Things Remembered, Inc. v. Petrarca

PETITIONER: Things Remembered, Inc.
RESPONDENT: Petrarca
LOCATION: Seminole Tribe

DOCKET NO.: 94-1530
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 516 US 124 (1995)
ARGUED: Oct 02, 1995
DECIDED: Dec 05, 1995

ADVOCATES:
John C. Weisensell - Argued the cause for the respondent
Steven D. Cundra - Argued the cause for the petitioner

Facts of the case

Anthony Petrarca commenced an action in Ohio state court to collect rent allegedly owed by Child World, Inc. under two commercial leases and to enforce Cole National Corporation's guarantee of Child World's performance under the leases. After Child World filed a Chapter 11 bankruptcy petition, Cole's successor in interest, Things Remembered, Inc., removed the action to federal court under the bankruptcy removal statute and the general federal removal statute. The Bankruptcy Court held that the removal was timely and proper and that it had jurisdiction. The District Court reversed and remanded the case to state court, holding that the removal was untimely and that the Bankruptcy Court lacked jurisdiction. The Court of Appeals dismissed Things Remembered's appeal for lack of jurisdiction.

Question

May a federal court of appeals review a district court order remanding a bankruptcy case to state court on grounds of untimely removal?

Media for Things Remembered, Inc. v. Petrarca

Audio Transcription for Oral Argument - October 02, 1995 in Things Remembered, Inc. v. Petrarca

John Paul Stevens:

Mr. Cundra, are you ready?

We'll now hear argument in Number 94-1530, Things Remembered v. Petrarca.

Mr. Cundra.

Steven D. Cundra:

Justice Stevens, and may it please the Court:

The case before the Court today concerns whether an order of a district court remanding a case on jurisdictional or other than equitable grounds, a case which had been removed pursuant to Federal Bankruptcy Court jurisdiction, may be reviewed for error in the circuit court.

It is petitioner's contention that the bankruptcy removal statute, 1452 of title 28, which prohibits review in the circuit court of equitable remands does not apply to the remand in this case, as it was on jurisdictional or other than equitable grounds, and that the general removal statute, 1447, has no application in the bankruptcy removal context.

Since neither bar to review is applicable to the remand in this case, which was premised on a demonstrably erroneous holding that the removal was simply untimely, petitioner Things Remembered should be permitted to appeal this remand and to seek the correction of that holding.

John Paul Stevens:

May I ask a preliminary question?

The briefs mainly argue about whether either statute prohibits review.

Would you explain to me what statute grants you the right to review, and in what language?

Steven D. Cundra:

The statute that would grant the right of review would be 158(d), I believe, of title 28, which grants review from final orders or decisions of the district court sitting as an appellate court over bankruptcy matters.

John Paul Stevens:

And is this a final order?

Steven D. Cundra:

I think it is a final order in the context of this Court's holding in the Cohen case, that it is a... under the collateral order doctrine, it finally determines a disputed issue between the parties, it's an important issue that doesn't go to the merits of the controversy, and would be unreviewable on appeal.

John Paul Stevens:

But your theory is it's a collateral order under Cohen?

That's--

Steven D. Cundra:

Yes, Justice.

Ruth Bader Ginsburg:

--And you have... you're relying on the Third Circuit Pacor case for that preliminary... for how you characterize this as a Cohen v. Beneficial--

Steven D. Cundra:

Yes, Justice.

I believe there are other cases which address that issue as well.

Ruth Bader Ginsburg:

--Can you explain to me what sense it would make to say that, in general, removal is not reviewable at all, then we know Congress wanted to take into account a different... to make the remand larger rather than smaller, and then to say... and for that larger, no review but for what was always understood never to be reviewable, suddenly in the bankruptcy context it's reviewable?

What possible sense does that reading make?

Steven D. Cundra:

One has to consider the context.

The context is the Bankruptcy Reform Act of 1978.

Prior to 1978, this country's bankruptcy jurisdiction was extremely limited.

The only jurisdiction of the bankruptcy court was that referees in bankruptcy who had the jurisdiction, which was called summary jurisdiction, which was only property in the actual or constructive possession of the court.

There was also plenary jurisdiction, but it was only by consent.

In 1978, Congress determined that the Bankruptcy Act was not being effectively administered... Chapter 11 cases, what are now Chapter 11 cases were not being effectively administered, and it passed a brand new statute with a very broad jurisdiction over all cases arising in, arising under, or related to a bankruptcy case.

And Congress determined that in order to be effective it had to grab all litigation in whatever court, Federal, State, or tribal, and bring it into one central forum so that the bankruptcy court could adjudicate the estate of the debtor and adjudicate in a fair manner consistent with the interests of all creditors, not just the two private litigants, and it created the central forum.

It created a new court which ultimately the delegation of power was so great to an Article I court this Court struck down that statute, or had it amended in the Northern Pipeline and Marathon decision.

But that's what justified the broad jurisdiction to get all matters before one court.