Goradia v. O'Connor , 174 F. App'x 209 ( 2006 )

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opinion should not be published and is not precedent except under the limited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
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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
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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
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§ 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.
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