Nos. 13-1289 & 13-1292 ================================================================ In The Supreme Court of the United States C.O.P. COAL DEVELOPMENT COMPANY, Petitioner, v. GARY E. JUBBER, TRUSTEE, ET AL., Respondents. ANR COMPANY, INC., ET AL., Petitioners, v. GARY E. JUBBER, TRUSTEE, ET AL., Respondents. On Petitions For Writs Of Certiorari To The United States Court Of Appeals For The Tenth Circuit BRIEF FOR RESPONDENT GARY E. JUBBER, TRUSTEE IN OPPOSITION PETER W. BILLINGS Counsel of Record DOUGLAS J. PAYNE FABIAN & CLENDENIN, P.C. 215 South State Street, Suite 1200 Salt Lake City, Utah 84111 (801) 531-8900 pbillings@fabianlaw.com ================================================================ COCKLE LEGAL BRIEFS (800) 225-6964 WWW.COCKLELEGALBRIEFS.COM
i QUESTION PRESENTED Where there is no split on this issue in the circuits, should this Court grant review of a carefully considered decision of the Tenth Circuit Court of Appeals that applied existing circuit precedents to the specific facts of this case and determined that Petitioners appeals were moot under 11 U.S.C. 363(m) because they sought relief that would undermine the bankruptcy court sale order?
ii TABLE OF CONTENTS Page QUESTION PRESENTED... i TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iii OPINIONS AND ORDERS BELOW... 1 BASIS FOR JURISDICTION... 1 STATUTORY PROVISIONS... 1 INTRODUCTION... 2 REASONS FOR DENYING THE PETITION... 3 THE PANEL S DECISION IS NOT IN CON- FLICT WITH DECISIONS OF OTHER COURTS OF APPEALS... 3 CONCLUSION... 6
iii TABLE OF AUTHORITIES Page CASES Cinicola v. Scharffenber, 248 F.3d 110 (3d Cir. 2001)... 4 In re C.W. Mining Co., 740 F.3d 548 (10th Cir. 2014)... 1 In re Vlaskek, 325 F.3d 955 (7th Cir. 2003)... 3, 4 Miami Center Ltd. Partnership v. Bank of New York, 838 F.2d 1547 (11th Cir. 1988), cert. denied, 488 U.S. 823 (1988)... 4 Paulman v. Gateway Venture Partners (In re Filtercorp.), 163 F.3d 570 (9th Cir. 1998)... 4, 5, 6 STATUTES 11 U.S.C. 363(b)... 1, 4 11 U.S.C. 363(c)... 4 11 U.S.C. 363(m)... 3, 5, 6 11 U.S.C. 365... 4 RULES U.S. Sup. Ct. R. 10... 2, 3, 7
1 OPINIONS AND ORDERS BELOW The decision of the Tenth Circuit Court of Appeals is reported at In re C.W. Mining Co., 740 F.3d 548 (10th Cir. 2014). A copy of the Tenth Circuit s opinion is contained in the Appendix in the Petition for Certiorari filed by Petitioners ANR Company, Inc. ( ANR ) and Hiawatha Coal Co. ( Hiawatha ) in No. 13-1292 (the ANR App. ). See ANR App. 1. The decisions below of the United States District Court for the District of Utah are in the ANR App. at 68, 91 & 37. The decisions below of the United States Bankruptcy Court for the District of Utah are in the ANR App. at 112, 130, 134 & 150. BASIS FOR JURISDICTION The Supreme Court has jurisdiction to review petitions for certiorari to the courts of appeals pursuant to 28 U.S.C. 1254(1). STATUTORY PROVISIONS 11 U.S.C. 363(m) (m) The reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the
2 validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal. INTRODUCTION Respondent, Gary E. Jubber, the newly appointed Chapter 11 Trustee in February 2014 1 and his counsel, subsequently appointed, did not participate in any of the proceedings below. However, both Petitions (No. 13-1289 and 13-1292) raise only one reason for granting the petitions that purports to comply with U.S. Sup. Ct. R. 10. Therefore, Respondent will limit this brief solely to the Petitions contention that there is a split among the circuits. That contention can easily be refuted from the face of Tenth Circuit s opinion and from the opinions of the other courts of appeals which Petitioners allege to be in conflict. Respondent will not spend the estate s limited resources becoming familiar with the extensive record in order to respond 1 On February 6, 2014, the bankruptcy court granted a motion to convert the case from a Chapter 7 to a Chapter 11. As a result, Kenneth A. Ruston, the Chapter 7 Trustee, was removed and on February 10, 2014, Gary E. Jubber was appointed as the Chapter 11 Trustee. On February 20, 2014, Fabian & Clendenin was approved as counsel to the Chapter 11 Trustee.
3 to Petitioners lengthy Statements of the Case. Nor will Respondent address the many other non-rule 10 issues raised by Petitioners either in their Questions Presented or in their Reasons for Granting the Petition. REASONS FOR DENYING THE PETITION THE PANEL S DECISION IS NOT IN CON- FLICT WITH DECISIONS OF OTHER COURTS OF APPEALS. Citing the same four decisions from four other courts of appeals and using almost identical language, both Petitions contend that there is a conflict between the Tenth Circuit and the other four courts of appeals as to whether 11 U.S.C. 363(m) can apply to an order that is not the actual sale order. This is not so. None of the four courts of appeals cases cited by Petitioners holds that the protections of 11 U.S.C. 363(m) are limited solely to the sale order itself. To the contrary, all recognized that appeals other than an appeal of the sale order could adversely impact the sale. In the first case, In re Vlaskek, 325 F.3d 955, 961 (7th Cir. 2003), the trustee had sold four parcels of property and the debtor then unsuccessfully sought to dismiss the bankruptcy itself and the debtor appealed. The Seventh Circuit held the appeal moot because the practical effect of allowing Vlaskek to
4 withdraw from the bankruptcy process at this stage would be to overturn these sales. Id. In the second case, Cinicola v. Scharffenber, 248 F.3d 110 (3d Cir. 2001), the issue was an appeal of an order to assume and assign physician employment contracts under 11 U.S.C. 365. The assumed employment contracts, along with other assets of the debtor (a healthcare company) were sold to another healthcare company. The Third Circuit remanded for a determination of whether modifying the 365 order would affect the validity of the transaction between... [the two healthcare companies]. Id. at 128. In the third case, Miami Center Ltd. Partnership v. Bank of New York, 838 F.2d 1547 (11th Cir. 1988), cert. denied, 488 U.S. 823 (1988), concerned an appeal of orders consolidating bankruptcies and confirming a plan of reorganization which involved a sale of the debtor s property to a third party. The Eleventh Circuit recognized the continuing viability and applicability of the mootness standards in situations other than transfers by a trustee under 363(b) or (c). Id. at 1553. The Court of Appeals went on to hold that the sale could not be separated from the confirmation order and therefore it was impossible to fashion effective relief and affirmed the dismissal of the appeal as being moot. Id. at 1556-1557. The fourth case, Paulman v. Gateway Venture Partners (In re Filtercorp.), 163 F.3d 570 (9th Cir. 1998), the lender appealed both the sale order and the summary judgment order holding that the lender did not have a security interest in the
5 assets being sold. Contrary to the assertion of both Petitioners, the Ninth Circuit did not hold that summary judgment order was intertwined with final sale order. That was the contention of the appellees, not a holding of the court of appeals. Instead, the Ninth Circuit held that effective relief to the lender was possible without undoing the sale because, if successful on the merits, the lender could be paid from the proceeds. Id. at 577-578. Here, the Tenth Circuit panel rejected the contention of the appellants that 363(m) is limited to appeals of the sale order itself. (ANR App. 12) Instead, the Tenth Circuit, like the courts of appeals in the four cases cited by both Petitioners, examined each appellant s appeal to determine whether any relief can be granted that would not affect the sale s validity. (ANR App. 3) With respect to Petitioner ANR Company, Inc. s ( ANR ) appeal, the panel noted that ANR wanted a declaratory ruling that the mining agreement (a major part of the assets that were being sold) was no longer in effect. (ANR App. 17-18) Because the only remedy ANR has preserved on appeal would unwind the sale order, the ANR appeal was dismissed as moot. (ANR App. 18) Likewise, the panel held that since Petitioner C.O.P. Coal Development Co. s ( COP ) appeal was seeking to reverse the bankruptcy court s interpretation of the same mining agreement, COP would be altering the definition and
6 value of the assets purchased and thus would violate 363(m) s bar on any modification... [that] affect[s] the validity of [the] sale. (ANR App. 33) With respect to Petitioner Hiawatha s appeal, the panel held that Hiawatha could not prevail on its constructive trust theory because under Utah law it could not trace its assets to the sale s proceeds and therefore dismissed the appeal. (ANR App. 27-28) However, like the Ninth Circuit in Filtercorp, the panel did hold that another of the consolidated appeals (the Reynolds Appeal) did not affect the sale order, but sought only recovery from the sales proceeds. Therefore, the panel held that the Reynolds Appeal was not moot and remanded to the district court for review on its merits. (ANR App. 28-31) In sum, there is no conflict between the panel s decision and other courts of appeals that the test for mootness under 363(m) is whether the relief sought affects the validity of the sale. CONCLUSION Petitioners arguments provide no basis for this Court to grant the Petitions because there is no conflict among the courts of appeals. Further, even if the Tenth Circuit had incorrectly applied the law to the facts of the case, which it did not, that error would
7 clearly not satisfy Rule 10. Accordingly, their Petitions for Writs of Certiorari should be denied. DATED: May 13, 2014. Respectfully submitted, PETER W. BILLINGS Counsel of Record DOUGLAS J. PAYNE FABIAN & CLENDENIN, P.C. 215 South State Street, Suite 1200 Salt Lake City, Utah 84111 (801) 531-8900 pbillings@fabianlaw.com Attorneys for Respondent Gary E. Jubber, Trustee