Bais Din of Mechon L'hoyroa v. Congregation Birchos Yosef (In re Congregation Birchos Yosef)

Case Type:
Case Status:
16-3620 (2nd Circuit, Nov 01,2017) Not Published
In a summary order, the Second Circuit Court of Appeals affirmed the district court’s decision to dismiss the appellant’s appeal of the bankruptcy court's order due to lack of standing.
Procedural context:
The bankruptcy court found that certain adversary proceeding defendants violated the automatic stay under Section 362(a) when they commenced rabbinical proceedings with the appellant while the automatic stay was in effect. The appellant appealed the bankruptcy court’s decision. The district court dismissed the appeal, finding that the appellant lacked standing to appeal. The appellant appealed the district court's decision, and the 2nd Circuit affirmed.
The debtor-appellee filed for bankruptcy under Chapter 11, and commenced adversary proceedings against certain defendants. While the automatic stay was in effect, the subject defendants commenced rabbinical proceedings in the Bais Din, a rabbinical court that was not a party in the adversary proceedings. The bankruptcy court found that (i) the defendants’ actions violated the automatic stay; and (ii) the decrees issued by the Bais Din while the automatic stay was in effect also violated the stay, and were therefore void ab initio. The Bais Din appealed the bankruptcy court’s ruling on the basis that the court’s order inhibited the free exercise of religion in violation of the Free Exercise Clause and the Religious Freedom Restoration Act. The district court dismissed the Bais Din’s appeal on the basis of standing, and the Bais Din appealed. The Second Circuit affirmed the district court’s decision, finding that because the appellant failed to show that it was “pecuniarily” harmed by the bankruptcy court’s order, the appellant lacked standing to appeal the order.
Katzmann, Lohier, Jr., and Droney

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