PBCBA BAR BULLETINS pbcba_bulletin_april 2018 | Page 12
BANKRUPTCY C o r n e r
COURTHOUSE
Bankruptcy Courts Aren’t “Courts”
C O M M O N S
MOVE-IN READY SUITES AVAILABLE
JASON S. RIGOLI
It may be hard to envision that when you
walk into a courtroom, appear before a
judge, make motions, argues points of
law, present evidence, or prosecute or
defend against a complaint, you may not
be before a “court,” but that is exactly
what the United States District Court of
Delaware recently ruled.
The District Court’s Holding on the Plain
Language and Legislative History of 28
U.S.C. §§ 610 and 1631
In In re IMMC Corporation, et
al., Case No. 15-1043 (GMS), 2018 WL
259941, the appellant, the liquidating
trustee of IMMC Corporation, appealed
the decision of the bankruptcy court
denying the appellant’s motion to
transfer an adversary proceeding and the
renew motion to transfer based on the
bankruptcy court’s lack of authority. Id.
at *1. There are two pertinent statutes,
which were relied upon by both courts, 28
U.S.C. § 1631 (the “Transfer Statute”) and
28 U.S.C. § 610.
The Transfer Statute reads as
follows:
Whenever a civil action is filed in a court
as defined in section 610 of this title or
an appeal, including a petition for review
of administrative action, is noticed for
or filed with such a court and that court
finds that there is a want of jurisdiction,
the court shall, if it is in the interest of
justice, transfer such action or appeal to
any other such court in which the action
or appeal could have been brought at the
time it was filed or noticed, and the action
or appeal shall proceed as if it had been
filed in or noticed for the court to which
it is transferred on the date upon which
it was actually filed in or noticed for the
court from which it is transferred.
28 U.S.C. § 1631 (emphasis added). The
pertinent language being italicized, “in
a court as defined in section 610 of this
title.” Section 610 defines “courts” as
As used in this chapter the word “courts”
includes the courts of appeals and district
courts of the United States, the United
States District Court for the District of the
Canal Zone, the District Court of Guam,
the District Court of the Virgin Islands, the
United States Court of Federal Claims, and
the Court of International Trade.
28 U.S.C. § 610.
Adhering the “plain
language” of the statutes, the District Court
affirmed the bankruptcy court’s conclusion
that the bankruptcy court was not a “court”
for purposes of transferring an action from
one court to another. IMMC Corp., at *4.
The District Court went on to analyze the
Legislative history of both sections, 610 and
1631, and reached the same conclusion.
A Bankruptcy Court as a Unit of the District
Court under 28 U.S.C. § 151 Cannot be
Deemed a “Court” under 28 U.S.C. § 610
The Appellant argued that as a
“unit” of the District Court, the Bankruptcy
Court should be “deemed” one of the
“courts” under 28 U.S.C. § 610. The District
Court rejected this contention, holding that
the language of § 151, that the bankruptcy
court “may exercise the authority under
this chapter,” limited the authority of the
bankruptcy to only the authority granted in
Part I, Chapter 6 of the Title 28. Id. at *5.
The District Court did not address
whether the outcome would be different
under 28 U.S.C. §§ 157 or 1412, because the
issue had not been raised by the liquidating
trustee to the Bankruptcy Court.
The Consequence of the Bankruptcy Court
Not Being a “Court”
One consequence of the Bankruptcy Court
not being a “court” is that a plaintiff may run
up against a limitations issue, as occurred
in IMMC Corp. The liquidating trustee
was seeking to transfer the adversary
proceeding from the Delaware Bankruptcy
Court to District Court in Pennsylvania,
however, because the Bankruptcy Court
is not a “court” and never had jurisdiction,
the Transfer Statute could not protect the
liquidating trustee from the expiration of
the limitations period. Id.
This article is submitted by Jason S. Rigoli, Esq., Furr
Cohen, 2255 Glades Road, Suite 337W, Boca Raton, FL
33431, [email protected].
PBCBA BAR BULLETIN
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