Opinion ID: 2818765
Heading Depth: 3
Heading Rank: 1

Heading: Appellant’s Challenge to the Equitable

Text: Mootness Doctrine As an initial matter, Appellant asserts that the equitable mootness doctrine is unconstitutional and contrary to the Bankruptcy Code. Because we have already approved the doctrine of equitable mootness in Continental,6 only the 6 It should be noted that nearly all of the other Courts of Appeals with jurisdiction to hear bankruptcy appeals have endorsed some form of the equitable mootness doctrine. See In re Healthco Int’l, Inc., 136 F.3d 45, 48 (1st Cir. 1998); In re Charter Commc’ns, Inc., 691 F.3d 476, 481 (2d Cir. 2012); Behrmann v. Nat’l Heritage Found., 663 F.3d 704, 713–14 (4th Cir. 2011); In re Scopac, 624 F.3d 274, 281–82 (5th Cir. 2010); In re Am. HomePatient, Inc., 420 F.3d 559, 563–65 (6th Cir. 2005); In re UNR Indus., Inc., 20 F.3d 766, 769 (7th 7 Court sitting en banc would have the authority to reevaluate our prior holding. See United States v. White, 748 F.3d 507, 512–13 (3d Cir. 2014).7 This Court may only decline to follow a prior decision of our Court without the necessity of an en banc decision when the prior decision conflicts with a Supreme Court decision. See Chester ex rel. N.L.R.B. v. Grane Healthcare Co., 666 F.3d 87, 94 (3d Cir. 2011); see also Morrow v. Balaski, 719 F.3d 160, 179 (3d Cir. 2013) (en banc) (Smith, J., concurring) (“‘[E]ven in constitutional cases’ . . . , the doctrine of stare decisis ‘carries such persuasive force’ that departing from it has ‘always required’ some ‘special justification.’”) (quoting Arizona v. Rumsey, 467 U.S. 203, 212 (1984)). Cir. 1994); In re Thorpe Insulation Co., 677 F.3d 869, 879– 83 (9th Cir. 2012); In re Paige, 584 F.3d 1327, 1337–38 (10th Cir. 2009); In re Lett, 632 F.3d 1216, 1225–26 (11th Cir. 2011); In re AOV Indus., Inc., 792 F.2d 1140, 1147–48 (D.C. Cir. 1986). The Eighth Circuit has yet to address the merits of the doctrine’s applicability in a precedential opinion. Compare In re Nevel Props. Corp., 765 F.3d 846, 848 & n.3 (8th Cir. 2014) (affirming on the merits and denying as moot appellee’s motion to dismiss the appeal as equitably moot), with In re President Casinos, Inc., 409 F. App’x 31, 31–32 (8th Cir. 2010) (per curiam) (affirming district court’s dismissal of bankruptcy appeal as equitably moot). 7 See also 3d Cir. I.O.P. 9.1 (2010) (“[N]o subsequent panel overrules the holding in a precedential opinion of a previous panel. Court en banc consideration is required to do so.”). 8 Appellant argues that our equitable mootness jurisprudence should be reevaluated in light of the Supreme Court’s decision in Stern v. Marshall, 131 S. Ct. 2594 (2011). Appellant contends that after Stern, a bankruptcy court’s ability to enter binding, final judgments in “core” bankruptcy proceedings—like plan confirmations—must be subject to district court review on appeal under traditional appellate standards. Stern alone does not permit us to depart from Continental. In Stern, the Supreme Court granted certiorari to resolve the question of whether 28 U.S.C. § 157(b)(2)(C) is unconstitutional because it gives non-Article III judges the power to render final judgments on common law compulsory counterclaims that are not necessarily resolved in the process of allowing or disallowing the defendant’s proof of claim. The Court in Stern found that the provision unconstitutionally delegated the judicial power of the United States to nonArticle III bankruptcy judges. Justice Roberts’s opinion relied heavily on Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 284 (1855), which stated that with the exception of certain “public rights,” Congress cannot “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at common law, or in equity, or admiralty.” Because the counterclaim at issue in Stern was a tort claim at common law, the Court held that “[t]he Bankruptcy Court below lacked the constitutional authority to enter a final judgment on [this] state law counterclaim.” Stern, 131 S. Ct. at 2620. Thus, the Court in Stern made clear that non-Article III bankruptcy judges do not have the constitutional authority to adjudicate a claim that is exclusively based upon a legal right grounded in state law despite appellate review of the 9 bankruptcy judge’s decision by an Article III judge. However, Stern did not consider the authority of bankruptcy judges to make final determinations regarding other kinds of claims and counterclaims brought by debtors and creditors, nor did Stern consider whether Article III requires appellate review of a bankruptcy judge’s decisions by an Article III judge. Accordingly, we are obligated to apply this Court’s equitable mootness doctrine notwithstanding Stern.