In the case of Ohio v. Kovacs, DBA B & W Enterprises et al., 1984, the U.S Supreme Court ruled that a bankruptcy court could discharge a debtor's obligation to clean up and stop polluting an industrial site. The State of Ohio had obtained a judgment against George Kovacs for his company’s pollution of state waters and ordered him to clean it up. However, when he failed to comply with this order, a receiver was appointed by the state court to take possession of his assets including his business operations in order to carry out the cleanup process. Meanwhile, Kovacs filed for bankruptcy which automatically stayed all actions against him or his property under federal law. The issue before the Supreme Court was whether this stay prevented Ohio from continuing its cleanup efforts through its receiver. The Court held that since Kovac's obligation could be reduced into monetary terms (the cost required for cleaning), it constituted as 'a claim' under Bankruptcy Act and thus can be discharged in bankruptcy proceedings like any other debt owed by bankrupt debtor despite being originated from enforcement action taken by government agency.

In the dissenting opinion for Ohio v. Kovacs, Justice Brennan argued that bankruptcy courts should not have jurisdiction over environmental cleanup orders issued by state agencies. He contended that such orders are police or regulatory actions and therefore exempt from being stayed under the Bankruptcy Act. In his view, allowing a bankruptcy court to interfere with these orders could undermine states' ability to protect their citizens from public health hazards posed by pollution. Furthermore, he believed it was inappropriate for federal courts to decide whether an order is too burdensome on a debtor's estate without considering its importance in protecting public health and safety. Thus, he disagreed with the majority's decision which allowed Kovacs' obligation to clean up his polluted property be treated as a dischargeable debt rather than an ongoing duty enforceable through contempt proceedings.