IN RE: JEFFREY J. PROSSER
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 22-3456 (3rd Circuit, Mar 22,2024) Not Published
- Tag(s):
-
- Ruling:
- Defendants forfeited their right to challenge the authority of a bankruptcy judge who was transferred to sit in the Bankruptcy Division of the United States District Court for the Virgin Islands by failing to raise the challenge before they appealed the bankruptcy judge's decision.
Two judges entered a concurrence asking Congress to enact legislation to "fill a lacuna in the statutory scheme governing bankruptcy courts" relating to federal courts in the Virgin Islands. (Cleaned up.)
- Procedural context:
- Following entry of a sanctions order in 2010, appellants engaged in numerous appeals to avoid paying the full amount of the sanctions.
In a last-gasp effort, the appellants asked the district court to reconsider an order that summarily dismissed the appellant's appeal. The district court denied the motion, and the appellants timely appealed to the Third Circuit.
- Facts:
- A bankruptcy judge transferred to preside over the Virgin Islands Bankruptcy Division of the United States District Court under 28 U.S.C. § 155 entered a sanctions order against the appellants in 2010 for vexatious litigation that accused the debtor's chapter 7 trustee of a witness bribery scheme.
The appellants failed to pay the full amount of the sanctions. In 2014, the trustee filed a notice of default, and the appellants appealed the sanctions order to the district court.
The district court reversed and remanded. The trustee refunded amounts received from the appellants and appealed to the United States Court of Appeals for the Third Circuit. In 2015, the Third Circuit reversed the district court and remanded, directing the district court to reinstate the sanctions order.
The sanctions order was reinstated. In 2019, the bankruptcy court reduced the fees awarded as part of the sanctions order to a judgment under Fed. R. Civ. P. 58(b).
The appellants appealed that to the district court and failed to file a brief. The district court summarily denied the appeal and affirmed the bankruptcy court's order.
In 2022, twelve years after the sanctions order was entered, the appellants filed a motion for reconsideration of the district court's summary dismissal of their appeal. In this motion for reconsideration, the appellants argued that the bankruptcy court for the Virgin Islands was not "legally constituted." The district court denied the motion.
- Judge(s):
- HARDIMAN, KRAUSE, RENDELL, Circuit Judges
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
