989 F.3d 919
11th Cir.2021Background
- Charles Breland, Jr. voluntarily filed for Chapter 11 and served as debtor-in-possession, with statutory fiduciary duties to creditors.
- Creditors alleged Breland transferred assets and defrauded them; the bankruptcy court appointed a trustee and removed Breland as debtor-in-possession.
- Breland argued the trustee’s appointment violated his Thirteenth Amendment right against "involuntary servitude," asserting the trustee would divert his post-petition earnings to the estate and strip his ability to dismiss or convert the case.
- The bankruptcy court dismissed the Thirteenth Amendment claim as unripe; the district court affirmed, holding Breland lacked Article III injury-in-fact (and thus standing).
- The Eleventh Circuit reversed: it held that removal as debtor-in-possession—and the attendant loss of statutory rights and control over the estate—constitutes a concrete, traceable, and redressable injury giving Breland Article III standing; the case is remanded for consideration of the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Breland has Article III standing to bring a Thirteenth Amendment challenge to the trustee appointment | Breland: removal forces him to lose control and have post-petition earnings applied to creditors—effectively involuntary servitude | Courts/creditors: claim is unripe/no injury-in-fact until a plan forces Breland to work or devote income to the estate | The loss of debtor-in-possession statutory rights/authority is a concrete, traceable, and redressable injury; Breland has Article III standing; remanded for merits |
Key Cases Cited
- Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167 (2000) (articulates standing elements: injury-in-fact, causation, redressability)
- Kernel Records Oy v. Mosley, 694 F.3d 1294 (11th Cir. 2012) (appellate courts may affirm on any ground supported by the record)
- Stalley ex rel. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229 (11th Cir. 2008) (dismissal for lack of subject-matter jurisdiction is without prejudice)
- United States v. American Ry. Exp. Co., 265 U.S. 425 (1924) (appellee may not, without cross-appeal, seek to convert a dismissal without prejudice into one with prejudice)
- In re Sublett, 895 F.2d 1381 (11th Cir. 1990) (standard of review for bankruptcy and district court legal determinations is de novo)
- In re Walker, 515 F.3d 1204 (11th Cir. 2008) (appointment or removal of a bankruptcy trustee is a final, appealable order)