Statek Corp. v. Development Specialists, Inc.
2015 U.S. App. LEXIS 22755
| 2d Cir. | 2015Background
- Statek sued its former law firm Coudert for malpractice after discovering in 2004 that Coudert had helped its former controller launder assets; Statek filed a proof of claim in Coudert’s Chapter 11 bankruptcy and attached the original Connecticut complaint.
- The bankruptcy court disallowed Statek’s claim as time-barred under New York choice-of-law (applying N.Y. C.P.L.R. § 202) and denied Statek’s Rule 59(e) motion for reconsideration, treating Statek’s “transferee court”/choice-of-law argument as a new argument not cognizable on reconsideration.
- This Court in Statek Corp. v. Dev. Specialists (In re Coudert Bros. LLP) (Coudert I), 673 F.3d 180, reversed the denial of reconsideration and instructed the bankruptcy court to apply Connecticut choice-of-law rules (treating the bankruptcy court as the transferee court) on remand, but did not expressly rule on whether the argument was a new one for Rule 59(e) purposes.
- On remand the bankruptcy court (1) analyzed Connecticut choice-of-law but concluded no “clear answer” on timeliness and (2) instead relied on its earlier alternative holding that Statek’s transferee-court argument was a new argument and therefore not cognizable on reconsideration, and again denied reconsideration.
- The district court affirmed the bankruptcy court’s denials. This appeal challenges whether the bankruptcy court complied with Coudert I’s mandate and asks for reinstatement of Statek’s claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court complied with this Court’s mandate to apply Connecticut choice-of-law on remand | Coudert I required the bankruptcy court to apply Connecticut choice-of-law and therefore to decide timeliness under Connecticut law; the court failed to give the mandate full effect | The remand left open other grounds; the bankruptcy court could still rely on its prior alternative holding that the argument was new | Reversed: the bankruptcy court failed to follow the mandate — it did not meaningfully apply Connecticut law and improperly relied on its prior alternative holding |
| Whether Statek’s “transferee court” argument could be treated as a new argument barred on reconsideration | Even if raised first on reconsideration, this Court considered the argument on appeal and remanded — the lower court may not ignore that ruling as a “new argument” | The argument was not squarely presented earlier and law-of-the-case permits adhering to prior rulings | Held for Statek: by considering and remanding on that argument, this Court impliedly foreclosed the bankruptcy court’s reliance on the “new argument” bar |
| Appropriate remedy where mandate not given effect | Statek sought reversal of the denials of reconsideration, vacatur of the claim-disallowance, and reinstatement of the claim | Plan Administrator argued the bankruptcy court’s alternative grounds could remain and that further proceedings were permissible | Remedy ordered: reverse denials of reconsideration, vacate the Claim Disallowance Order, reinstate Statek’s claim, and permit further proceedings consistent with opinion |
Key Cases Cited
- Statek Corp. v. Dev. Specialists (In re Coudert Bros. LLP), 673 F.3d 180 (2d Cir. 2012) (prior appellate opinion directing application of Connecticut choice-of-law on remand)
- E.I. du Pont de Nemours & Co. v. United States, 366 U.S. 316 (U.S. 1961) (mandate must be scrupulously and fully carried out)
- Briggs v. Pa. R.R. Co., 334 U.S. 304 (U.S. 1948) (mandate rule requires lower courts to follow appellate mandates)
- Sprague v. Ticonic Nat’l Bank, 307 U.S. 161 (U.S. 1939) (mandate controls matters within its compass; issues necessarily implied by mandate are foreclosed)
- Puricelli v. Republic of Argentina, 797 F.3d 213 (2d Cir. 2015) (lower court has no discretion in carrying out an appellate mandate)
- Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165 (2d Cir. 2014) (mandate may impliedly resolve issues not expressly decided)
- Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., 671 F.3d 261 (2d Cir. 2012) (limitations on raising alternative dispositive grounds on remand)
- Ginett v. Comput. Task Grp., Inc., 11 F.3d 359 (2d Cir. 1993) (mandate must be given full effect and followed by lower courts)