Hanna v. Philadelphia Asbestos Co., 83-1744

Decision Date27 August 1984
Docket NumberNo. 83-1744,83-1744
Parties, Bankr. L. Rep. P 70,003 Samuel HANNA and Theresa Hanna, Administratrix of the Estate of Samuel Hanna, and Parents and Natural Guardians of Maureen Hanna, Appellees, v. PHILADELPHIA ASBESTOS COMPANY, Philadelphia Asbestos Company T/A Pacor, Inc. and Pacor. Appeal of PACOR, INC., Appellant.
CourtU.S. Court of Appeals — Third Circuit

W. Jeffrey Garson (Argued), John H. McCarthy, Michael Halprin, Rawle & Henderson, Philadelphia, Pa., for appellant Pacor, Inc.

Armin Feldman (Argued), Stanley P. Kops, Avram G. Adler, Adler & Kops, Philadelphia, Pa., for appellees Theresa Hanna and Maureen Hanna.

Before GARTH and SLOVITER, Circuit Judges and FISHER, District Judge. *


GARTH, Circuit Judge.

This case presents, in a somewhat different procedural context, the same issues as those in In re Pacor, Inc. v. Higgins, 743 F.2d 984, also decided today. For much the same reasons, therefore, we affirm.


Theresa Hanna, as Administratrix of the Estate of Samuel Hanna, brought a products liability-personal injury action against the Philadelphia Asbestos Co. (trading as "Pacor") in the Pennsylvania Court of Common Pleas in September, 1976, seeking damages due to exposure to asbestos. In December, 1977, Pacor impleaded Johns-Manville Corporation, the alleged manufacturer of the asbestos, as a third party defendant. Manville subsequently filed a chapter 11 reorganization bankruptcy petition on August 26, 1982, and on April 22, 1983. 1 Pacor filed a Petition for Removal in the bankruptcy court for the Eastern District of Pennsylvania, seeking to remove the Hanna-Pacor action, along with the Pacor-Manville third party action, to federal court. At the same time, Pacor moved to transfer venue of the controversy to the Southern District of New York, to be joined with the rest of the Manville bankruptcy administration.

Hanna moved to remand her action against Pacor to state court, citing equitable considerations of time and convenience. The bankruptcy court, however, denied the motion, and granted Pacor's motion to transfer venue of the entire Hanna-Pacor-Manville controversy to the Southern District of New York. Hanna then sought review of the bankruptcy court's determination in the district court. After a hearing, the district court found that the equities of the situation weighed in favor of remanding the matter to state court, where it would be tried more expeditiously and conveniently. The district court, evidencing uncertainty as to the exact procedural posture of the case, stated in its opinion:

to the extent that this is considered an appeal from the bankruptcy judge's decision, I will reverse that decision. To the extent it is considered to be a review of a termination [sic] by the bankruptcy judge, I will in reviewing it determine that the order should not be entered and in reviewing the application for remand, determine that the remand is proper.

Tr. at 51, App. at 112. It therefore ordered the removed Hanna-Pacor action remanded to the Pennsylvania Court of Common Pleas. It is from this order that Pacor appeals.


Pacor's principal contention is that the district court had no jurisdiction to review the bankruptcy court's order transferring venue to the Southern District of New York. It claims that the transfer order should be construed as an order "denying remand," thus making it unreviewable under 28 U.S.C. Sec. 1478:

(a) A party may remove any claim or cause of action in a civil action, other than a proceeding before the United States Tax Court or a civil action by a Government unit to enforce such governmental unit's police or regulatory power, to the bankruptcy court for the district where such civil action is pending, if the bankruptcy courts have jurisdiction over such claim or cause of action.

(b) The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order under this subsection remanding a claim or cause of action, or a decision not so remanding, is not reviewable by appeal or otherwise.

(Emphasis added).

Alternatively, Pacor contends that the transfer order is the equivalent of a decision to abstain, and thus would be unreviewable pursuant to 28 U.S.C. Sec. 1471(d):

(d) Subsection (b) or (c) of this section does not prevent a district court or a bankruptcy court in the interest of justice, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11. Such abstention, or a decision not to abstain, is not reviewable by appeal or otherwise.

We decline to engage in the tenuous reasoning required to accept Pacor's argument. In enacting the relevant statutory provisions pertinent to the remand issue before us, Congress has evinced a knowledge of the differences among a decision to remand, a decision to abstain, and a decision to transfer venue. Indeed, Congress provided separately for each, by specific statute. In the case of transfer of venue orders, that provision is contained in 28 U.S.C. Sec. 1475:

A bankruptcy court may transfer a case under title 11 or a proceeding arising under or related to such a case to a bankruptcy court for another district, in the interest of justice and for the convenience of the parties.

Section 1475 itself contains no prohibition on review unlike section 1471(d) and section 1478(b). 2 Pacor therefore attempts to engraft these other statutory provisions onto section 1475, which on their face do not apply, in order to deprive the district court, and ultimately this court, of jurisdiction. We will not impose such unnatural interpretations onto those statutes.

An order transferring venue is, in itself, neither the equivalent of an order denying remand nor of an order abstaining from decision, and we decline to blur that which Congress itself kept apart. This is especially appropriate in this instance, given the rule that a statute should not be interpreted as precluding judicial review absent clear evidence of Congressional intent. See Johnson v. Robison, 415 U.S. 361, 373-74, 94 S.Ct. 1160, 1168-69, 39 L.Ed.2d 389 (1974).


More fundamentally, Pacor's contention that the district court could not review the decision of the bankruptcy court to transfer the Hanna-Pacor action miscomprehends the respective roles of the district court and bankruptcy judges in proceedings related to bankruptcy, especially in the aftermath of Northern Pipeline Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). 3

Northern Pipeline, of course, held that non-Article III judges such as those of the bankruptcy court could not constitutionally exercise the broad jurisdiction conferred by 28 U.S.C. Sec. 1471(b) over matters "related to" bankruptcy. In response, the district courts adopted local emergency rules which provided that district judges would oversee the bankruptcy court in related proceedings, and would itself enter orders and judgments in connection with such proceedings. In essence, the district court became the bankruptcy court for these purposes. This court has upheld the exercise by the district court of bankruptcy jurisdiction. See Gold v. Johns-Manville Corp., 723 F.2d 1068, 1075 (3d Cir.1983); Coastal Steel Corp. v. Tilghman Wheelabrator, Ltd., 709 F.2d 190, 199 (3d Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 349, 78 L.Ed.2d 315 (1983).

For jurisdictional purposes, therefore, Hanna's "appeal" to the district court was not really an appeal at all, but more in the nature of a review of a recommendation made by the bankruptcy judge. It is the district court, however, which now exercises control over proceedings related to bankruptcy. Thus, even if a transfer order were the equivalent of an order denying remand or an order abstaining, the prohibitions on appellate review of such orders are simply inapplicable, since the district court is not engaging in appellate review. Rather, it is acting in the place of the bankruptcy court, and acts upon motions to remand or abstain as a court of original jurisdiction.


Pacor also cites to the Local Emergency Rules of the Eastern District of Pennsylvania, as support for its jurisdictional arguments. That Rule, enacted in response to Northern Pipeline, provides in part:

(c) Reference to Bankruptcy Judges

(1) All cases under Title 11 and all civil proceedings arising under Title 11 or arising in or related to cases under Title 11 are referred to the bankruptcy judges of this district.

(2) The reference to a bankruptcy judge may be withdrawn by the district court at any time on its own motion....

(d) Powers of Bankruptcy Judges

(3)(A) Related proceedings are those civil proceedings that in the absence of a petition in bankruptcy, could have been brought in a district court or a state court. Related proceedings include, but are not limited to, claims brought by the estate against parties who have not filed claims against the estate ....

(B) In related proceedings the bankruptcy judge may not enter a judgment or dispositive order, but shall submit findings, conclusions, and a proposed judgment or order to the district judge, unless the parties to the proceeding consent to entry of the judgment or order by the bankruptcy judge.

(e) District Court Review

(2)(A) A district judge shall review:

(iii) A proposed order or judgment lodged under paragraph (d)(3) whether or not any notice of appeal or application for leave to appeal has been filed.

(B) In conducting review, the district judge may hold a hearing and may receive such evidence as appropriate and may accept, reject, or modify, in whole or in part, the order or judgment of the bankruptcy judge, and need give no deference to the findings of the bankruptcy judge. At the conclusion of the review the district judge shall enter an appropriate order or judgment.

Pacor argues that the...

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