First Federal Savings & Loan Ass'n v. Drake (In Re Ramada Inn-Paragould General Partnership)

138 B.R. 63, 26 Collier Bankr. Cas. 2d 1853, 1992 Bankr. LEXIS 504, 1992 WL 63161
United States Bankruptcy Court, E.D. Arkansas·Decided March 13, 1992·No. Bankruptcy No. 91-42419 S, Adv. No. 91-4188·Published·Cited by 7 cases

Opinion

ORDER DENYING MOTION FOR RELIEF FROM ORDER

MARY D. SCOTT, Bankruptcy Judge.

THIS CAUSE is before the Court upon the debtor’s Motion for Relief from Order of Remand and to Stay Parties to State Court Proceedings. The motion is made pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure to set aside the previous order remanding this case to the state court. On February 20, 1992, the Court’s Order was entered remanding this adversary proceeding to the state court. 137 B.R. 31. The debtor claims that this Court is “without jurisdiction to enter an Order of Remand or Abstention inasmuch as it is not an Article III Court.” Several issues are raised by the debtor’s motion, many of which are resolved by analysis of the most recent amendments to the removal statute.

The debtor’s motion asserts that the Court’s Order of Remand is void, Fed. R.Civ.Proc. 60(b)(4), or that other reasons justify relief from the order, Fed.R.Civ. Proc. 60(b)(6). The Court disagrees. The Order of Remand is not void because it fully comports with the provisions of title 28 and Rule 9027, Federal Rules of Bankruptcy Procedure. Further, inasmuch as there is no case in controversy, nor a “civil action pending” within the meaning of Rule 9027, there is no “reason justifying relief” from the Order. 1

In December 1990, an amendment to 28 U.S.C. § 1452 (Removal of claims related to bankruptcy cases) was signed into law. Previously, the bankruptcy court was required to make a report and recommendation to the district court regarding remand of a case removed under section 1452. With the passage of Section 309(c) of the Judicial Improvements Act of 1990, Section 1452(b) was amended to allow the bankruptcy court to enter a binding order regarding remand. See generally Dickinson v. Duck (In re Borelli), 132 B.R. 648 (N.D.Cal.1991). If the bankruptcy court remands a case, an appeal to the district court is permitted under title 28. Section 1452(b) only precludes appeal from the district court decision: section 1452(b) restricts only appeals under 28 U.S.C. § 158(d) (appeal from orders of district courts or bankruptcy appellate panels), 28 U.S.C. § 1291 (appeals from final decisions of district courts), and 28 U.S.C. § 1292 (appeals from interlocutory decisions of district courts). Rule 9027(e) was later amended to conform to these changes.

While the statute appears to be unambiguous, the Court notes that the legislative history supports this analysis:

Section 309 would amend ... 38 [sic] U.S.C. 1334(c)(2) and U.S.C. 1452(b) to clarify that, with respect to certain determinations in bankruptcy cases, they forbid only appeals from the district courts to the courts of appeals, not from bankruptcy courts to the district courts.... Such determinations would therefore be reviewable by the district court.

136 Cong.Rec. S17580 (daily ed. Oct. 27, 1990).

The debtor is thus incorrect in its assertion that it has “not only ... been denied a determination of the remand and abstention by a District Judge, it has also been denied all rights of due process.” As discussed above, the statute in no manner precludes appeal to the district court. This argument was addressed in Dickinson v. Duck (In re Borelli), 132 B.R. 648, 650 (N.D.Cal.1991), wherein the court stated:

Because section 1452(b), as amended, retains district court review of remand decisions, there are also no constitutional *65 impediments to the bankruptcy court’s authority to enter a final order denying a motion to remand. District court review satisfied the constitutional standard set forth in [Northern Pipeline Constr. Co. v.] Marathon [Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982)].

It has been noted that a “bankruptcy court has a ‘much broader range of discretion’ in deciding motions to remand in the bankruptcy context than under 28 U.S.C. § 1447(c), the general removal statute.” O’Rourke v. Cairns, 129 B.R. 87, 89 (E.D.La.1991). Upon the filing of a notice of removal, the Court is required to review the notice and determine whether jurisdiction is proper. Strange v. Arkansas-Oklahoma Gas Corp., 534 F.Supp. 138, 139 (W.D.Ark.1981). If the matter does not properly rest with the court, “[t]he court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground.” 28 U.S.C. § 1452(b) (emphasis added). There is no requirement in section 1452 that a motion be made by any party. Indeed, it is the duty of every court to determine its jurisdiction over the subject matter. Thus, this Court may, upon its own motion, remand the matter to the state court. See Strange, 534 F.Supp. at 139; Smith v. City of Picayune, 795 F.2d 482 (5th Cir.1986).

The debtor appears to argue that a statement by the Court at a status conference previously granted the removal. The debtor states: “The Court noted at the hearing that the proceeding would be removed.” The debtor appears to misunderstand the import of the statement “the proceeding would be removed.” (The Court assumes, without ordering a transcript of the proceedings, that the statement is correct.) The appropriate document under title 28 for removal is a “Notice of Removal.” Upon the filing of this document, the matter is removed; the Court need not sign an order approving the Notice. Just as a civil action is commenced upon the filing of a complaint, Fed.R.Civ. Proc. 3, a case is commenced in the federal district or bankruptcy court upon the filing of the Notice of Removal. However, a court’s subject matter jurisdiction and the court’s duty to determine its jurisdiction are separate issues from whether a case has been filed or removed. The issue before the Court is not whether a case has been filed, but whether its remand is proper or necessary.

The debtor argues that it has not had the opportunity to brief the issue of remand. As discussed above, this Court does have the power to remand the cause, sua sponte. If, however, any party believed there were issues which were not considered by the Court in its decision, a motion for reconsideration would be appropriate. No such motion has been filed. Further, the debtor has now filed a brief in support of this Rule 60 motion arguing the jurisdictional question. However, the debt- or has raised

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First Federal Savings & Loan Ass'n v. Drake (In Re Ramada Inn-Paragould General Partnership), 138 B.R. 63, 26 Collier Bankr. Cas. 2d 1853, 1992 Bankr. LEXIS 504, 1992 WL 63161 (Ark. 1992).

138 B.R. 63 (First Federal Savings & Loan Ass'n v. Drake (In Re Ramada Inn-Paragould General Partnership)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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