Opinion ID: 539850
Heading Depth: 2
Heading Rank: 1

Heading: The Effect of the Automatic Stay

Text: 11 Rule 60(b)(4) allows relief from judgments that are void. Picco argues that the bankruptcy court's automatic stay prohibited the district court from proceeding in any way in his personal injury action and therefore divested the district court of jurisdiction to enter the dismissal. Thus, Picco argues, the dismissal was void, and the district court had authority to set it aside under Rule 60(b)(4). 12 The record indicates, however, that the district court was fully aware of the automatic stay, and therefore implicitly concluded that its dismissal was consistent with its terms. Picco did not object or appeal to challenge the district court's jurisdiction. 13 The automatic stay of the bankruptcy court does not divest all other courts of jurisdiction to hear every claim that is in any way related to the bankruptcy proceeding. As we have noted, other district courts retain jurisdiction to determine the applicability of the stay to litigation pending before them, and to enter orders not inconsistent with the terms of the stay. Hunt v. Bankers Trust Co., 799 F.2d 1060, 1069 (5th Cir.1986). A court's determination of its own jurisdiction is subject to the principles of res judicata; it generally may not be challenged in a collateral proceeding. Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 102 S.Ct. 2099, 2104 n. 9, 72 L.Ed.2d 492 (1982); Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 319, 84 L.Ed. 329 (1940). This bar applies whenever the party challenging the judgment has the opportunity to raise the jurisdictional issue but fails to do so. Chicot County, 60 S.Ct. at 320. 14 A number of decisions rendered in other circuits have extended the principles of Chicot County to the analogous context of Rule 60(b)(4) motions. See, e.g., Nemaizer v. Baker, 793 F.2d 58, 64-65 (2d Cir.1986); Kansas City Southern Ry. Co. v. Great Lakes Carbon Corp., 624 F.2d 822, 825 (8th Cir.), cert. denied, 449 U.S. 955, 101 S.Ct. 363, 66 L.Ed.2d 220 (1980); Marshall v. Board of Education, 575 F.2d 417, 422-23 (3d Cir.1978); Lubben v. Selective Serv. Sys. Local Bd. No. 27, 453 F.2d 645, 649 (1st Cir.1972). We agree with this approach, at least where, as here, the challenging party was before the court when the order in question was entered and had notice of it and had a full and fair, unimpeded opportunity to challenge it, and the court's jurisdiction, by appeal. Therefore, Picco is now barred from challenging the district court's jurisdiction in a Rule 60(b)(4) proceeding. 6 15 In any case, even if the district court's decision did violate the automatic stay when it was entered, the bankruptcy court's order lifting the stay cured any defect. We recently held in Sikes v. Global Marine, Inc., 881 F.2d 176 (5th Cir.1989), that actions taken in violation of an automatic stay are not void, but rather that they are merely voidable, because the bankruptcy court has the power to annul the automatic stay pursuant to section 362(d). 7 Sikes involved exactly the same order lifting the stay as is involved in Picco's litigation. Sikes, like Picco, was one of several personal injury plaintiffs included in the blanket orders lifting the stay in Global Marine's bankruptcy. Sikes had filed his case in clear violation of the automatic stay, but this Court held that the filing was validated by the bankruptcy court's blanket order lifting the stay. If the order validated the filing of a lawsuit by a creditor against the debtor in blatant violation of the stay, a fortiori the same order cured any defect in the district court's original dismissal of Picco's claim. Cf. Dennis v. A.H. Robins Co., 860 F.2d 871 (8th Cir.1988). 16