Even though the bankruptcy court is a “unit” of the district court in that district, the Eleventh Circuit held that a district court lacks jurisdiction to rule on a complaint alleging a violation of the discharge injunction that should have been filed in the bankruptcy court in the same district.
Pro se, a man got a discharge without reaffirming the debt on his home. He later defaulted on the mortgage, and the bank foreclosed. The man filed a complaint in district court, contending, among other things, that the bank violated the discharge injunction by sending him foreclosure notices and alleging that the notices failed to recognize that he was no longer personally liable on the mortgage debt.
The district court dismissed the complaint, ruling there was no violation of the discharge injunction because the notices “disclaimed that he was personally liable if he had received a bankruptcy discharge.”
Again pro se, the man appealed and won in an unsigned, per curiam, nonprecedential opinion on Nov. 9.
The circuit court’s opinion began from the proposition that the court that issues a discharge injunction “alone” has jurisdiction to enforce compliance.
Of course, the bankruptcy court is a “unit” of the district court under 28 U.S.C. Section 151. In a footnote, the Eleventh Circuit acknowledged that “district courts have original subject-matter jurisdiction” over bankruptcy cases under 28 U.S.C. Section 1334. The statute notwithstanding, the opinion says that the bankruptcy court “alone possessed the power to enforce compliance” with the discharge injunction.
Consequently, the opinion says, the district court “lacked jurisdiction to entertain alleged violations of an order that it did not issue” and “should not have reached the merits” about violating the discharge injunction.
In the interest of judicial efficiency, the appeals court decided to remand with instructions for the district court to refer the complaint to the bankruptcy court, rather than dismiss without prejudice, since the man could refile the complaint in bankruptcy court.
The opinion does not address whether a district court in the same position could rule on the merits by first withdrawing the reference sua sponte.