IN RE: MEGAN MARIE TETER
- Summarized by J. Debbeler , Bricker Graydon LLP
- 2 years 1 month ago
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- No. 22-3778; File Name: 24a0003p.06 (6th Circuit, Jan 03,2024) Not Published
- Tag(s):
-
- Ruling:
- A debtor is not entitled to recover attorneys fees from the United States Trustee's Office (UST) under the Equal Access to Justice Act (EAJA) when the UST withdraws a motion to dismiss the bankruptcy case under Section 707 (b) of the Bankruptcy Code (Code).
- Procedural context:
- Debtor had about $96,000 in debt when she filed her Chapter 7 case, most of it unpaid student loans. Debtor claimed the student loan debt was business debt and not consumer debt. UST disagreed. After reviewing the debtor's income, the UST concluded there was an abuse of the bankruptcy system and filed a motion to dismiss the bankruptcy case under Section 707 (b) of the Code. Debtor filed a motion for summary judgment and, after the bankruptcy court originally declined to grant the motion, the UST withdrew the motion on the grounds of newly discovered facts. The Debtor then sought attorneys fees under the EAJA, 28 U.S.C. Section 2412. The bankruptcy declined to grant the requested fees and the district court affirmed the bankruptcy court.
- Facts:
- The Sixth Circuit agreed with the bankruptcy court. To recover attorneys fees under the EAJA there must be a "civil action" brought against the U.S. and the party seeking attorneys fees must be the prevailing party. The Sixth Circuit found that a motion to dismiss under Section 707 (b) is not a "civil action". The Court did not address whether the bankruptcy itself constituted a "civil action". The Sixth Circuit determined that the result would be the same whether the request for attorneys fees under EAJA was a core or non-core proceeding. No party objected to the bankruptcy court's jurisdiction. The U.S. has sovereign immunity and there is a partial waiver of that under EAJA but such waiver must be construed in favor of the U.S. Other bankruptcy cases may have suggested that the EAJA applies to motions to dismiss but those cases lacked analysis. Bankruptcy Rule 9002 does not help as it cannot expand the scope of a statute. The debtor's argument the district court failed to hear oral argument (as provided in Bankruptcy Rule 8019) was unavailing as the Sixth Circuit reviews bankruptcy court decisions and not those of the district court.
- Judge(s):
- Gilman, Bush, Readler
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