What Good Are 9th Circuit BAP Opinions in Cases Arising Outside Oregon?

Please note that this writer is not licensed to practice law in Oregon. This means that he is not legally permitted to give any legal advice to anyone. This Bulletin and the entire contents of this website is written only for attorneys. and is not intended for the public. If any non-attorney is reading this, you must consult an attorney about ANYTHING you read here. Nothing in this website is intended to be or should be read as being legal advice to anyone.

By Andrew Toth-Fejel, Bankruptcy Litigation Support for Attorneys, Andy@BLSforAttorneys.com

A while ago I asked an attorney I knew to be a conscientious bankruptcy practitioner a question I thought for sure he could answer: Are 9th Cir BAP opinions from federal districts outside Oregon binding in Oregon bankruptcy courts? His amusing answer: yes, if the Oregon judge who is hearing your local bankruptcy case currently serves on or has served on the Bankruptcy Appellate Panel, no, if she is or has not! After we both laughed he said that his joke was in fact at least partly based on his experience. The joke was also his way of delaying admitting that he really did not know the precedential value of non-Oregon 9th Circuit BAP opinions.

This seems like a rather important question for any Oregon bankruptcy attorney. Given the huge size of the 9th Circuit--57 million people, 9 states, 13 federal districts plus two territories--a huge proportion of the 9th Circuit's BAP opinions arise from cases outside of Oregon. For example, of the 15 opinions filed by the 9th Circuit BAP so far this year, none arose from Oregon. (10 of the 15 were from California, not surprising since California contains virtually 2/3rs of the population of the entire 9th Circuit!) Are all these non-Oregon cases binding on Oregon bankruptcy courts?

Here are some answers:

1) A Judge Alley opinion published in 2000:

Congress established the appellate panels in order to promote uniformity of decision within the circuits. It follows that BAP precedent should be followed by Bankruptcy Courts in the absence of any contrary authority from the District Court. In re Proudfoot, 144 B.R. 876, 878 (9th Cir. BAP (Or.) 1992).

Harry Ritchie’s Jewelers, Inc. v. Chlebowski (In re Chlebowski), 246 B.R. 639, 645 (Bankr. D.Or. 2000).

2) A Judge Dunn opinion published in 2001, following the opinion above and repeating its holding:

. . . Congress provided for the appointment of bankruptcy appellate panels in order to promote greater uniformity of bankruptcy decision making within the circuits. Accordingly, bankruptcy appellate panel decisions should be followed by the bankruptcy courts so long as there is no contrary local district court authority,

In re Platt, 270 B.R. 773, 775 (Bankr. D.Or. 2001).

3) The most extensive recent local bankruptcy court opinion's discussion on the subject that I could find is another Judge Alley opinion, this one, from March 2007. It is surprisingly unpublished, perhaps because the judge explicitly said he would have ruled oppositely on the merits but for a BAP opinion that he felt bound to follow. After citing the above two opinions, Judge Alley stated:

The Doctrine of stare decisis advances two important principles: the uniformity of case law throughout a jurisdiction, and the resulting predictability of results required in order to ensure fairness of the judicial process to litigants. As a matter of fundamental fairness to parties before it, a trial court must strive to apply the law as it is held by courts which may review its decisions. Otherwise, parties will often be forced to the trouble and expense of an appeal to achieve a lawful result whenever the trial court disagrees with the higher court’s view of the law. Rules of comity and stare decisis are essentially corollaries of this basic rule.

In this case, there is appellate authority from the BAP that is directly on point. There is no decision from any Oregon District Court judge addressing the issues before the Court at present. . . . . It is one thing to say that District Court authority somehow

outweighs the BAP’s where the two conflict; it is quite another to say that, where the District Court has been silent, the Bankruptcy Courts are free to disregard the opinions of the BAP. Such a rule would seriously undermine the BAP’s role in promoting uniformity in the law in this Circuit.

I hold that where the Bankruptcy Appellate Panel has issued an opinion applicable to the facts before the Bankruptcy Court, and there is no District Court opinion applicable to those facts, the Bankruptcy Appellate Panel’s opinion is binding.

In re Vue, Case No. 05-66116-fra13, 3/16/2007. (Click on the link to this opinion to see Judge Alley's dicta about potential conflicts between District Court and BAP opinions, in footnote 3 at the very end of his "Discussion and Analysis".)

BOTTOM LINE: All three opinions tell us that, unless our own U.S. District Court in its appellate role has spoken differently (and it's not clear what happens with that conflict) Oregon bankruptcy courts ARE bound by all those originating-away-from-Oregon BAP opinions, yes even all those ones from California!

by: Andrew Toth-Fejel
Bankruptcy Litigation Support for Attorneys
Andy@BLSforAttorneys.com

Please note that this writer is not licensed to practice law in Oregon. This means that he is not legally permitted to give any legal advice to anyone. This Bulletin and the entire contents of this website is written only for attorneys. and is not intended for the public. If any non-attorney is reading this, you must consult an attorney about ANYTHING you read here. Nothing in this website is intended to be or should be read as being legal advice to anyone.

© 2008 Bankruptcy Litigation Support for Attorneys