Ozenne to be Heard by the 9th Circuit en banc

Ozenne is the 9th Circuit case that announced that the BAP is not “a court established by Act of Congress,” and therefore cannot issue a writ of mandamus.  The opinion is here.  There is a pretty interesting discussion about “what is a court established by Act of Congress”?  The BAP said “that’s us” and then denied the writ.  The 9th Circuit panel (two of the three) said the BAP had no jurisdiction and therefore must dismiss the petition for the writ.  

The strange thing about the decision to hear it en banc is that it seems obvious that there were no grounds to issue the writ anyway.  That is basically the concurrence.  But Judge Bybee says in his concurrence that the ruling raises serious constitutional issues.  He writes that he is “concurring in the judgment but vigorously disagreeing with everything else.”  If the BAP is not “created by Congress,” then who created it?  The 9th Circuit Judicial Council.  That means that Congress delegated its power to create a court to someone else and that by itself may be unconstitutional.

Judge Bybee ends his concurrence with:

Congress established bankruptcy appellate panels, and authorized us to adapt them to our needs.  When Congress established the BAP it necessarily authorized the BAP to “issue all writs necessary or appropriate in aid of [its] respective jurisdiction[] and agreeable to the usages and principles of law.” 28 U.S.C. § 1651(a).  I respectfully, but emphatically, dissent.

My brief:

Ozenne v. Chase Manhattan Bank  (In re Ozenne)  — F. 3d, —- (9th Cir. Mar, 2016)

Issue:   Does the BAP have the power to issue a Writ of Mandamus?    

Holding:   No.  It is not a “courts established by Act of Congress.”

Appeal from the BAP

Wallace, Leavy, Bybee  Concurrence in part and Dissent in part by Judge Bybee

“Several years after his bankruptcy case was closed, [the debtor] Ozenne filed a motion for sanctions in the bankruptcy court.  The bankruptcy court ruled that it lacked jurisdiction to grant relief and Ozenne filed a petition for writ of mandamus before the BAP.  . . .  the BAP held that it had jurisdiction pursuant to 28 U.S.C. § 1651 to consider the petition, and then denied the petition.”

The 9th Circuit vacated the BAP decision and remanded with instructions to dismiss the appeal.  The “All Writs Act” states that “[t]he Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”  “The question therefore is whether the BAP is one of the ‘courts established by Act of Congress.’  We conclude that the answer is no.”  The key to the panel was that BAPs are optional, i.e., the circuit can create a BAP if it chooses.  The circuit makes an independent decision.  “The BAP is, in effect, a temporary panel to be used only so long as the judicial council chooses to keep it operational.”   Further, the parties have to consent to use the BAP as either can decide to appeal instead to the district court.

The dissent starts, “BYBEE, Circuit Judge, concurring in the judgment but vigorously disagreeing with everything else.”  “I just can’t go there.  I concur in the judgment only, and respectfully dissent otherwise.”  “I am going to start with an observation: even among flyspecks, this case is a nothing.  We are dealing with the denial of a writ of mandamus filed by a party with a penchant for repeat (and likely frivolous) bankruptcy filings.”  Apparently the bankruptcy court refused to reopen this guy’s case to hear a request for damages for violation of the automatic stay (for wrongful foreclosure I think).  The debtor appealed to the district court and then the 9th Circuit and lost.  Then he filed a Motion for Sanctions for violation of the stay which the bankruptcy court denied saying it had no jurisdiction.  Instead of appealing the denial, the debtor sought a Writ of Mandamus.  The BAP summarily denied the request for a writ.  The dissent says that there was no appellee therefore there was no consent “by the parties” to go to the BAP anyway and therefore no jurisdiction by the BAP.  He says the majority should have affirmed the BAP decision because, among other things,  there is no chance a Writ of Mandamus is appropriate under the facts here.  “But instead of stopping with the most obvious answers to a most obviously meaningless case, the majority forges ahead, without even calling for briefing, and grinds an axe with which to cut the BAP off at the knees.  The majority opinion is needless, wrong, and raises serious constitutional concerns with the separation of powers.”

Judge Bybee then argues for several pages that the BAP is a “court.”  “The majority’s opinion begs an answer to the following question: if the BAP is not ‘a ‘court established by Act of Congress,’’ then who, precisely, ‘established’ this court?  If we accept the majority’s analysis, the BAP was ‘established by the Judicial Council of the Ninth Circuit.’  This presents us with a second, far more troubling question: Can Congress delegate its power to create courts to the judicial branch?  The majority says that the answer is ‘yes,’ and sees no problem.”

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