Friday, December 12, 2008

The Ninth Circuit BAP Gap in Published Opinions; Its Last Three Unpublished but Citeable Memoranda

By Andrew Toth-Fejel, Bankruptcy Litigation Support for Attorneys,

The Ninth Circuit Bankruptcy Appellate Panel has not published an opinion since early August, more than four months ago. (For a summary of that most recent opinion see my Litigation Report entitled The "Law of the Case" Doctrine Applied in the Most Recent 9th Circuit BAP Opinion, Written by Judge Dunn.) This is surprising because in 2008 before August and throughout 2007 the largest gap in published opinions was only about six weeks. In fact, throughout 2005 and 2006 not a single month passed without at least one published opinion. Furthermore, during the calendar years 2005, 2006 & 2007, the BAP published no less than 32 published opinions. So far this year--half-way through December--it has published only 15. A phone call to the BAP Clerk's Office in Pasadena, California asking about this yielded a slightly defensive retort to the effect that "well, we are generating many unpublished memoranda opinions," without any admission of an uncharacteristic gap in published opinions. There seems to be more to this story, and if there is anything newsworthy about it I will report it in a future Bulletin. In the meantime, here are short summaries of the three most recent BAP unpublished but still potentially very valuable memoranda, all from November 2008, two of which had Oregon's Judge Randall Dunn on the three judge panel.

Citeability of the BAP's Unpublished Memoranda

The following cautionary note introduces these memoranda on the Court's website: "All memoranda are unpublished. Memoranda issued before January 1, 2007 may not be cited to or by the courts of this circuit except under the limited circumstances specified in Ninth Circuit BAP Rule 8013-1(c). In accordance with Federal Rule of Appellate Procedure 32.1, memoranda issued on or after January 1, 2007 may be cited without restriction."

Federal Rules of Appellate Procedure Rule 32.1 is titled "Citing Judicial Dispositions" and states in full:
(a) Citation Permitted. A court may not prohibit or restrict the citation of federal judicial opinions, orders, judgments, or other written dispositions that have been:
(i) designated as “unpublished,” “not for publication,” “non-precedential,” “not precedent,” or the like; and
(ii) issued on or after January 1, 2007.
Each of the BAP's unpublished memoranda included here have the following as their first footnote:
"This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1."

In turn, the most pertinent part of 9th Cir. BAP Rule 8013-1 is subsection (c) stating: "Unpublished memoranda and orders have no precedential value and may not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel." (The rest of the Rule has aspects of interest not directly relevant here, such as the criteria for determining whether a BAP's decision becomes a published opinion or instead an unpublished memorandum, and the procedure to request that a memorandum be turned into an opinion--see the entire Rule 8013-1 at the end of this Bulletin.)

So, under Rule 32.1 of the Federal Rules of Appellate Procedure all unpublished but written dispositions of any federal court since the beginning of 2007 may be cited, but under the 9th Cir. BAP Rule 8013-1(c) citation seems not to be permitted except in the very limited contexts of "the doctrines of law of the case, res judicata, or collateral estoppel."

However the indicated footnote then says that particular case "may be cited for whatever persuasive value it may have," seemingly contradicting the restriction of the BAP Rule. Perhaps the answer is in 9th Cir. Rule 36-3 (a) and (b):
Citation of Unpublished Dispositions or Orders
(a) Not Precedent: Unpublished dispositions and orders of this Court are not precedent, except when relevant under the doctrine of law of the case or rules of claim preclusion or issue preclusion.
(b) Citation of Unpublished Dispositions and Orders Issued on or after January 1, 2007: Unpublished dispositions and orders of this court issued on or after January 1, 2007 may be cited to the courts of this circuit in accordance with Fed. R. App. P. 32.1.
The bottom line: Citation is permitted to unpublished memoranda for persuasive value--9th Cir. Rule 36-3 (b) trumps any seeming contradiction arising out of 9th Cir. BAP Rule 8013-1(c). The best proof: see footnote 6 in the BAP's own unpublished memorandum in Olympic Coast Investment v. Crum (In re Wright) below, in which the BAP itself cites a Ninth Circuit "unpublished non-precedential decision" "for its persuasive value." Even though the BAP's use of that Ninth Circuit decision was technically governed by 9th Cir. Rule 36-3 (b) instead of 9th Cir. BAP Rule 8013-1(c), I believe the BAP would endorse the use of its own unpublished memoranda in the same fashion.

The Three November 2008 Memoranda

Jared v. Keahey (In re Keahey)

BAP No. WW-08-1151-PaJuKa
November 3, 2008

Issue: Did the bankruptcy court err in "finding that a creditor’s attorney committed the tort of outrage and violated his fiduciary duties as a deed of trust trustee in connection with his repeated, abusive attempts to collect a debt secured by the debtor’s home"?
Holding: "The bankruptcy court did not err in finding that [creditor] committed the [Washington state] tort of outrage," in that 1) the conduct at issue was "extreme and outrageous," "the infliction was intentional or reckless," and the recipient "suffered extreme emotional distress" as a result of the conduct.

Olympic Coast Investment v. Crum (In re Wright)
BAP No. MT-08-1164-MoDH
November 3, 2008

Issue: Does a Chapter 7 trustee's distribution to creditors render as moot the appeal by a creditor which did not receive any payment through that distribution? Specifically, if that 7 trustee proposed and received a court order, over an undersecured creditor's objection, to make a final distribution paying nothing to that undersecured creditor because it had filed a proof of claim failing to specify the amount of the unsecured portion, and never filed an amended proof of claim so specifying, would the creditor's appeal of the distribution order be moot if it did not seek to stay the distribution order pending the appeal and the distribution to creditors occurred while the appeal was pending?
Holding: The BAP held that it lacks jurisdiction over appeals that are moot, and this case was "equitably moot" in that the appellant failed "to pursue their available remedies to obtain a stay of the objectionable orders of the Bankruptcy Court" and so allowed "such a comprehensive change of circumstances to occur as to render it inequitable ... to consider the merits of the appeal." The court also stated that, had it not dismissed the appeal as equitably moot, it would rule on the merits that "a trustee does not have to make distributions to an undersecured creditor who did not amend its claim to assert or estimate the unsecured portion."

Kosmala v. Cook (In re Cook)
BAP No. CC-08-1091-HMoD
November 3, 2008

Issue: Was a debtor's interest in a trust property of his Chapter 7 estate? Particularly, did debtor acquire an interest in trust property under § 541(a)(5)(A) as a "bequest, devise or inheritance" acquired within 180 days of the Chapter 7 filing, since most of the trust assets were transferred to the trust by his mother's will, or instead is debtor's interest in the trust property excluded from property of the Chapter 7 estate because his interest merely vested at the time of the mother's death. § 541(a)(5) includes in the bankruptcy estate “any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date-- (A) by bequest, devise, or inheritance."

Holding: Looking to state law to define debtor's interest in the trust, on the facts here under California law the trust was not a testamentary trust but rather an inter vivos one, and the devise of the assets to the trust through the will did not make the trust testamentary. "[T]the Properties were devised through a pour over provision to the Trust, not to the Debtor. The Debtor was a
contingent beneficiary of the Trust at the date of his bankruptcy filing and had no direct interest in the Properties." The BAP affirmed the decision of the bankruptcy court.


Rule 8013-1
(a) OPINION or MEMORANDUM. The Panel may determine that a written disposition of a matter before the Panel will be designated an OPINION if it:
(1) Establishes, alters, modifies or clarifies a rule of law;
(2) Calls attention to a rule of law which appears to have been generally overlooked;
(3) Criticizes existing law; or
(4) Involves a legal or factual issue of unique interest or substantial public importance.
A written disposition of a case not designated for publication will be captioned a MEMORANDUM.
(b) PUBLICATION. Publication of a final disposition means the BAP Clerk will release a copy to recognized channels for dissemination. Only opinions, and orders designated for publication by the Panel, will be published.
(c) CITATION. Unpublished memoranda and orders have no precedential value and may not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.
(d) REQUEST FOR PUBLICATION. Any party may request, by letter, that the Panel publish a memorandum. The request must be received no later than 30 days after the filing of the memorandum and must state concisely the reasons for publication.

by Andrew Toth-Fejel
Bankruptcy Litigation Support for Attorneys

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 or provide and legal services. 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 nor should be read as being legal advice to anyone.

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