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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. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  2. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  3. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  4. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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