United States Ex Rel. Bowman v. Computer Learning Centers, Inc. , 73 F. App'x 735 ( 2003 )


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  •                                                        United States Court of Appeals
    Fifth Circuit
    F I L E D
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT                 August 25, 2003
    Charles R. Fulbruge III
    Clerk
    No. 02-21354
    Summary Calendar
    United States of America, ex rel.; JAMES BOWMAN; JERMON BROWN;
    DONNA BUZZELLI; CHRISTINA CARLYLE; GILBERT CRUZ; LEVI GASTON,
    III; MICHAEL GRANDMAITER; RICHARD HIGGINS; BEN HUGHES; JOHN
    KURUVILLA; JOHN T. KEYS; DONNA LEATH; KYLE LYNCH; GEORGE
    MICHALINOS; MICHAEL MORRIS; KIMBERLY D. PRICE; SCOTT SORENSON;
    JACK H. TA; LINDA VANDALL; FRANK WETEGROVE; MICHAEL WOOD,
    Plaintiffs-Appellants,
    versus
    COMPUTER LEARNING CENTERS, INC.; REID R. BECHTLE; CHARLES S.
    COSGROVE; SUSAN L. LUSTER; MARK M. NASSER; HARRY H. GAINES; RALPH
    CLARK; IRA COHEN; JOHN L. CORSE; STEPHEN P. REYNOLDS; PRICE
    WATERHOUSE LLP,
    Defendants-Appellees.
    --------------------
    Appeal from the United States District Court
    for the Southern District of Texas
    USDC No. H-99-CV-1138
    --------------------
    Before JONES, BENAVIDES, and CLEMENT, Circuit Judges.
    PER CURIAM:*
    James Bowman, et al. (Bowman) filed a qui tam action
    pursuant to 
    31 U.S.C. § 3730
    (b)(1) of the False Claims Act
    against Computer Learning Centers (CLC), various officers and
    *
    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    that this opinion should not be published and is not precedent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.
    No. 02-21354
    -2-
    board members of CLC, and Price Waterhouse LLP (“PW”).    After CLC
    filed a bankruptcy petition, the district court, invoking 
    11 U.S.C. § 362
    (a)(1), issued an order dismissing the entire action
    without prejudice.
    Bowman argues that the district court’s dismissal of the
    entire action was erroneous.    He argues that CLC’s filing of a
    bankruptcy petition should not affect the pursuit of claims
    against PW and the remaining defendants.
    Once a party files in bankruptcy, further actions against
    the debtor are stayed under 
    11 U.S.C. § 362
    .    See Arnold v.
    Garlock, Inc., 
    278 F.3d 426
    , 435-36 (5th Cir. 2001).     However,
    “a section 362(a)(1) stay is available only for the debtor’s
    benefit and does not prohibit actions against nonbankrupt third
    parties or codefendants.”     In re S.I. Acquisition, Inc., 
    817 F.2d 1142
    , 1147 (5th Cir. 1987).    Accordingly, we VACATE the district
    court’s order of dismissal and REMAND this matter for further
    proceedings not inconsistent with this opinion.
    PW argues that the district court’s dismissal should be
    affirmed on an alternate ground.    PW contends that Bowman failed
    to effect service within the 120-day period provided by FED.
    R. CIV. P. 4(m), and that Bowman cannot show “good cause.”
    However, as we explained in Thompson v. Brown, 
    91 F.3d 20
    , 21
    (5th Cir. 1996), a district court enjoys discretion under Rule
    4(m) to extend the time for service even when a plaintiff fails
    to show good cause.   “If good cause is present, the district
    No. 02-21354
    -3-
    court must extend time for service.     If good cause does not
    exist, the court may, in its discretion, decide whether to
    dismiss the case without prejudice or extend time for service.”
    
    Id.
    Because Rule 4(m) vests the district court with discretion
    to extend the time for service if good cause does not exist, see
    
    id.,
     it would be inconsistent with the dictates of the rule, as
    well as an infringement on the discretion granted the district
    court, to affirm the district court’s dismissal based merely on
    the absence of good cause.     Accordingly, we do not reach the good
    cause issue, and we decline to affirm the judgment on the
    alternate ground argued by PW.
    VACATED and REMANDED.
    

Document Info

Docket Number: 02-21354

Citation Numbers: 73 F. App'x 735

Judges: Benavides, Clement, Jones, Per Curiam

Filed Date: 8/25/2003

Precedential Status: Non-Precedential

Modified Date: 8/1/2023