Respondents Brief — Things Remembered, Inc. v. Petrarca

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FILED

JUL 14 1995

CLERK

ae “in The _

Supreme Court of the United States

October Term, 1994

THINGS REMEMBERED , Inc.,

Petitioner,

ia | Respondent.

es On Writ of Certiorari

oe ieee a to the United States Court of Appeals

ee Bea : for the Sixth Circuit

ease BRIEF FOR RESPONDENT

WIA. .

ay - »

iss

lp li ae en _ A, hi 44308-1322

The Victor Printing & Publishing Co., Akeon, Ohio — 216-945-4090

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—_—— -_————

ION ED FOR REVIEW

Whether an Order of a District Court

remanding on jurisdictional grounds under

28 U.S.C. § 1447(d) a case which had been

removed under 28 U.S.C. §§ 1446 and 1452

is reviewable by the Court of Appeals.’:?

'Plaintiff-Respondent Petrarca has restated the Question

Presented for Review based upon Petrarca's position, as set

forth in greater detail infra, that by not appealing from the

Bankruptcy Court's holding that the "bankruptcy removal"

was not timely, Petitioner has waived its right to seek

further review of that issue even if the District Court

remand Order is appealable. Further, it is Petrarca's

position that given the statutory language of §§ 1447 and

1452, this case was clearly remanded on jurisdictional

grounds under § 1447 and not under § 1452 as Petitioner

contends.

This Court must also determine whether Petitioner

properly preserved its right to make this appeal and whether

Petitioner has waived its right to make this appeal by

prosecuting in the state courts the issues which Petitioner

contends must be litigated in the federal system.

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW

TABLE OF CONTENTS ... -

TABLE OF AUTHORITIES . .

JURISDICTION . +++ s+ »

STATEMENT OF THE CASE . .

SUMMARY OF THE ARGUMENT .

ARGUMENT ..+ ++ + «© © »

I. APPELLATE REVIEW OF REMAND

ORDERS IS BARRED BY 28 U.S.C.

§ 1452(bD). - - «= « «

A. Congress intended to

include "jurisdiction"

within the phrase "on any

equitable ground.” ... -

B. Petitioner's literal

reading of § 1452

contradicts Congress's

intention. .. -

Cc. Petitioner never

defines "on any equitable

ground." ...- -

D. Assuming arguendo there

is a split in the circuits,

Congress's intention has

been manifested in

decisions by the majority

of courts holding that

remands under § 1452(b)

are not reviewable.

II. APPELLATE REVIEW OF THIS

REMAND ORDER IS BARRED BY

28 U.S.C. § 1447.

A. Section 1447 bars

appellate review when

cases are remanded for

want of jurisdiction.

B. Removal under special

removal provisions does

not imply inapplicability

of general removal statute

provisions.

III.

PETITIONER DID NOT

PRESERVE ITS RIGHT TO MAKE

THIS APPEAL WHEN IT FAILED

TO APPEAL THE BANKRUPTCY

COURT ORDER AND WAIVED ITS

RIGHT TO MAKE THIS APPEAL BY

PROSECUTING STATE COURT

LITIGATION ON ISSUES IT

CONTENDS MUST BE LITIGATED

IN THE FEDERAL SYSTEM.

CONCLUSION .....

CERTIFICATE OF SERVICE

iii

TABLE OF AUTHORITIES

CASES

Aetna Life Ins. Co. v. Haworth,

300 U.S. 227 (1937),

reh. den. 300 U.S. 687 (1937)

Boone Coal and Timber Co. v. Polan,

787 F.2d 1056 (6th Cir. 1986)

Browning v. Navarro,

743 F.2d 1069 (5th Cir. 1984)

Daleske v. Fairfield

Communities, Inc.,

17 F.3d 321 (10th Cir. 1994)

Dominick v. Dixie National

Life Insurance,

809 F.2d 1559 (llth Cir. 1987)

o « 26,

FSLIC v. Frumenti Development Corp.,

857 F.2d 665 (9th Cir. 1988)

Hernandez v. Brakegate, Ltd.,

942 F.2d 1223

(7th Cir. 1991) . . . . . . .

In re Adams,

809 F.2d 1187 (5th Cir. 1987)

In re Branded Products, Inc.,

154 B.R. 936 (Bkrtcy. W.D.

fem. 1993) <«c«eteteveee

In re Compton,

711 F.2d 626 (5th Cir. 1983)

26, 32,

. 40

. 34

. 28

. 36

- 27

. 29

- 28

In re FSLIC,

881 F.2d 564 (8th Cir. 1989) ....

In re Hanson Industries, Inc.,

83 B.R. 659 (Bkrtcy. D. Minn. 1988) .

In re National Developers, Inc.,

803 F.2d 616, 619

(Sees ee, bw oe ers se ce DP

In re totts,

724 F.2d 47 (6th Cir. 1984) .....

In re Rayburn Enterprises, Inc.,

781 F.2d 501 (5th Cir. 1986) .

Mercer v. Theriot,

377 U.S. 152 (1964),

reh. den. 377 U.S. 973 (1964) ....

Michel v. Louisiana,

CO gk kk

Missouri, Kansas &

Texas R. Co. v. Ferris,

79 U.8. 662, 606 (1900) ...-c.ce

Nasuti v. Scannell,

792 F.2d 264 (lst Cir. 1986) ....

North Carolina v. Rice,

EE. I ee

Northern Pipeline Construction Co. v.

Marathon Pipe Line Co.,

Ug lg et

Pacor, Inc. v. Higgins,

743 F.2d 984

(3rd Cir. 1984) . . . 22, 23, 26, 27,

Pennsylvania R. Co. v.

Illinois Brick Co.,

297 U.S. 447 (1936) ...+-+-+ ees

Resolution Trust Corp. v.

Lightfoot,

938 F.2d 65 (7th Cir. 1991)... 33,

Sykes v. Texas Air Corporation,

834 F.2d 488

(5th Cir. 1987) .... . 21, 22, 25,

Thermtron Products, Inc. v.

Hermansdorfer,

423 U.S. 336 (1976) ..... 2, 34,

United States v. Rice,

327 U.S. 742 (1946) . . «© © © « 33,

United States v. Socony-Vacuum Oil

Co., Inc., 310 U.S. 150 (1940) .. .-

Volvo of America Corp. v. Schwarzer

429 U.S. 1331 (1976) ....- 2, 3,

STATUTES

12 U.S.C. 1730 * * * . >. * >. > * .

28 U.S.C. 1331 . . * > > * >. * * >

28 G.8.C. 1334 . . . . . * . o . .

28 U.S.C. 1441 * . . . * . > * * *

28 U.S.C. 1446 . .. £8 ae 5-8, 33,

wDounnn wn Mm

28 U.S.C.

30-34, 36, 38,

1447 i, 1411, 2, 8, 12, 14,

28 U.S.C. § 1452 i, ii, 2, 6-9, 11-14,

18-20, 23-34, 37, 38, 41

1978 Bankruptcy Reform Act . 14-16, 18

1990 Judicial Improvements Act .. . 18

ap imaiae. 16-10

RULES

Bankruptcy Rule 9027 ....... 6, 7

MISCELLANEOUS

130 Cong. Rec. S 6084 (May 21, 1984) 17

130 Cong. Rec. S. 7619

[or oe MED 6 6 &» 6 6,0 © ew © e 28

Collier on Bankruptcy § 3.01,

at 3-80.1 - 3-81 (15th ed. 1984)) . . 27

H.R. Rep. No. 595, 95th Cong.,

2d Sess. 51 (1978), reprinted

in 1978 U.S.C.C.A.N. 5787, 6012 . 15, 19

S. Rep. No. 55, 98th Cong.,

RE Es |

S. Rep. No. 989, 95th Cong.,

2d Sess. 17 (1978), reprinted in

1978 U.S.C.C.A.N. 5787, 5803 .. 15, 16

vii

No. 94-1530

In The

Supreme Court of the United States

October Term, 1994

THINGS REMEMBERED, INC.,

Petitioner,

Vv.

ANTHONY A. PETRARCA,

Respondent.

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR RESPONDENT

JURISDICTION

Despite the Court's grant of the

Petition for Writ of Certiorari,

Respondent respectfully submits that this

Court should find, in deciding the case

on the merits, that neither the Sixth

Circuit nor this Court has jurisdiction

to review the District Court Order

pursuant to 28 U.S.C. § 1452(b), 28

U.S.C. § 1447(d) and this Court's

previous decisions in Volvo of America

Corp. v. Schwarzer, 429 U.S. 1331 (1976),

and Thermtron Products, Inc. Vv.

Hermansdorfer, 423 U.S. 336 (1976).

STATEMENT OF THE CASE

Plaintiff-Respondent Anthony A.

Petrarca (hereinafter "Petrarca" )

commenced this action by filing his

Complaint in the Summit County, Ohio

Court of Common Pleas on March 18, 1992.

Petrarca's Complaint named Child World,

Inc. (hereinafter "Child World") and Cole

National Corporation (hereinafter "Cole" )

as Defendants.’ Petrarca's Complaint

sets forth four counts. The first count

*Things Remembered, Inc. (herein-

after "TRI") purported to enter into the

Summit County action "as a successor by

merger to Defendant Cole National

Corporation" and has asserted in all

Courts since that time that TRI “is

successor in interest by merger to Cole

National Corporation.” See e.g.

Petitioner's Brief at 3, n.l.

is a claim for money damages against

Child World as lessee and Cole as

guarantor based upon Child World's breach

of a lease between Petrarca and Child

World in Denver, Colorado. The second

count is a claim against Child World as

lessee and Cole as guarantor for future

rents pursuant to that Denver lease. The

third and fourth counts assert claims

against Child World only and are not

involved in this appeal.

On May 6, 1992, Child World filed

its petition pursuant to Chapter 11 of

Title 11, United States Code, in the

United States Bankruptcy Court for the

Southern District of New York, Case No.

92B20887.

On May 11, 1992, Child World filed

in the Summit County action a suggestion

of stay. On May 22, 1992, the Court

entered an Order transferring the case to

the inactive docket as to Child World

only.

TRI filed an Answer on May 28, 1992.

TRI did not assert in its Answer that the

case should properly be in Federal Court.

Next, TRI noticed and took two

depositions, one of a non-party witness

and one of Plaintiff Petrarca.

On June 26, 1992, TRI filed its

Amended Answer and Counterclaims. TRI

asserted Counterclaims against Petrarca

and also joined an additional

Counterclaim Defendant Colfax Manor

Gardens ("Colfax"), previously not a

party to the action, and asserted purely

permissive Counterclaims against Colfax.

TRI asserted in its Counterclaim four

counts for declaratory judgment raising

issues virtually identical to those

raised by Petrarca's original Complaint

but relating to four additional leases

between Petrarca and Child World and Cole

guaranties of those leases. Obviously,

TRI did not allege in its Amended Answer

and Counterclaims that this action could

only be litigated in Federal Court.

The parties proceeded with discovery

until on August 28, 1992, Petrarca filed

his First Amended Complaint bringing five

more guaranty claims against TRI and Cole

raising identical issues previously

raised by Petrarca's original Complaint

and by TRI's Counterclaim. Two of the

properties which are the subject of

Petrarca's First Amended Complaint had

previously been placed in issue by TRI's

Counterclaim.

On September 15, 1992, TRI filed in

the Court of Common Pleas, Cuyahoga

County, Ohio a separate Complaint for

declaratory relief against Petrarca and

other Defendants seeking declaratory

judgment upon two additional Cole

guaranties of Child World leases raising

issues similar to, although not identical

to, the issues raised in this litigation

but as to still more properties

(hereinafter "TRI vs. BGTV"). Again,

obviously, TRI did not allege in TRI v.

BGTV that those claims could only be

litigated in Federal Court.

On or about September 25, 1992, TRI

filed its untimely Notice of Removed

Action in the Court of Common Pleas,

Summit County, Ohio, indicating that the

case had been removed to the United

States District Court, Northern District

of Ohio and indicating further that the

case had been removed only pursuant to 28

U.S.C. § 1446(d). On or about the same

day, TRI filed in the United States

District Court for the Northern District

of Ohio and in the United States

Bankruptcy Court for the Northern

District of Ohio two separate and

untimely Notices of Removal indicating

that the case had been removed pursuant

to 28 U.S.C. §§ 1331, 1334(b), 1441,

1446, 1452 and Bankruptcy Rule 9027.

Petrarca filed in the District Court and

in the Bankruptcy Court virtually

identical Motions to Remand and Motions

for Costs.

TRI filed both in the District Court

and in the Bankruptcy Court Memoranda in

Opposition to Petrarca's Motions to

Remand. TRI then filed only in the

Bankruptcy Court a Motion to Transfer

Venue and a Memorandum in Support

requesting the Bankruptcy Court to

transfer venue of this case to the United

States Bankruptcy Court for the Southern

District of New York. Petrarca filed a4

Brief in Opposition and TRI filed a Reply

Memorandum.

On June 25, 1993, the Bankruptcy

Court entered its Memorandum of Decision

on Motion to Remand and Motion to

Transfer Venue. The Court found and held

that TRI's removal to the District Court

under the general removal statute, 28

U.S.C. § 1446, was proper; however, the

Court also found and held "that the

removal to [the bankruptcy] court was

untimely." (J.A. 12a.)

Petrarca timely appealed to the

United States District Court. TRI did

not appeal from any aspect of the

Bankruptcy Court's Memorandum of Decision

or the Court's Order. Upon consideration

of Petrarca's appeal, the District Court

reversed. Relative to the federal

question removal, the District Court held

that the September 25, 1992, Notice of

Removal "was plainly without the thirty-

day period for removal provided by §

1446(b)." (J.A. 27a.) The District

Court then went on to affirm the

Bankruptcy Court's holding that TRI had

failed to timely remove the case under

the bankruptcy removal provisions of 28

U.S.C. § 1452 and Bankruptcy Rule 9027.

In so doing, the District Court reversed

the Order of the Bankruptcy Court only

insofar as the Bankruptcy Court had held

that TRI's removal under the general

removal statute was proper. The District

Court remanded the case to the Bankruptcy

Court for further proceedings consistent

with the District Court Order.

TRI appealed to the United States

Court of Appeals for the Sixth Circuit.

The Sixth Circuit ordered TRI to show

cause why the appeal should not be

dismissed since, "[a]s a general rule, an

order remanding an action to a state

court from which is (sic) was removed is

not reviewable on appeal or otherwise.

28 U.S.C. §§ 1447(d) and 1452(b); * * *

[Citations omitted.] * * * It does not

appear, therefore, that the order of the

district court is an appealable order.”

(J.A. 34a.)

The parties briefed the show cause

Order, and the Sixth Circuit then

dismissed the appeal. The Sixth Circuit

held: "The record clearly demonstrates

that defendant sought removal pursuant to

the general removal statute and that the

district court held that the notice of

removal was not filed within the time

required by 28 U.S.C. § 1446(b). Thus,

section 1447(d) prohibits review of that

ruling. [Citations omitted.]" (J.A.

36a. ) Relative to the bankruptcy

removal, the Sixth Circuit held: "In

addition, the district court held that

the notice of removal pursuant to § 1452

was not timely filed. Appellate review

of that ruling is likewise barred.

{Citations omitted.]" (J.A. 36a.)

TRI then petitioned the Sixth

Circuit for rehearing and rehearing en

banc. In response, on January 12, 1995,

the Sixth Circuit entered an Order

concluding “that the issues raised in the

petition were fully considered upon the

original submission and decision of the

case." (J.A. 38a.)

On January 20, 1995, TRI filed as

Plaintiff in state court in Denver,

Colorado, a declaratory judgment action

seeking a declaration by the Colorado

state court of the rights and liabilities

of TRI, Petrarca, and three other party

defendants relative to the very same

Denver Child World guaranty which was the

subject of Petrarca's original Complaint

but which TRI argues must be litigated in

the federal court system.

On March 10, 1995, TRI filed its

Petition for a Writ of Certiorari in this

Court.

On March 15, 1995, TRI filed as

Plaintiff in state court in Lancaster,

Pennsylvania, an Action for Declaratory

Judgment seeking a declaration by the

Pennsylvania state court of the rights

and liabilities cf TRI, Petrarca, and

three other party defendants relative to

a Cole guaranty of Child World's

obligations under a lease of a Child

World store in Manheim Township,

Pennsylvania. That Manheim Child World

guaranty had been first placed in issue

in the Summit County, Ohio litigation,

the case now pending before this Court,

by TRI in the Second Claim of its

Counterclaim filed June 26, 1992.

Petrarca also placed the Manheim Child

World guaranty in issue in Counts Seven

and Eight of his First Amended Complaint

filed August 28, 1992. These two counts

were included in TRI's improper removals.

As with the Denver guaranty, TRI argues

to this Court that the Manheim guaranty

must be litigated in Federal Court, while

at the same time TRI has commenced and is

pursuing a declaratory judgment action on

that guaranty in state court in

Pennsylvania.

SUMMARY OF THE ARGUMENT

Appellate review of remand Orders is

barred by 28 U.S.C. § 1452(b).

Petitioner's semantic argument is

contrary to Congress's intention to

restrict judicial review of remand Orders

and also creates an anomaly in and of

itself. Accepting Petitioner's literal

reading of § 1452 requires an

interpretation of that statute which does

not permit remands on the basis of lack

of jurisdiction.

Assuming arguendo that there is a

split in the circuits, Congress's

intention to restrict judicial review of

remand orders is supported by the

majority of courts which have addressed

the question. In fact, there is even

authority out of at least one of the

circuits which Petitioner contends

supports its argument that remand Orders

of bankruptcy removals are not

reviewable.

Alternatively, since, under

Petitioner's literal reading of § 1452,

this case could not have been remanded

under § 1452, the proper focus for

reviewability of the remand Order is in

fact under 28 U.S.C. § 1447. Section

1447 unequivocally bars all appeals where

cases are remanded based upon a lack of

jurisdiction. In fact, this Court has

already held that it has no authority to

hear an appeal of a remand Order.

Finally, this Court should also find

and hold that Petitioner did not preserve

its right to make this appeal since

Petitioner failed to appeal the

Bankruptcy Court Order holding that

Petitioner's bankruptcy remand was not

timely. Additionally, Petitioner has

waived its right to make this appeal by

commencing and prosecuting in state

courts litigation on the very same issues

it contends must be litigated in the

federal system.

ARGUMENT

e ©

APPELLATE RZVIEW OF REMAND

ORDERS IS BARRED BY 28 U.S.C. §

1452(b).

Title 28 U.S.C. § 1452(b) provides:

The court to which such claim or

cause of action is removed may

remand such claim or cause of action

on any equitable ground. An order

entered under this subsection

remanding a claim or cause of

action, or a decision to not remand,

is not reviewable by appeal or

otherwise by the court of appeals

under section 158(d), 1291 or 1292

of this title or by the Supreme

Court of the United States under

section 1254 of this title.

(Emphasis added. )

Subsection 1452(b) only permits a

court to remand a claim on an equitable

ground, whatever "on any equitable

ground" means in the context of that

statute. Petitioner does not tell this

Court, or even attempt to tell this

Court, what "on any equitable ground"

means or what Petitioner thinks it means

or should mean, but rather, Petitioner

simply argues that the interpretations

which have been presented by various

circuit courts of appeals are clearly

incorrect, and "jurisdiction" cannot be

"any equitable ground." As discussed

below, Congress intended to include

"jurisdiction" within the phrase "on any

equitable ground." The legislative

history is clear and convincing evidence

of Congress's intention to restrict

judicial review of remand Orders.

Further, Petitioner only desires to

literally interpret the second sentence

of subsection 1452(b) and completely and

totally ignores the first sentence of

that subsection. Accepting Petitioner's

literal reading of the second sentence of

§ 1452(b) not only contradicts Congress's

intention, but also requires this Court

to find that this case was not remanded

"on any equitable ground" and therefore

is without the provisions of § 1452(b).

Therefore, the issue of appealability of

the remand Order must be examined under

28 U.S.C. § 1447(d).

A. Congress intended to include

"jurisdiction" within the phrase "on

any equitable ground."

The phrase "equitable ground” was

incorporated into the 1978 Bankruptcy

Reform Act. However, the 1978 amendments

did not discuss the intended meaning of

the phrase “equitable ground.” Before

1978 there was a dichotomy of

jurisdiction between the bankruptcy

courts and the district courts which the

1978 Bankruptcy Reform Act terminated.

S. Rep. No. 989, 95th Cong., 2d Sess. 17

(1978), reprinted in 1978 U.S.C.C.A.N.

5787, 5803. In 1978, Congress broadened

the jurisdiction held by bankruptcy

courts to avoid serious delays, expense,

and duplications that would occur by

dividing claims in one cause of action or

completely changing forums. H.R. Rep.

No. 595, 95th Cong., 2d Sess. 51 (1978),

reprinted in 1978 U.S.C.C.A.N. 5787,

6012. The House Report stated that the

bankruptcy courts were to serve two

goals: (1) be a fair and credible forum;

(2) be efficiently and quickly operated.

H.R. Rep. No. 595, 95th Cong., 2d Sess.

13 (1978), reprinted in 1978 U.S.C.C.A.N.

5787, 5974. In order to accomplish these

goals, Congress decided that

* * * except where the bankruptcy

court abstains from hearing an

action or proceeding arising under

or related to a case under title ll,

all cases under title 11 and all

civil actions and proceedings

arising under or related to cases

under title 11 are to be hefore the

bankruptcy judge. S. Rep. No. 989,

95th Cong., 2d Sess. 18 (1978),

reprinted at 5804.

Congress broadened the jurisdiction of

the bankruptcy courts but this amendment,

as noted, did not directly address or

define the meaning of “equitable ground."

In the case of Northern Pipeline

Construction Co. v. Marathon Pipe Line

Co., 458 U.S. 50 (1982) this Court

concluded that the 1978 Act conferring

broad subject-matter jurisdiction upon

the bankruptcy courts was

unconstitutional. S. Rep. No. 55, 98th

Cong., lst Sess. 8 (1983). The

bankruptcy courts were intended to be

adjuncts to the district courts, but,

after 1978, they became more than

adjuncts by adjudicating questions of

constitutional law and even state law.

S. Rep. No. 55.

Congress developed the Bankruptcy

Amendments and Federal Judgeship Act of

1984 in response to Marathon. The Act of

1984 stipulated that bankruptcy courts

would still handle most cases brought

before them unless, as in this case, the

cause of action was grounded in state law

and the parties did not consent to

jurisdiction, or the district court

elected to take the suit. 130 Cong. Rec.

S 6084 (May 21, 1984) (statement by Sen.

Doyle). Congress repeatedly cited to the

concepts of equity and fairness by

stating:

If a party to a suit has a wholly

State law claim which he wishes to

have decided before his local state

court, what principles of equity

dictate that he should be subject to

the jurisdiction of a distant

Federal court simply because the

other party has filed bankruptcy?

Id., at S. 6089. (Emphasis added. )

Furthermore, the debates surrounding the

1984 Act centered mostly on the fear of

abuse of bankruptcy power. Congress

feared that a party would not only use

bankruptcy laws to escape state court

jurisdiction and deny claimants a right

to a fair trial in the appropriate court,

but Congress also feared that, as in this

case, parties would litigate the

jurisdictional question in order to delay

the suit and increase litigation

expenses. 130 Cong. Rec. S. 7619 (June

19, 1984) (statement by Sen. Heflin).

In fact, the Congressional intent in

enacting the 1984 Act was expressly to

preserve a litigant's right to have state

law issues tried in the appropriate state

forum and to avoid the use, as in this

case, of "the bankruptcy laws solely to

escape state court jurisdiction and deny

Claimants a right to a fair trial in the

appropriate court.” Id. Congress

recognized that, as in this case, "[{t]his

is an abuse of the bankruptcy power.”

Id. Thus, in the 1984 Act, Congress

clarified its intent to include

"jurisdiction" as an “equitable ground,"

and limited the appeals process to the

district courts.

The 1990 Judicial Improvements Act

adopted many recommendations made by the

Federal Courts Study Committee one of

which was a clarification of the second

sentence of 28 U.S.C. § 1452(b). Both

the 1978 and 1984 Acts stated that an

Order by the bankruptcy court to remand

or not to remand was not reviewable by

appeal or otherwise. The Federal Courts

—— _——

Study Committee recommended that Congress

amend 28 U.S.C. §1452(b)

‘to clarify that they forbid only

appeals from the district courts to

the court of appeals, not from

bankruptcy courts to the district

courts.' Staff of the Federal

Courts Study Committee, 10lst Cong.,

2d Sess., Report of the Federal

Courts Study Committee 77 (Comm.

Print 1990) (Emphasis added).

This recommendation was obviously

accepted. As one can see, Congress has

continuously limited the appeals in which

jurisdictional issues can be litigated.

Congress intended for jurisdiction

to be an “equitable ground" in order to

declare district court decisions to

remand cases unreviewable by the court of

appeals. This is evident by the

strenuous debates concerning the

unfairness of "jurisdiction by ambush,"

undue delay and expense, and the effects

upon the estate in question of litigation

in a different forum. H.R. Rep. No. 595

at 51.

B. Petitioner's literal reading of §

1452 contradicts Congress's

intention.

Not only does Petitioner's proposed

interpretation of § 1452 contradict

Congress's intention to include

"jurisdiction" within the phrase "on any

equitable ground," but Petitioner's

literal reading of section 1452 also

presents an anomaly. Petitioner presents

the issue as whether or not a remand

Order under § 1452 is reviewable before

petitioner answers’ the question of

whether or not the case was in fact even

remanded under § 1452. If Petitioner's

argument is correct, that only Orders

remanding cases "on any equitable ground"

are not reviewable by appeal or

otherwise, and if Petitioner is also

correct that " jurisdiction" is not an

"equitable ground" as that term is used

in the statute, then it also must follow

that cases may in fact only be remanded

under § 1452(b) “on any equitable ground”

and since this case was remanded on

jurisdictional grounds, it could not have

been remanded pursuant to § 1452(b).

Perhaps the best analysis of the

flaw in Petitioner's reasoning appears in

Sykes v. Texas Air Corporation, 834 F.2d

488 (5th Cir. 1987). As the Court in

Sykes explained, the position espoused by

Petitioner here would create more

problems than it would resolve and would

also undermine the Congressional policy

behind the rule precluding appellate

review of remand Orders. If this Court

were to accept Petitioner's position,

then months, or perhaps even years after

a@ remand Order is entered, if a court of

appeals decides that the remand was

improper, the case would be

* * * thrown into confusion and the

effort expended by the parties on

the state court proceeding (along

with a good deal of state judicial

resources) [would be] in jeopardy.

And if the state case has proceeded

to judgment, the subsequent re-

removal is for naught as the parties

are bound by res judicata.

[Citations omitted. ]

834 F.2d at 490.

The Sykes court also noticed that

appellate review of remand Orders is

necessarily inefficient since the remand

is either affirmed, thereby rendering the

appeal itself a waste of time and

judicial resources, or the remand is

reversed, in which case any progress made

in the state court proceeding is

nullified. Id., at 491. Additionally,

the Sykes court noted the anomaly created

by the holding in Pacor, Inc. v. Higgins,

743 F.2d 984 (3rd Cir. 1984), the case

upon which Petitioner principally relies,

which drew a distinction between

bankruptcy removals and other removals.

Under Pacor, in bankruptcy removals, only

jurisdictional remands and not

discretionary remands are reviewable.

Under Pacor, in all other removals, only

discretionary remands and not

jurisdictional remands are reviewable.

The Sykes court stated: "We cannot

imagine that Congress actually intended

such a perverse asymmetry, nor can we see

how it furthers any conceivable

congressional goal." Id., at 491. This

situation creates a very real possibility

for manipulation. Under the theory

presented by Petitioner here, a defendant

could choose to direct which of two

removal routes should be taken and

thereby control the possible grounds for

remand and the type of appellate review,

if any, that would be available. Id., at

491-492.

Finally, the scope of review under

the Pacor rule "turns on what the

district court says it is doing." Where

the district court "says it is remanding

for lack of jurisdiction, the decision--

even if flagrantly wrong--is completely

unreviewable." However, where the

district court says that its decision is

based upon something other than lack of

jurisdiction, then review of that order

is available. Id., at 492.

For all of these reasons, in

addition to the fact that Congress

intended to include "jurisdiction" within

the phrase "any equitable ground," it is

clear that appellate review of remand

Orders is barred by 28 U.S.C. § 1452(b).

Cc. Petitioner never defines "on any

equitable ground."

Although Petitioner argues that §

1452 only bars review of remand Orders

"On any equitable ground," Petitioner

never defines or attempts to define the

“eguitable grounds" under which a case

could be remanded thereby precluding

appellate review. Petitioner merely

states that this case was remanded on

"jurisdictional grounds" and therefor was

not remanded on "equitable grounds."

Petitioner then argues, again without

ever having defined "equitable grounds,"

that since this case was remanded on

jurisdictional grounds, it is clearly not

included in the language precluding

appeal of remand orders under subsection

1452(b).

This Court need not construct an

argument placing words into § 1452(b)

which are not there as Petitioner

contends in order to find that review of

this remand Order is precluded by §

1452(b). As described above, Congress

intended to include "jurisdiction" within

the phrase "on any equitable ground."

Again, the legislative history to this

effect is clear and convincing and also

indicates Congress's intention to

restrict judicial review of remand Orders

under § 1452(b).

D. Assuming arguendo there is a split

in the circuits, Congress's

intention has been manifested in

decisions by the majority of courts

holding that remands under § 1452(b)

are not reviewable.

As set forth in Respondent's Brief

in Opposition to the Petition for Writ of

Certiorari, it is Respondent's position

that there is not truly a split in the

circuits since the cases upon which

Petitioner relies can be distinguished on

their facts or by the issues which were

actually pending before the courts at the

times of their decisions. Nevertheless,

assuming for sake of argument that there

is a split in the circuits, the majority

of courts which have faced the issue have

clearly manifested Congress's intention

by their holdings that remands under §

1452(b) are not reviewable. Petitioner

acknowledges that the Fifth, Sixth, and

Seventh Circuits have all held that they

do not have authority to hear appeals of

remand Orders entered under 28 U.S.C. §

1452(b). See Petitioner's Brief at 11-

13. Those cases are Sykes, supra;

Hernandez v. Brakegate, Ltd., 942 F.2d

1223 (7th Cir. 1991); and Boone Coal and

Timber Co. v. Polan, 787 F.2d 1056 (6th

Cir. 1986). Sykes has been discussed

above. Hernandez also supports’ the

Congressional intent discussed earlier in

this section. The Hernandez court

recognized the anomaly discussed earlier:

"If § 1452(b) indeed identifies the only

basis of remand, and if as Pacor held

lack of subject-matter jurisdiction is

not an ‘equitable' ground, then there is

no statutory authority to remand cases

removed without jurisdiction. They would

have to be dismissed outright." 942 F.2d

1223, at 1225 (7th Cir. 1991).

The Sixth Circuit in Boone Coal

adopted the reasoning of the Fifth

Circuit in Browning v. Navarro, 743 F.2d

1069 (5th Cir 1984), and also echoed the

Congressional intent to avoid delay in

litigating the issue of propriety of

remand orders when it stated: “The court

noted that the purpose of making non-

reviewable the bankruptcy court's remand

order or its decision not to remand was

to avoid the delay that would result from

litigating remand decisions (citing 1

Collier on Bankruptcy § 3.01, at 3-80.1 -

3-81 (15th ed. 1984))." 787 F.2d 1056,

at 1060 (emphasis added).

Only the Third Circuit in Pacor and

the Eleventh Circuit in In re National

Developers, Inc., 803 F.2d 616, 619 (11th

Cir. 1986), have drawn the distinction

which Petitioner requests this Court to

draw. Virtually every other court,

whether a Bankruptcy Court, Federal

District Court, or Circuit Court of

Appeals, which has addressed this issue

has refused to hold that orders remanding

cases removed under 28 U.S.C. § 1452 are

reviewable. See, In re Adams, 809 F.2d

1187 (5th Cir. 1987) (holding that court

of appeals had no jurisdiction to review

District Court's order remanding

litigation under section 1452(b)) (This

is the further history of the case which

Petitioner cites as "[a]n example of a

plaintiff's timely removal from a non-

state forum court under § 1452."

Petitioner's Br. at 20, n. 13); Browning

v. Navarro, 743 F.2d 1069 (5th Cir. 1984)

(Section 1478(b) provides that "[a]n

order under this subsection remanding a

claim or cause of action or a decision

not so remanding, is not reviewable by

appeal or otherwise. * * * The statute

plainly prohibits our review of 4a

bankruptcy court's remand order on direct

appeal."); In re Compton, 711 F.2d 626

(5th Cir. 1983) (action of Federal

District Court remanding divorce case to

state court after bankruptcy court had

exerted removal jurisdiction was not

appealable whether the remand was 4

matter of abstention or was for 4

perceived want of jurisdiction); In re

Rayburn Enterprises, Inc., 781 F.2d 501

(5th Cir. 1986) (appellate court lacked

jurisdiction over appeal of district

court order remanding to state court an

action which had been removed to

bankruptcy court regardless of whether

the order was viewed as grounded in want

of jurisdiction or based on abstention);

Dominick Vv. Dixie National Life

Insurance, 809 F.2d 1559 (11th Cir. 1987)

(It is clear that by virtue of 28 U.S.C.

§ 1478(b) [the precursor of § 1452(b)] a

decision not to remand is not reviewable

on appeal.) (It should be noted that

Dominick is from the same Circuit and

later in time than In re National

Developers, Inc., one of the two cases

upon which Petitioner places primary

reliance for its position. ); In re Hanson

Industries, Inc., 83 B.R. 659 (Bkrtcy. D.

Minn. 1988) ("In all cases where the

bankruptcy court entered the order of

remand, the circuit courts found that the

bankruptcy court's decision was

appealable to the district court, but not

appealable to the circuit court."

[Citations omitted.] 83 B.R. 659, at 666-

667.); In re Branded Products, Inc., 154

B.R. 936 (Bkrtcy. W.D. Tex. 1993) (Where

bankruptcy court lacks jurisdiction, case

should be remanded immediately to state

court. Id., at 945. No appellate review

is available from district court decision

remanding case. Id., at 946.); In re

Potts, 724 F.2d 47 (6th Cir. 1984)

(bankruptcy court's refusal to remand

case to court from which it was removed

was not reviewable).

In summary, appellate review of

remand Orders, regardless of the basis,

is barred by 28 U.S.C. § 1452(b).

Congress intended to include

"jurisdiction" within the phrase "on any

equitable ground." This legislative

history is "clear and convincing

evidence" of Congress's intention to

restrict judicial review of all remand

Orders, regardless of their context or

their basis. Assuming arguendo there is

a split amongst the circuits, the weight

of authority amongst those Courts which

have faced the issue holds that remands

under § 1452(b), regardless of the

grounds, are not reviewable. The

analysis of the issue presented by these

Courts is clearly the better reasoned

approach. This Honorable Court should

hold, consistent with Congress's

intention, that remands under 28 U.S.C. §

1452(b), regardless of the basis, are not

reviewable by Circuit Courts of Appeals

or by this Court. Alternatively, this

Court should find that this case was not

remanded under § 1452 and move to the

analysis presented in Part II of this

Brief, that being whether appellate

review of remand Orders is barred by 28

U.S.C. § 1447.

It.

APPELLATE REVIEW OF THIS REMAND

ORDER IS BARRED BY 28 U.S.C. §

1447.

Again, this Court can and should

find and hold that § 1452(b) bars

appellate review of this remand Order.

Alternatively, the Court should

determine, under Petitioner's literal

reading of all parts of § 1452(b), that

this case was not remanded pursuant to §

1452(b). In that instance, the analysis

shifts to § 1447(d). Also in that

instance, this Court can and should find

that section 1447(d) bars review of the

District Court's Order of remand in this

case.

A. Section 1447 bars appellate review

when cases are remanded for want of

jurisdiction

There is no question that § 1447(d)

bars appellate review. It does not

contain the language which Petitioner

hangs its hat on in § 1452 to say that

jurisdictional remands are reviewable.

Subsection 1447(d) provides:

An order remanding a case to the

State from which it was removed is

not reviewable on appeal or

otherwise, except that an order

remanding a case to the State court

from which it was removed pursuant

to section 1443 of this title shall

be reviewable by appeal or

otherwise. (Emphasis added. )

The issue in the analysis of

application of § 1447 is not whether that

section permits review of remand Orders

but whether that section can have

application to cases removed under § 1452

or under §§ 1452 and 1447. The best

analysis of the applicability of both

sections to a single case appears in

Hernandez, supra. In Hernandez the

Seventh Circuit stated:

Sections 1447 and 1452 belong to

Chapter 89 of Title 28. Nothing in

text or structure suggests that the

general provisions of § 1447 are

inapplicable to cases removed under

§ 1452, any-more than they would

fall away for removals under § 1442

(federal officers), § 1442(a)

(members of armed forces) or other

statutes authorizing removal. To

the contrary, § 1452 relies on other

provisions in Chapter 89, which

specify the time and procedure for

removal. All § 1452(a) does is

describe a class of removable cases;

it does not say or imply, for

example, that removal may occur

without the signed petition required

by § 1446(a) or after the time

specified by § 1446(b). a

1452(b) indeed identifies the only

basis of remand, and if as Pacor

held lack of subject-matter

jurisdiction is not an ‘equitable’

ground, then there is no statutory

authority to remand cases removed

without jurisdiction. They would

have to be dismissed outright. If

filed again in state court, they

could be removed again, followed by

dismissal. Defendants could

immunize themselves from iegal

process, a most unlikely outcome of

§ 1452. The statute authorizing

remand for want of jurisdiction is §

1447(c), and § 1447(d) bars review

of such remands. Both the Supreme

Court, United States v. Rice, 327

U.S. 742, 66 S.Ct. 835, 90 L.Ed. 982

(1946), and this Court, Resolution

Trust Corp. v. Lightfoot, 938 F.2d

65 (7th Cir. 1991), have held that

authorization to remove cases

arising out of a particular subject

does not imply inapplicability of

the general provisions concerning

removal. Section 1452 is not an

exception to this rule.

942 F.2d 1223, at 1225.

Additionally, the Tenth Circuit

recently held in Daleske v. Fairfield

Communities, Inc., 17 F.3d 321 (10th Cir.

1994), as follows:

Moreover, the remand provision in

section 1452(b) is limited to

discretionary remands based on

equitable grounds. If this were the

only statute to apply, there would

be no requirement that cases removed

under section 1452(a) be remanded on

the purely legal ground that the

District Court lacks subject matter

jurisdiction. Because § 1447(c)

requires such a remand, the statutes

cover different contingencies, and

should both be given effect. For

these reasons, the provisions of 28

U.S.C. § 1447(c) apply to cases

removed under § 1452(a) as well.

17 F.3d 321, at 324.

Assuming that § 1447 does apply to

bankruptcy removals as the Courts in

Hernandez and Daleske have held, under

this Court's own rulings in Volvo of

America Corp. v. Schwarzer, 429 U.S. 1331

(1976) and Thermtron Products, Inc. v.

Hermansdorfer, 423 U.S. 336 (1976),

neither a Circuit Court of Appeals nor

this Court has jurisdiction to review a

District Court Order remanding an action

to state court on grounds permitted

within the statute. Volvo is

particularly significant here insofar as

the District Court in Volvo found that it

was without jurisdiction over the matter

and that was the basis for the remand.

B. Removal under special removal

provisions does not imply

inapplicability of general removal

statute provisions.

Finally, as described above, this

Court has also held in United States v.

Rice, 327 U.S. 742 (1946), that the mere

authority to remove an action arising out

of a particular subject matter does not

imply the inapplicability of the general

statutory provisions concerning removal

to those types of cases. Although

Petitioner argues that Rice was decided

prior to enactment of the Bankruptcy

Code, Rice has been reaffirmed by this

Court and followed by various Circuit

Courts on many occasions since enactment

of the Bankruptcy Code. See e.g.

Thermtron Products, Inc. Vv.

Hermansdorfer, 423 U.S. 336 (1976) (in

the bankruptcy context); Resolution Trust

Corp. v. Lightfoot, 938 F.2d 65 (7th Cir.

1991); FSLIC v. Frumenti Development

Corp., 857 F.2d 665 (9th Cir. 1988) (the

FSLIC's special removal statute, 12

U.S.C. § 1730(k)(1), does not make §

1447(d) inapplicable); In re FSLIC, 881

F.2d 564 (8th Cir. 1989) (same); Nasuti

v. Scannell, 792 F.2d 264 (lst Cir.

1986).

Iil.

PETITIONER DID NOT PRESERVE ITS

RIGHT TO MAKE THIS APPEAL WHEN

IT FAILED TO APPEAL THE

BANKRUPTCY COURT ORDER AND

WAIVED ITS RIGHT TO MAKE THIS

APPEAL BY PROSECUTING STATE

COURT LITIGATION ON ISSUES IT

CONTENDS MUST BE LITIGATED IN

THE FEDERAL SYSTEM.

This Court and other federal

appellate courts have long recognized the

proposition that this Court is without

jurisdiction to consider an argument not

raised in the court below. Pennsylvania

R. Co. v. Illinois Brick Co., 297 U.S.

447 (1936); United States v. Socony-

Vacuum Oil Co., Inc., 310 U.S. 150

(1940); and Michel v. Louisiana, 350 U.S.

91 (1955).

In this case, it is clear from the

record of each court in which this case

has proceeded that TRI attempted to

remove this action both under the general

removal statute, 28 U.S.C. § 1446, and

under the bankruptcy removal statute, 28

U.S.C. § 1452. In fact, the Notice of

Removed Action filed in the Summit County

Court of Common Pleas indicated that the

case had been removed only pursuant to 28

U.S.C. § 1446(d).‘ The Bankruptcy Court

held that TRI had failed to timely remove

this case under the bankruptcy removal

statute but that TRI had timely removed

the case under the general removal

statute. TRI did not appeal any aspect

of that ruling of the Bankruptcy Court.

Because the bankruptcy judge ordered

the case transferred to the United States

Bankruptcy Court for the Southern

District of New York, Petrarca did appeal

“Arguably, the case was only properly removed under

§ 1446(d) and the § 1452 issue is not properly before this

Court.

the Bankruptcy Court's holding that the

case was properly removed under the

general removal statute. Now, despite

TRI's reliance upon the i Bankruptcy

Court's holding that it had properly

removed the case under the general

removal statute, and despite TRI's

failure to appeal the Bankruptcy Court's

holding that TRI had failed to properly

remove the case under the bankruptcy

removal statute, TRI desires to have this

Court decide the question of whether or

not an appeal of an Order remanding a

case removed under § 1452 is barred where

the remand Order is based on

jurisdictional grounds. Since Petrarca

appealed the Bankruptcy Court's holding

that the case had been properly removed

under the general removal provisions, the

District Court's Order, in effect, only

reversed that portion of the Bankruptcy

Court Order and remanded the case under

the provisions of 28 U.S.C. § 1447(d).

Section 1447(d) does not include the

language which TRI asks this Court to

examine and which is contained in § 1452.

TRI's argument is misdirected since this

case was not remanded under § 1452. TRI

failed to appeal the Bankruptcy Court's

earlier holding that the bankruptcy

removal was not timely. Therefore, TRI

forfeited its right to appeal that

question here.

TRI has also waived its right to

argue that these issues as between

Petrarca and TRI ought to, and can only,

be litigated in Bankruptcy Court as a

result of TRI's most recent conduct in

commencing two separate state court

actions seeking to litigate in state

court the very same issues involved in

this case.

In this regard, not only has TRI

waived its right to assert that these

issues ought to, and can only, be

litigated in Bankruptcy Court,

additionally, the question which TRI asks

this Court to decide is now moot as a

result of TRI's conduct in commencing

state court actions in Ohio, Colorado,

and Pennsylvania on these very same

issues.

Federal Courts are prohibited from

deciding moot questions. There must be

an actual case or controversy between the

parties at the time the issue is

reviewed. Aetna Life Ins. Co. Vv.

Haworth, 300 U.S. 227 (1937), reh. den.

300 U.S. 687 (1937); North Carolina v.

Rice, 404 U.S. 244 (1971). "[MJoot

questions require no answer." Missouri,

Kansas & Texas R. Co. v. Ferris, 179 U.S.

602, 606 (1900). Further, this Court may

refuse to consider unnecessary questions.

Mercer v. Theriot, 377 U.S. 152 (1964),

reh. den. 377 U.S. 973 (1964).

In this case, as a result of TRI's

voluntary choice to pursue state court

remedies on those issues it had

previously argued must be litigated in

Bankruptcy Court, the issues are moot and

it is unnecessary for this Court to

decide the issue presented by Petitioner

TRI.

CONCLUSION

This Court should find, consistent

with the Congressional intent to include

"jurisdiction" within the phrase "on any

equitable ground," and consistent with

the Congressional intent to restrict

judicial review of all remand Orders,

that 28 U.S.C. § 1452(b) precludes

appellate review of the District Court's

Order remanding this case to state court

either by the Sixth Circuit or by this

Court.

In the alternative, this Court

should find, accepting Petitioner's

"literal" interpretation of § 1452, but

literally interpreting all of § 1452 and

not only that portion of the statute

which Petitioner desires this Court to

examine, that § 1452(b) permits remands

of bankruptcy removals only "on any

equitable ground.” Hence, § 1452 does

not apply to this action; rather, the

District Court remand Order was based on

§ 1447(d) which unequivocally precludes

review of the District Court remand Order

either by the Sixth Circuit or by this

Court.

This Court cou d also resolve this

appeal by simply finding that Petitioner

failed to properly preserve its right to

make this appeal or that Petitioner has

waived its right to make this appeal by

commencing and prosecuting state court

litigation in various state court forums

on the very same issues which Petitioner

contends must be litigated in the federal

system.

Respectfully submitted,

Wace

J C. Weisensell,

Cc sel of Record

Andrew R. Duff

Jack Morrison, Jr.

AMER CUNNINGHAM BRENNAN CO., L.P.A.

Sixth Floor, Society Building

159 South Main Street

Akron, Ohio 44308-1322

(216) 762-2411

Attorneys for Respondent

Anthony A. Petrarca

ERTIFI F VICE

Three (3) true copies of the

foregoing Brief for Respondent were sent

by regular U.S. Mail, postage prepaid,

to:

Steven D. Cundra

Thompson, Hine & Flory

1920 N Street, N.W.

Washington, D.C. 20036-1601

202-973-2700

Counsel of Record for Petitioner,

Things Remembered, Inc.

on this 3 aay of July, 1995.

77. LW perp ——

J C. Weisensell

Cc sel of Record for Respondent,

Anthony A. Petrarca

In compliance with Rule 29.5, all

parties required to be served have been

served.

P: \5200\5260-660. RB9

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