Court Opinion

ID: 3033481
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:49:34.11938+00
Date Added: 2024-06-11T11:40:47.187015
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 03-1992
                                   ___________

Carl Cibulka,                           *
                                        *
                   Appellant,           * Appeal from the United States
                                        * District Court for the Eastern
      v.                                * District of Missouri.
                                        *
Trans World Airlines, Inc.,             *     [UNPUBLISHED]
                                        *
                   Appellee.            *
                                   ___________

                              Submitted: January 12, 2004

                                  Filed: January 21, 2004
                                   ___________

Before LOKEN, Chief Judge, FAGG and BOWMAN, Circuit Judges.
                              ___________

PER CURIAM.

       Carl Cibulka brought a disability discrimination action against Trans World
Airlines, Inc. (TWA) in federal district court. TWA filed for bankruptcy, and the
district court* stayed the discrimination action. Cibulka then filed a claim in the
bankruptcy proceeding. TWA filed a motion for sale of substantially all of its assets
to American Airlines free and clear of any claims by TWA’s employees. At the sale
hearing, testimony established that if the sale to American Airlines did not go

      *
       The Honorable Catherine D. Perry, United States District Judge for the Eastern
District of Missouri.
forward, TWA would likely liquidate, and given its financial condition, TWA’s past
and current employees would lose their jobs and retirement benefits. The bankruptcy
court granted the motion. See In re Trans World Airlines, Inc., 2001 WL 1820325,
at *1-2 (Bankr. D. Del. Mar. 27, 2001). The sale order enjoined all persons from
seeking to enforce successor liability claims against American. Before TWA’s debts
were discharged by the bankruptcy court, Cibulka withdrew his claim in bankruptcy
and moved to amend his federal discrimination complaint to add American Airlines
as TWA’s successor. The district court denied the motion to amend and dismissed
the action, concluding any liability was discharged in the bankruptcy and American
did not assume liability for claims like Cibulka’s, which were asserted and then
withdrawn from the bankruptcy proceedings.

       Cibulka appeals arguing that he is entitled to proceed against American
Airlines under the theory of federal successor liability and that the district court’s
dismissal violates public policy. The Equal Employment Opportunity Commission
(EEOC) raised the same arguments in its emergency motion to stay the order granting
TWA’s motion to sell its assets to American Airlines. See id. The bankruptcy court
rejected the arguments. First, the bankruptcy court concluded that both 11 U.S.C. §
363(f) and the bankruptcy court’s equitable authority permitted the sale free and clear
of successor liability claims. In re TWA, 2001 WL 1820325, at *3-6. The court also
held that although there is a strong public interest in enforcement of federal statutes
prohibiting discrimination in the workplace, the public interest did not favor
jeopardizing the job security of 20,000 TWA employees, including some of the
EEOC claimants, at the expense of preserving successor liability claims that would
be rendered unenforceable absent a sale of substantially all of TWA’s assets as a
going concern. Id. at *11.

       Later, the Third Circuit affirmed the bankruptcy court’s order approving the
sale free and clear of successor liability for employment discrimination claims against
TWA. In re Trans World Airlines, Inc., 322 F.3d 283, 285 (3d Cir. 2003). After

                                         -2-
thoroughly reviewing the relevant law, the court concluded both 11 U.S.C. § 363(f)
and the bankruptcy code’s priority scheme supported the transfer of TWA’s assets
free and clear of the discrimination claims. Id. at 288-91.

      We agree with the analysis of the bankruptcy court and the Third Circuit.
Cibulka is not entitled to proceed on a theory of successor liability against American
Airlines, and the district court’s dismissal of his action does not violate public policy.
We thus affirm the district court. See 8th Cir. R. 47B.
                         ______________________________

                                           -3-