In re: HOFFINGER INDUSTRIES, INC., Debtor. Leesa Bunch, Creditor-Appellant, v. Hoffinger Industries, Inc., doing business as Doughboy Recreational Company, doing business as Lomart Industries, doing business as Environmental Products and Research, Inc., doing business as Prest Metals, doing business as Pools & Accessories Unlimited, Inc. Debtor-Appellee.
No. 02-3323.
United States Court of Appeals, Eighth Circuit.
Submitted: April 14, 2003. Filed: June 2, 2003.
329 F.3d 948
Stanley D. Smith, argued, Little Rock, AR (Lance R. Miller, Charles R. Camp and Derrick W. Smith, on the brief), for appellees.
Before MORRIS SHEPPARD ARNOLD, BEAM, and MELLOY, Circuit Judges.
MORRIS SHEPPARD ARNOLD, Circuit Judge.
This case involves the propriety of a bankruptcy court‘s1 decision to annul the automatic stay of
Hoffinger filed a petition under Chapter 11 of the United States Bankruptcy Code around a month after Leesa Bunch was awarded more than $13,000,000 from Hoffinger in a products liability suit in California state court. When the bankruptcy petition was filed, the provisions of
I.
Ms. Bunch argues that the bankruptcy court lacked subject-matter jurisdiction over Hoffinger‘s motion for relief from the stay. For this contention, she relies first on the so-called Rooker-Feldman doctrine. Under this doctrine, lower federal courts, including bankruptcy courts, do not have subject-matter jurisdiction over challenges to state court decisions in judicial proceedings, see Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983); In re Ferren, 203 F.3d 559, 559-560 (8th Cir.2000) (per curiam), and thus a lower federal court has jurisdiction only over claims that are not “‘inextricably intertwined’ with claims adjudicated in state court.” Fielder v. Credit Acceptance Corp., 188 F.3d 1031, 1034 (8th Cir.1999) (quoting Feldman, 460 U.S. at 483 n. 16).
The Rooker-Feldman doctrine, however, simply has no application to the instant case. Under Rooker-Feldman, “a state claim is inextricably intertwined if the federal challenge succeeds only to the extent that the state court wrongly decided the issues before it. That is, Rooker-Feldman precludes a federal action if the relief requested in the federal action would effectively reverse the state court decision or void its holding.” Snider v. City of Excelsior Springs, Mo., 154 F.3d 809, 811 (8th Cir.1998) (internal citation omitted). Because a grant of retroactive relief by a bankruptcy court does not effectively reverse any state court ruling, Rooker-Feldman is beside the point. We similarly refuse Ms. Bunch‘s request to create an abstention doctrine to fit her case.
Ms. Bunch also asserts that the bankruptcy court had no jurisdiction to annul the stay because the deadline to file an appeal under relevant California law, as well as the sixty-day extension granted to debtors-in-possession under
if applicable nonbankruptcy law ... fixes a period within which the debtor ... may file any pleading, demand, notice, ... or perform any other similar act, and such period has not expired before the date of the filing of the petition, the trustee may only file, cure, or perform, as the case may be, before the later of —
(1) the end of such period ... ; or
(2) 60 days after the [petition has been filed].
This argument, however, suffers from several flaws, the first of which is that it does not go to the bankruptcy court‘s jurisdiction. The matter of jurisdiction has to do only with “the court‘s statutory or constitutional power to adjudicate the case,” United States v. Cotton, 535 U.S. 625, 630 (2002) (internal quotation omitted), which exists here pursuant to
We believe that Ms. Bunch‘s argument is more appropriately directed to the bankruptcy court‘s legal authority to annul the stay once certain dates had passed and to the propriety of exercising that authority here. We reach these issues in turn.
II.
Bankruptcy courts have the power to annul an automatic stay retroactively for cause pursuant to
Ms. Bunch‘s argument to the contrary (described above) fails to recognize how different sections of the bankruptcy code work together to alter nonbankruptcy appellate deadlines that are relevant to certain actions stayed by
Because an appeal by a debtor-in-possession (on behalf of a debtor) in a case in which the debtor originally was the defendant is a “‘continuation’ of a ‘proceeding against the debtor,‘” see Farley v. Henson, 2 F.3d 273, 275 (8th Cir.1993), we believe that
if applicable nonbankruptcy law ... fixes a period for ... continuing a civil action in a court other than a bankruptcy court on a claim against the debtor ... and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of —
(1) the end of such period ... ; or
(2) 30 days after notice of the termination or expiration of the stay under section 362 ...
We note the obvious fit between the provisions in
Thus, when the debtor has a deadline for filing an appeal prior to bankruptcy, if the action was originally brought against the debtor, the trustee [or debtor-in-possession] need not meet the 60 day limit of section 108(b) since the action would have been stayed by section 362. There is no need to file pleadings or other briefs in a proceeding which has been stayed; section 108(c) will be applicable if the stay terminates.
2 Collier on Bankruptcy ¶ 108.03[2], at 108-10 (15th ed. rev.2003); see id., ¶ 108.04[1], at 108-12 to 108-13; cf., e.g., Raley v. Lile, 861 S.W.2d 102, 104 (Tex.Ct.App.1993). But see Production Credit Ass‘n of Minot v. Burk, 427 N.W.2d 108, 111 (N.D.1988) (deeming
We of course recognize that certain appeals, such as those involving “criminal action[s]” or “a governmental unit‘s ... police and regulatory power,” are not subject to the automatic stay in the first instance, see
For similar reasons, we reject Ms. Bunch‘s reliance on Johnson v. First Nat‘l Bank of Montevideo, Minn., 719 F.2d 270 (8th Cir.1983), cert. denied, 465 U.S. 1012 (1984), for the proposition that, although the appeal is stayed, the period to file the notice of appeal is not suspended by the automatic stay. We held in Johnson, 719 F.2d at 276-78, that
Finally, we reject Ms. Bunch‘s contention that
III.
Because of the additional time allowed by
Although void because of the stay, Hoffinger‘s notice of appeal filed in October, 2001, was timely under California law. Around a month later, Hoffinger moved in the bankruptcy court for relief from the automatic stay prospectively to pursue available post-judgment motions and appeals in the California litigation, and the court granted the motion on December 27. Due to difficulties in the clerk‘s office of the bankruptcy court, however, the court‘s action was not entered on the docket until January 10, 2002. Hoffinger maintains, moreover, that it first received notification on January 29, an assertion that the bankruptcy court later “accepted ... as true.”
On February 21, Ms. Bunch filed a motion to dismiss in the California Court of Appeals, arguing that because the bankruptcy court‘s relief from the stay was only prospective, the notice of appeal was still void. The next day, Hoffinger filed a second notice of appeal in the California case
The bankruptcy court believed that retroactive relief was appropriate because, among other reasons, the amount owed Ms. Bunch (which was, as we have said, over $13,000,000) was essential to the resolution of the bankruptcy case, and, had Hoffinger moved to lift the stay before filing its first notice of appeal, there would have been no basis to deny the motion.
Ms. Bunch argues that it was inappropriate for the bankruptcy court to grant retroactive relief because she lost her right to file a cross-appeal as a result. After Hoffinger filed its first notice of appeal, Ms. Bunch did not file a cross-appeal. She contends that she did not do so because, under California law, the twenty-day period to file a cross-appeal begins only after a valid notice of appeal has been filed; since she believed that the original notice of appeal was void because of the stay, she did not believe that she was able to file a cross-appeal. The bankruptcy court rejected this argument, on the ground that “nothing prevented Bunch from obtaining relief from the stay to pursue a cross-appeal in October when the Debtor filed its notice of appeal.” The bankruptcy court further noted its belief that Ms. Bunch had not lost her right to file a cross-appeal, because of the time extensions provided by
At the outset, we note our belief that the second notice of appeal was timely even without the retroactive relief that the bankruptcy court granted because Hoffinger was not notified of its prospective relief from the stay until January 29 (a finding by the bankruptcy court that has never been challenged). Section 108(c)(2) extended the period to file a notice of appeal until thirty days after that date. Hoffinger‘s second notice of appeal, filed on February 22, came within that period.
Even if retroactive relief was unnecessary, we nevertheless conclude that the bankruptcy court appropriately granted it here. Having reviewed the transcript of the hearing prior to the grant of retroactive relief, it is readily apparent to us that there was a large amount of confusion over the status and timeliness of various filings, in large measure due to matters outside of Hoffinger‘s control. We think that retroactive relief was an appropriate way to extricate the various proceedings from the morass into which they had fallen and to set things going again.
We also note that although the first notice of appeal was filed in October, 2001,
IV.
Accordingly, we affirm the judgment of the district court.