Late May Wrap-up: Another First Opinion, Another En Banc, Another Cert Grant
Co-Authored by Barrett Block of UK Law.
Murphy’s (first) Law — Jurisdiction is often the first topic encountered by law students; fittingly, Judge Eric Murphy confronted it in his first published opinion as a Sixth Circuit judge–In re Capital Contracting Company. Judges Sutton and Moore joined to make the decision unanimous.
“Explaining that ‘jurisdiction’ ‘is a word of many, too many, meanings,’” the court determined that a party appealing from a bankruptcy court judgment must satisfy Article III standing requirements. It’s not sufficient for “’concerned bystanders’” to vindicate ‘value interests.’” Instead, a party must demonstrate a specific, concrete, and real injury stemming from the invasion of a legally protected interest. Here, because the debtor’s failure to list an asset on a trustee’s final report would not have provided the creditor-appellant with “one more cent,” the court affirmed the district court’s dismissal.
Cert Watch: Bankruptcy Finality –The Supreme Court granted a petition for certiorari to review the Sixth Circuit’s dismissal of a bankruptcy appeal in Ritzen Group Inc. v. Jackson Masonry LLC (Thapar writing; Sutton & McKeague joining). Doing so promises to resolve a split among the circuits regarding whether an order denying relief from the automatic stay, after a Chapter 11 filing, is appealable. Courts disagree on whether an order denying relief from stay is “final.” The Sixth Circuit (and several others) follow a “blanket rule” that such orders are always appealable.
Tax-shelter guidance: unchallengeable — In CIC Services LLC v. Internal Revenue Service, Judge Clay, joined by Judge Suhrheinrich, held that the Anti-Injunction Act bars CIC Services from challenging IRS guidance that categorizes some in-house insurance companies as tax shelters, which must be disclosed.
Judge Nalbandian dissented, emphasizing the practical realities of the case. Without the opportunity to contest the guidance, a company unsure of its internal unit’s tax-shelter status can choose to report and ruin its reputation, or else risk coughing up $50,000 for each unreported transaction with that internal unit. In other words, a choice between “risk[ing] financial ruin and criminal prosecution.”
En banc watch –A short, unanimous, per curiam, en banc decision in United Statesv. Williams held that the en banc Sixth Circuit had already held in United States v. Burris that Ohio Revised Code §§ 2903.11 and 2923.02 (felonious assault) no longer qualified as a violent felony predicate under the Supreme Court’s (first) Johnsondecision.
The most (only?) noteworthy aspect of the full court’s decision was the solo concurrence it drew from Judge John Rogers—regarding the stare decisis effect of separate opinions in prior en banc rulings. That’s a mouthful, and a topic only a fed-courts purist could love. According to the concurrence, the per curiam improperly characterized the court’s Burris precedent as having overturned binding precedent. But that portion of Burris, he explained, was mere dicta–and a patchwork of dicta at that. Yet it all came out in the wash for Judge Rogers: because the court was sitting en banc, it was free to directly overturn (once and for all) the law of the circuit.