- Case Type:
- Case Status:
- Case No. 17-2449, Third Circuit Court of Appeals (3rd Circuit, Sep 05,2018) Published
- The Third Circuit affirmed the lower courts' rulings that the bankruptcy court had statutory and constitutional jurisdiction to disallow a claimant's hostile workplace and wrongful termination claims because the claimant did not raise such jurisdictional objections in the bankruptcy court. Therefore, the claimant impliedly consented to the bankruptcy court's jurisdiction. In addition, the Third Circuit also affirmed the merits of the claims disallowance.
- Procedural context:
- Bankruptcy court disallowed claimant's claims. Thereafter, he challenged for the first time the Bankruptcy Court’s jurisdiction to hear his claims. The District Court held he impliedly consented to the Bankruptcy Court’s jurisdiction and also held that the Bankruptcy Court correctly disallowed his hostile work environment and wrongful termination claims. The Third Circuit affirmed.
- A claimant, Keith Young, filed a proof of claim against the debtor for being subject to a hostile workplace and that he was wrongfully terminated. The claimant had previously filed a complaint with the Pennsylvania Commission on human Relations prior to the bankruptcy filing, and also submitted the complaint to the EEOC. The bankruptcy court disallowed these claims. On appeal to the District Court, the claimant argued for the first time that the bankruptcy court did not have jurisdiction to hear the appeal. In addition, he argued that he was also deprived of his due process rights, right to a jury trial and right to counsel. The Third Circuit noted that personal injury tort claims are expressly excluded from the scope of the bankruptcy court's jurisdiction. Nevertheless, the claimant voluntarily submitted to a decision by the bankruptcy court on the merits of the claims, as he filed a proof of claim, filed a response to the debtor's objection, filed a supplemental response, and appeared at a hearing before that court. Similarly, with respect to constitutional jurisdiction, no court has stated that a litigant must expressly consent to a bankruptcy court’s jurisdiction, so the implied consent was sufficient. The court noted that the Supreme Court has expressed concerns with claimants "remaining silent about his objection and belatedly raising the error only if the case does not conclude in his favor”, and therefore, must raise jurisdiction issues with the bankruptcy court in the first instance. In addition, the Third Circuit held that there is no Seventh Amendment right to a jury trial for determination of objections to claims, nor could the claimant point to any specific issues that failed to afford him adequate due process. Younge also requested that the court transfer the case, but the court held that it could not transfer the claims because they have been discharged and he should not have another opportunity to relitigate these same claims. Lastly, the Third Circuit affirmed the lower court's ruling on the merits that the claimant did not prove any liability on behalf of the debtor.
- Ambro, Scirica and Siler
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