All posts in Courts

Bringing an Action in Federal Court versus State Court.

On another list serve an attorney asked if there was any benefit to bringing an action in federal court versus state court (assuming there is diversity).  My friend Gary Wallace’s answer is great.

There are a great many differences between the two forums.  Here are some:

1.    Filing fees differ, especially post-complaint filing.  E.g., MSJ fee now $500 in state court.  Non-refundable $150 jury fee must be posted very early in the case (or waiver may result) (CCP 631).  Typical motion fee: $60.  It can add up.

2.    Time to respond to complaint: 21 days in federal court vs. 30 days in state court.

3.    Recording of proceedings:  Under federal law, each session of court and every proceeding designated by rule or order of the court or by one of the judges shall be recorded verbatim by shorthand, stenotype, stenomask, or electronic sound recording equipment. The method of recording may be elected by the district judge.  In contrast, budgetary constraints have greatly reduced the availability of court reporters in state court proceedings and there is little or no electronic recording. Read more…

Proposed Amended Local Rules

This is the announcement re the comment period.  As they say, if you don’t speak up now, don’t start complaining later.  A redline of the amendments can be accessed here.

RE: REQUEST FOR COMMENTS ON PROPOSED LOCAL BANKRUPTCY RULES AMENDMENTS

The United States Bankruptcy Court, Central District of California, is proposing amendments to its Local Bankruptcy Rules, to become effective December 1, 2017, and is circulating the proposed amendments to the bar and public for comment.  A summary and redline of the proposed amendments is available on the Court’s website www.cacb.uscourts.gov under Rules, or by clicking here.

All comments on the proposed amendments will be carefully considered by the Court.  Please provide any comments on the proposed amendments as soon as possible but no later than July 7, 2017.

Comments concerning the proposed amendments must be submitted by email to bkcomments@cacb.uscourts.gov and include the name, email address, and phone number of the person submitting the comment.

KATHLEEN J. CAMPBELL

CLERK OF COURT

Short Bio of Judge Maureen Tighe from the Insolvency Law Committee

The link to the bio is here.  The link also has the past bios created by the ILC.

In re Sundquist – $45 million in Punis Sounds About Right to Me

I hereby nominate Judge Christopher Klein for Super Judge.  This is my brief of the 109 page Memorandum.

Sundquist v. Bank of America (In re Sundquist) 566 B.R. 563, 14-02278 CN (Bkrtcy, E. D. Cal. May, 2017) Klein, J.

Issue:   Given that Bank of America violated the automatic stay, what is the proper amount of damages under section 362(k)?

Holding:   Actual damages of $1,074,000 plus $5 million of punitive damages, further punitive damages awarded of $40 million payable to two consumer organizations and five law schools.

Judge Christopher Klein

The debtors here had attempted unsuccessfully prepetition to do loan mods with Bank of America.  They finally filed chapter 13 to stop the foreclosure sale.  Notwithstanding that it had notice, the bank conducted the foreclosure sale the next day anyway.  “Bank of America committed at least six further automatic stay violations by the end of August 2010 as it bulled forward.”  This included bringing an unlawful detainer.  About the same time, a different department of the bank recognized the error and notified the foreclosure company.  But upon receiving the three day notice, the debtors panicked and immediately moved.  “Although Bank of America knew on August 20, 2010, and beyond cavil by September 7, 2010, that the foreclosure would be rescinded, it did not withdraw the unlawful detainer action or tell the Sundquists the action would be dismissed.”  Six months later, the bank finally rescinded the foreclosure sale but did not tell the debtors nor their counsel.  The debtors learned about the rescission a month or two later and asked for the keys back.  The bank gave them the keys.  When they moved back into the property, the tress were dead, appliances gone, the place was ransacked, and the HOA had assessed a $20,000 penalty for not taking care of the place.  The bank not only refused to pay for the damages but demanded that the debtors pay the mortgage for the time when it owned the property.  Read more…

Interview with Judge Alex Kozinski

The highlight of the Insolvency Conference on Coronado Island this year was the interview of Judge Alex Kozinski on Friday afternoon.  Judge Peter Bowie (Ret.) started off by asking Judge Kozinski for a word that describes who he is and what he is all about.  The word? – handsome!  He asked Judge Kozinski about his early life in Romania and his life after that in Vienna – when he first tasted ice cream and “immediately became a capitalist.”

After clerking for 9th Circuit Judge Anthony Kennedy and US Supreme Court Justice Warren Burger, his first job was with Quittner, Stutman, Triester & Glatt.  He was sworn in as a US citizen sometime in those years by Judge Harry Pregerson, then a district court judge, now his colleague on the 9th Circuit.   Judge Kozinski gushed about what a great judge William Lazarow was and determined to be like him.  After joining the 9th Circuit himself in 1985 at 35 years old, he somehow wangled himself the the job of running Judge Lisa Fenning’s calendar while she was off on maternity leave.   He described the effort as “the hordes coming at your.”  He was not derisive in the slightest.  The bankruptcy world has a lot of people who need help and the bankruptcy judge deals with that every day.  He said that bankruptcy “brings order from chaos.”  For that reason it is important.

There is a great hour-log interview with Judge Kozinski on youtube here.  Pretty fun.

Prof. Chemerinsky Explains Goodyear Tire & Rubber Co. v. Haeger

The 9th Circuit was reversed by the Supreme Court on Tuesday in Goodyear Tire & Rubber Co. v. Haeger, — S. Ct. —, 2017 WL 1377379 (2017).  The case deals with a court’s inherent powers to sanction parties and attorneys.   The rule is pretty clear that a court may sanction a party using its inherent power if the party’s conduct was “bad faith, wanton, vexatious, or oppressive,” i.e., more than reckless or even frivolous.  But how much?  The unanimous Supreme Court said the sanctions “must be compensatory rather than punitive in nature.”  It said that the “fee award may go no further than to redress the wronged party ‘for losses sustained’; it may not impose an additional amount as punishment for the sanctioned party’s misbehavior.”  Thus, “a court’s shifting of fees is limited to reimbursing the victim.”  That is not to say that the sanctions cannot be punitive but if they are, that is essentially a criminal proceeding and the sanctionee has the same rights as other criminal defendants.

In Goodyear, certain reports favorable to the Plaintiff were not turned over to the Plaintiff.  The Plaintiff, not knowing that the reports existed, ultimately settled with Goodyear.  A year later, the reports were discovered.  How is the district court going to figure out “the losses sustained” because of the failure to turnover the reports? Read more…

Court is Asking for Local Students to Participate in 9th Circuit Civics Contest

The U.S. District and Bankruptcy Courts for the Central District of California are encouraging high school students to participate in the 2017 Ninth Circuit Civics essay and video competition (the “Contest”).

The theme of the Contest is “Not to be Forgotten: Legal Lessons of the Japanese Internment.”  Students are asked to relate the legal history of the Japanese internment to current government efforts to protect the nation against terrorism.  The focus is on constitutional conflicts that can arise when national security and individual rights are both at stake. Student winners will receive cash prizes and other recognition.

For more information, please review the attached flyer.

Brown Bag on the Loan Modification Management Program – Feb 6, 2017 at Roybal

Judges Barash and Bason are going to host a brown bag lunch presentation on the Loan Modification Management Program (“LMM”) currently in the pilot phase in cases pending before Judges Barash, Bason, Bauer, Brand and Yun.  The luncheon will be held on 2/6/17 at 12:00 p.m. at the Roybal building.    This is the link to the event page on the Court’s website.

I highly recommend attending this.  The courts need our input.  If they don’t get our input, they are flying blind to some extent.  There is certainly the desire on the part of the courts to help.

See you there.

Judge Erithe Smith Calendar This Week

Dear Colleagues:

The Court announced that:  “I am sorry to report that Judge Erithe Smith’s mother has just passed away.  Judge Smith will be continuing all of her hearings this week.  

Keith Higginbotham

Haeger v. Goodyear Tire – Supreme Court to Consider Limits on Federal Court’s Inherent Power to Award Compensatory Sanctions

I will be attending oral argument at the Supreme Court next week, January 10, 2017.  Below is my brief of the 9th Circuit Opinion at issue.

Haeger v. Goodyear Tire and Rubber Co, 813 F.3d 1233 (9th Cir, 2016)

Issue: Do compensatory sanctions awarded under the district court’s inherent power have to be causally linked to the harm done by the bad conduct?

Holding: No, compensatory sanctions may be part punitive and part compensatory.

District Judge Roslyn O. Silver, District of Arizona,

Milan Smith, dissent by Paul Watford (other judge on the panel was Clifford Wallace). Read more…