In Ozenne v. Chase Manhattan Bank (In re Ozenne), a panel of the Ninth Circuit held in March that Bankruptcy Appellate Panels were not “established by an Act of Congress” and thus lacked jurisdiction to issue writs of mandamus under the All Writs Act contained in 28 U.S.C. Section 1651(a).
On a petition for rehearing en banc, 11 Ninth Circuit judges ducked the constitutional question and held on Nov. 9 that the BAP lacked jurisdiction for a different, nonconstitutional reason: A petition for mandamus is not a substitute for a timely appeal.
For now, at least, there is no circuit court authority saying whether BAPs were “established” by Congress.
The Original Panel Opinion
Pro se, a homeowner filed multiple unsuccessful proceedings in bankruptcy court and on appeal, alleging that foreclosure of his home 15 years ago violated the automatic stay in one of his seven bankruptcies. Most recently, the Ninth Circuit BAP denied his mandamus petition after the bankruptcy court had held there was no jurisdiction to adjudicate an alleged stay violation long after the bankruptcy case was closed.
Without briefing from the parties, two Ninth Circuit judges decided sua sponte on March 25 that BAPs were not “established by an Act of Congress.” The majority said that BAPs were created at the “discretion” of the “judicial council of each circuit” under 28 U.S.C. Section 158(b)(1).
Circuit Judge Jay S. Bybee “emphatically” dissented. Although he agreed with the judgment, he “vigorously” disagreed “with everything else” in the majority’s opinion. He said that BAPs are “plainly a court established by an Act of Congress,” and that he would have reached the merits and upheld dismissal of the mandamus petition on several grounds including res judicata, since the debtor had lost the same argument several times before.
Rehearing En Banc
Sua sponte, the panel withdrew the mandate, sought the parties’ views, and called for rehearing en banc. With the benefit of amicus briefs, rehearing was submitted on the briefs to 11 circuit judges in early September. Writing for a unanimous en banc court on Nov. 9, Circuit Judge N. Randy Smith vacated the BAP’s decision and remanded to dismiss the mandamus petition for lack of jurisdiction, but on different, nonconstitutional grounds.
Judge Smith recounted how the debtor never filed an appeal from the bankruptcy court order where he was seeking to mandamus the bankruptcy judge. He then said that the mandamus petition “sought exactly what a proper appeal” would have achieved.
Citing the principle that a court must consider nonconstitutional grounds before reaching constitutional issues, Judge Smith then examined whether there was reason for the BAP to dismiss the mandamus petition for lack of jurisdiction other than a lack of constitutional authority.
Judge Smith cited Ninth Circuit authority for the proposition that a “writ of mandamus cannot substitute for a timely appeal.” Since mandamus sought “precisely the same relief” as an appeal, he held that the BAP “would not have jurisdiction to consider the untimely appeal.” Therefore, he said, the BAP “did not have jurisdiction to consider the appeal labeled as a mandamus petition.”
Although holding that the BAP lacked jurisdiction, Judge Smith also appeared to consider the merits of the petition because he evidently held that mandamus could not issue because the debtor had another “‘means to attain the relief he desires’” by filing a timely appeal.
To read ABI’s discussion of the March panel opinion, click here.