Even with consent from the parties, the district court may not refer a bankruptcy appeal to a magistrate judge for a final ruling on the merits, according to an emphatic but terse opinion from the Fifth Circuit on June 30.
Before bankruptcy, the landlord evicted the debtor from leased premises. The debtor evidently had been withholding rent, claiming the landlord had not repaired the roof.
In bankruptcy court, the debtor sued the landlord for breach of contract. The bankruptcy judge ruled in favor of the landlord by dismissing the suit on summary judgment.
On the debtor’s appeal to the district court, both sides agreed for the appeal to be decided by a magistrate judge, who proceeded to rule in favor of the landlord.
On a second appeal, Circuit Judge Edith H. Jones first addressed the “obligation to consider the basis of the district court’s jurisdiction sua sponte before addressing the merits of a dispute.”
Judge Jones cited a Fifth Circuit opinion which recognized the “broad latitude” given to district judges in referring matters to magistrate judges. Nonetheless, she said that the circuit held in 1988 that “28 U.S.C. § 158, plainly and solely, allows appeals to ‘be taken either to (i) the District Court or (ii) to a panel of bankruptcy judges.’” Minerex Erdoel Inc. v. Sina Inc., 838 F.2d 781, 786 (5th Cir. 1988).
Judge Jones vacated the judgment entered by the magistrate judge and remanded to the district court, “because the district court improperly authorized referral of the appeal from a bankruptcy court decision to a magistrate judge.”
Questions
Two questions: (1) May a district judge refer a bankruptcy appeal to a magistrate judge for a report and recommendation, and (2) should a district judge refer a bankruptcy appeal to a magistrate judge for a report and recommendation?
Even with consent from the parties, the district court may not refer a bankruptcy appeal to a magistrate judge for a final ruling on the merits, according to an emphatic but terse opinion from the Fifth Circuit on June 30.
Before bankruptcy, the landlord evicted the debtor from leased premises. The debtor evidently had been withholding rent, claiming the landlord had not repaired the roof.
In bankruptcy court, the debtor sued the landlord for breach of contract. The bankruptcy judge ruled in favor of the landlord by dismissing the suit on summary judgment.
On the debtor’s appeal to the district court, both sides agreed for the appeal to be decided by a magistrate judge, who proceeded to rule in favor of the landlord.
On a second appeal, Circuit Judge Edith H. Jones first addressed the “obligation to consider the basis of the district court’s jurisdiction sua sponte before addressing the merits of a dispute.”