Northwest Erection, Inc. v. Morgan Manufacturing (In re Northwest Erection, Inc.)
Northwest Erection, Inc. v. Morgan Manufacturing (In re Northwest Erection, Inc.)
Opinion of the Court
OPINION AND ORDER
On April 13, 1981, plaintiff, Northwest Erection, Inc. (Northwest), filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On December 27, 1982, Northwest, as debtor in possession, filed this action in the bankruptcy court, asserting contract claims against the defendants, and demanded a jury trial. On January 4, 1983, the bankruptcy judge transferred the cause to this court.
A motion to dismiss for want of jurisdiction was filed by Morgan Equipment Company (MEC), a California corporation, and Morgan Manufacturing, Inc. (MMI), an Oregon corporation. A motion to dismiss was likewise filed by Fred J. Early Company, Inc., and United States Fidelity & Guaranty.
All defendants contend that, under the decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), the bankruptcy court had no jurisdiction, and hence could not transfer jurisdiction to this court. This case was filed with the bankruptcy court, not the district court as required by Fed.R.Civ.P. 3. Summons was issued by the bankruptcy judge, not the clerk of the district court as required by Fed.RCiv.P. 4.
A question then arises as to the scope of the decision in Marathon. Did it simply declare unconstitutional that part of the Bankruptcy Act of 1978 vesting in the bankruptcy judge the power to try and decide cases? Or did it strike down all of the procedural rules of the Act implementing the jurisdiction to try and decide? While the court was largely concerned with the power of other than Article III judges to try certain cases, it is my opinion, based on the effect of the decision and the language in it, that the power of the bankruptcy court to receive complaints and to issue process was likewise voided.
In the Marathon case Northern Pipeline filed a petition under Chapter 11. It then filed an action in the bankruptcy court seeking to collect a debt. The jurisdiction of the bankruptcy court was questioned, and the bankruptcy judge denied a motion to dismiss questioning his jurisdiction. The district court on appeal reversed the bankruptcy judge and granted the motion to dismiss. The Supreme Court affirmed the district court. It held that the broad jurisdictional grant of Section 241(a) of the Bankruptcy Act of 1978 (28 U.S.C. § 1471 (1976 ed., supp. Ill)) was unconstitutional. As previously stated, the Marathon case was filed in the bankruptcy court. Had the Supreme Court deemed that only the power to try and decide was involved, it could have remanded with directions that the case should be referred for trial to the district court. In short, the Supreme Court did not
The Court, in footnote 40,
The only possible distinction between this case and Marathon is that on December 23, and prior to the filing of this case, the Montana District Court adopted an emergency resolution,
The procedure employed here did follow the emergency resolution, and the court does have subject matter jurisdiction.
A question of jurisdiction over the person is raised by MEC. MEC argues that it was organized in California and has no minimum contacts with the State of Montana. I assume, without deciding, that the minimum contacts rule announced in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), is applicable.
The dissolution of a corporation shall not take away or impair any remedy available to or against such corporation, its directors, officers, or shareholders, for any claim existing or any liability incurred prior to such dissolution if action or other proceedings thereon is commenced within five years after date of issuance of certificate of dissolution or*114 filing of a decree of dissolution. Any such action or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name.
Or.Rev.Stat. § 57.630(1) (emphasis added).
When MEC dissolved MMI under Oregon law, that dissolution did not impair Northwest’s remedy, a part of which was its right to sue in Montana. By this opinion, I express no view as to liability of MEC beyond its obligation as trustee of the assets received from MMI for the benefit of creditors.
I conclude that the district court has jurisdiction over MEC.
The motions to dismiss are denied.
In my opinion the order denying the motions to dismiss for want of jurisdiction involves controlling questions of law as to which there is substantial ground for difference of opinion, and an immediate appeal from the order, under 28 U.S.C. § 1292, may materially advance the termination of this litigation.
. Fed.R.Civ.P. 3 and 4 refer to “the court” and “the clerk” and do not use the words “district court” or “clerk of the district court,” but the power to prescribe rules stems from 28 U.S.C. § 2072, which refers to “the district courts,” and Fed.R.Civ.P. 1 makes it clear that the reference to “the court” in Rules 3 and 4 is to the district court. Rule 1 reads in part: “These Rules govern the procedure in the United States District Courts . .. . ”
. Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 87, 102 S.Ct. 2858, 2880, 73 L.Ed.2d 598 (1982).
. This order was adopted pursuant to an order from the Judicial Council of the Ninth Circuit.
. I am aware that this case was filed with the clerk of the bankruptcy court, that process was issued by the bankruptcy judge, and that the process issued was in the form authorized by the bankruptcy rules and is different from the form authorized by the civil rules.
.Because the problem with respect to minimum contacts is otherwise solved, I do not reach the problem of whether the fact of a bankruptcy makes inapplicable the minimum contacts rule in cases which would otherwise be subject to it. See Fitzsimmons v. Barton, 589 F.2d 330 (7th Cir. 1979).
Reference
- Full Case Name
- In re NORTHWEST ERECTION, INC., a Montana corporation, Debtor. NORTHWEST ERECTION, INC., a Montana corporation v. MORGAN MANUFACTURING, a corporation Morgan Equipment Company, a corporation Fred J. Early Company, Inc., a corporation and United States Fidelity and Guaranty, a corporation
- Status
- Published