Over a vigorous dissent, the Ninth Circuit held that Bankruptcy Appellate Panels were not “established by an Act of Congress” and thus lack jurisdiction to issue writs of mandamus under the All Writs Act contained in 28 U.S.C. Section 1651(a).
Circuit Judge Jay S. Bybee “emphatically” dissented. Although he agreed with the judgment, Judge Bybee “vigorously” disagreed “with everything else” in the majority’s opinion written by Circuit Judge J. Clifford Wallace.
The appeal arose from a home foreclosure 15 years ago. Pro se, the homeowner filed multiple, uniformly unsuccessful proceedings in bankruptcy court and on appeal, alleging that foreclosure violated the automatic stay. His most recent loss was in 2012, when the Ninth Circuit’s Bankruptcy Appellate Panel denied his mandamus petition after the bankruptcy court held there was no jurisdiction to adjudicate an alleged stay violation long after the bankruptcy case had been closed.
Without briefing from the parties or seeking amicus briefs on the issue, the Ninth Circuit sua sponte held in Judge Wallace’s opinion on March 25 that BAPs were not “established by an Act of Congress.” Instead, the majority concluded that BAPs were created at the “discretion” of the “judicial council of each circuit” under 28 U.S.C. Section 158(b)(1).
The majority said that BAPs are created “on a temporary basis” and have “none of the permanency of a court.” Rather than having been created by Congress, they result from the “independent action” of a “third party,” namely, the judicial councils in each circuit, and thus lack jurisdiction to entertain mandamus petitions.
Dissenting, Judge Bybee said that BAPs are “plainly a court established by an Act of Congress.” He would have reached the merits and upheld dismissal of the mandamus petition on several grounds, such as res judicata, since the debtor had lost the same argument several times before.
Judge Bybee said the majority altered the All Writs Act by requiring that courts be “directly” created by Congress as a condition to having jurisdiction for issuing writs. That conclusion, he said, “grinds an axe with which to cut the BAP off at the knees.”
The majority’s opinion, he said, “raises serious constitutional concerns with the separation of powers” and “is going to cause us major constitutional headaches.”
In his view, BAPs are not “some mere tribunal or administrative adjunct.” They are, he said, an “alternative to federal district courts” and are “treated by statutes as equal in authority to the district court.” He pointed out how three circuits have held that bankruptcy courts themselves can issue writs of mandamus. The majority, he said, “left the BAP out in the cold.”
By holding that BAPs are established by a circuit’s judicial councils, Judge Bybee said the majority raised a “troubling question: Can Congress delegate its power to create courts to the judicial branch?” Judge Bybee said he was “deeply skeptical of the constitutionality of such an arrangement.”
In view of the Ninth Circuit’s 1992 holding in Perroton v. Gray, “It is bizarre that a circuit that is the most supportive of BAPs is the most restrictive of its powers,” said Prof. Bruce A. Markell of the Northwestern Univ. Pritzker School of Law. In an e-mail, Prof. Markell explained how the Ninth Circuit BAP had to perform “mental gymnastics” whenever a litigant would ask for in forma pauperis status. The BAP was forced to call on district judges to grant so-called IFP status since that ability was restricted by Perroton to “courts of the United States.” Prof. Markell was a bankruptcy judge in Las Vegas and a panelist on the Ninth Circuit BAP before returning to teaching.
The majority’s opinion does not address the ability of bankruptcy courts or BAPs to issue writs under the version of the All Writs Act contained in Section 105(a) of the Bankruptcy Code. The majority overruled a 2002 decision by the Ninth Circuit’s BAP, which had held they had power to issue writs.