Milton Thomas, Sr. v. City of Philadelphia

Date: 01-22-2022

Case Number: 17-3042 & 17-3089

Judge: Theodore Alexander McKee

Court: center>

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

On appeal from The United States District Court for the Eastern District of Pennsylvania

Plaintiff's Attorney:

Philadelphia, PA - Best Property Tax Lawyer Directory

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Defendant's Attorney: City of Philadelphia; The School District of Philadelphia Attorney’s Office

Description:

Philadelphia, PA - Property Tax lawyer represented Appellant with arguing that City's efforts to collect those taxes by a Sheriff Sale violated a discharge injunction that had been entered in Thomas' bankruptcy proceedings.

The defendants first argue that the District Court lacked subject matter jurisdiction

to resolve the underlying dispute. In In re Joubert, we considered whether 11 U.S.C.

§105(a) grants a private cause of action to plaintiffs suing to recover for a violation of §

506(b).1

Analogizing § 506(b) to §524 we held that the "lone remedy is a contempt

proceeding pursuant to §105(a) in bankruptcy court.”

2 Moreover, we have cautioned that



*** This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not

constitute binding precedent.

1

In re Joubert, 411 F.3d 452 (3d Cir. 2005)

2

Id. at 455

3

§105(a) has limited scope, supplementing "specifically enumerated bankruptcy powers

by authorizing orders necessary or appropriate to carry out provisions of the Bankruptcy

Code.”3

Although we appreciate that the District Court may have been appropriately

concerned about the convenience of this pro se plaintiff, that does not empower the court

to act beyond the statutory parameters of the bankruptcy process. While §105(a) is both a

powerful and versatile tool, it operates solely within the context of bankruptcy

proceedings.4

In In re Morristown, we held that §105(a) "authorizes the bankruptcy court,

or the district court sitting in bankruptcy, to fashion such orders as are required to further

the substantive provisions of the Code.”5 But §105(a) does not give "the court the power

to create substantive rights that would otherwise be unavailable under the Code.”6

The District Court correctly noted, "Defendants had multiple opportunities to

argue the Court does not have jurisdiction, yet raised it only after the Third Circuit

remanded this action for [the District Court] to 'decide anew, . . . whether the City had

sufficient notice of Thomas's bankruptcy.'”7 However, it is axiomatic that federal courts

must always assure themselves that they have subject matter jurisdiction, and that

jurisdiction can be challenged at any time during the life of a case. Accordingly, the



3

In re Continental Airlines, 203 F.3d 203, 211 (3d. Cir. 2000)

4

In re Morristown & Erie Railroad Co., 885 F.2d 98 (3d Cir. 1990)

5

Id. at 100

6

Id.

7 Thomas v City of Philadelphia, 682 F. App'x 174, 177-78 (3d Cir. 2017)

4

timing of the challenge to the court's jurisdiction was irrelevant and remains irrelevant to

any inquiry into the court's authority to act.

The District Court incorrectly relied on In re Motichko, in concluding that it did

have subject matter jurisdiction and could sanction the defendants for violating the

bankruptcy injunction.8

The Court explained that the approach taken there allows "a

court discretion to resolve a matter using the most appropriate procedure.”9 However, the

question in In re Motichko was not one of subject matter jurisdiction. Rather, the court

was faced with a 12(b)(6) motion to dismiss a complaint that the plaintiff/debtor had filed

seeking damages for a violation of the bankruptcy injunction that arose pursuant to 11

U.S.C. § 524. The bankruptcy court noted that § 524 did not provide a private right of

action but that a court could regard such a violation as contempt pursuant to the

"inherent . . . statutory powers under 11 U.S.C. § 105(a).”10 The court held that it could

impose a sanction for contempt even though a party sought to recover damages as long as

the injured party could establish that the defendant had violated the bankruptcy

injunction. Significantly, the court also noted that suits for alleged violations of § 524

"generally involve jurisdictional issues,” and it cited Pertuso v. Ford Motor Credit Co. in

observing that courts had dismissed such suits where they were brought "outside [of] the

bankruptcy court where the discharges were granted.”11 That is, of course, the situation

here.



8 395 B.R. 25, 28 (Bankr. N.D. Ohio 2008)

9 App. 12

10 In re Motichko at 29.

11 Id. at 30 (citing Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 420 (6th Cir. 2000).

5

Moreover, in In re Joubert we stated our agreement with those courts that have

held that "§ 105(a) does not authorize separate lawsuits as a remedy for bankruptcy

violations, though established in the § 524 context. . . .”.

12

Thus, the matter is settled.

Any sanction for violating the § 524 injunction must be imposed by the bankruptcy court;

the District Court therefore lacked subject matter jurisdiction to sanction the defendants

for violating § 524

Outcome:

If Thomas is to receive any remedy for the City’s dereliction, it must be in

Bankruptcy Court. However, we take no position on whether that court should grant any

relief or sanction in the event that Thomas does file an action there.

For the foregoing reasons the District Court’s judgment is vacated.

Plaintiff's Experts:

Defendant's Experts:

Comments:

Pennsylvania Attorneys

Mark Walmer Lancaster, PA
General Practicer

Cary Davis Philadelphia, PA
Civil Rights

Timothy Stengel Lancaster, PA
Criminal Defense

Shoshana Savett Newtown, PA
Employment Law, Fair Labor Standards Act Violation...

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About This Case

What was the outcome of Milton Thomas, Sr. v. City of Philadelphia?

The outcome was: If Thomas is to receive any remedy for the City’s dereliction, it must be in Bankruptcy Court. However, we take no position on whether that court should grant any relief or sanction in the event that Thomas does file an action there. For the foregoing reasons the District Court’s judgment is vacated.

Which court heard Milton Thomas, Sr. v. City of Philadelphia?

This case was heard in center><h4><b> UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT </b> <br><br> <font color="green"><i>On appeal from The United States District Court for the Eastern District of Pennsylvania </i></font></center></h4>, PA. The presiding judge was Theodore Alexander McKee.

Who were the attorneys in Milton Thomas, Sr. v. City of Philadelphia?

Plaintiff's attorney: Philadelphia, PA - Best Property Tax Lawyer Directory Tell MoreLaw About Your Litigation Successes and MoreLaw Will Tell the World. Re: MoreLaw National Jury Verdict and Settlement Counselor: MoreLaw collects and publishes civil and criminal litigation information from the state and federal courts nationwide. Publication is free and access to the information is free to the public. MoreLaw will publish litigation reports submitted by you free of charge Info@MoreLaw.com - 855-853-4800. Defendant's attorney: City of Philadelphia; The School District of Philadelphia Attorney’s Office.

When was Milton Thomas, Sr. v. City of Philadelphia decided?

This case was decided on January 22, 2022.