Court Opinion

ID: 41733
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:10:23+00
Date Added: 2024-06-11T14:57:23.318458
License: Public Domain

United States Court of Appeals
                                                             Fifth Circuit
                                                           F I L E D
                 UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT                 April 6, 2006

                     _______________________          Charles R. Fulbruge III
                                                              Clerk
                           No. 05-20270
                     _______________________

         IN THE MATTER OF: O’CONNOR INTERNATIONAL, INC.
            DOING BUSINESS AS JAMES W. O’CONNOR HOMES

                                                            Debtor.

                    -------------------------

                  VIJAY GORADIA; MARIE GORADIA,
                                                          Appellees,

                             versus

                       JAMES W. O’CONNOR,
                                                          Appellant.

**************************************************************
*

                     _______________________
                        Consolidated With
                           No. 05-20271
                     _______________________

                    In Re: JAMES W. O’CONNOR

                                                      Petitioner.

          Appeals from the United States District Court
                for the Southern District of Texas
                     Docket No. 4:04-CV-02929

Before JONES, Chief Judge, and KING and DENNIS, Circuit Judges.
PER CURIAM:*

           James     W.   O’Connor    (“O’Connor”)     brings   this    appeal,

challenging the district court’s abstention, vacatur and remand of

his adversary proceeding in bankruptcy.                As this court lacks

jurisdiction    to   review   the    decisions    of   the   district   court,

O’Connor’s application for a writ of mandamus is DENIED and his

appeal is DISMISSED.

                              I.     Background

           This case began in Texas state court, where Marie and

Vijay Goradia (“the Goradias”) sued O’Connor International, Inc.

(“OCI”) for breach of contract and various torts related to the

construction of their home. The Goradias later amended their state

complaint to include tort claims against O’Connor, the owner of

OCI, in his individual capacity.

           The case between the Goradias and OCI was sent to binding

arbitration, and the Goradias prevailed, obtaining a judgment

against OCI.    On April 2, 2003, after the judgment was issued, OCI

filed for Chapter 7 bankruptcy protection.             Claiming “related to”

jurisdiction under 28 U.S.C. § 1334(b), O’Connor then removed the

state court case against him to bankruptcy court, where it became

an adversary proceeding within the OCI bankruptcy.

     *
            Pursuant to 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.

                                       2
          In bankruptcy court, the Goradias moved to remand the

adversary proceeding to state court, and O’Connor moved for summary

judgment on the basis of res judicata and collateral estoppel.         The

bankruptcy   court   granted   O’Connor’s   motion   and   dismissed   the

Goradias’ motion as moot.        The Goradias then appealed to the

district court.

          On appeal, citing 28 U.S.C. § 1334(c)(1), the district

court abstained from ruling on the adversary proceeding, vacated

the decision of the bankruptcy court, and remanded the O’Connor

case to state court.   O’Connor has appealed the court’s decision to

vacate and remand, and also filed a mandamus petition challenging

the court’s abstention, which was consolidated with his appeal.

                           II.   Discussion

          As an initial matter, this court must determine whether

its limited jurisdiction encompasses O’Connor’s appeal.          Webb v.

B.C. Rogers Poultry, Inc., 174 F.3d 697, 699 (5th Cir. 1999);

Castaneda v. Falcon, 166 F.3d 799, 801 (5th Cir. 1999).          Because

the district court’s decisions to abstain and remand are not

reviewable here, we need not reach the merits of the bankruptcy

case.

             This case was removed to bankruptcy court through

28 U.S.C. § 1452, which allows removal of state cases related to a

bankruptcy proceeding.    O’Connor asserts that federal jurisdiction

                                   3
exists in this case under 28 U.S.C. § 1334(b), which gives the

district court “original but not exclusive” jurisdiction over all

claims “related to” title 11 bankruptcy proceedings.1 The Goradias

argue that removal was inappropriate, as a state law case involving

two nondebtors is not sufficiently “related to” OCI’s bankruptcy.

In its opinion, the district court appeared to agree with the

Goradias, though the court ultimately declined to decide the

jurisdictional issue and proceeded on the assumption that “related

to” jurisdiction existed under § 1334(b).                   It is true that “no

pussy-footing around is allowed on jurisdictional issues.”                     In re

Southmark Corp., 163 F.3d 925, 929 (5th Cir. 1999).                  However, the

result in the instant case is the same regardless whether “related

to” jurisdiction exists.

               In    the   event     that       the    bankruptcy   court     lacked

jurisdiction over the adversary proceeding, abstention would have

been       unnecessary,    and     remand       was   required   under   28   U.S.C.

§ 1447(c); a decision to remand on this basis is not reviewable by

this court.         28 U.S.C. § 1447(d); Quackenbush v. Allstate Ins. Co.,

517 U.S. 706, 712, 116 S. Ct. 1718 (1996); Schexnayder v. Entergy

La., Inc., 394 F.3d 280, 283 (5th Cir. 2004).

       1
            Without “related to” jurisdiction, there is no federal jurisdiction
in this case, as the parties are nondiverse and the Goradias’ suit raised only
state law tort claims.

                                            4
           However, the district court appears to have assumed the

existence of § 1334(b) jurisdiction, and in abstaining from hearing

the adversary proceeding, the court cited its authority under

28 U.S.C. § 1334(c)(1).   For “bankruptcy cases commenced after the

1994 amendments to the bankruptcy law, decisions either to abstain

or not to abstain are not, with very limited exceptions, reviewable

on appeal.”   In re Southmark, 163 F.3d at 929.   Section 1334(c)(1)

gives district courts discretion to abstain from hearing “related

to” cases in the interests of justice, comity with state courts, or

respect for state law.       Indeed, in light of § 1334(c)(1), the

district court listed numerous state law and equitable factors that

made the state court a more appropriate venue for the adversary

proceeding.   The Bankruptcy Code, 28 U.S.C. § 1334(d), makes clear

that any decision of the district court

     to abstain or not to abstain made under this subsection
     (other than a decision not to abstain in a proceeding
     described in subsection (c)(2)) is not reviewable by
     appeal or otherwise by the court of appeals under section
     158(d), 1291, or 1292 of this title or by the Supreme
     Court of the United States under section 1254 of this
     title.

           Under this plain language, the district court’s decision

to abstain based upon 28 U.S.C. § 1334(c)(1) is not reviewable

here.   The statute provides no exception dependent on whether the

district   court’s   order     exercised   original   or   appellate

jurisdiction.   Thus, this court lacks any jurisdiction to review

                                  5
the district court’s abstention order, and a writ of mandamus will

not issue.

           The district court’s decision to remand the O’Connor case

is also not reviewable by this court, regardless of whether subject

matter jurisdiction exists.     As discussed supra, assuming that the

courts lacked jurisdiction over the adversary proceeding, the

district court’s decision to remand would not be reviewable under

28 U.S.C. § 1447(d).     Alternatively, a district court may remand a

claim based upon valid § 1334 jurisdiction “on any equitable

ground.”     28 U.S.C. § 1452(b).   Remands made under § 1452(b) are

not “reviewable by appeal or otherwise by the court of appeals ...

or by the Supreme Court of the United States.”       Id.; see also In re

Adams, 809 F.2d 1187, 1189 (5th Cir. 1987).              Again, this court

lacks jurisdiction over O’Connor’s appeal.

           O’Connor’s    citation   to     Quackenbush      is    misplaced.

Quackenbush held that “only remands based on grounds specified in

§ 1447(c) are immune from review under § 1447(d),” and concluded

that the district court’s exercise of Burford abstention in that

case was appealable under 28 U.S.C. § 1291.       Quackenbush, 517 U.S.

at 712, 116 S. Ct. at 1718.         However, Quackenbush is readily

distinguishable from the instant case in that Quackenbush was

originally     removed   from   state    court   based     upon   diversity

jurisdiction; in that case, removal could not be premised upon

                                    6
§ 1447(c), and the Supreme Court therefore concluded that the

invocation of the § 1447(d) bar to review was improper.                In the

instant case, § 1447(d) is appropriately used if subject matter

jurisdiction   did    not   exist,    and   if   O’Connor   had    §   1334(b)

jurisdiction, then § 1334(d) and § 1452(b) prevent review, not

§ 1447(d).

           Finally, with regard to the district court’s vacatur of

the decisions of the bankruptcy court, we find that the decisions

of the bankruptcy court, including its grant of summary judgment to

O’Connor, were neither separate from the remand nor conclusive for

the purposes of reviewability under 28 U.S.C. § 1291.              See Doleac

v. United States, 264 F.3d 470, 478-83 (5th Cir. 2001) (discussing

reviewability of issues on appeal where remand order was not itself

reviewable;    none   of    the    cases    discussed   were      related   to

bankruptcy).   The district court’s decision to abstain and remand

could not be given its full effect without the court’s vacating the

earlier decisions of the bankruptcy court, and the district court’s

actions are not conclusive, as O’Connor will be able to reargue his

claims of res judicata and collateral estoppel in state court.

                            III.     Conclusion

           The decisions of the district court are not reviewable

here.   Therefore, O’Connor’s application for a writ of mandamus is

DENIED and his appeal is DISMISSED.

                                      7