If a complaint has “no possibility of succeeding” as shown from the outcome of a trial, does the bankruptcy court lack “related to” jurisdiction from the outset?
The Fifth Circuit, in an opinion by Circuit Judge Catharina Haynes, held that there is jurisdiction based on the Supreme Court’s teaching, which “gravitated away from conflating jurisdiction and merits.”
The Dec. 15 opinion leaves the door open a crack for finding no jurisdiction, because Judge Haynes said the complaint in her case was “not wholly insubstantial or frivolous.”
If the complaint were frivolous on its face, can there be a lack of “conceivable effect” to support jurisdiction? A finding of no jurisdiction in such a case would have a curious effect, to say the least.
If a court were to dismiss a complaint as frivolous and therefore find no jurisdiction, the ruling on dismissal would be without jurisdiction, thus giving the parties a second bite at the apple in another court, even though the first court thought the claim was frivolous. Consequently, it would seem that Judge Haynes’ holding should hold true even if the complaint were frivolous on its face.