Snubbing Court Authority Doesn’t Tank Right to Appeal

(CN) - A woman who took more than $1.3 million in cash, diamond rings and gold bars and fled her husband's creditors to France is still entitled to have her appeal heard in federal court, the 9th Circuit ruled Friday.

After Linda Mastro's husband, Michael Mastro, declared bankruptcy, the bankruptcy court found Linda liable for fraudulent transfers of estate assets in an attempt to defraud her husband's creditors.

It ordered Linda to turn over two diamond rings, gold bars and money worth a total of $1.3 million.

Linda went missing after she appealed the order in Seattle, and was later found living in France with Michael. She has declared her intention not to return to the U.S., and French authorities declined to extradite the couple.

Senior U.S. District Judge Barbara Rothstein cited Linda's flight in refusing to rule on the merits of her bankruptcy appeal. Finding that Linda's "blatant disregard for the authority of the judicial system renders her ineligible to pursue an appeal," the court dismissed the challenge under the fugitive disentitlement doctrine.

In a Friday reversal, the 9th Circuit found that "the District Court abused its discretion by dismissing Linda's appeal under the fugitive disentitlement doctrine."

The Supreme Court's decision in the 1996 case Degen v. United States significantly limited the use of the fugitive disentitlement doctrine in non-criminal contexts, finding the disentitlement an exceptionally "harsh sanction" that should not be imposed even for rebellion against the U.S.

"The District Court's dismissal of Linda's civil bankruptcy appeal was based solely on Linda's 'blatant disregard for the authority of the judicial system,'" Judge Wallace Tashima wrote for a three-judge panel in Seattle. "But disregard for the authority of a different court does not constitute a 'necessity' capable of 'justify[ing] the rule of disentitlement in this case.' Because the District Court dismissed Linda's civil bankruptcy appeal on a basis that Degen rejected, that dismissal was, as in Degen, 'an arbitrary response' to Linda's flight from a related criminal prosecution."

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