County of San Mateo v. Peabody Energy Corp. (In re: Peabody Energy Corp.)

The Eighth Circuit Court of Appeals upheld a district court judgment that affirmed a bankruptcy court’s determination that California municipalities’ climate change-based common law and statutory nuisance claims against the coal company Peabody Energy Corporation (Peabody) were discharged during Peabody’s bankruptcy proceeding. The Eighth Circuit found that the district court did not abuse its discretion in finding that the bankruptcy plan’s exemptions for governmental claims brought “under any applicable Environmental Law” or “under any … applicable police or regulatory law.” The Eighth Circuit also rejected the municipalities’ argument that their public-nuisance claim asserted on behalf of the people of California was not a claim under bankruptcy law because it only entitled them to equitable relief. In addition, the Eighth Circuit agreed with the bankruptcy court all of the municipalities’ claims were directed at Peabody’s pre-bankruptcy conduct and therefore did not survive the bankruptcy.