Two years after Bildisco, Midlantic National Bank v. New Jersey Department of Environmental Protection presented another closely contested bankruptcy case. Where Bildisco pitted the new Bankruptcy Code against labor law, Midlantic juxtaposed the Code with environmental law. More fundamentally, Midlantic produced the Court's first interpretation of Congress's broadened bankruptcy regime: Case law under the old Act limited the bankrupt's ability to ignore environmental law, but language in the Code suggested that Congress contemplated a much broader freedom of action going forward.

The Court did not, however, credit the broader language of the Code. Rather, the Court adopted a clear-statement rule under which it would presume that provisions of the Bankruptcy Code have the same meaning as predecessor provisions of the Bankruptcy Act. As in Hoffman and Nordic Village (discussed in Chapter 6), the Court applied a presumption against the intention to reform the bankruptcy system. Application of the clear-statement rule in Hoffman and Nordic Village reflected the Court's unwillingness to treat bankruptcy differently in a context of long-standing constitutional concern. But the Midlantic Court wrote on a clean slate, and on that slate inscribed an interpretive rule premised on a counterfactual intention of Congress that the new Bankruptcy Code should preserve rather than modernize the old regime.

The vigor of that new rule is apparent from its application here, in the face of substantial broadening of the relevant provisions of the Code from the predecessor provisions of the Act. Paralleling Marathon in the constitutional domain, this is the case where the Court most firmly set itself on a course to downplay the major changes Congress provided in the Code. To make the matter even more intriguing, the unpublished papers document a contingency of the result unknown in the existing literature – that Justice Powell “stole” a Court in this case. The decision at Conference favored the bankrupt; it was only a changed vote in the opinion writing that led to the Court's adoption of Midlantic's bankruptcy-narrowing analysis.

Section 8.1 situates the Midlantic decision within the broader state and federal environmental movements of the 1980s, which sought to regulate polluting industries that had caused a series of environmental disasters in the 1970s. Section 8.2 examines the history of Section 554 and the emergence of the abandonment exception in pre-Bankruptcy Code common law.