Monday, December 21, 2009

How to Interpret the Chrysler Ruling by the Supreme Court

As I mentioned, in my last post, Mr. Leo C. Donofrio, who writes on the Natural Born Citizen Blog, has made an argument about the reason that the Supreme Court in its order of December 14, 2009 instructed the United States Court of Appeals for the Second Circuit to dismiss the appeal as moot.

Mr. Donofrio was kind enough to post a discussion of my post on his blog. He was also quite complimentary of my discussions about the Chrysler case earlier this year.

In addition, Mr. Donofrio posted two comments on this blog. I responded to his first comment, which also referred to his blog commentary, in the comments section of my post. Unfortunately, he found my response lacking, leading him to add comments on his blog post and to leave a second comment to my post.

Rather than continue this discussion in the comments section of the last post (the comments section is rather limiting), I decided to respond in this post, as follows:

First, let me thank you for recognizing me, in your original post, as a bankruptcy expert.

I'm disappointed that our discussion has led you to question my expertise AND that you don't permit comments on your blog (thus requiring me to respond here).

I'm also disappointed that you are not impressed with my last response.

Let me state my case in a clearer manner:
  1. The Bankruptcy Court is a Federal Court.

  2. The Court of Appeals is a Federal Court that is two levels above the Bankruptcy Court in the judicial hierarchy. The Court of Appeals can overrule any ruling by a Bankruptcy Judge at its discretion (or any judge at any level subordinate to them, which would be pretty much every court except the Supreme Court).

  3. On June 2, 2009 the United States Court of Appeal for the Second Circuit "granted a motion for a stay and for expedited appeal directly to the Court of Appeals pursuant to 28 U.S.C. § 158(d)(2)." That is a direct quote from the opinion issued by the United States Court of Appeals for the Second Circuit on August 5, 2009.

  4. Article III, Section 1 of The Constitution of the United States of America, states: "The judicial Power of the United States, shall be vested in one supreme Court." The Supreme Court, therefore, can over-rule any ruling by the Courts of Appeal - and certainly the Bankruptcy Courts.

  5. Justice Ginsburg, in her role as a Justice of the Supreme Court, has the authority and right to stay the ruling of any court in the United States of America - for any matter before them, including bankruptcy.

I don't understand why you would make a statement that "Justice Ginsberg apparently erred by extending the stay and the new SCOTUS order effectively vacates her extension." That simply isn't true. In fact, the Supreme Court issued a Per Curium decision on June 9, 2009 vacating Justice Ginsburg's order.

This whole discussion has been about why the Supreme Court said that the appeal of the Chrysler asset sale was moot.

Your argument stands on Judge Gonzalez's order, which, as I discussed above, was over-ruled as to the stay. An argument that Judge Gonzalez has the power to limit the actions of the courts above the Bankruptcy Court would seem to be in violation of, among other things, The Constitution.

The only argument that makes sense to me as to why the Supreme Court would order the Second Circuit Court of Appeals to dismiss the appeal as moot, is Section 363(m) of the Bankruptcy Code, which states "The reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal."

I believe you are using the same subsection of The Code for your argument, but focusing, for some reason, on the stay.

My argument is that the sale can't be unwound since there is no dispute as to the good faith of the parties.

In either case, under 363(m), the sale can't be unwound. There is, therefore, no way to compensate the appellant. As a result, there is no reason to hear the case.

I'm sorry if I was unclear in the way that I stated my opinion about the SCOTUS ruling. Since we were discussing our opinions, I thought that was clear. I use quotes when I'm quoting someone and those statements were not in quotes. I never intended it to be a trick, neat or not.

I don't know why you are suggesting that I "fail to confront the facts of the case and the facts of the order."

The facts of the case aren't even being discussed; only an interpretation of a ruling.

The ruling was one paragraph. You and I are both interpreting it.

Here, in full, is the final ruling by SCOTUS:

The motion of Washington Legal Foundation, et al. for leave
to file a brief as amici curiae is granted. The petition for a
writ of certiorari is granted. The judgment is vacated, and the
case is remanded to the United States Court of Appeals for the
Second Circuit with instructions to dismiss the appeal as moot.
See United States v. Munsingwear, Inc., 340 U.S. 36 (1950).

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1 comment:

Paramendra Kumar Bhagat said...

Came here from Fred's blog. Hello.