National Labor Relations Board v. Adams Delivery Service, Inc. (In Re Adams Delivery Service, Inc.)

24 B.R. 589, 7 Collier Bankr. Cas. 2d 672, 1982 Bankr. LEXIS 3217, 9 Bankr. Ct. Dec. (CRR) 1144
CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedSeptember 30, 1982
DocketBAP No. NC 81-1353-EKV, Bankruptcy No. 481-02666 H, Adv. No. 481 0643 AW
StatusPublished
Cited by18 cases

This text of 24 B.R. 589 (National Labor Relations Board v. Adams Delivery Service, Inc. (In Re Adams Delivery Service, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Labor Relations Board v. Adams Delivery Service, Inc. (In Re Adams Delivery Service, Inc.), 24 B.R. 589, 7 Collier Bankr. Cas. 2d 672, 1982 Bankr. LEXIS 3217, 9 Bankr. Ct. Dec. (CRR) 1144 (bap9 1982).

Opinion

OPINION

ELLIOTT, Bankruptcy Judge:

The debtor in possession, Adams Delivery Service purported to remove to the bankruptcy court a proceeding pending before the National Labor Relations Board under the authority of 28 U.S.C. § 1478. The ■ NLRB challenged the authority of the bankruptcy court to assume jurisdiction of the NLRB’s proceeding under the removal statute. The bankruptcy court refused to remand the case and the NLRB appealed. We grant leave to appeal the court’s interlocutory order, 28 U.S.C. § 1482(b), and reverse.

I. FACTS

Adams, a pharmaceutical delivery service, was a party to a collective bargaining contract with the Teamsters Union. The subject of the present litigation is the discharge of an employee, Dennis Wilson.

On August 30, 1978 the NLRB found the firing was an unfair labor practice under § 8(a) of the National Labor Relations Act (the “Labor Act”). The primary issue was whether Wilson had been fired for discussing an overtime pay dispute with his union representative. In accordance with the Labor Act, the NLRB sought judicial enforcement of its order before the Ninth Circuit. See Labor Act §§ 10(e), 10(f). The Ninth Circuit enforced the order by a decision dated August 26, 1980. NLRB v. Adams Delivery Service, Inc., 623 F.2d 96 (9th Cir.1980). The case was then returned to the NLRB for determination of the amount of backpay to be awarded to Wilson in accordance with the Labor Act’s bifurcated system of determination of liability and liquidation of claims.

The hearing began before an NLRB Administrative Law Judge (“ALJ”) on July 9, 1981, but was continued until August 6, 1981 in order to allow Adams to obtain certain documents it had subpoenaed. On August 5, 1981, Adams filed its Chapter 11 petition under the Bankruptcy Code. On August 6, 1981, prior to the appointed time of the NLRB hearing, Adams filed an application for removal of the NLRB proceeding to the bankruptcy court and notified the NLRB that the proceeding was subject to the automatic stay provisions of the Bankruptcy Code. See 11 U.S.C. § 362. At the reconvened hearing, Adam’s bankruptcy and labor counsel both refused to formally participate on the grounds that the hearing was stayed. Notwithstanding this, the NLRB submitted its case to the ALJ.

The ALJ then ordered briefs to be filed by September 8, 1981. On September 10, 1981 Adams sought and obtained an injunction from the bankruptcy court in the removed proceeding. The injunction prohibited the NLRB from pursuing the proceeding. However, the injunction was directed only to the NLRB qua litigant and did not purport to enjoin the ALJ.

Meanwhile, the NLRB sought a remand order from the bankruptcy court on the grounds that the purported removal was ineffective. While the remand motion was pending, the ALJ issued findings unfavorable to Adams which were later adopted by the NLRB.

On November 10, 1981 the bankruptcy court refused to remand the action even though it refused to expressly find that the removal was properly effected. In part this was based upon the events that occurred after removal and after the exercise of its injunctive powers. The court concluded:

*591 If NLRB’s contention that this court is without jurisdiction and the automatic stay and temporary restraining order are void is correct there is no need to remand as the NLRB proceedings have continued regardless of the removal. If this court has jurisdiction it concludes that it should not remand in light of the proceedings which have been taken adverse to debtor.

Appellant’s Excerpts of Record at 163. It is that failure to remand that the NLRB now appeals. The NLRB was granted leave to appeal on February 9, 1982.

II.ISSUES

The NLRB’s appeal presents two issues to the panel:

(1) Does 28 U.S.C. § 1478(b) preclude this panel from reviewing the bankruptcy court’s refusal to remand the case?

(2) Is a NLRB backpay liquidation proceeding subject to removal under 28 U.S.C. § 1478? We conclude that the answer to both questions is no.

III.JURISDICTION TO REVIEW

Adams claims that the trial court’s order is not reviewable under 11 U.S.C. § 1478(b). That section precludes review of a bankruptcy court order granting or denying a request to remand a claim or cause of action. We hold that if the court has jurisdiction over a matter which has been removed pursuant to § 1478(a), its ruling on such a request to remand is within its absolute discretion and not subject to appellate review. But where an action has been wrongfully removed to a court with no jurisdiction, a motion to remand is not directed to the discretion of the court but is a challenge to the court’s power to entertain the matter at all. A court always has the power to determine whether it has jurisdiction. In effect, the NLRB is not seeking review of the court’s decision denying its motion to remand, rather it is challenging the jurisdiction of the trial court.

Apparently the NLRB styled its jurisdictional challenge as a “request for remand” because that is the terminology historically used with respect to removals to the United States District Courts and is the terminology used by Interim Bankruptcy Rule 7004(j) (adopted in the Northern District of California as a local rule) regarding jurisdictional challenges to the removal of civil actions. This result is consistent with the legislative history of the Bankruptcy Reform Act of 1978 which enacted § 1478. It is clear that the authors of the principal House committee report on the subject contemplated that jurisdictional challenges to the removal of an action or claim would be heard by the appellate courts as are such challenges in the case of actions removed to the district courts. See House Report 95-595, 95th Cong.2d Sess. at 51, U.S.Code Cong. & Admin.News 1978, p. 5787. Although the clause which provides that decisions under § 1478(b) not to remand are not reviewable was added later in the legislative process to the then proposed § 1478, we are aware of nothing in the legislative history indicating an intention to prevent review of a decision to assume jurisdiction over a case beyond the scope of the bankruptcy court’s powers. Neither are we aware of any judicial authority for such a proposition. The sole case cited by Adams, Harlow v. Sargent, 14 B.R. 267 (Bkrtcy.D.Vt.1981), is distinguishable since it dealt with an attempt to appeal an order remanding a case to the state courts, not a decision, as is the ease here, to assume jurisdiction over a controversy allegedly beyond the court’s authority.

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24 B.R. 589, 7 Collier Bankr. Cas. 2d 672, 1982 Bankr. LEXIS 3217, 9 Bankr. Ct. Dec. (CRR) 1144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-adams-delivery-service-inc-in-re-adams-bap9-1982.