Burton v. Infinity Capital Management

Burton v. Infinity Capital Management, et al., Case No. 12-15618 (9th Cir. June 4, 2014)
The Ninth Circuit Court of Appeals affirmed the district court's denial of summary judgment, holding that an attorney who prepared an order to show cause at the request of a judge is not entitled to absolute quasi-judicial immunity on a claim for violation of the automatic stay provision of Bankruptcy Code Section 362.
Procedural context:
Appeal from the United States District Court for the District of Nevada on its order denying summary judgment, reviewed de novo.
Appellees, bankruptcy debtor, Freddie Lee Burton ("Debtor"), and his attorney, Jan Paul Koch ("Koch"), filed an action in District Court for violation of the automatic stay against, among others, attorney Salvatore Gugino ("Gugino") arising from his preparation of a draft order to show cause ("OSC") for the District Court judge in an interpleader action. Appellees contended that the OSC was drafted in the interpleader action after the Debtor had filed a bankruptcy petition and was, thus, in violation of the automatic stay provided by Bankruptcy Code Section 362. Gugino filed a motion to dismiss the complaint against him for violation of the stay, on the grounds that the claims were barred by the doctrine of quasi-judicial immunity because he had prepared the OSC at the request of the District Court judge. In response to a (converted) motion for summary judgment, the District Court issued an order denying the motion and holding that the doctrine does not apply to an attorney who volunteers to prepare an order for a judge. Upon review, the Ninth Circuit upheld this decision, confirming that absolute quasi-judicial immunity is not applicable to claims arising from the preparation of an order by an attorney at the request of a judge. To qualify for absolute immunity, the function at issue must be a judicial act that involves the exercise of discretion. Because the preparation of the OSC did not involve any discretionary judgment by the attorney (it merely mirrored the judge's order), that act was not protected.
Sidney R. Thomas and Johnnie B. Rawlinson, Ninth Circuit Judges, and Ronald Lee Gilman, Senior Sixth Circuit Judge (sitting by designation).

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