BANKRUPTCY CORNER
BANKRUPTCY CORNER
Trustees are Protected by Judicial Immunity
JASON S . RIGOLI
The Supreme Court articulated , in Barton v .
Barbour , 104 U . S . 126 ( 1881 ), the requirement that a plaintiff seek and obtain leave from the court appointing a receiver before a suit is brought against the receiver . Id . at 128 . The so-called Barton doctrine applies to “ bankruptcy trustees and other bankruptcy court appointed officers for acts done in their official capacity .” Juravin v . Fla . Bankr . Tr ., 2024 U . S . App . LEXIS 28043 at * 12 ( 11th Cir . Nov . 5 , 2024 ) ( citing Carter v . Rodgers , 220 F . 3d 1249 , 1252 ( 11th Cir . 2000 )). The rationale behind the doctrine “ follows from the bankruptcy court ' s in rem jurisdiction over the debtor ' s estate . Because one who ‘ first exercises jurisdiction over certain property may exclude others from exercising jurisdiction over it ,’ we require a plaintiff to ask the bankruptcy court whether it will exercise its jurisdiction in cases that are both within its jurisdiction and against its officers for their official actions .” Id . ( quoting Chua v . Ekonomou , 1 F . 4th 948 , 954 ( 11th Cir . 2021 )).
Generally , the Barton doctrine precludes any other court from exercising subjectmatter jurisdiction where leave is not granted by the appointing court . Lack of subject-matter jurisdiction , applying
Barton , is why the lower court dismissed the lawsuit in Juravin , 2024 U . S . App . LEXIS 28043 at * 10 . In Juravin , ultimately the Eleventh Circuit affirmed the district court but for a different reason . Id . at * 3 .
In Juravin , the Trustee obtained a break order from the bankruptcy court to search the debtor ’ s home and seize or photograph business records belonging to the debtor ’ s companies , electronic communication devices , the debtor ’ s watch collection , and “[ a ] ny additional items Trustee , in his sole discretion , reasonably believes to be part of the bankruptcy estate .” Id . at * 4 ( internal quotation marks omitted ). The records in the house were a mess and mixed into the debtor ’ s records were the debtor ’ s wife ’ s records or medical records of their kids , etc . Ultimately , the non-debtor records were returned . The debtor ’ s wife and children filed suit against the trustee and his professionals without seeking leave .
The Barton Doctrine and Ultra Vires Exception
The Eleventh Circuit determined that facially the Barton doctrine applied to the Trustee and his counsel , for three reasons : ( i ) the defendants were court-appointed or court-approved officers , id . at * 12-13 ; ( ii ) the acts were taken within the defendants ’ official capacities , id . at * 13-14 ; and ( iii ) the actions were “ related to ” the bankruptcy case . Id . at * 14 .
The appellant argued , however , that the “ ultra vires ” exception to Barton applied . Id . at * 15 . The ultra vires exception to Barton “ applies ‘ if , by mistake or wrongfully , the receiver takes possession of property belonging to another .’” Id . ( citing Barton , 104 U . S . at 134 ). The appellant argued the trustee and his professional seized many personal items unrelated to the debtor ’ s estate and therefore the ultra vires exception applied , and appellant did not need to obtain leave to file the suit .
Judicial Immunity Protects a Trustee and Counsel for Acts Withing the Scope of Their Authority
The Eleventh Circuit did not have to decide whether subject-matter jurisdiction was an appropriate basis to dismiss the complaint , because ultimately , such errors are covered by judicial immunity . Id . at * 17-19 .
A court appointed trustee enjoys “ ‘ judicial immunity for acts within the scope of [ his or her ] authority .’” Id . at * 17 ( quoting Prop . Mgmt . & Invest ., Inc . v . Lewis , 752 F . 2d 599 , 602 ( 11th Cir . 1985 ) ( additional alteration )). “ That immunity applies even if a bankruptcy trustee acts in error , maliciously , or in excess of the appointing court ' s jurisdiction .” Id . ( citing Bolin v . Story , 225 F . 3d 1234 , 1239 ( 11th Cir . 2000 )). Plus , it extends to his attorneys . Id . ( citing Chua , 1 F . 4th at 955 ; cf . Goldberg , 573 F . 3d at 1270 ).
In Juravin , the Eleventh Circuit concluded : “[ Trustee ] and his counsel acted within the scope of the Break Order . The Break Order authorized [ Trustee ] to seize any items he reasonably believed to be part of the Debtor ' s estate . And given that the documents and assets at the Juravins ' residence were voluminous , disorganized , and previously undisclosed , some accidental seizure of non-debtor property is understandable — and protected .” Id . at * 17-18 .
Accordingly , the dismissal was affirmed on the grounds of judicial immunity .
This article was submitted by Jason S . Rigoli , Esq ., Furr and Cohen , P . A ., 2255 Glades Road , Suite 419A , Boca Raton , FL 33431 , jrigoli @ furrcohen . com
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