Benta, et al. v. Carroll

Case No. 13-2139 (3d Cir. Jan. 16, 2014) (Not Precedential)
Appeal alleging district court abused its discretion when dismissing declaratory judgment action is moot where district court effectively ruled on the merits by denying appellants' subsequent motion to withdraw the reference.
Procedural context:
On appeal from the District Court of the Virgin Islands
Avoidance actions had been commenced against defendants in the bankruptcy court. Defendants filed an action in the district court seeking declaratory judgment that the district court's standing order of reference to the bankruptcy court is unconstitutional. Defendants simultaneously sought to stay the avoidance actions while the declaratory judgment action was pending. The bankruptcy court denied a stay, and avoidance litigation continued apace. The district court dismissed the declaratory judgment action, finding that there was an alternative forum (the bankruptcy court) in which to assert the constitutional challenge. This appeal followed. The district court thereafter denied defendants' motion to withdraw the reference. Here, the Third Circuit Court of Appeals ruled that this denial mooted the earlier appeal.
Fisher, Cowen (author), Nygaard

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