In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3433

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

APEX OIL COMPANY, INC.,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 05-242-DRH—David R. Herndon, Chief Judge.

ARGUED MAY 11, 2009—DECIDED AUGUST 25, 2009

Before CUDAHY, POSNER, and KANNE, Circuit Judges.

POSNER, Circuit Judge. Apex Oil Company appeals

from the grant of an injunction, at the behest of the Environmental Protection Agency and on the authority of

42 U.S.C. § 6973 (a part of the Resource Conservation and

Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.), that requires Apex to clean up a contaminated site in Hartford,

Illinois. In a 178-page opinion following a 17-day bench

trial, the district judge made findings that millions of
2 No. 08–3433

gallons of oil, composing a “hydrocarbon plume” trapped

not far underground, are contaminating groundwater

and emitting fumes that rise to the surface and enter

houses in Hartford and in both respects are creating

hazards to health and the environment. The judge

deemed it Apex’s legal responsibility to abate this

nuisance because the plume was created by an oil

refinery owned by a corporate predecessor of Apex.

Apex challenges these findings and conclusion, but the

challenge has no possible merit.

The principal question presented by the appeal is

unrelated to the district judge’s findings and conclusions; it is whether the government’s claim to an

injunction was discharged in bankruptcy and therefore

cannot be renewed in a subsequent lawsuit—this suit.

The bankruptcy judge’s confirmation (approval) of a

claim in a Chapter 11 proceeding discharges the debtor

from “any debt that arose before the date of” confirmation,

11 U.S.C. § 1141(d)(1)(A), with immaterial exceptions.

“Debt” is defined as “liability on a claim,” § 101(12), and

“claim” as either a “right to payment,” § 101(5)(A), or—the

critical language in this case—a “right to an equitable

remedy for breach of performance if such breach gives

rise to a right to payment, whether or not such right to

an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,

secured, or unsecured.” § 101(5)(B). The critical question

is the meaning of “gives rise to a right to payment.”

Because Apex no longer does refining and as a result

has no in-house capability of cleaning up a contaminated
No. 08–3433 3

site, it would have to hire another company to do the

clean up in order to comply with the injunction. It estimates that it would have to pay such a company $150

million for the job, though it might be able to recover

some of the expense from other contributors to the contamination.

The natural reading of the statutory provision that

we quoted is that if the holder of an equitable claim can,

in the event that the equitable remedy turns out to be

unobtainable, obtain a money judgment instead, the

claim is dischargeable. If for example you have a decree

of specific performance (a type of injunction and therefore an equitable remedy) that you can’t enforce

because the property that the decree ordered the

defendant to sell you was sold to someone else (from

whom, for whatever reason, you cannot recover it), you

are entitled to a money judgment for the value of the

property, e.g., UFG, LLC v. Southwest Corp., 848 N.E.2d

353, 363, 365 (Ind. App. 2006); Vinson v. Marton & Associates, 764 P.2d 736, 739-40 (Ariz. App. 1988); Engasser v.

Jones, 198 P.2d 546, 549 (Cal. App. 1948)—and your

claim to that value is a claim to a right to receive payment and is dischargeable in the seller’s bankruptcy.

In re Davis, 3 F.3d 113, 116 (5th Cir. 1993); In re Irizarry,

171 B.R. 874, 878-79 (9th Cir. BAP 1994).

In addition, some equitable remedies, such as backpay

orders in employment cases, Doe v. Oberweis Dairy, 456

F.3d 704, 714 (7th Cir. 2006); Pals v. Schepel Buick & GMC

Truck, Inc., 220 F.3d 495, 500-01 (7th Cir. 2000); Broadnax

v. City of New Haven, 415 F.3d 265, 271 and n. 1 (2d Cir.
4 No. 08–3433

2005), and orders of equitable restitution, 1 Dan B. Dobbs,

Law of Remedies § 4.3 (2d ed. 1993), are orders to pay, and

so would be dischargeable were it not for specific exceptions in the Bankruptcy Code. See, e.g., Eden v. Robert

A. Chapski, Ltd., 405 F.3d 582, 586-87 (7th Cir. 2005); Bush

v. Taylor, 912 F.2d 989, 992-93 (8th Cir. 1990) (en banc).

That equitable remedies are always orders to act or not

to act, rather than to pay, is a myth; equity often orders

payment. Williams Electronics Games, Inc. v. Garrity, 366

F.3d 569, 576-77 (7th Cir. 2004); Clair v. Harris Trust &

Savings Bank, 190 F.3d 495, 498-99 (7th Cir. 1999); John H.

Langbein, “What ERISA Means by ‘Equitable,’ ” 103

Colum. L. Rev. 1317, 1350-51 (2003).

But the Resource Conservation and Recovery Act,

which is the basis of the government’s equitable claim,

does not entitle a plaintiff to demand, in lieu of action

by the defendant that may include the hiring of another

firm to perform a clean up ordered by the court, payment of clean-up costs. It does not authorize any form of

monetary relief. 42 U.S.C. § 6973(a). The Act’s companion

provision authorizing private suits, 42 U.S.C. § 6972(a)(2),

has been held not to authorize monetary relief, Meghrig

v. KFC Western, Inc., 516 U.S. 479, 483-87 (1996); Avondale

Federal Savings Bank v. Amoco Oil Co., 170 F.3d 692, 694-95

(7th Cir. 1999); AM Int’l, Inc. v. Datacard Corp., 106 F.3d

1342, 1348 (7th Cir. 1997); Abreu v. United States, 468 F.3d

20, 31 (1st Cir. 2006); South Carolina Dep’t of Health &

Environmental Control v. Commerce & Industrial Ins. Co., 372

F.3d 245, 256 (4th Cir. 2004), and the relevant language

of the two provisions is identical.
No. 08–3433 5

Thus the government’s equitable claim, if well

founded, as the district court ruled it to be, entitles the

government only to require the defendant to clean up

the contaminated site at the defendant’s expense. Earlier

cases, such as United States v. Northeastern Pharmaceutical

& Chemical Co., 810 F.2d 726, 749-50 (8th Cir. 1986), and

United States v. Conservation Chemical Co., 619 F. Supp. 162,

201 (W.D. Mo. 1985), which allowed an award of clean-up

costs on the basis of general equitable principles

set forth in such cases as Mitchell v. Robert De Mario

Jewelry, Inc., 361 U.S. 288, 291-92 (1960), and Porter v.

Warner Holding Co., 328 U.S. 395, 397-98 (1946), are dead

after Meghrig, if we are correct in thinking that the

identical language in sections 6972(a)(2) and 6973(a)

requires an identical conclusion with regard to a plaintiff’s right to seek a money judgment.

That leaves Apex to argue that the cost of complying

with an equitable decree should be deemed a money

claim, and hence dischargeable. We rejected that proposition, which does not comport with the language of the

Bankruptcy Code—the cost to Apex is not a “right [of the

plaintiff] to payment”—in AM Int’l, Inc. v. Datacard

Corp., supra, 106 F.3d at 1348; see also In re CMC

Heartland Partners, 966 F.2d 1143, 1145-47 (7th Cir. 1992);

In re Torwico Electronics, Inc., 8 F.3d 146, 150 (3d Cir.

1993); In re Commonwealth Oil Refining Co., 805 F.2d 1175,

1186-87 (5th Cir. 1986); Penn Terra, Ltd. v. Department of

Environmental Resources, 733 F.2d 267, 278-79 (3d Cir.

1984); United States v. Hubler, 117 B.R. 160, 164 and n. 1

(W.D. Pa. 1990); In re Chateaugay Corp., 112 B.R. 513, 523-24

(S.D.N.Y. 1990), affirmed, 944 F.2d 997 (2d Cir. 1991).
6 No. 08–3433

Almost every equitable decree imposes a cost on the

defendant, whether the decree requires him to do something, as in this case, or, as is more common, to refrain

from doing something. The logic of Apex’s position is

thus that every equitable claim is dischargeable in bankruptcy unless there is a specific exception in the Code.

That is inconsistent with the Code’s creation in 11 U.S.C.

§ 101(5)(B) of only a limited right to the discharge of

equitable claims. And if “any order requiring the debtor

to expend money creates a dischargeable claim, it is

unlikely that the state could effectively enforce its laws:

virtually all enforcement actions impose some cost on

the violator.” In re Torwico Electronics, Inc., supra, 8 F.3d

at 150 n. 4.

It is true that in Ohio v. Kovacs, 469 U.S. 274 (1985), the

Supreme Court allowed the discharge in bankruptcy of

an equitable obligation to clean up a contaminated site

owned by the debtor. An injunction ordering the clean

up had been issued before the bankruptcy. The debtor

had failed to comply with the injunction and a receiver

had been appointed to take possession of his assets and

obtain from them the money needed to pay for the clean

up. The receiver thus was seeking money rather than

an order that the debtor clean up the contaminated site.

That was a claim to a “right to payment.” The plaintiff in

our case (the government) is not seeking a payment of

money and the injunction that it has obtained does not

entitle it to payment. See In re Udell, 18 F.3d 403, 409-10

(7th Cir. 1994); In re Torwico Electronics, Inc., supra, 8 F.3d

at 150; In re Chateaugay Corp., 944 F.2d 997, 1008 (2d Cir.

1991).
No. 08–3433 7

Apex cites Johnson v. Home State Bank, 501 U.S. 78 (1991),

which held that a mortgage, which is an equitable

interest, can be discharged in a Chapter 13 bankruptcy. A

mortgage secures a loan, and thus entitles the lender to

force the sale of the mortgaged property (the collateral

for the loan) in the event the borrower defaults, and to

collect the unpaid portion of the debt from the proceeds. That is a straightforward case of an equitable claim

that gives rise to a right of payment to the claimant—namely, as in Kovacs, the right to payment of his

debt out of the proceeds of a sale of property pursuant to

a decree (the equitable remedy) that the property be sold.

One appellate case, factually similar to the present one,

United States v. Whizco, Inc., 841 F.2d 147, 150-51 (6th

Cir. 1988), does support Apex. But it cannot be squared

with the decisions which hold that cost incurred is not

equivalent to “right to payment,” and it sets forth no

limiting principle that would distinguish cases under

the Resource Conservation and Recovery Act from other

cases in which compliance with an equitable decree

requires expenditures by the defendant. The distinctions

that Apex suggests to limit the scope of a position that

it realizes is untenable (that all equitable claims are

dischargeable in bankruptcy in the absence of a specific

exception in the Code)—between injunctions to do and

injunctions not to do, between injunctions that require

major expenditures and those that require minor ones,

between injunctions that the defendant can comply

with internally and injunctions that it has to hire an

independent contractor in order to achieve compliance—are arbitrary.
8 No. 08–3433

The root arbitrariness of Apex’s position is that

whether a polluter can clean up his pollution himself

or has to hire someone to do it has no relevance to the

policy of either the Bankruptcy Code or the Resource

Conservation and Recovery Act. If adopted by the

courts, Apex’s position would discourage polluters

from developing an internal capability of cleaning up

their pollution, even if hiring third parties to do it

would be more expensive. Moreover, the cost of cleaning

up pollution when the polluter does the cleaning up

himself is as real a cost as the price paid to an outsider

to clean it up. Why distinguish a check written to an

employee from a check written to an independent contractor?

The sparsity of case law dealing with the discharge of

claims such as Apex’s, together with the near consensus

of the cases, cited above, in which the issue has arisen,

suggests a general understanding that discharge must

indeed be limited to cases in which the claim gives rise

to a right to payment because the equitable decree

cannot be executed, rather than merely imposing a cost

on the defendant, as virtually all equitable decrees do.

Apex argues that to deny discharge in a case such as

this disserves the government’s long-term interest in

environmental quality by precluding, as a practical

matter, reorganization in bankruptcy. (The argument

derives from Douglas G. Baird and Thomas H. Jackson,

“Kovacs and Toxic Wastes in Bankruptcy,” 36 Stan. L. Rev.

1199, 1202-03 (1984).) It says that had it known in 1986

when it declared bankruptcy that it might be liable for
No. 08–3433 9

$150 million in clean-up costs, it would have had to

liquidate—it could not have reorganized with such a

huge debt overhanging it—and had it liquidated there

would be no surviving or successor entity to conduct or

pay for the clean up and so the full expense would fall on

the government. But that is just to say that in some cases

the government might benefit from the rule that Apex

advocates; in others not and apparently the government

believes, at present anyway—for it has taken the BairdJackson position in the past, see United States v.

Aceto Agricultural Chemicals Corp., 872 F.2d 1373, 1376

(8th Cir. 1989); United States v. Apex Oil Co., 438 F. Supp. 2d

948, 953 n. 6 (S.D. Ill. 2006); Office of Enforcement

and Compliance Assurance, United States Environmental Protective Agency, “Guidance on the Use of

Section 7003 of RCRA” pp. 22-23 (Oct. 1997),

www.epa.gov/compliance/resources/policies/cleanup/

rcra/971020.pdf (visited Aug. 11, 2009)—that it is better

off on balance if the cost of clean up is not dischargeable.

Apex makes the unrelated argument that the injunction is vague (it is) and that Rule 65(d) of the civil

rules requires (and it does) that an injunction “state its

terms specifically” and “describe in reasonable detail—and

not by referring to the complaint or other document—the

act or acts restrained or required.” We have insisted on

strict compliance with these requirements. Nuxoll ex rel.

Nuxoll v. Indian Prairie School Dist. #204, 523 F.3d 668,

675 (7th Cir. 2008); Chicago Board of Education v. Substance,

Inc., 354 F.3d 624, 631-32 (7th Cir. 2003); IDS Life Ins. Co.

v. SunAmerica Life Ins. Co., 136 F.3d 537, 543 (7th Cir.

1998); Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d
10 No. 08–3433

1126, 1132 (9th Cir. 2006); Corning Inc. v. PicVue Electronics,

Ltd., 365 F.3d 156, 158 (2d Cir. 2004) (per curiam). The

rule applies equally to a mandatory injunction (“acts

required”)—an injunction that, as in this case, commands

that acts be done rather than not done, rather than

the more common negative injunction. International Longshoremen’s Ass’n v. Philadelphia Marine Trade Ass’n, 389

U.S. 64, 74-76 (1967); Petrello v. White, 533 F.3d 110, 115-16

(2d Cir. 2008); Gates v. Shinn, 98 F.3d 463, 468 (9th Cir.

1996); 13 Moore’s Federal Practice § 65.60[3] (3d ed. 2009).

Yet the injunction contains such vague requirements

as that Apex have a vapor-control system that has “adequate capacities and efficiencies” and that “all work

required by this injunctive order shall be subject to

U.S. EPA oversight and approval,” which is not so

much vague as open-ended because it specifies no

criteria for the EPA’s approval of efforts by Apex to

comply with the decree.

But Apex has no suggestions for rewriting the

injunction to make it less vague or open-ended. The

clean up of the contaminated site is a huge project—Apex

says it will take 15 years to complete (though maybe

it’s just trying to frighten us, or to push the costs as far

into the future as it can). To specify the details of the

project in the decree would either impose impossible

rigidity on the performance of the clean up or, more

likely, require constant recourse to the district judge

for interpretation or modification of the decree.

The decree resembles one of those “regulatory decrees”

that federal courts issue when they take over the
No. 08–3433 11

running of a school system or other complex public

institution that has failed to comply with federal law in

one respect or another. E.g., Freeman v. Pitts, 503 U.S. 467,

489-90 (1992); Gautreaux v. Chicago Housing Authority, 475

F.3d 845, 852 (7th Cir. 2007); Alliance to End Repression v.

City of Chicago, 237 F.3d 799, 799-800 (7th Cir. 2001); Glover

v. Johnson, 138 F.3d 229, 232-33 (6th Cir. 1998). These

decrees, on the interpretation of Rule 65(d) advanced

by Apex, do not comply with the rule.

The aims of Rule 65(d) are to minimize the occasion

for follow-on proceedings to the issuance of an

injunction and to protect defendants from being held in

contempt for failure to follow a directive that was a trap

because of its ambiguity. Schmidt v. Lessard, 414 U.S. 473,

476-77 (1974); Dupuy v. Samuels, 465 F.3d 757, 759-60 (7th

Cir. 2006); CPC Int’l, Inc. v. Skippy Inc., 214 F.3d 456, 459

(4th Cir. 2000); 11 Charles A. Wright & Arthur R. Miller,

Federal Practice and Procedure § 2955, pp. 308-09 (2d ed.

1995). But the cases that insist on strict compliance with

an inflexible interpretation of the rule must be understood as ones in which such compliance is feasible and

desirable. A degree of ambiguity is unavoidable in a

decree ordering a complicated environmental clean up.

“[T]he Rule does not require the impossible. There is a

limit to what words can convey.” Scandia Down Corp. v.

Euroquilt, Inc., 772 F.2d 1423, 1431 (7th. Cir. 1985). The

defendant can always seek clarification or modification

of the decree from the district court, id. at 1432, and is

protected because if the decree remains ambiguous

after efforts at clarification, or after being modified, the

defendant cannot be held in contempt for violating it. Cf.
12 No. 08–3433

D. Patrick, Inc. v. Ford Motor Co. 8 F.3d 455, 460-61 (7th

Cir. 1993); NBA Properties, Inc. v. Gold, 895 F.2d 30, 32

(1st Cir. 1990); Inmates of Allegheny County Jail v. Wecht,

754 F.2d 120, 129 (3d Cir. 1985).

Any disputes over whether the vapor-control system

that Apex installs has “adequate capacities” will be

submitted to the EPA, as in United States v. Conservation

Chemical Co., 628 F. Supp. 391, 410-11 (W.D. Mo. 1985); see

also United States v. Kasz Enterprises, Inc., 862 F. Supp. 717,

723-24 (D.R.I. 1994); Cunningham v. English, 175 F. Supp.

764, 767-68 (D.D.C. 1958), and a party dissatisfied with

the agency’s resolution will be able to seek redress from

the district court, the ultimate arbiter (subject to appellate review) of the decree’s meaning. See United States

v. Northlake, 942 F.2d 1164, 1167-68 (7th Cir. 1991); cf. Local

28 of Sheet Metal Workers’ International Ass’n v. EEOC,

478 U.S. 421, 481-82 (1986). There is no improper delegation to the EPA (compare United States v. Microsoft Corp.,

147 F.3d 935, 955 (D.C. Cir. 1998)), because its exercise

of “oversight and approval” will be subject to the

court’s override.

AFFIRMED.

8-25-09