Court Opinion

ID: 9740700
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:40:31.746216+00
Date Added: 2024-06-11T07:24:19.837047
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(dissenting). In this action, the State of Wisconsin seeks civil forfeitures from David J. Matyas and John E. Zenner, two bankruptcy trustees who allegedly violated Wisconsin's Hazardous Waste Management Act while operating a bankrupt Wisconsin corporation in DePere, Wisconsin. If Matyas and Zenner had operated a corporation that was not bankrupt when they violated the Wisconsin statute, a Wisconsin court would have held them strictly and personally liable for the violation of sec. 144.64, Stats. 1985-86.
The majority concludes that because Matyas and Zenner were bankruptcy trustees at the time of their violations and were not acting outside the scope of their authority, Wisconsin courts do not have jurisdiction *388over this matter. I disagree. The majority opinion has reserved more extensive exclusive jurisdiction to the bankruptcy courts than have the federal statutes.
I conclude that the state courts have subject matter jurisdiction over claims made against trustees personally, as in this case.1 Section 959(a) (28 U.S.C.) expands state court jurisdiction to allow a trustee to be sued in his or her representative capacity if the action arises out of an act or transaction in carrying on the bankrupt business. Section 959(a) has not eliminated or narrowed the state court's jurisdiction to determine the personal liability of a bankruptcy trustee alleged to have acted outside the scope of his or her authority.2
Whether the state court holds the trustees personally liable depends on the resolution of several issues: whether the trustees acted outside the scope of their authority in a manner rendering them personally liable (and the standards for making this determination when the trustees are charged with violating state law),3 to *389what extent, if any, federal law immunizes the trustees from personal liability for violations of state law, and whether federal law preempts the operation of state law. These are, I believe, the issues which the majority must decide.
For the reasons set forth, I would not hold that the circuit court has no jurisdiction. Accordingly, I dissent.

 Wisconsin statutes clearly grant the state courts jurisdiction to decide cases under the Wisconsin Hazardous Waste Management Act. Section 144.98, Wis. Stats., states:
The circuit court for Dane County or for any other county where a violation occurred in whole or in part has jurisdiction to enforce this chapter ... by injunctional and other relief appropriate for enforcement.

 See, e.g., Vass v. Conron Bros. Co., 59 F.2d 969 (2nd Cir. 1932); In re Kalb & Berger Mfg. Co., 165 F. 895 (2nd Cir. 1908). See also E. Allan Tiller, Personal Liability of Trustees and Receivers in Bankruptcy, 53 Am. Bankr. L.J. 75, 83-88 (1979).

 To reach its result that Wisconsin courts do not possess jurisdiction over this action, the majority summarily concludes that the bankruptcy trustees did not act outside their scope of authority even though the trustees violated Wisconsin law. The majority notes only that the trustees acted "to accomplish the *389goals of the initial order" of the bankruptcy court, which apparently included managing and operating the business and ultimately selling the property. Majority opinion at 386.
The majority does not support its conclusion nor distinguish the facts of this case from other cases in which a trustee would exceed the scope of his or her authority by violating state law. The broad grant of authority to the trustee cited by the majority does not justify the trustee's violation of state law. A bankruptcy court does not possess unlimited power to authorize a bankruptcy trustee to violate state law. Midlantic Nat'l Bank v. New Jersey Dep't of Envtl. Protection, 474 U.S. 494 (1986); Gillis v. California, 293 U.S. 62 (1934).