[00:00:01] Speaker 02:
Good morning, justices.

[00:00:03] Speaker 02:
My name is Neil Tardif, and I represent the appellant, Carol King, in this matter. And may I reserve a few minutes for rebuttal?

[00:00:11] Speaker 04:
Yes.

[00:00:12] Speaker 02:
Okay, thank you.

[00:00:13] Speaker 02:
May it please the court. This case obviously is about the holding in the Higgins case and whether Section 303, subsection 1 of the bankruptcy code allows for the recovery of appellate fees incurred and successfully paid defending the creditor's appeal of the bankruptcy court's dismissal.

[00:00:35] Speaker 04:
I guess the first question would be whether or not you have any grounds for distinguishing Higgins and saying it doesn't control this case, and if not, whether you can point to any intervening authority from the en banc court or from the Supreme Court of the United States that would allow us to revisit its holding.

[00:00:57] Speaker 02:
That was the end of my argument. I think we need to start with that.

[00:01:01] Speaker 04:
That seems to be the key issue in this case.

[00:01:03] Speaker 02:
I mean, Higgins is a difficult case to distinguish, but I think it is distinguishable. It's factually and procedurally different than this case because in Higgins, the motion for attorney's fees was brought in the bankruptcy court. And at that time, they were looking mostly at sanctions, so they looked at the Del Mission case and the Vitale case. And at that time, Rule 38 was, in fact, the only available motion to appellate lawyers for receiving appellate fees.

[00:01:37] Speaker 04:
Higgins has a part where they talk about what the standards should be for exercising the discretion under this bankruptcy-specific provision, but then it also has a holding at the end about appellate fees and says that based on a prior decision, there's no authority. The mere grant of discretion to the trial court to award fees is not a grant of discretion to an appellate court, and Rule 38 is the only available means. And that broad holding seems to sweep without regard to the kind of factual distinctions you're suggesting.

[00:02:15] Speaker 02:
But the court didn't need to go that broad. I mean, if

[00:02:19] Speaker 04:
The question is that it did. The rule it adopted seems to be a rather bright line, and we don't get to revisit that unless we've got other authority.

[00:02:30] Speaker 02:
Well, procedurally... you have to bring, to receive an attorney fee award in a fee-shifting case in this Ninth Circuit, procedurally, you have to bring a motion in the Ninth Circuit under either 39-1.6 or under Rule 38.

[00:02:49] Speaker 02:
And the two cases that Higgins relied upon at the time, because they were really looking at a sanction, the Delmission case and the Vasselli case, I think is the name, 39-1.6 didn't even exist. In this court's ruling in Cummings v. Connell at 402 Fed 3rd, 936, this court stated that for a fee shift to get an award, a fee shifting fee, An award of attorney's fees under fee shifting for appellate fees.

[00:03:22] Speaker 02:
You must bring a motion under 39-1.6, or there's 1.8. You can ask the court to bring it down back to the bankruptcy court to look at, but we didn't do that in this case. In this case, the motion was under 39-1.6, and I think that's the distinction. I think Higgins is strictly a proper venue as to where to bring the motion. The Higgins case did not have to go so broad and say 303.1.

[00:03:49] Speaker 02:
is silent on appellate fees, and therefore we're not going to go that far. I mean, when you're looking at the fee-shifting cases, particularly in this Ninth Circuit, virtually every fee-shifting statute is silent as to whether appellate fees are allowed.

[00:04:08] Speaker 02:
For example, you know, in ray, wind and wave, Hyken versus Department of Defense, legal voice versus Storm and Zinc, Planned Parenthood versus State of Arizona. All those cases allowed appellate fees, even though the statute was silent. But again, in Higgins, they didn't need to go that far. All they needed to say, just like this court said in Cummings, they said, you don't get appellate fees unless you file a motion in the Ninth Circuit. And in Higgins, they didn't do that. And that's why they didn't get the appellate fees.

[00:04:40] Speaker 02:
But 303.1, the purpose of that is to avoid the filings of abusive involuntary petitions, number one, and to make the debtor whole in the event there is a dismissal.

[00:04:57] Speaker 02:
If appellate fees aren't allowed, obviously they're not going to be made whole.

[00:05:03] Speaker 02:
It's also very well established that 3031 is, in fact, a fee-shifting statute and that attorney's fees are presumed. And bad faith doesn't need to be shown.

[00:05:16] Speaker 03:
Mr. Tardif, I guess where in the text of 303, Roman and I, would we kind of locate the appellate fee shifting in a way that would allow us to get around Higgins?

[00:05:29] Speaker 02:
It's silent, Justice. And just like I said, virtually all fee-shifting statutes are silent.

[00:05:38] Speaker 03:
Well, I guess my understanding of the logic of Higgins following Del Mission is that it refers to the court. And the court in there is the court that can dismiss a petition. And an appellate court, that's usually the bankruptcy court that dismisses the petition. Correct.

[00:05:58] Speaker 02:
Correct.

[00:05:59] Speaker 03:
So I guess in terms of the logic of Higgins, I'm trying to, again, where we locate a shifting of appellate fees in here in a way that would allow you to get around Higgins.

[00:06:10] Speaker 02:
Well, I think you can look at the U.S. Supreme Court case, and I think it's Commissioner versus Jean.

[00:06:18] Speaker 02:
which is cited in the other circuit court cases where they do allow appellate fees. And I cited that in my brief where the U.S. Supreme Court says when you're looking at the proceeding, even though the proceeding's down, let's say, on the bankruptcy court level, you've got to look at the whole picture, and it includes all of that. And I think Commissioner v. Jean is the U.S. Supreme Court case that helps you on that.

[00:06:44] Speaker 04:
Was Jean decided before or after Higgins?

[00:06:49] Speaker 02:
I'm not sure, Your Honor. I think it was before.

[00:06:50] Speaker 04:
Okay. I mean, because if you had authority from the U.S. Supreme Court that came after Higgins and that said something that seemed to contradict the premises of Higgins, that would be something a three-judge panel could work with.

[00:07:04] Speaker 02:
Right.

[00:07:04] Speaker 04:
But if it's prior to Higgins, that isn't available to us.

[00:07:08] Speaker 02:
I don't recall, Your Honor, but I'm almost sure that it was before because it's cited in the Rosenberg.

[00:07:14] Speaker 04:
Do you have any...

[00:07:15] Speaker 04:
Supreme Court case since Higgins that you think says something, any proposition of law that you think is inconsistent with Higgins and would give a lever for reconsidering it?

[00:07:27] Speaker 02:
I researched that just as late as last night, Your Honor, to see if I could find anything other than the Commissioner v. Jean case, which has been cited in the 3031 cases and other circuits, but I haven't been able to find anything since Higgins. Okay.

[00:07:41] Speaker 04:
And this circuit split has existed for at least 10 years, and has no one ever brought this to the Supreme Court?

[00:07:50] Speaker 02:
Yes, Rosenberg brought it to the Supreme Court, and Richards Home Building brought it to the Supreme Court. But there, they received appellate fees. It was the creditor that brought it to the Supreme Court, and they both denied writ on that, which gives me indication that the Supreme Court feels that Rosenberg and Richard Home Builders is correct. Okay. Can I reserve the rest of my time? Yes, you may. Thank you. All right.

[00:08:18] Speaker 04:
We will hear now from Mr. Moskovitz.

[00:08:29] Speaker 01:
Thank you, R. As you know, this panel is bound by Higgins, and Higgins is clearly in point. If there were no Higgins, I think the answer would be just as simple. The statute refers to the court several times. That couldn't award attorney's fees. It's clear it's talking about the trial court, not the BAP, not this court, because only, as you mentioned, only the trial court can dismiss the case.

[00:09:02] Speaker 04:
We can enter an order either affirming a judgment of dismissal or ordering a judgment of dismissal. And so, you know, that would seem to then suggest maybe we could be the court. I'm not so sure. Your textual argument is so strong. I mean, the words of Higgins are what they are, and they're quite broad, but...

[00:09:26] Speaker 01:
I'm not sure I agree with it. The statute says what it says.

[00:09:28] Speaker 04:
There are other statutes that allow discretionary attorney's fees where it's been read to extend to appellate attorney's fees. Is that correct?

[00:09:38] Speaker 01:
Yes.

[00:09:39] Speaker 04:
And is the wording of those materially different in a way that it very clearly addresses an appellate court?

[00:09:46] Speaker 01:
It's very different for this reason. We have another rule, Rule 38, which is now in...

[00:09:55] Speaker 01:
bankruptcy rule 8020 that says the court can award attorney's fees when the appeal was frivolous.

[00:10:04] Speaker 01:
Now, under counsel's interpretation of Higgins and the statute, that becomes meaningless.

[00:10:12] Speaker 01:
They don't have to show it's frivolous.

[00:10:14] Speaker 03:
So why would Congress... It's not frivolous if we view...

[00:10:19] Speaker 03:
Rule 38 is to allow more than just fee shifting. Rule 38 goes to damages and it can go up to double costs. So it's not impossible to read them theoretically working hand in hand.

[00:10:37] Speaker 01:
It's a struggle. It's a struggle.

[00:10:40] Speaker 01:
Anyway, as I said, I think the arguments on the merits of this – interesting I think they favor what Higgins did but I think it's a moot question because of Higgins only an en banc court can overrule Higgins and Higgins as you pointed out the language of the case is crystal clear that you can't get appellate attorneys fees from from even from the the trial court so If you can't give them the trial court, how do you get it from the BAP?

[00:11:14] Speaker 01:
Their motion was to the BAP, not to the trial court.

[00:11:17] Speaker 04:
Let me ask you this question. Suppose the bankruptcy court enters its order And then it goes to the district court rather than to the BAP. And the district court reviewing the bankruptcy court reverses and enters a judgment dismissing the petition. Does the district court then have authority to award fees for the proceedings before the district court?

[00:11:50] Speaker 01:
I'm not even sure the district court could dismiss on its own other than order the bankruptcy court to dismiss

[00:11:57] Speaker 04:
You may be correct that how it would have to paper that order would be to order the bankruptcy court to enter the judgment dismissing the petition. But if it did that, could fees be awarded for the activity before the district court?

[00:12:16] Speaker 01:
You know, this is an interesting discussion, but we're trying to spin wheels and make all this happen. Why? Why? Why?

[00:12:27] Speaker 01:
They have a clear remedy for getting attorney's fees on appeal if it's frivolous, which is the normal rule. And why should this be any different?

[00:12:38] Speaker 04:
Counsel, I'd like an answer to the question. I'm trying to look at the words of Section 303I, and I'd like to know whether you think— If the court dismisses the petition, would apply to a district court that directs dismissal of the petition, would you be able to get the fees in the district court? I think that's a real question.

[00:13:08] Speaker 01:
struggle to make that happen, and I'm worrying what the policy would be behind doing that kind of thing. There's no point to it.

[00:13:16] Speaker 04:
Do you know whether there's any case law that has addressed that question, whether if they go through the district court rather than through the bankruptcy appellate panel, you can get fees at the district court level?

[00:13:28] Speaker 01:
I'm aware of no case which has allowed that.

[00:13:30] Speaker 03:
Well, I guess it seems to me in reading Higgins, and we've I probably ought not read our opinions like statutes, but it seems like when we held that it should not be construed to grant similar authority to award fees at the appellate level, whether the appellate level modifies award or modifies fees. If the concern is award fees, to pick up on Judge Collins' line of questioning, if the award of fees at the appellate level is worried about whether the appellate level is making the award, if it's read that way, that could go one way.

[00:14:08] Speaker 03:
But if it's simply just talking about whether...

[00:14:13] Speaker 03:
the court in 303i can award the fees, that might be something different. I mean, why should we read Higgins to rule out a theory along the lines of district courts or the bankruptcy court's ability to award the fees, even if they include appellate fees?

[00:14:34] Speaker 01:
I mean, the reasoning you're using is it's very clever.

[00:14:42] Speaker 01:
As a practical matter, the first thing that occurred to me when I read the statute was at the time of the dismissal, there's been no appellate fees. There's been no appeal.

[00:14:54] Speaker 01:
So it seems another level of awkwardness to say, well, after the appeal, they can come back to the bankruptcy court and ask for appellate fees then, when the statute seems to contemplate you do the whole thing at one time and get rid of the case. So I guess there's a way around that too, even though the statute doesn't say so.

[00:15:22] Speaker 01:
I just think of all cases to deal with this complicated problem, factually, it's the worst one you could think of because they didn't prove the amount of fees they incurred for Carole King. If you look at their timesheets, They represented both the husband, John King, and Carol King. And there's a whole list of charges and a very small handful of them, no more than half a dozen, even mention Carol's name.

[00:15:57] Speaker 01:
John King was the big case here. It resulted in a longer opinion. We got a reversal. And our brief in the John King case was twice as long as Carole King's case. And what do they want? Well, we didn't indicate clearly who the work was for. Let's just do a 50-50. That's what they asked about. 50-50. Most of the work was done for John King.

[00:16:26] Speaker 00:
By the way, I wasn't sure you wanted me to... Sorry, doesn't that go to reasonableness of the amount of fees? I mean, whether or not they get them is a separate question.

[00:16:38] Speaker 01:
Yeah, the issues in the case were very different.

[00:16:43] Speaker 01:
I could go into that, but they're totally different, and there was no overlap between the issues at all. So you can look at the two opinions and see that. So 50-50...

[00:16:57] Speaker 01:
obviously they're not entitled to 50% of their fees based on work on Carroll. They didn't do it. And anyway, the rule is you've got to keep your timesheets clear as to who you're working for.

[00:17:09] Speaker 04:
I think Judge Dalva's question is that the only issue we have before us is whether the fees could be granted if, you know, we...

[00:17:19] Speaker 04:
were able to reach that conclusion notwithstanding Higgins, we'd have to remand it for the lower courts to assert, figure out in the first instance, the kind of fact-intensive questions you're raising here. That isn't before us in any event.

[00:17:33] Speaker 01:
This brings us back to a more fundamental question. Why are they taking your time and our time and our expenses to deal with this whole Higgins matter? They don't have the timesheets that entitle them, attorney's fees, In any event.

[00:17:48] Speaker 03:
Right, but the FAP didn't reach that. We're reviewing, I mean.

[00:17:50] Speaker 01:
No, but why would you want to? Why would you want to send this to an en banc hearing on whether Higgins is invalid when you just look at the time sheets and say it's a moot question? They're never going to get an attorney's fees anyway. Why deal with this? And there's another reason why it's moot. This appeal never should have been bought because they don't have authority to represent Carole King. We asked them for a retainer agreement. Carol King is incapacitated.

[00:18:22] Speaker 01:
She couldn't be deposed. They admitted that. She was incapacitated. So we filed a motion to dismiss because at the time they filed the notice of appeal, they didn't have authority to represent her because she couldn't write a contract or sign a contract that did that. Let's see the retainer agreement. No, we won't give it to you. It's confidential. Well, it's not confidential. This court so held in the Michelson case. They wouldn't show it to us.

[00:18:52] Speaker 01:
But there is no retainer agreement. That's why they wouldn't show it to us. What happened, we're sure, is the husband, John, told them, represent Carol. Now, John did have a power of attorney.

[00:19:07] Speaker 01:
for Carroll's affairs. But it didn't kick in until he either went to court and got approval or had two physicians authorize it. And none of those things happened. All right. Thank you, Counsel. You shouldn't be here hearing this.

[00:19:22] Speaker 04:
You've exhausted your time.

[00:19:23] Speaker 01:
Okay. All right.

[00:19:24] Speaker 04:
Thank you. All right. We'll hear rebuttal.

[00:19:32] Speaker 02:
Thank you, Justice. Just a couple of quick ones to answer your question about the district court, whether they would have the right. If you look to the definition of the court and the bankruptcy court, I think it's under Rule 9001. It basically says the definition of court is.

[00:19:50] Speaker 02:
the court that's in the proceeding at the time, whenever the ruling is. And so if the proceeding at the time is the district court, then that's the court. And in my opinion, if the proceeding is in the Ninth Circuit Court of Appeal or the BAP, That's the court of the proceeding at the time.

[00:20:09] Speaker 04:
Is there any authority that addresses whether or not a district court that hears an appeal from a bankruptcy court could award attorney's fees?

[00:20:22] Speaker 04:
Generally? One way or the other. Is there any authority that addresses that question?

[00:20:27] Speaker 02:
I think the Sunbelt case does.

[00:20:31] Speaker 02:
Because in that case, they were talking about just regular fees, not appellate fees. And I think it was at the district court. But I think the Sunbelt case is indicative, answers your question as to that.

[00:20:47] Speaker 02:
And as to the motion to dismiss, I submitted opposition to that. And I would submit it on my papers on that.

[00:20:55] Speaker 02:
As to the question of why are we doing this, the purpose of 303i is to make the debtor whole. And if you can't get your attorney's fees, it's just everything's diluted from that. And all the cases say that. That's why we're doing this, because we think under 303i and all the other district court cases and all the other fee-shifting cases, appellate fees should be allowed silent or not because, again, virtually everyone Every fee-shifting statute is silent as to appellate fees.

[00:21:28] Speaker 04:
All right. Thank you, counsel.

[00:21:29] Speaker 02:
Thank you.

[00:21:30] Speaker 04:
The case just argued will be submitted.

[00:21:32] Speaker 02:
Thank you so much.