In re Charter Co.
| Decision Date | 23 August 1988 |
| Docket Number | Bankruptcy No. 87-98-Civ-J-12,84-289-BK-J-GP. |
| Parties | In re The CHARTER COMPANY, et al., Debtors. The CERTIFIED CLASS IN the CHARTER SECURITIES LITIGATION and Certain Individual Members Thereof, Appellants, v. The CHARTER COMPANY, et al., Appellees. |
| Court | U.S. District Court — Middle District of Florida |
Nicholas E. Chimicles, Kenneth A. Jacobsen, James R. Malone, Jr., Denise Davis Schwartzman, Haverford, Pa., and A. August Quesada, Jr., Jacksonville, Fla., for appellants.
Stephen D. Busey, Jacksonville, Fla., for appellees.
ORDER ON MOTION TO DISMISS APPEAL
This is an appeal of an order of the Bankruptcy Court confirming a plan of reorganization. This cause is presently before the Court on The Charter Company, Charter Oil Company, Charter International Oil Company, Charter Crude Oil Company, and Charter International Finance N.V.'s ("debtors" or "appellees") Motion to Dismiss Appeal, filed herein on April 6, 1987. The Certified Class in the Charter Securities Litigation and Certain Individual Members Thereof ("appellants") filed a memorandum of law in opposition to said motion on May 8, 1987.1 A hearing on the matter was held on August 19, 1987. On December 4, 1987, appellees filed supplemental authority in support of its motion. Appellants filed a response to appellees' supplement on December 18, 1987.
Thereafter, on February 24, 1988, the Honorable John H. Moore, II, handed down an opinion in The Certified Class in the Charter Securities Litigation and Certain Individual Members Thereof v. The Charter Co., Case No. 86-1079-Civ-J-16 ("Certified Class I"), affirming the Bankruptcy Court's disallowance of the proof of claim filed by class appellant. Judge Moore's decision prompted this Court to order the parties to file supplemental briefs addressing the jurisdictional issues of standing and mootness. See Order entered May 13, 1988.2
Upon consideration of the submissions of counsel, the arguments presented at the August 19, 1987 hearing, and upon review of the law applicable hereto, the Court is of the opinion that this appeal should be dismissed. The reasoning of the Court follows.
Appellants seek reversal of an order entered December 18, 1986, by the United States Bankruptcy Court for the Middle District Florida, Jacksonville Division in which the Court confirmed the fourth amended joint plan of reorganization of appellees. Appellants contend that they have securities fraud claims against debtors' estates. The order of the Bankruptcy Court has not been stayed by the Bankruptcy Court or this Court as provided for in Bankruptcy Rule 8005. Three issues are presently before the Court: (1) whether class appellant has standing to object to the reorganization plan in light of the district court's affirmation of the Bankruptcy Court's disallowance of the class proof of claim; (2) whether individual class members who filed claims are parties to this appeal apart from their membership in the class; and (3) whether the reorganization plan has been so substantially consummated that effective relief is no longer available to appellants.
The starting point for determining whether class appellant has standing to pursue this appeal is to decide whether in the first instance class appellant was a "party in interest" on December 18, 1986, the date the Bankruptcy Court confirmed the reorganization plan. See 11 U.S.C. § 1128(b) (). If class appellant was not among those who could object to the confirmation of the plan, it follows that class appellant lacks standing to appeal the Bankruptcy Court's order confirming the plan.3
The focus of this Court's analysis is the opinion authored by the District Court in Certified Class I. In that case, the Court affirmed the Bankruptcy Court's decision granting appellees' objection to the class proof of claim, holding that a class proof of claim is not allowable in a bankruptcy proceeding. Id. at 5. Alternatively, the Court determined that even if class proofs of claim are allowable in bankruptcy proceedings, class appellant failed to obtain class certification, or to even apply for class certification by November 19, 1988, the date by which "all entities" had to file proofs of claim. The class proof of claim, therefore, was properly disallowed as untimely. Id. at 5-6.
The decision in Certified Class I serves to constructively eliminate class appellant's claimed status as a party in interest who can object to the confirmation of the plan; therefore, the class appellant has no standing to pursue this appeal. This determination flows from the doctrine of "the law of the case" and its application to the circumstances of this case. Applying this legal precept to the instant case leads to the conclusion that absent a claim, class appellant has no stake in the plan and therefore cannot object to it.
Class appellant contends that it will in fact be affected by the plan. The focal point of class appellant's argument is that the affirmation of the Bankruptcy Court's disallowance of its claim in Certified Class I is now on appeal to the Eleventh Circuit Court of Appeals. According to class appellant, "the certified class is vigorously pursuing the appeal because its counsel believes that the Eleventh Circuit will rule that the claim should not have been disallowed." See Appellants' Supplemental Memorandum of Law in Opposition to Appellees' Motion to Dismiss Appeal, at p. 4. Characterizing its claim as "unresolved," class appellant claims that the pendency of the appeal in Certified Class I is sufficient to classify it as a party in interest under 11 U.S.C. § 1128(b). As an interested party, then, it can appeal the confirmation order. This argument, however, runs counter to the law of the case doctrine.
The law of the case doctrine has been described as "an amorphous concept." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983). It is well-settled, however, that under this precept decisions by an appellate court are binding upon all subsequent proceedings in the same case, absent exceptional circumstances. Joshi v. Florida State University Health Center, 763 F.2d 1227, 1231-32 (11th Cir.1985), cert. denied, 474 U.S. 948, 106 S.Ct. 347, 88 L.Ed.2d 293 (1985); Piambino v. Bailey, 757 F.2d 1112, 1120 (11th Cir.1985), cert. denied 476 U.S. 1169, 106 S.Ct. 2889, 90 L.Ed.2d 976; Wheeler v. City of Pleasant Grove, 746 F.2d 1437, 1440 (11th Cir.1984). As the Fifth Circuit Court of Appeals observed in White v. Murtha, 377 F.2d 428, 431 (5th Cir.1967) (footnotes omitted):
The "law of the case" rule is based on the salutary and sound public policy that litigation should come to an end. It is predicated on the premise that "there would be no end to a suit if every obstinate litigant could, by repeated appeals, compel a court to listen to criticisms on their opinions or speculate of chances from changes in its members," and that it would be impossible for an appellate court "to perform its duties satisfactorily and efficiently" and expeditiously "if a question, once considered and decided by it were to be litigated anew in the same case upon any and every subsequent appeal" thereof.
The law of the case doctrine "comes into play only with respect to issues previously determined." Quern v. Jordan, 440 U.S. 332, 347 n. 18, 99 S.Ct. 1139, 1148 n. 18, 59 L.Ed.2d 358 (1979). The issues, however, do not have to be determined explicitly because the law of the case "applies to issues decided by necessary implication." Gaines v. Dougherty County Board of Education, 775 F.2d 1565, 1568 (11th Cir. 1985); accord Conway v. Chemical Leaman Tank Lines, Inc., 644 F.2d 1059, 1062 (5th Cir. Unit A 1981).
A corollary of the law of the case doctrine mandates, as a general rule, that one panel of appellate tribunal not revisit questions which another panel has decided on a prior appeal in the same case. In re Sonoma, 34 B.R. 758, 760 (9th Cir.BAP 1983). A district court which hears an appeal of a decision of the Bankruptcy Court sits as an appellate court. See In re Neis, 723 F.2d 584, 588 (7th Cir.1983).4 Since this appeal emanates from the same case which gave rise to the appeal in Certified Class I, and is properly viewed as a subsequent appeal, this Court, in its appellate capacity, must follow the law of the case set down by the Court in Certified Class I. Stated another way, this Court, absent a change in circumstances, must not reconsider issues expressly or impliedly resolved in the earlier appeal.5
In Certified Class I, Judge Moore expressly decided that class proofs of claim are not allowable in bankruptcy proceedings. By necessary implication, he determined that class appellant was not a party in interest under 11 U.S.C. § 1128 when the plan was confirmed. To hold that a party without a cognizable claim qualifies as a party in interest who can object to the confirmation of the plan requires a leap in logic that this Court is unwilling to take.6 Absent a claim, class appellant was not an interested party when the order of confirmation entered and is not now "`directly and adversely affected pecuniarily'" by the plan. Kane, 843 F.2d at 641.7 Class appellant, therefore, has no standing to pursue this appeal.
It appears that two members of the class properly filed separate, individual proofs of claim. The parties agree that the Bankruptcy Court did not enter an order disallowing these individual claims. The reorganization plan, however, does not provide compensation for the individual claimants. Individual appellants assert that they, standing alone without the class, are parties in interest because consummation of the plan serves to discharge their claims. See 11 U.S.C. § 1141(d).8
While the individual claimants may in fact have a stake in the plan, and might...
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