Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-01967/USCOURTS-caed-2_03-cv-01967-2/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

In re:

PLANET PRO, INC.,

Debtor. Bk. Ct. No. 03-23152-C-11

Adv. Case No. 03-2271

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NO. CIV. S-03-1967 LKK

SEETARAMA SARMA,

Appellant.

v. O R D E R

PLANET PRO, INC.,

Appellee.

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The court is in receipt of the Ninth Circuit’s judgment in the

above captioned case. Upon consideration of the Ninth Circuit’s

decision and the record herein, the bankruptcy court’s initial

decisions must be affirmed. 

Background 

Appellant, Seetarama Sarma, is a former employee of the debtor

who was terminated in December 2001. On November 15, 2001,

Case 2:03-cv-01967-LKK Document 115 Filed 04/16/07 Page 1 of 4
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appellant filed a complaint against appellee Planet Pro, Inc.

(“Planet Pro”) in the San Francisco Superior Court, alleging, inter

alia, breach of an employment contract, and seeking $1 million in

damages. On March 21, 2003, Planet Pro filed for Chapter 11

bankruptcy. Appellant thereafter removed and transferred his

pending employment suit to the bankruptcy court. See 28 U.S.C. §

1452.2

At the commencement of trial, the bankruptcy judge concluded

that appellant waived his right to jury trial, and that appellant

tendered evidence late, striking it, and then dismissing the

adversary proceeding.

Appellant appealed to this court. On January 21, 2005 this

court issued an order denying all but one of the appellant’s

claims. Namely, this court found that the bankruptcy court had

abused its discretion in excluding certain testimony and thereby

dismissing the adversarial proceeding. Accordingly, the case was

referred back to the bankruptcy court. See January 21, 2005 Order.

Some time later, this court also reviewed appellant’s appeal

of the confirmation of Planet Pro’s reorganization plan. In a 27-

page order, this court addressed appellant’s contentions and

remanded certain claims to the bankruptcy court. See March 1, 1005

Order. 

Both parties appealed. Defendant-Appellee appealed the

January 21, 2005 Order and appellant appealed several of this

court’s conclusions as to the legality of Planet Pro’s disclosure

statement and reorganization plan. 

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Analysis

The Ninth Circuit reversed in part, dismissed in part, and

vacated in part. The Ninth Circuit held that the bankruptcy court

did not abuse its discretion in striking as untimely Sarma’s direct

testimony statement pursuant to the local rules of bankruptcy

court. Accordingly, the Ninth Circuit reversed this court’s order

remanding the adversary proceeding to the bankruptcy court. See

Ninth Circuit Judgment April 9, 2007. 

The Ninth Circuit also addressed Sarma’s cross-appeals from

this court’s decision regarding Planet Pro’s reorganization plan.

The Ninth Circuit found that the issues were moot. Specifically,

the court explained that a bankruptcy appeal is moot if a party

opposing a reorganization plan has failed to obtain a stay pending

appeal, and the plan has been carried out to “substantial

completion.” See Ninth Circuit Judgment April 9, 2007, citing

Baker & Drake, Inc. v. Pub. Serv. Comm’n (In re Baker & Drake,

Inc.), 35 F.3d 1348, 1351 (9th Cir. 1994). The Ninth Circuit

explained:

In this case, Sarma failed to obtain a stay, and Planet

Pro’s reorganization plan has been fully implemented.

Because all creditors except Sarma have been paid under

the plan, neither this Court nor the bankruptcy court can

fashion effective relief related to Sarma’s legal

challenges to the plan. Any relief would require nonparty creditors, over whom this court has no authority,

to disgorge payments to which they were indisputably

entitled. Therefore, the cross-appeal must be dismissed

as moot. For the same reasons, we must also vacate the

district court’s order remanding certain claims

challenging the plan.

Ninth Circuit Judgment April 9, 2007.

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In light of the Ninth Circuit’s decision, this court finds

that the bankruptcy court’s initial decisions must be affirmed.

With respect to the bankruptcy court’s decision to exclude certain

testimony and dismissal of the adversarial proceedings, that

decision is hereby AFFIRMED. The claims regarding Planet Pro’s

reorganization plan are hereby DISMISSED. There are no other

outstanding claims by appellant and the decisions of the bankruptcy

court must be affirmed in full. Accordingly, the court orders as

follows:

1. The decision of the bankruptcy court regarding the

exclusion of testimony is AFFIRMED.

2. Appellant’s claim regarding Planet Pro’s Reorganization

Plan are DISMISSED as moot. 

3. The Clerk of the Court is directed to CLOSE the case. 

IT IS SO ORDERED. 

DATED: April 13, 2007.

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