all of their interests are the site they're aligned you know in fact if you want to get into the underlying lawsuit we acquired claims from the chapter seven trustee so our claims were her claims at some point they were assigned to us as part of the settlement she's out of the case now correct she's she's not she's a name plaintiff but i don't report oh she has no no interest in the case she has no interest in the outcome of the case in terms of the interested parties did see t c kentucky call venture one l l c the entity that acquired the claims in connection with a half million dollar settlement your honour's i know that you've already the district court so what did you want to dismiss the court the the appeal of the order of the bankruptcy court dismissing pikeville energy's first amended cross claims those were proceeding in which the cross claims are part of right was dismissed dismissed completely the whole adversary lack for lack of subject managers to action including the cross claims well they've been dismissed two years earlier but now it's right to do an appeal that you can't  s if you've dismissed the adversary action for lack of subject matter jurisdiction how can the cross claims exist they had already been dismissed i don't care whether they were already dismissed if you're dismissing the adversary action saying there is no subject matter jurisdiction how can there be cross claims the cross claims have been asserted years earlier i understand they were inserted earlier can cross claims exist independent of the primary claims brought on that are the cause of the adversary action no so when the district judge affirms the bankruptcy court holding that the adversary proceeding must be dismissed because of lack of subject matter jurisdiction why aren't the cross claims automatically dismissed as part of that holding that's not the way it works and that's not my understanding of the way it works but they appealed the cross claim dismissal here but they were peeling the dismissal of the cross claims on a different basis right but if if the bankruptcy court doesn't have subject matter jurisdiction how can the bankruptcy court be deciding cross claims i think if they had been decided and dismissed earlier years earlier too you're giving me that he answered consistently but i i'll say that the problem that i'm having is if the bankruptcy court doesn't have jurisdiction over the adversary proceeding there is nothing for the district court to remain and to the bankruptcy court unless there's some arcane area of bankruptcy law that people can bring cross claims that have independent subject matter jurisdiction but the reason so let's get back to the question the reason for their not being subject matter jurisdiction over the adversary action is because it's not a court matter right now is because of the complete assignment of the claims by the trustee to my client therefore the state no longer had an interest in the outcome of the lawsuit and under twenty eight u s c thirteen thirty four b there's no there's no jurisdiction anymore there's no related to rather was cornered so the a state doesn't have an interest in the claims that the estate made right and then the cross claims involve claims against t h c and others other than the estate but there would still be the question why would a bankruptcy court be interested in the well that record would have jurisdiction is clear imply because at the time they were certain that the state had an interest in the lawsuit and so the bankruptcy court would then be deciding issues having to do with energies that are not involved at the bankruptcy at all it happens all the time under really even though the bankruptcy cases it's gone when you say the bankruptcy case do you mean  even if there is no jurisdiction that we have jurisdiction to adjudicate previous rulings in the case before it was decided that jurisdiction was absent that is correct because they appeal to you and you have a statutory or case law that supports the idea that when a district court or a bankruptcy court is without jurisdiction to adjudicate an issue which is governed by or was in a locket or it became a final word could be appealed upon dismissal of the case two years later both parties appealed the dismissal of the case they appealed across claims it was still alive issue it was a live issue up until the court the district court summer twenty sixth two thousand and twelve said lack of subject matter jurisdiction but at that point there their appeal was a live appeal alive and well except they had found the record designation the statement issues on appeal we're here today on two issues and i wanted to address the sanctions issue first we wanted oral argument because we wanted the process up a lease to come to this court and explain to the court why they are challenging sanctions order when they admitted on the record in front of the district court of oral argument when he said i need a record to find it's clearly erroneous the sanctions order and they said and the record does not exist so there's no way they can challenge the factual findings of the bankruptcy court sanction them then the only other argument is the court was without jurisdiction the bankruptcy court was out with their jurisdiction to sanction want to dismiss the case will united states supreme court and this court in rhodes re that arose during the litigation crap to this that that the cattle situation you're saying that's exactly the situation we have here which is cooter in gill versus hart marks which is exactly what happened in that case and screen court said of course because the issue doesn't judge mirrored had to beginning mr groans argument which is why the court would have had subject matter jurisdiction to address cross claims that it didn't have such managers strict jurisdiction to address the cases i hope and you're completely correct  clients they were dismissed for failure state a claim two years before the court ultimately dismissed the entire case for lack of subject matter jurisdiction so we appealed that out of been dismissed based on subject matter jurisdiction instead of the unit they declined it also really was a motion to dismiss for lack of subject matter jurisdiction two years prior to that the court had dismissed these cross  were simply appealing that dismissal of the cross claims so there wouldn't be any prior collateral effect on later proceedings in state court for example so really you don't even have to get to the question of whether we were late in designating the record if you if you assume that the court never had subject matter jurisdiction to dismiss across claims and get in the beginning why is it that the court the bankruptcy court and then the district court dismissed for lack of subject better jurisdiction what was the essence of the subject matter jurisdiction problem because the question here this was it was all there all state law claims there were all state tort law claims right not related to the underlying bankruptcy claim and when when t h c kentucky coal venture purchased the trustees claims and in this settlement agreement and the similar agreement provided that the trustee would have no benefit whatsoever if they had a prison if they prevailed in the adversary case all the money would go to that private venture wreck to say that once the bankrupt estates claim under state law or conveyed to a third party that the bankruptcy court has found in this case no longer had jurisdiction because the state law claims no longer related to anything having to do with exactly and the bankruptcy court held that the district court affirmed that and they did not appeal that then does that holding pertain to the cross claims it does it does the entire case in other words the cross claims  what he did was he he set aside he he reversed the bankruptcy court which didn't allow us to file or designation of the issues in a record two days late he said that the bankruptcy court had abused its discretion in not permitting that late filing by that by doing that then he got to the next question which is whether or not the our appeal of the cross claims was legitimate and he found in fact that that there was no subject matter jurisdiction so therefore it was wrong of the of the bankruptcy court to dismiss those cross claims in other words what he was what he was saying of the bankruptcy court to dismiss the prosecution or to entertain the cross claims or the motion to dismiss the cross allow us to late file that it went to the district court in the district court and we have you know we appealed that issue to the district court to disport address that said the bankruptcy court and abuse is discretion and what did the bankruptcy court send back the bankruptcy court sorry what did the district court said back the district or didn't send anything back to the district court held that there was no such a manager stiction that it was wrong for the bankruptcy court to to entertain the motion to dismiss the cross appeals when it did because there was no jurisdiction and the only thing that it affirmed was the sanctions judge just because you couldn't get in the extension the file he  items not permitted because it's very confusing just play the the the lack of there's a they argued the because we didn't designate the issues timely we couldn't even raise the issue of whether the bankruptcy court should have address those cross claims two years earlier we took it to the judge ultimately fail on that didn't make any difference because there was no server manager stiction why did the judge say the plaintiff's motion to dismiss and i thought you were appeal that was being appealed yes they appealed that that's correct the judge did say that the plaintiff's motion trying to say what was what the judge was addressing there was the  dismissal they were trying to have the order dismissing the cross claims basically they were they were saying that those should still be better still be a viable order even though the brief but i thought maybe it's just because i don't know that much about bankruptcy but it's a fairly simple problem it has nothing to do with bankruptcy law it's subject matter jurisdiction under federal law i truly do not understand then why we care about whether there is excusable neglect and missing the deadline or why we care whether the district c properly denied the plaintiff's motion to dismiss if you really shouldn't why do we have the briefing on well we had to respond to the briefing that the appellant and the reason we did it was because we were concerned that you would address it ok but the court ever had said your manager section ok from your perspective what issues do you think we need to decide the sanctions banks and issue is there any other issue that you think we need to decide i think you need to affirm the district court simply on those other matters why if there's no subject matter jurisdiction we can't we don't have jurisdiction to herm doing well the district court jurisdiction do we have jurisdiction to go back and resurrect the case about which there is no tourist thing again and are sad some of the questions in that case i mean and when it wasn't even appealed to us i think what you need to do is clarify i think the district court addressed all of these issues perhaps when it needed not do so and i think that what discourse should do on those issues is to say that was never subject matter jurisdiction in the first place nothing that the bankruptcy court did was valid as a result because they didn't have subject matter jurisdiction and therefore none of the prior orders dismissing or anything else have any continuing validity they don't affect anything on the topic of subject matter jurisdiction because that was an appeal it was an appeal and normally we would sanctions order was proper under the appropriate standard issue ok and then on that issue at the end sort of the mediation was all related to this mediation process we had found a motion to dismiss for lack of subject matter jurisdiction the court didn't dress sinister mediation it was a six month mediation process my client out of state flew in three times for different mediation sessions we found a seven page single spaced letter to the mediator explaining the case  produced hundreds of pages of documents which were requested by them made by the other side we acted in good faith to do that the mediator my client acted in good faith presented a power point presentation to the mediator and to the other parties about why they should never have to pay any money in this case we had a strong threshold issue which was lack of subject matter jurisdiction we felt like we didn't need to pay money to settle the case when there was no subject matter jurisdiction in the first place and there are cases that say if there's a strong threshold issue that it's not unreasonable for a party to take a no pay position at mediation yet at the very last mediation session which really got into the skin of the mediator the mediator for the first time changed his position he was trying to position the parties to a mutual walk away and instead at the last mediation session he pressured our client to pay money are you asking us to decide  reynolds case that i cited him a brief for example there was a wells fargo bank case wells fargo came into mediation with a position that it was not going to pay money to settle and it maintain that position throughout the mediation the  court on appeal held that there were strong arm tactics to try to get that bank to to read to read visit his position when it had a strong threshold position in the first place same here there was a strong threshold a rgument that there was no subject managers direction all and that all to the ultimately was borne out after this six month process which the bankruptcy court forced us into and then the bankruptcy court because of issues related to the i like to get back to your first point if they didn't appeal the order dismissing the cross claims it would have been raised to the ca that they had to do that appeal there was no question because that would or would have become a final order once the case was dismissed they didn't have a choice so the thing was a live issue i just don't know what more to say about it in terms of the assessment of the sanctions the record is replete with instances and reasons why they were safe first of all the mediator didn't assess any sanctions the mediators a formal federal magistrate in the western district of of kentucky he said in practice and he had been involved in mediations for twenty years that this was the worst contact he'd ever seen and he recommended that the sanctions of the conduct it was so terrible about showing up late three hours to a mediation then when you get there you say i don't want to even begin the mediation till i have six hours to consult with my lawyers about the fact that during that mediation process they served a complaint of claims that they didn't even own or or were not allowed to assert before a before principles meeting lawful and so they were unprepared they showed up late the lawyers showed up late and they show disrespect for the mediation process and they did the bankruptcy judge imposed sanctions on the basis of good faith and he found and there's no record to dispute his findings and they've admitted to the district court on the record there is no record to dispute those clearly though those facts there's no basis to call them clearly erroneous it all happened before the mediator and would either support or not support the conduct right now we don't know what we don't know officially it at the crowd yes we do because the judge in his on how many page decision he laid out all the reasons why he was going to impose sanctions in connection with that he asked for the transcript and that is correct the thing to back him up about that i mean that's what he says the facts are but there is no record in support of that one way or the other mediators report to the court he was required to file a report and then the judge him out of thirty thousand dollars and sanctions is to be paid to paid to us for the expenses we incurred in doing the mediation that would then they never engaged in good faith so the party was the mediator see the mediator see to do this case was over twenty thousand dollars so the judge didn't make final findings  findings and in connection with the imposition of the sanctions he didn't take governance but there are findings there's an order of the court laying out the reasons for the sanctions and at the end of the process before you even decided then  case he said well now i want briefing on whether i have jurisdiction and the order the briefs that issue he relied on the supreme court said yes i have jurisdiction if anybody wants to have a hearing before i enter my ruling on the sanctions motion step forward and b what was that based on that what was full of some of the main means that when you go to the mediation you don't have to pick up the phone to get authority from other shareholders or other interest olders to settle the case he did not have that authority and the order of the court was that  appropriate order this sounds like you could make some bad as well the good reason to whether they want to or not i don't i don't think so at all it's just a come to the mediation with authority to settle it doesn't say you must settle nobody ever said they had to settle that's just that's not in the record but why can't you have the ability to check backing assault with your client i just don't understand why this is a reasonable order it was the order that was in or for both parties and we same approval from the client your honor that was the order of the court we didn't have to go to mediation we were ordered to mediation both parties were by the bankruptcy correct what power does the bankruptcy court have to force mediation the ability to control one's docket i think will sixty and can just tell parties if a party says no honor we just want ruling we don't want any mediation nobody said that in fact they got up at the hearing because i was there and they a case that we now agree that there was no jurisdiction remediating before the case was dismissed long before the case was dismissed a year before but the dismissal was based on the fact that at that time the court which had ordered mediation had no jurisdiction to correct ok so if i could just take us back to the beginning if you want us to affirm the order of sanctions absolutely is there anything else that you want us to do we want you to reverse the district court's reversing the bankruptcy courts dismissal those cross claims we want that order reversed for all the reasons and tomorrow about if i'm just talking abilities what if we said the bankruptcy court held and the district court held that there was no subject matter jurisdiction and therefore any subsequent orders are beyond the power of the district court except for this except for the sanctions matter i would disagree with that  so i think the when they dismissed the cross claims it was in our locked or it became a final order there was jurisdiction until the court later said there was not but at the time of the events in question when they blew the deadline to file the record does a glacier and the was a live issue and it's still hot issue the district court's orders now final order that's why we court has an independent duty to decide whether there is subject matter jurisdiction maybe this is a misnomer that this is that a subject matter jurisdiction situation but at the time the claims were sort of there was subject ma we appreciate very much i think this that it might have been ten but it's in our brief it's late oh ok we have two minutes  are jurisdiction disappear and such a manager's direction and disappeared from the outset when they found their amended complaint that's what the district court when they filed their amended complaint in took all of those claims away from the trustee the case was no longer related to the bankruptcy case and therefore there was no jurisdiction that's what the district complaint i'm sorry that i'm slow on this but the amended complaint was the one that said it's not the trustee asserting its claims that the trustee is aside the interest to th think that's right what happened was the originally the adversary proceeding was brought by the trustee against his client they settled in they reversed situations he did they became the plaintiff at that point against us it was all state law claims and there was the amended complaint when that happened the court lost jurisdiction that's what date i can look at that but if you know what date was the amended complaint filed it was in two thousand and ten and the mediation didn't occur until two thousand and one and we had already found our motion to  or saying that the sanctions are like the earlier rulings that once it's became clear that there was no jurisdiction in the case for the court to act that everything that was done during that period it had no jurisdiction falls right to court as  collateral order that should be adjudicated like a lawyer gets contempt held in contempt of court for something that happened in my case where the court had no jury otherwise had no jurisdiction same kind of problem well except that the district court cited two cases for ancillary jurisdiction for that but in those two cases the sanctions were awarded before the court ever decided that it didn't have jurisdiction here and we distinguish that here because the court had already dismissed the case for lack of subject matter jurisdiction before dinner decisions or so there was no there were no other proceedings to manage in an orderly fashion thank you thank you for your argument the case will be submitted