IN THE DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN
In Re: ) ) JEFFERY J. PROSSER, ) Case No. 3:06-bk-30009 ) Debtor, ) Case No. 3:21-ap-03001 ____________________________________________________ ) ) OAKLAND BENTA, JEFFREY J. PROSSER, ) and DAWN E. PROSSER, ) ) ) Plaintiffs/Appellants, ) ) v. ) ) Case No. 3:22-cv-0071 CHRISTIE’S INC., CHARLES ANTIN, FOX ) ROTHSCHILD LLP, YANN GERON, WILLIAM ) STASSEN, DAVID M. NISSMAN, JAMES ) CARROLL, ) ) Defendants/Appellees. ) ) ) ORDER BEFORE THE COURT are he following: (1) Joint Notice of Appeal of the Order Dismissing the Adversary Proceeding [Dkt. No. 40] and the Order Denying Plaintiffs’ Motion 1 for Reconsideration [Dkt. No. 52] (ECF No. 1); (2) Appellant’s Motion to Vacate the VIBC’S Order Dismissing Their Complaint (ECF No. 30); and (3) Request for Certification to the Third Circuit (ECF No. 31). Appellees opposed the motion to vacate and the request for certification. (ECF No. 35.) For the following reasons, the Court will deny the motions and dismiss the appeal. I. BACKGROUND
On July 20, 2021, Plaintiffs filed a complaint against Defendants in an adversary proceeding in the District Court of the Virgin Islands Bankruptcy Division, alleging torts and
1 Case N2o. 36:22-cv-0071 Order Page of
civil violations of the Racketeer Influenced and Corrupt Organizations Act and the Virgin Islands Criminally Influenced and Corrupt Organizations Act. (Case No. 3:21-ap-03001.) On August 26, 2022, U.S. Bankruptcy Judge Mary F. Walrath (the “Bankruptcy Court”) granted the Defendants’ motion to dismiss the complaint, finding that: (a) judicial immunity bars the claims asserted against bankruptcy trustees and their agents; (b) collateral estoppel bars the claims asserted in the complaint, except the claims by Oakland Benta who was not a party to the previous litigation; and (c) all the claims asserted in the complaint are time-barred. (Case No. 3:21-ap-03001, Memorandum Opinion, Dkt. 39.) On the same date, the Bankruptcy Court entered an Order dismissing the complaint. (Case No. 3:21-ap-03001, Order, Dkt. 40.) Plaintiffs made a motion requesting that “the Court reconsider its jurisdiction to enter any orders or conduct any proceedings as this Court is not properly constituted under the United States Constitution and therefore lacks any authority to so proceed.” (Case No. 3:21- ap-03001, Dkt. 41 at 1.) On November 15, 2022, the Bankruptcy Court denied the Plaintiffs’ i.e. motion for reconsideration of the August 26, 2022 decision. (Case No. 3:21-ap-03001, Order, Dkt. 52.) The Bankruptcy Court found that the purported legal basis for the motion, “that ‘this Court is not properly constituted under the United States Constitution and therefore lacks any authority to adjudicate any matters in this case or its related proceedings’ has Vickers Assocs., Ltd. v. Urice In re Jaritz Indus., Ltd. already been definitely decided to the contrary by the Third Circuit Court of Appeals” in (“ ”), 151 F.3d 93 (3d Cir. 1998), and “the Supreme Court did not explicitly, or implicitly, overrule the Third Circuit decision regarding the handling of bankruptcy cases in the Virgin Islands.” (Case No. 3:21-ap-03001, Order, Dkt. 52 at 2-4.) On November 23, 2022, Appellants filed a Joint Notice of Appeal of the Order Dismissing the Adversary Proceeding [Dkt. No. 40] and the Order Denying Plaintiffs’ Motion for Reconsideration [Dkt. No. 52]. After several delays occasioned by motions filed by Appellants, the Court, on April 5, 2024, ordered that Appellants file their brief in support of their appeal no later than May 10, 2024. (ECF No. 29.) Instead of filing an appellate brief, Appellants, on May 9, 2024, filed the instant motion to vacate the August 26, 2022 Order Case N3o. 36:22-cv-0071 Order Page of
dismissing their complaint with prejudice and the request for certification to the Third Circuit. Appellees opposed the motIiIo. nLsE. G AL STANDARD “ The District Court of the Virgin Islands shall have the jurisdiction of a District Court of the United States, including, but not limited to . . . that of a bankruptcy court of the United States.” 48 U.S.C. § 1612 (a). The Bankruptcy Amendments and Federal Judgeship Act of 1984 provides that the district courts of the United States shall have jurisdiction to hear appeals Jaritz from final judgments, orders and decrees of bankruptcy judges entered in proceedings referred to them under Title 28, Chapter 6, Section 157. 28 U.S.C. § 158 (a). In , the Third Circuit held that, “because the district court of the Virgin Islands exercises all of the jurisdiction of a district court of the United States under 48 U.S.C. § 1612(a), section 158(a) In re Jaritz Indus., Ltd., applies to orders of a bankruptcy judge sitting in its judicial district and forecloses an appeal from such an order directly to this court.” 151 F.3d at 99. In re Fiber- “When sitting in an appellate capacity, district courts are obligated to accept a Span, Inc. bankruptcy court's factual findings unless those findings are clearly erroneous.” , 40 F.4th 79, 93 (3d Cir. 2022). A factual finding is clearly erroneous when it is Kool, Mann, Coffee & Co. v. “completely devoid of minimum evidentiary support displaying some hue of credibility or Coffey Hoots v. Pennsylvania bears no rational relationship to the supportive evidentiary data.” , 300 F.3d 340, 353 (3d Cir. 2002) (quoting , 703 F.2d 722, 725 In re O'Brien (3d Cir.1983). In their appellate capacity, district courts review the bankruptcy court’s “legal Env't Energy, Inc., determinations de novo . . . and its exercise of discretion for abuse thereof.” Id. 188 F.3d 116, 122 (3d Cir. 1999). “A bankruptcy court abuses its discretion when its ruling is founded on an errorI IoIf. lDaIwS CoUr SaS mIOisNa pplication of law to the facts.” Prosser v. In re Prosser Appellants assert that their motion to vacate “resurfaces as a consequence of the In re Jaritz Indus., Ltd. recent decision,” Gerber, (“ ”), No. 22-3456, 2024 WL 1230148 (3d Cir. In re Mar. 22, 2024), in which the concurrence agreed that “decision is Prosser statutorily and constitutionally infirm.” (ECF No. 30 at 2.) Appellants contend that “Panel’s adjudication prolonged the VIBC’s unconstitutional existence through Case N4o. 36:22-cv-0071 Order Page of
judicial legislation judicial malfeasance,” and “[a]llowing the VIDC’s standing order of referral of bankruptcy cases to the VIBC has the effect of egregious : the creation and Id. authorization of the continuing operation of a non-constitutional court by judicial decree.” Nugyen Jaritz Prosser v. Gerber ( at 4-5.) Appellants argue that: (1) “The VIBC Is Unlawfully Constituted”; (2) “VIBC Is Jaritz Prosser v. Gerber Unconstitutional”; (3) “ Implicitly Overruled ”; (4) “The Panel Recognized SCOTUS Implicitly Overruled ”; (5) “The Panel Has Condoned the Continuing Operation of a Manifestly Unconstitutional Court, the VIBC”; (6) It Jaritz is Disingenuous to Ignore the Third Circuit’s Supervisory Obligations”; (7) “It Was Disingenuous to Rely upon to Foreclose Arguments”; (8) “28 U.S.C. § 451 – Third Circuit Jaritz Precedent Is Arbitrary and Capricious”; (9) “Forfeiture Was Applied in Bad Faith”; (10) Id.
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IN THE DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN
In Re: ) ) JEFFERY J. PROSSER, ) Case No. 3:06-bk-30009 ) Debtor, ) Case No. 3:21-ap-03001 ____________________________________________________ ) ) OAKLAND BENTA, JEFFREY J. PROSSER, ) and DAWN E. PROSSER, ) ) ) Plaintiffs/Appellants, ) ) v. ) ) Case No. 3:22-cv-0071 CHRISTIE’S INC., CHARLES ANTIN, FOX ) ROTHSCHILD LLP, YANN GERON, WILLIAM ) STASSEN, DAVID M. NISSMAN, JAMES ) CARROLL, ) ) Defendants/Appellees. ) ) ) ORDER BEFORE THE COURT are he following: (1) Joint Notice of Appeal of the Order Dismissing the Adversary Proceeding [Dkt. No. 40] and the Order Denying Plaintiffs’ Motion 1 for Reconsideration [Dkt. No. 52] (ECF No. 1); (2) Appellant’s Motion to Vacate the VIBC’S Order Dismissing Their Complaint (ECF No. 30); and (3) Request for Certification to the Third Circuit (ECF No. 31). Appellees opposed the motion to vacate and the request for certification. (ECF No. 35.) For the following reasons, the Court will deny the motions and dismiss the appeal. I. BACKGROUND
On July 20, 2021, Plaintiffs filed a complaint against Defendants in an adversary proceeding in the District Court of the Virgin Islands Bankruptcy Division, alleging torts and
1 Case N2o. 36:22-cv-0071 Order Page of
civil violations of the Racketeer Influenced and Corrupt Organizations Act and the Virgin Islands Criminally Influenced and Corrupt Organizations Act. (Case No. 3:21-ap-03001.) On August 26, 2022, U.S. Bankruptcy Judge Mary F. Walrath (the “Bankruptcy Court”) granted the Defendants’ motion to dismiss the complaint, finding that: (a) judicial immunity bars the claims asserted against bankruptcy trustees and their agents; (b) collateral estoppel bars the claims asserted in the complaint, except the claims by Oakland Benta who was not a party to the previous litigation; and (c) all the claims asserted in the complaint are time-barred. (Case No. 3:21-ap-03001, Memorandum Opinion, Dkt. 39.) On the same date, the Bankruptcy Court entered an Order dismissing the complaint. (Case No. 3:21-ap-03001, Order, Dkt. 40.) Plaintiffs made a motion requesting that “the Court reconsider its jurisdiction to enter any orders or conduct any proceedings as this Court is not properly constituted under the United States Constitution and therefore lacks any authority to so proceed.” (Case No. 3:21- ap-03001, Dkt. 41 at 1.) On November 15, 2022, the Bankruptcy Court denied the Plaintiffs’ i.e. motion for reconsideration of the August 26, 2022 decision. (Case No. 3:21-ap-03001, Order, Dkt. 52.) The Bankruptcy Court found that the purported legal basis for the motion, “that ‘this Court is not properly constituted under the United States Constitution and therefore lacks any authority to adjudicate any matters in this case or its related proceedings’ has Vickers Assocs., Ltd. v. Urice In re Jaritz Indus., Ltd. already been definitely decided to the contrary by the Third Circuit Court of Appeals” in (“ ”), 151 F.3d 93 (3d Cir. 1998), and “the Supreme Court did not explicitly, or implicitly, overrule the Third Circuit decision regarding the handling of bankruptcy cases in the Virgin Islands.” (Case No. 3:21-ap-03001, Order, Dkt. 52 at 2-4.) On November 23, 2022, Appellants filed a Joint Notice of Appeal of the Order Dismissing the Adversary Proceeding [Dkt. No. 40] and the Order Denying Plaintiffs’ Motion for Reconsideration [Dkt. No. 52]. After several delays occasioned by motions filed by Appellants, the Court, on April 5, 2024, ordered that Appellants file their brief in support of their appeal no later than May 10, 2024. (ECF No. 29.) Instead of filing an appellate brief, Appellants, on May 9, 2024, filed the instant motion to vacate the August 26, 2022 Order Case N3o. 36:22-cv-0071 Order Page of
dismissing their complaint with prejudice and the request for certification to the Third Circuit. Appellees opposed the motIiIo. nLsE. G AL STANDARD “ The District Court of the Virgin Islands shall have the jurisdiction of a District Court of the United States, including, but not limited to . . . that of a bankruptcy court of the United States.” 48 U.S.C. § 1612 (a). The Bankruptcy Amendments and Federal Judgeship Act of 1984 provides that the district courts of the United States shall have jurisdiction to hear appeals Jaritz from final judgments, orders and decrees of bankruptcy judges entered in proceedings referred to them under Title 28, Chapter 6, Section 157. 28 U.S.C. § 158 (a). In , the Third Circuit held that, “because the district court of the Virgin Islands exercises all of the jurisdiction of a district court of the United States under 48 U.S.C. § 1612(a), section 158(a) In re Jaritz Indus., Ltd., applies to orders of a bankruptcy judge sitting in its judicial district and forecloses an appeal from such an order directly to this court.” 151 F.3d at 99. In re Fiber- “When sitting in an appellate capacity, district courts are obligated to accept a Span, Inc. bankruptcy court's factual findings unless those findings are clearly erroneous.” , 40 F.4th 79, 93 (3d Cir. 2022). A factual finding is clearly erroneous when it is Kool, Mann, Coffee & Co. v. “completely devoid of minimum evidentiary support displaying some hue of credibility or Coffey Hoots v. Pennsylvania bears no rational relationship to the supportive evidentiary data.” , 300 F.3d 340, 353 (3d Cir. 2002) (quoting , 703 F.2d 722, 725 In re O'Brien (3d Cir.1983). In their appellate capacity, district courts review the bankruptcy court’s “legal Env't Energy, Inc., determinations de novo . . . and its exercise of discretion for abuse thereof.” Id. 188 F.3d 116, 122 (3d Cir. 1999). “A bankruptcy court abuses its discretion when its ruling is founded on an errorI IoIf. lDaIwS CoUr SaS mIOisNa pplication of law to the facts.” Prosser v. In re Prosser Appellants assert that their motion to vacate “resurfaces as a consequence of the In re Jaritz Indus., Ltd. recent decision,” Gerber, (“ ”), No. 22-3456, 2024 WL 1230148 (3d Cir. In re Mar. 22, 2024), in which the concurrence agreed that “decision is Prosser statutorily and constitutionally infirm.” (ECF No. 30 at 2.) Appellants contend that “Panel’s adjudication prolonged the VIBC’s unconstitutional existence through Case N4o. 36:22-cv-0071 Order Page of
judicial legislation judicial malfeasance,” and “[a]llowing the VIDC’s standing order of referral of bankruptcy cases to the VIBC has the effect of egregious : the creation and Id. authorization of the continuing operation of a non-constitutional court by judicial decree.” Nugyen Jaritz Prosser v. Gerber ( at 4-5.) Appellants argue that: (1) “The VIBC Is Unlawfully Constituted”; (2) “VIBC Is Jaritz Prosser v. Gerber Unconstitutional”; (3) “ Implicitly Overruled ”; (4) “The Panel Recognized SCOTUS Implicitly Overruled ”; (5) “The Panel Has Condoned the Continuing Operation of a Manifestly Unconstitutional Court, the VIBC”; (6) It Jaritz is Disingenuous to Ignore the Third Circuit’s Supervisory Obligations”; (7) “It Was Disingenuous to Rely upon to Foreclose Arguments”; (8) “28 U.S.C. § 451 – Third Circuit Jaritz Precedent Is Arbitrary and Capricious”; (9) “Forfeiture Was Applied in Bad Faith”; (10) Id. “Attribution”; (11) “In Re Watson”; and (12) “ Is Judicial Legislation under the Guise of Statutory Interpretation.” ( at 6-18.) Appellants requeste that the Court certify to the Third Circuit the issue “whether the VIBC is Unlawfully Constituted.” (ECF No. 31. at 1.) Appellees contend that Appellants “have engaged in numerous delays, including numerous motions for stay, a motion for recusal, and the instant Motion,” which is an inappropriate and untimely attempt by Plaintiffs to disturb the Bankruptcy Court Order.” Id. (ECF No. 35 at 1.) Similarly, their request for certification to the Third Circuit “is a delay Jaritz Jaritz tactic, relying on previously-made and rejected arguments.” ( at 2.) Appellees argue that: (a) “ Remains Good Law and Controls in This Case”; (b) “The Third Circuit Upheld Jaritz and Denied En Banc Review”; (c) “The District Court Does Not Have the Authority to Overrule Id. ”; and (d) “The Court Should Deny the Request for Certification to the Third Circuit.” ( at 4-8.) Appellants request certification to the Third Circuit of the issue “whether the VIBC is Unlawfully Constituted.” (ECF No. 31. at 1.) Appellants failed to comply with the Court’s April 5, 2024 Order directing that they file their brief in support of the appeal. Rather than complying with the Court’s Order or In re Prosser seeking an extension to do so, Appellants filed the instant motion and certification request. Appellant’s reliance on the concurring judge’s statement in that “I perceive a strong textual argument that there is no statutory basis for the existence of the VIBC” is misplaced because the concurring judge clearly stated that such “argument is Case N5o. 36:22-cv-0071 Order Page of Jaritz
In re Prosser foreclosed by , which atextually declined to apply the § 451 definitions and held that In re Jaritz Indus., Ltd. the VIBC was lawfully constituted.” , 2024 WL 1230148, at *5 (Hardiman, J., In re Prosser concurring) (citing , 151 F.3d at 100-01). The Appellants’ arguments in their motion to vacate were raised on appeal and rejected by the Third Circuit in , and the Third Circuit denied the Appellants’ petition for rehearing by the panel and the Third In re Jaritz Indus., Ltd. Circuit en banc. As clearly acknowledged by the Third Circuit, including the concurrence, the Garcia v. Att'y Gen. of U.S. Appellant’s arguments are foreclosed by , which remains binding precedent at this time. , 553 F.3d 724, 727 (3d Cir. 2009) (“We are In re bound by precedential opinions of our Court unless they have been reversed by an en banc Korean Air Lines Disaster of Sept. 1, 1983 proceeding or have been adversely affected by an opinion of the Supreme Court.”); , 829 F.2d 1171, 1176 (D.C. Cir. 1987) (Ginsburg, J.) (“Binding precedent for all is set only by the Supreme Court, and for the district courts within a circuit, only by the court of appeals for that circuit.”). Appellants do not cite any legal authority permitting the Court to disregard or overrule the binding precedent, and the Court finds none. In re Prosser Because the issue of “whether the VIBC is Unlawfully Constituted” was before the Third Circuit in , and the Third Circuit denied the Appellant’s petition for rehearing by the panel and the Court en banc, the court finds that granting the Appellants’ request for certification is not warranted. Instead of filing an appellate brief in accordance with this Court’s deadline and instead electing to file the motion to vacate, the Court finds that Appellants failed to prosecuOtRe DthEeRirE aDppeal, warranting dismissal. Accordingly, it is hereby that ADpEpNeIllEaDnts’ Motion to Vacate VIBC’s Order Dismissing Their ComplaOinRtD, EECRFE NDo. 30, is ; it is further DENIED that Request for Certification to the Third Circuit, ECF No. 31, is ; it is furOthReDr ERED AFFIRMED; that the Order of the Bankruptcy Court dated August 26, 2022, is ORDE iRt iEsD further DISMISSED that the appeal is for failure to prosecute; and it is further Case N6o. 36:22-cv-0071 Order Page ofO R DERED SHALL
that the Clerk of Court close this case. Dated: Robert A. Molloy ROBERT A. MOLLOY July 15 , 2024 /Csh/ief Judge