Bankruptcy Panel Designation Rankles Judge

(CN) - A Ninth Circuit judge became apoplectic as his colleagues ruled Friday that the appeals court's bankruptcy appellate panel does not have authority to issue writs because it is not a true court.

Procedurally, the case that inspired Judge Jay Bybee's outrage is unremarkable.

Gary Ozenne moved for sanctions years after his bankruptcy case had closed, and appealed unsuccessfully to the court's bankruptcy appellate panel (BAP) for relief.

"Even among flyspecks, this case is a nothing," Bybee groaned.

Though the BAP denied Ozenne's petition, the Ninth Circuit ruled Friday that the panel should not have even considered the petition in the first place.

The 17-page ruling rests on the fact that no act of Congress created the bankruptcy panel, thus it is not a court with writ power under the All Writs Act.

Congress did authorize the circuit to create bankruptcy appellate panels, but the panels are temporary, Judge J. Clifford Wallace wrote for the majority, "to be used only so long as the judicial council chooses to keep it operational."

"It has none of the permanency of a court," Wallace added, joined by Judge Edward Leavy.

Judge Bybee said he concurred in the judgment but disagrees "vigorously ... with everything else."

"Oh, the majority is willing, I think, albeit begrudgingly, to admit that the BAP is a court; it just doesn't believe that it was 'established directly by Act of Congress,'" Bybee wrote. "That last sentence was, of course, a bit of a cheat on my part: the statute doesn't actually say that the court must be 'established directly by Congress. But the majority does. It has added a word to the All Writs Act that is not there. And, for the reasons I will explain, it is so unnecessary to do so, and it is going to cause us major constitutional headaches." (Emphasis in original.)

What Ozenne's case boils down to is whether Congress can "delegate its power to create courts to the judicial branch," the 19-page dissent states.

"The majority says that the answer is 'yes,' and sees no problem," Bybee wrote. "I am deeply skeptical of the constitutionality of such an arrangement between Congress and the judiciary."

Wallace had little patience with Bybee's caustic dissent.

"The dissent contends that our opinion neuters the BAP," he wrote. "The dissent ignores the BAP's historically subordinate role within the federal judiciary, and the constitutional issues that would arise should the BAP be afforded power under the All Writs Act."

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