791 F.2d 712 (9th Cir. 1986), 84-2805, In re Benny

Docket Nº:84-2805, 85-1517, 85-1530 and 85-1765.
Citation:791 F.2d 712
Party Name:In re George I. BENNY and Alexandra Benny, Debtors. (Four Cases) Alexandra BENNY, Debtor-Appellant, v. John M. ENGLAND, Trustee; Chicago Title Insurance Company, Creditor, etc., et al., Appellees. UNITED STATES of America, Intervenor-Appellant, v. John M. ENGLAND, Trustee, Chicago Title Insurance Company, Creditor, etc., et al., Appellees. Keith M.
Case Date:June 09, 1986
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 712

791 F.2d 712 (9th Cir. 1986)

In re George I. BENNY and Alexandra Benny, Debtors. (Four Cases)

Alexandra BENNY, Debtor-Appellant,

v.

John M. ENGLAND, Trustee; Chicago Title Insurance Company,

Creditor, etc., et al., Appellees.

UNITED STATES of America, Intervenor-Appellant,

v.

John M. ENGLAND, Trustee, Chicago Title Insurance Company,

Creditor, etc., et al., Appellees.

Keith M. LUNDIN, Mark B. McFeely, William L. Norton, George

C. Paine, III, Hugh Robinson and Arthur N.

Votolato, Jr., Bankruptcy Judges,

Applicants for Intervention-Appellants,

v.

Alexandra BENNY, Debtor-Appellee.

UNITED STATES of America, Intervenor-Petitioner-Appellee,

v.

John M. ENGLAND, Trustee; Chicago Title Insurance Company,

Creditor, etc., et al., Appellees.

Nos. 84-2805, 85-1517, 85-1530 and 85-1765.

United States Court of Appeals, Ninth Circuit

June 9, 1986

Argued and Submitted July 10, 1985.

Page 713

[Copyrighted Material Omitted]

Page 714

Law Offices of John T. Hansen, John T. Hansen, Lewis C. Maldondo, San Francisco, Cal., for Benny.

Richard K. Willard, Asst. Atty. Gen., Joseph P. Russoniello, U.S. Atty., Paul Blankenstein, Appellate Litigation Counsel, Judith F. Ledbetter, Atty., Dept. of Justice, Washington, D.C., for U.S.

Steven R. Ross, Gen. Counsel to the Clerk, Charles Tiefer, Deputy Gen. Counsel to the Clerk, Michael L. Murray, Asst. Counsel to the Clerk, U.S. House of Representatives, Washington, D.C., for Speaker & Bipartisan Leadership Group of the House of Representatives.

Michael Davidson, Morgan J. Frankel, Office of Senate Legal Counsel, Washington, D.C., for U.S. Senate.

Laurence J. Kaiser, Kronish, Lieb, Shainswit, Weiner & Hellman, New York City, for Bankruptcy Judges.

Page 715

Appeals from the United States District Court for the Northern District of California.

Before: FERGUSON, NORRIS and WIGGINS, Circuit Judges.

WIGGINS, Circuit Judge:

These cases involve appeals from a district court's order, 44 BR 581, upholding the constitutionality of sections 106 and 121 of the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. No. 98-353, 98 Stat. 333 (the 1984 Act), and from an order denying intervention to a group of bankruptcy judges.

We dismiss appeals Nos. 84-2805 and 85-1517, challenging the constitutionality of the 1984 Act, for lack of jurisdiction. We also dismiss for lack of jurisdiction appeal No. 84-1765, raising the same issue, in which permission to appeal pursuant to 28 U.S.C. Sec. 1292(b) (1982) had previously been granted. Finally, in appeal No. 85-1530, we affirm the district court's decision denying the bankruptcy judge's motion to intervene as of right, and we conclude that the district court did not abuse its discretion in denying their motion for permissive intervention.

FACTS AND PROCEDURAL HISTORY

The involuntary bankruptcy proceeding that gives rise to these appeals was filed against the Bennys in 1982. After the bankruptcy court entered an order for relief of creditors, the Bennys moved the bankruptcy court for reconsideration. Alexandra Benny (Benny) also moved to dismiss the proceeding on the basis of the bankruptcy court's lack of jurisdiction. 1 She contended that the bankruptcy judge was improperly exercising jurisdiction over the bankruptcy proceedings because he had been unconstitutionally reinstated to office. The district court granted Benny's motion for partial withdrawal of the reference to bankruptcy court with respect to the constitutionality issue.

Benny subsequently filed a motion in district court seeking: (1) a declaration that Congress violated the Constitution in passing sections 106 and 121 of the 1984 Act, which extended bankruptcy judges' terms retroactively to June 28, 1984, and prospectively for two to four years; and (2) rescission of the Northern District of California's July 20, 1984, general reference order referring all bankruptcy matters to bankruptcy judges. The crux of her argument was that either the bankruptcy judgeships or the bankruptcy judges' terms of office had terminated on June 28, 1984, on the expiration of the Bankruptcy Reform Act of 1978, Pub.L. 95-598, 92 Stat. 2549 (the 1978 Act). She contended that the 1984 Act Secs. 106 and 121 constituted congressional reinstatement of the bankruptcy judges, which violated the Appointments Clause, U.S. Const. art. II, Sec. 2, cl. 2.

The Bennys' trustee in bankruptcy and a committee of the Bennys' unsecured creditors opposed the motion. Shortly thereafter, the Attorney General intervened pursuant to 28 U.S.C. Sec. 2403(a) (1982), and submitted a memorandum in support of Benny's position, arguing that the sections were unconstitutional. 2 The United States Senate (the Senate), the Speaker and Bipartisan Leadership Group of the House of Representatives (the House), and a group of bankruptcy judges (the bankruptcy judges) sought leave to intervene. None of the bankruptcy judges sits in this circuit. The court permitted the House and Senate to intervene. It did not rule on the bankruptcy judges' motion to intervene until after it had rendered a decision on the merits, but it permitted them to file a brief and present their arguments at the hearing.

The court heard argument on the motion on November 2, 1984. On November 30,

Page 716

1984, the court entered an order rejecting the constitutional challenge to the 1984 Act Secs. 106 and 121. Benny filed a timely notice of appeal (No. 84-2805) ten days later. On January 4, 1985, the United States also filed a timely notice of appeal (No. 85-1517).

Although the district court announced at the November 2 hearing that it was denying the bankruptcy judges' motion to intervene and treating the judges as amicus, it did not enter an order denying the motion to intervene until December 7. The bankruptcy judges filed a timely notice of appeal (No. 85-1530) on January 8. This court consolidated Benny's, the United States', and the bankruptcy judges' appeals on February 11.

The district court entered an order on February 12 certifying its order that upheld the constitutionality of sections 106 and 121 for immediate appeal pursuant to 28 U.S.C. Sec. 1292(b). The United States filed a petition for leave to appeal on February 25. On May 21, this court granted the petition and directed the parties to discuss whether 28 U.S.C. Sec. 1292(b) applies to this case. In the same order, the court consolidated the appeal (No. 85-1765) with the appeals described above.

DISCUSSION

I.

Nos. 84-2805 and 85-1517

Order Affirming Constitutionality of 1984 Act

At the outset, we are obligated to determine our own jurisdiction over these appeals. See Pizza of Hawaii, Inc. v. Shakey's, Inc. (In re Pizza of Hawaii, Inc., 761 F.2d 1374, 1377 (9th Cir.1985). Debtor-appellant Benny and intervenor-appellant United States both appeal the district court's order holding sections 106 and 121 of the 1984 Act constitutional. Because both appeals arise in the same jurisdictional posture, we consider them together in examining the possible bases for jurisdiction in this court.

  1. 28 U.S.C. Sec. 158(d) as a Basis for Jurisdiction

    Jurisdiction over these two appeals arguably exists under the jurisdictional component of the 1984 Act, codified at 28 U.S.C. Sec. 158. 3 Section 158(d) provides this court with jurisdiction over judgments from district courts "entered under subsection (a) of this section." Section 158(a) vests district courts with jurisdiction only over appeals from bankruptcy courts. By its literal terms, therefore, section 158 vests this court with jurisdiction over district courts' decisions only if those decisions are rendered on appeal from bankruptcy courts. 1984 Act Sec. 104(a), 28 U.S.C. Sec. 158(a), (d).

    The order at issue in these appeals was entered by the district court in the first instance, rather than on appeal from a bankruptcy court. Because the district court had withdrawn the reference of the constitutional issue from the bankruptcy court, the bankruptcy court did not consider the issue. Thus the order here does not fall within the literal language of section 158(d).

    We are not persuaded to extend our jurisdiction under section 158 beyond its literal terms. First, we are hesitant to do so without some clear indication that such an extension is consistent with congressional intent. Here, no such indication exists. Moreover, the 1984 Act uses much narrower language than its predecessor, the 1978 Act, in conferring specific bankruptcy jurisdiction on this court. The 1978 Act gave this court jurisdiction over any "appeal from a final judgment, order, or decree of a ... District court of the United States,"

    Page 717

    without specifying whether such final orders must have been entered in appeals from bankruptcy courts. 1978 Act, Sec. 236(a) (formerly codified at 28 U.S.C. Sec. 1293(b) (1982)). The narrowing of this language in the 1984 Act suggests a limiting of the circumstances under which this avenue of appeal may be used and is inconsistent with the expansive reading necessary to save our jurisdiction under section 158(d).

    We note that the precedent of this circuit is not particularly helpful in determining the propriety of expanding our jurisdiction under section 158 beyond its literal terms. An early opinion involving the 1984 act concludes that section 158 is "the exclusive basis of jurisdiction in the appellate courts in bankruptcy matters." Teleport Oil Co. v. Security Pacific National Bank (In re Teleport Oil Co.), 759 F.2d 1376, 1378 (9th Cir.1985). Because section 158 is silent about appeal of orders entered in the district court in the first instance, Teleport suggests that we would have to stretch section 158 beyond its literal terms to establish appellate jurisdiction in this case. 4 Later cases, however, have found both concurrent and exclusive appellate jurisdiction over various bankruptcy matters pursuant to sections other...

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64 practice notes
  • 130 F.R.D. 410 (D.Ariz. 1990), CIV 88-1854 PHX PGR, Yniguez v. Mofford
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Arizona
    • 3 Abril 1990
    ...unconstitutionality could affect their interests is too tenuous to meet the impairment requirement of Rule 24(a)(2). See In re Benny, 791 F.2d 712, 721 (9th Cir.1986). While stare decisis may, in appropriate circumstances, supply the practical impairment required for intervention of right, ......
  • 4 F.3d 1556 (10th Cir. 1993), 92-1121, In re Investment Bankers
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Tenth Circuit
    • 17 Septiembre 1993
    ...Tom Carter Enters., Inc., 44 B.R. 605, 606-07 (C.D.Cal.1984); In re Benny, 44 B.R. 581 (N.D.Cal.1984), dismissed in part on other grounds, 791 F.2d 712 (9th Cir.1986); In re Sweetwater, 55 B.R. 724, 726-28 (D.Utah 1985) aff'd on other grounds and rev'd on other grounds, 884 F.2d 1323 (10th ......
  • 954 F.2d 1169 (6th Cir. 1992), 91-3228, In re Baker & Getty Financial Services
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • 24 Enero 1992
    ...re Hester), 899 F.2d 361, 365 (5th Cir.1990); In re First S. Sav. Ass'n, 820 F.2d 700, 708 (5th Cir.1987); Benny v. England (In re Benny), 791 F.2d 712, 718 n. 5 (9th Cir.1986). Two other circuits have implied that they would follow this position. See Brown v. Pennsylvania State Employees C......
  • 64 B.R. 912 (Bkrtcy.W.D.Mo. 1986), 85-0252-1-3-11, Matter of Phillips House Associates, Inc.
    • United States
    • Federal Cases United States Bankruptcy Courts Eighth Circuit
    • 4 Septiembre 1986
    ...to the appellate court cannot be made unless there was an initial appeal of the same issue from a bankruptcy court decision, In re Benny, [791 F.2d 712] 1986 CCH Bankruptcy L.Rep. Para. 71.178 (9th Cir.1986); a ruling that the 'clearly erroneous' standard of review implies that the bankrupt......
  • Free signup to view additional results
64 cases
  • 130 F.R.D. 410 (D.Ariz. 1990), CIV 88-1854 PHX PGR, Yniguez v. Mofford
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Arizona
    • 3 Abril 1990
    ...unconstitutionality could affect their interests is too tenuous to meet the impairment requirement of Rule 24(a)(2). See In re Benny, 791 F.2d 712, 721 (9th Cir.1986). While stare decisis may, in appropriate circumstances, supply the practical impairment required for intervention of right, ......
  • 4 F.3d 1556 (10th Cir. 1993), 92-1121, In re Investment Bankers
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Tenth Circuit
    • 17 Septiembre 1993
    ...Tom Carter Enters., Inc., 44 B.R. 605, 606-07 (C.D.Cal.1984); In re Benny, 44 B.R. 581 (N.D.Cal.1984), dismissed in part on other grounds, 791 F.2d 712 (9th Cir.1986); In re Sweetwater, 55 B.R. 724, 726-28 (D.Utah 1985) aff'd on other grounds and rev'd on other grounds, 884 F.2d 1323 (10th ......
  • 954 F.2d 1169 (6th Cir. 1992), 91-3228, In re Baker & Getty Financial Services
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • 24 Enero 1992
    ...re Hester), 899 F.2d 361, 365 (5th Cir.1990); In re First S. Sav. Ass'n, 820 F.2d 700, 708 (5th Cir.1987); Benny v. England (In re Benny), 791 F.2d 712, 718 n. 5 (9th Cir.1986). Two other circuits have implied that they would follow this position. See Brown v. Pennsylvania State Employees C......
  • 64 B.R. 912 (Bkrtcy.W.D.Mo. 1986), 85-0252-1-3-11, Matter of Phillips House Associates, Inc.
    • United States
    • Federal Cases United States Bankruptcy Courts Eighth Circuit
    • 4 Septiembre 1986
    ...to the appellate court cannot be made unless there was an initial appeal of the same issue from a bankruptcy court decision, In re Benny, [791 F.2d 712] 1986 CCH Bankruptcy L.Rep. Para. 71.178 (9th Cir.1986); a ruling that the 'clearly erroneous' standard of review implies that the bankrupt......
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