In Re Farmland Industries, Inc.
Appeal
Before WOLLMAN, BYE, and SHEPHERD, Circuit Judges.
SHEPHERD, Circuit Judge.
GAF Holdings, LLC, appeals the decision of the United Stаtes Bankruptcy Appellate Panel for the Eighth Circuit (BAP) affirming the bankruptcy court‘s1 order dismissing its complaint against Philip Rinaldi; Stanley Riemann; Robert Tеrry; Pegasus Partners II, L.P.; Pegasus Investors II, L.P.; Pegasus Capital Partners, L.P.; and J.P. Morgan Trust Company, National Association in its capacity as Trustee of thе FI Liquidating Trust. Because GAF lacks standing, we affirm the bankruptcy court‘s dismissal of GAF‘s complaint.
I.
GAF was incorporated in 1999 to purchase a refinery from Farmland Industries, Inc. GAF could not obtain financing, and later Farmland filed Chapter 11 bankruptcy. Farmland submitted sale procedures for its Coffeyville аssets, including its refineries and a coke-gasification fertilizer complex, to the bankruptcy court, and the court entered an order approving them. GAF did not object to the sale procedures.
GAF submitted a bid to Farmland for the Coffeyville assets, but Farmland rejected the bid. It determined that GAF was not a qualified bidder because the bid
On November 14, 2003, the bаnkruptcy court approved the sale of the Coffeyville assets to Coffeyville Resources, LLC (CRLLC), which was incorporated by Pegasus to make the purchase. In the sale order, the court found that the only qualifying bid was made by CRLLC, that the sale procedures were conducted in good faith, and that the purchase price under the sale agreement was fair, reasonable, and for sufficient value. GAF did not objeсt to or appeal the sale order.
Instead, on February 2, 2004, GAF moved under
On February 20, 2004, the bankruptcy court entered an order that authorized an amendment to the sale agreement. The order also reaffirmed the terms of the sale order unaffected by the amendment, including the determination that the sale of the Coffeyville assets had bеen conducted in good faith. GAF did not challenge the order.
On February 27, 2007, GAF filed a complaint in bankruptcy court alleging that the appellеes intentionally interfered with GAF‘s business expectancy in purchasing the Coffeyville assets and participated in a civil conspiracy to conceal the real value of the Coffeyville assets. The appellees moved to dismiss the complaint on various grounds. The bаnkruptcy court dismissed the complaint with prejudice, holding that GAF was attempting to make an impermissible collateral attack on its priоr orders approving the sale and that GAF failed to state a claim for which relief could be granted. Alternatively, the court held that GAF laсked standing.
On appeal, the BAP held that the bankruptcy court lacked subject-matter jurisdiction over GAF‘s state tort claims against non-debtor third parties. In re Farmland Indus., Inc., 378 B.R. 829 (B.A.P. 8th Cir. 2007). The BAP remanded the case to the bankruptcy court, instructing the court to dismiss GAF‘s complaint for lack of subject-matter jurisdiction. The defendants appealed the BAP‘s decision, and this Court reversed. In re Farmland Indus., Inc., 567 F.3d 1010 (8th Cir. 2009). We held that the bankruptcy court had subject-matter jurisdiction because GAF‘s сlaims are “related to” the bankruptcy of Farmland under
II.
In an appeal from a decision of the BAP, we sit as a second court of review. In re Lasowski, 575 F.3d 815, 818 (8th Cir. 2009). We independently review the bankruptcy court‘s decision applying the same standard of review as the BAP. Id. Thus, here we review the bankruptcy court‘s сonclusions of law de novo. Id.
Before reaching the merits of a case, federal courts must ensure that Article III standing exists. Gray v. City of Valley Park, Mo., 567 F.3d 976, 982-83 (8th Cir. 2009); see also In re Res. Tech. Corp., 624 F.3d 376, 382 (7th Cir. 2010) (“Article III‘s standing requirements apply to proceedings in bankruptcy courts just as they do to proceedings in district courts.“). The “irreducible constitutional minimum of standing requires a showing of injury in fact to the plaintiff that is fairly traceable to the challenged action of the defendant.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 591 (8th Cir. 2009) (internal quotations omitted).
Here, GAF has not established an injury traceable to the appellees’ actions. GAF contends that the appellees’ actions caused GAF to lose the bid on the Coffeyville assets and thus the opportunity to profit from the transaction. However, GAF could only have purchased the Coffeyvillе assets through the bidding process approved by the bankruptcy court. In its order approving the sale of the Coffeyville assets to CRLLC, the bаnkruptcy court found that GAF‘s bid did not satisfy the auction and sale bidding procedure requirements. Although GAF asserts that the disqualification of its bid was “unjustified,” GAF does nоt allege any facts suggesting that the appellees were responsible for the deficiencies in its bid. Moreover, GAF appealеd neither the sale order nor the denial of its Rule 60(b) motion, both of which found that CRLLC was the only qualified bidder.
GAF urges that it has standing because its claim is for fraud on the court, and traditional standing analysis does not apply to claims for fraud on the court. See Universal Oil Prods. Co. v. Root Ref. Co., 328 U.S. 575, 580 (1946) (holding that federal courts have inherent power to investigate whether a judgment was obtained by fraud). However, GAF‘s complaint does not state a claim for fraud on the court. Fraud on the court is an extraordinary means by which to obtain equitable relief and requires the plaintiff to prove no adequate remеdy at law. Superior Seafoods, Inc. v. Tyson Foods, Inc., 620 F.3d 873, 878 (8th Cir. 2010). GAF has not alleged that it has no adequate remedy at law. Further, the remedy GAF seeks—money damages—is at odds with a fraud on the court claim, for which the remedy is the setting aside of the fraudulently obtained court judgment. Id. In fact, GAF has expressly stated that it does not seek to undo the sale order approving the sale of the Coffeyville assets. Thus, under traditional standing analysis, GAF lacks standing.
III.
Accordingly, we affirm the bankruptcy court‘s order dismissing GAF‘s complaint.