulatory schemes [is divided] between states and the federal government, with the federal government setting general standards and ensuring overall compliance, while state agencies are given latitude to proceed in any number of fashions, provided that they are not inconsistent with the Act and FCC regulations.” Id. (internal quotation marks and citation omitted). The Appellees have brought claims under both federal and state telecommunications laws, and further, interpretation and enforcement of ICAs is entrusted in the first instance to state commissions. See
Furthermore, state PUC rulings are subject to federal court review. See
We also find that the PUC actions at issue here pass both the pecuniary purpose and public policy tests outlined above, and are thus in furtherance of the states’ regulatory and police powers. Through these proceedings, the states do not “primarily see[k] to protect a pecuniary governmental interest in the debtor‘s property, as opposed to protecting the public safety and health.” Nortel, 669 F.3d at 139-40. None of the PUC proceedings would give the states access to Halo‘s property. In addition, the bankruptcy court‘s order ensures that if a PUC rules that Halo owes
Instead, they will aid in determining what kind of telecommunications provider Halo is, how it should interact with the local telephone companies with which it deals, and whether its interactions with them thus far have followed the applicable rules and regulations. The fact that Halo must expend money in defending these multiple actions does not mean that the exception should not apply. As this Circuit has recognized, “in contemporary times, almost everything costs something.” Commonwealth Oil, 805 F.2d at 1186 (quoting Penn Terra, 733 F.2d at 278). Even if a PUC enters a money judgment against Halo, as long as it does not seek to enforce that judgment, the action still falls under the exception to the automatic stay. Brennan, 230 F.3d at 71. This fact seriously weakens Halo‘s argument that the bankruptcy court‘s ruling will undermine “the ordered administration or re-organization of [its] estate or business.”
Moreover, the FTA indicates that regulation of telecommunications carriers serves the public interest. The Act was passed in part to ensure that “all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, [have available] a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.”
Halo argues that “[t]he facts underlying the parties’ disputes involve commercial competition and compensation—not government enforcement in the public interest.” However, state case law and statutes regarding PUCs demonstrate their public purpose. For instance, the Missouri Public Service Commission Act “was the result of growing feeling that such competition, as existed in this field, was inadequate to protect the public.” May Dep‘t Stores Co. v. Union Elec. Light & Power Co., 341 Mo. 299, 316 (1937). The Missouri Act uses the “police power of the state,” id. at 316, in order “to secure equality in service and in rates for all who needed or desired these services and who were similarly situated,” id. at 317. In Georgia, the Public Service Commission “clearly has enforcement and regulatory powers. It not only has the power to conduct hearings and render decisions, it also has the power to act on those decisions, such as granting or denying licenses and rate increases.” Campaign for a Prosperous Ga. v. Ga. Power Co., 174 Ga. App. 263, 264 (Ct. App. 1985). It is the policy of Texas “to protect the public interest in having adequate and efficient telecommunications service available to each resident of this state at just, fair, and reasonable rates.”
Under the pecuniary purpose and public policy tests, a bankruptcy court must “determine whether the particular regulatory proceeding at issue is
designed primarily to protect the public safety and welfare[.]” McMullen, 386 F.3d at 325. The bankruptcy court here recognized that “the actions of the Public Utilities Commission . . . are aimed at effectuating public policies[.] [T]he Public Utility Commissions are seeking to enforce regulatory statutes, including their tariffs and rules.” The bankruptcy judge‘s order limiting the effect of any monetary judgments issued by the PUCs ensures that the actions at issue pass the pecuniary purpose test; federal and state regulations and case law demonstrate that telecommunications regulation is intended to serve the public interest. Consequently, we find that the PUC proceedings meet the requirement of
C. Motion to Strike
The Missouri Public Service Commission (“MoPSC“) filed a brief at the same time as the telephone company Appellees. Halo then filed a motion to strike the MoPSC‘s brief and to remove it from the caption of the case, on the grounds that the MoPSC is not a party to this action, the bankruptcy judge did not grant the MoPSC‘s motion to intervene, and that the MoPSC had not requested permission to file an amicus brief from this Court. The MoPSC responded to the motion, asking the Court to accept its brief as the brief of an amicus curiae under
The MoPSC first argues that the bankruptcy judge granted its motion to intervene. However, while the record shows that on October 7, 2011, a motion to intervene was granted, the record does not reveal any court order associated with that docket entry. According to Halo, the entry “reflects only the electronic submission of a proposed order by the MoPSC.” The bankruptcy court did allow the MoPSC to appear at the October 7, 2011 hearing in which it made its
findings of fact and conclusions of law, and any testimony by a representative of the MoPSC there is now part of the record. However, it does not appear that the MoPSC was ever formally made a party to this action.
Halo opposes the MoPSC‘s alternative request that its brief be considered that of an amicus, arguing that the MoPSC has not met the requirements of Rule 29. Under that rule, “[t]he United States or its officer or agency or a state may file an amicus-curiae brief without the consent of the parties or leave of court. Any other amicus curiae may file a brief only by leave of court or if the brief states that all parties have consented to its filing.”
More fundamentally, Halo contends that the MoPSC‘s brief “adds nothing to this appeal.” The MoPSC counters that “[t]he other appellees in this case do not adequately represent the interests of the MoPSC[,]” because they are “regulated telephone companies” with “different interests than the MoPSC has as a regulator.” As Judge Posner has written,
[a]n amicus brief should normally be allowed when a party is not represented competently or is not represented at all, when the amicus has an interest in some other case that may be affected by the decision in the present case (though not enough affected to entitle the amicus to intervene and become a party in the present case), or when the amicus has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide.
Ryan v. CFTC, 125 F.3d 1062, 1063 (7th Cir. 1997); see also New England Patriots Football Club, Inc. v. Univ. of Colo., 592 F.2d 1196, 1198 n.3 (1st Cir. 1979) (stating that an amicus is one who “for the assistance of the court gives information of some matter of law in regard to which the court is doubtful or mistaken” (quotation marks and citation omitted)). Here, there is no evidence that any of the Appellees are poorly represented, or that there is a case outside of those between Halo and these Appellees in which the MoPSC has an interest. While the MoPSC may have a “unique perspective,” due to its status as a regulator, its brief in fact contains no information or arguments that the Appellees did not already provide to the Court. Furthermore, because the bankruptcy judge permitted a representative of the MoPSC to testify at the October 7, 2011 hearing, this Court is already aware of the MoPSC‘s concerns.
“Whether to permit a nonparty to submit a brief, as amicus curiae, is, with immaterial exceptions, a matter of judicial grace.” Nat‘l Org. for Women, Inc. v. Scheidler, 223 F.3d 615, 616 (7th Cir. 2000). Because the MoPSC‘s brief does not meet the requirements of Rule 29, and we do not find that it adds anything consequential to our consideration of this case, Halo‘s motion to strike is granted. See Ysleta Del Sur Pueblo v. El Paso Cnty. Water Improvement Dist. No. 1, 222 F.3d 208, 209 (5th Cir. 2000) (per curiam) (“We find that Southwestern Bell‘s motion is untimely, that the issue Southwestern Bell seeks to address has been adequately briefed by the Pueblo and the District, and that granting Southwestern Bell‘s motion would result in the needless delay of this case‘s disposition. Accordingly, Southwestern Bell‘s motion is denied.” (citation omitted)).
D. Motion to Take Judicial Notice
AT&T has filed a motion for the Court to take judicial notice of federal court and state commission proceedings and orders that have been referenced and/or discussed in the parties’ briefing in this appeal. Halo opposes AT&T‘s
motion, arguing that all but two of the matters come from outside the record and were not considered by the bankruptcy court. Halo also contends that AT&T is simply attempting to circumvent judicial rules regarding record excerpts and record supplementation.
Halo cites case law for the premise that judicial notice cannot be used as “an impermissible attempt to supplement the record on appeal” with evidence not before the district court. United States v. Okoronkwo, 46 F.3d 426, 435 (5th Cir. 1995). However, “[a]lthough a court of appeals will not ordinarily enlarge the record
Ultimately, AT&T‘s filing does not add anything to the record that assists us in deciding this case. The reasoning of a federal court in remanding an action by AT&T against Halo to a PUC, or a notice of proceedings by a state PUC not involved in the present dispute, do not help us to determine whether the state PUC proceedings should be excepted from the automatic bankruptcy stay. While the remand orders may give more detail regarding federal and state telecommunications law and how the two interact, they do not answer the central question: whether the state PUC actions are “commence[d] or continu[ed] . . . by a governmental unit” in the enforcement of its “police or regulatory power.”
record, we do so with the understanding that these documents are not especially helpful to the Court.
IV. CONCLUSION
“It is well to remember that section 362(b)(4) embodies a fundamental judgment of Congress: that protecting the public welfare and safety trumps the concerns that underlie the automatic stay, a provision whose main purpose is to prevent some private creditors from gaining priority on other creditors.” Spookyworld, 346 F.3d at 10. In addition, “a fundamental policy behind the police or regulatory power exception . . . is to prevent the bankruptcy court from becoming a haven for wrongdoers.” Commonwealth Cos., 913 F.2d at 527 (internal quotation marks and citation omitted). If Halo is permitted to stay all of the PUC proceedings, it will have used its bankruptcy filing to avoid the potential consequences of a business model it freely chose and pursued. A finding that the state PUC actions are being continued by governmental units does not run afoul of the statutory language of
Halo‘s motion to strike the brief submitted by the Missouri Public Service Commission and to remove the Missouri Public Service Commission from the caption of the case is GRANTED. AT&T‘s motion to take judicial notice is also GRANTED.