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Clain v. International Steel Group

United States District Court, S.D. New York
Jan 31, 2005
04 Civ. 173 (KNF) (S.D.N.Y. Jan. 31, 2005)

Opinion

04 Civ. 173 (KNF).

January 31, 2005


MEMORANDUM AND ORDER


I. INTRODUCTION

Plaintiff Max Clain ("Clain") commenced the instant actionpro se, seeking to appeal, pursuant to 28 U.S.C. § 158(a)(1), or to enforce certain orders that the United States Bankruptcy Court for this judicial district ("bankruptcy court") issued in connection with several bankruptcy actions filed by Bethlehem Steel Corporation and other related corporate entities (collectively, "Bethlehem"). Defendant International Steel Group ("ISG") and other entities — not parties to the instant action, acquired substantially all the assets of Bethlehem in a sale approved by the bankruptcy court.

Before the Court is a motion by ISG to dismiss Clain's complaint, pursuant to Fed.R.Civ.P. 12(b)(6). Clain opposes the motion.

For the reasons discussed below, part of the complaint is dismissed for lack of subject matter jurisdiction, and ISG's motion to dismiss is granted with respect to the balance of the complaint.

II. BACKGROUND AND FACTS

On October 15, 2001, Bethlehem filed several petitions in the bankruptcy court for this judicial district, pursuant to Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. On April 23, 2003, the bankruptcy court issued an order ("Sale Order") that, inter alia, approved the sale of substantially all of Bethlehem's assets to ISG and other entities affiliated with it. With exceptions not here pertinent, the Sale Order "forever bar[s], estop[s], and permanently enjoin[s]" all persons and entities, including holders of debt securities and equity securities in Bethlehem, from bringing any action against ISG. See In re: Bethlehem Steel Corporation, et al., 01-15288 through 01-15302, 01-15308 through 01-15315, Sale Order, at ¶¶ 8, 33, 34 (Bankr. S.D.N.Y., April 23, 2003) (BRL).

By order of the bankruptcy court, dated October 22, 2003 ("Confirmation Order"), all equity interests in Bethlehem were canceled. See In re: Bethlehem Steel Corporation, et al., Confirmation Order, at ¶ 56. Clain, who alleges that he held an equity interest in Bethlehem, filed a proof of claim with the bankruptcy court. In an order dated December 23, 2003 ("Claim Order"), the bankruptcy court disallowed and expunged Clain's proof of claim in its entirety. See In re: Bethlehem Steel Corporation, et al., Claim Order, at p. 3.

Clain filed the instant action against ISG, seeking to appeal the Confirmation Order and the Claim Order, pursuant to 28 U.S.C. § 158(a)(1). Clain also contends that ISG has not fulfilled its obligations under the Sale Order, and seeks enforcement of that order.

ISG contends, inter alia, that the instant action should be dismissed because Clain is enjoined by the Sale Order from prosecuting this action against ISG.

III. DISCUSSION

Subject Matter Jurisdiction

Before reaching the merits of ISG's motion, the Court must determine whether it has subject matter jurisdiction over this action. "It is axiomatic that federal courts are courts of limited jurisdiction and may not decide cases over which they lack subject matter jurisdiction." Lyndonville Savings Bank Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000). "Failure of subject matter jurisdiction . . . is not waivable and may be raised at any time by a party or by the court sua sponte."Oscar Gruss Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003). Indeed, the Federal Rules of Civil Procedure require that a court dismiss an action sua sponte if it appears that the court lacks subject matter jurisdiction. See Fed.R.Civ.P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.").

A district court has jurisdiction to hear appeals from final judgments, orders, and decrees of the bankruptcy court. See 28 U.S.C. § 158(a)(1). However, the Federal Rules of Bankruptcy Procedure provide certain procedural requirements that, if not met, may deprive a court of jurisdiction to hear an appeal. In pertinent part, the Federal Rules of Bankruptcy Procedure provide:

Rule 8001. Manner of Taking Appeal; Voluntary Dismissal

(a) Appeal as of right; how taken

An appeal from a judgment, order, or decree of a bankruptcy judge to a district court or bankruptcy appellate panel as permitted by 28 U.S.C. § 158(a)(1) or (a)(2) shall be taken by filing a notice of appeal with the clerk within the time allowed by Rule 8002. . . .

Rule 8002. Time for Filing Notice of Appeal

(a) Ten-day period

The notice of appeal shall be filed with the clerk within 10 days of the date of the entry of the judgment, order, or decree appealed from. . . .

Fed.R.Bankr.P. 8001(a), 8002(a).

"Failure to file the notice of appeal within the ten-day period is strictly enforced, and the deadline is jurisdictional in nature." In re Deutsch-Sokol, 290 B.R. 27, 29-30 (S.D.N.Y. 2003); see also Twins Roller Corp. v. Roxy Roller Rink Joint Venture, 70 B.R. 308, 310 (S.D.N.Y. 1987) ("Failure to file timely a notice of appeal within the meaning of Bankruptcy Rule 8002 bars appellate review.").

In the case at bar, Clain has not filed a notice of appeal, as required by Fed.R.Bankr.P. 8001. Moreover, more than ten days have elapsed since the entry of the orders of the bankruptcy court that Clain seeks to appeal. Accordingly, the Court lacks jurisdiction to entertain an appeal, and those parts of the instant action that seek to appeal orders of the bankruptcy court must be dismissed.

Motion to Dismiss

A court may dismiss an action, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted, only if "it appears beyond doubt, even when the complaint is liberally construed, that the plaintiff can prove no set of facts which would entitle him to relief." Jaghory v. New York State Dept. of Education, 131 F.3d 326, 329 (2d Cir. 1997). In considering a motion made pursuant to this rule, "the court must accept all factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff." Id. A court may also consider all papers and exhibits appended to the complaint, as well as any matters of which judicial notice may be taken. See Hirsch v. Arthur Andersen Co., 72 F.3d 1085, 1092 (2d Cir. 1995). When considering a motion to dismiss, a court may take judicial notice of the orders of another court. See, e.g., Steinmetz v. Toyota Motor Credit Corp., 963 F. Supp. 1294, 1299 (E.D.N.Y. 1997). Furthermore, in a case such as this, in which the plaintiff is apro se litigant, a court must be mindful that the plaintiff's pleadings "are [to be] held `to less stringent standards than formal pleadings drafted by lawyers.'" Hughes v. Rowe, 449 U.S. 5, 9, 101 S. Ct. 173, 176 (1980) (quoting Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594, 595).

"In bankruptcy cases, a court may enjoin a creditor from suing a third party, provided the injunction plays an important part in the debtor's reorganization plan." In re Drexel Burnham Lambert Group, Inc., 960 F.2d 285, 293 (2d Cir. 1992); In re Ionosphere Clubs, Inc., 184 B.R. 648, 655 (S.D.N.Y. 1995) (citing In re Drexel Burnham Lambert Group, Inc., 960 F.2d at 292) (anti-suit injunctions against creditors may be necessary "in order to resolve finally all claims in connection with the estate and to give finality to a reorganization plan"). In the case at bar, the bankruptcy court has enjoined Clain from bringing against ISG any action arising out of his status as a creditor of Bethlehem. A review of the Sale Order makes it clear that the injunction plays an important part in Bethlehem's reorganization plan. Accordingly, the injunction is enforceable.

As Clain is enjoined from bringing this action, he has not stated a claim upon which relief may be granted. That part of the instant action not already dismissed for lack of subject matter jurisdiction must be dismissed, pursuant to Fed.R.Civ.P. 12(b)(6).

IV. CONCLUSION

For the reasons set forth above, those parts of the instant action that seek to appeal orders of the bankruptcy court are dismissed for lack of subject matter jurisdiction, and the remainder of the complaint is dismissed for failure to state a claim upon which relief may be granted.

SO ORDERED.


Summaries of

Clain v. International Steel Group

United States District Court, S.D. New York
Jan 31, 2005
04 Civ. 173 (KNF) (S.D.N.Y. Jan. 31, 2005)
Case details for

Clain v. International Steel Group

Case Details

Full title:MAX CLAIN, Plaintiff, v. INTERNATIONAL STEEL GROUP, Defendant

Court:United States District Court, S.D. New York

Date published: Jan 31, 2005

Citations

04 Civ. 173 (KNF) (S.D.N.Y. Jan. 31, 2005)

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