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7th Circuit finds remand to be unreviewable

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The 7th Circuit Court of Appeals looked at the issues of removal and remand in the context of bankruptcy in a case July 21 and found the bankruptcy court’s decision to remand a case to state court is unreviewable.  

In the 19-page decision authored by Judge Richard Posner, the federal appellate court looked at Judicial Code (Title 28) sections 1446(a) and 1447, and federal cases, which included Carlsbad Technology Inc. v. HIF Bio Inc., 129 S. Ct. 1862 (2009), to determine whether a company could appeal a bankruptcy judge’s order that an action originally filed in state court and removed to bankruptcy court should be sent back to the state court.

Alan Brill owned several radio stations that eventually went into Chapter 11 bankruptcy. The successful bidder on those at auction was Regent Communications, now known as Townsquare Media, who had at one point discussed with Brill the possibility of buying the media companies prior to bankruptcy. Brill filed suit in state court claiming the creditors of the debtors and some of the debtors’ lawyers and other professional advisors misused confidential information and encouraged Regent to violate two confidentiality agreements it had previously made with Brill. All his claims were based on Indiana law.

The case was moved to bankruptcy court after pre-bankruptcy creditors named as defendants asked the bankruptcy judge to take the case to enforce compliance with a previous order. The bankruptcy court took the case, but Brill later amended the case to only include Regent as a defendant in the alleged violations of the confidentiality agreement claims.

The bankruptcy judge ruled the amended complaint was unrelated to the bankruptcy, so the court had no jurisdiction over it. The judge ordered the suit remanded to the state court, which Regent appealed. The District Court affirmed, saying once the bankruptcy court found it had no jurisdiction, no action could be taken but to remand the case.

“The word ‘jurisdiction’ is a chameleon, judges do not always use it with precision, and the distinction between relinquishing and disavowing jurisdiction is a fine one. Had Regent argued supplemental jurisdiction to the bankruptcy judge, we might interpret what the judge did as relinquishment rather than disavowal,” wrote Judge Posner in Townsquare Media Inc., f/k/a Regent Communications Inc. v. Alan R. Brill, et al., Nos. 10-3017, 10-3018.

“But as no one mentioned supplemental jurisdiction, it hardly seems likely that the judge, in holding that he lacked jurisdiction, meant that he had jurisdiction but was relinquishing it. Such a characterization of his ruling would not be ‘colorable.’ So the remand was indeed unreviewable, and Regent’s appeal must therefore be – we conclude at long last – dismissed.”

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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