United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 18, 2009 Decided October 27, 2009
No. 08-7089
IN THE MATTER OF: GREATER SOUTHEAST
COMMUNITY HOSPITAL FOUNDATION, INC.,
ADVANTAGE HEALTHPLAN INC. AND ELLIOT R. WOLFF,
APPELLANTS
v.
PATRICK J. POTTER ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:08-cv-00166-CKK)
Dennis Lane argued the cause for the appellants. Janet M.
Nesse was on brief.
Patrick J. Potter argued the cause for the appellees.
Stephen E. Leach and D. Marc Sarata were on brief.
Before: GINSBURG, HENDERSON and GARLAND, Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
2
KAREN LECRAFT HENDERSON, Circuit Judge: Appellants
Advantage Health Plan Inc. (Advantage) and Elliot R. Wolff, its
president, appeal a decision of the district court which (1)
affirmed the bankruptcy court’s order striking a document that
Wolff signed and submitted on behalf of Advantage on the
ground Wolff is not a licensed lawyer and (2) struck Wolff as an
appellant in the district court for lack of prudential standing.
Advantage HealthPlan, Inc. v. Potter, 391 B.R. 521 (D.D.C.
2008). For the following reasons, we affirm the district court’s
decision.
I.
In 1999, Greater Southeast Community Hospital
Foundation, Inc. and three affiliates1 filed petitions in the United
States Bankruptcy Court for the District of Columbia seeking
reorganization relief under Chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. §§ 1101-1174. On October 23,
2001, the bankruptcy court entered an order confirming the
debtors’ bankruptcy plan (Plan). The Plan established a three-
member “Plan Committee” consisting of Eaton Vance
representing bondholders, Stanley Zupnik representing creditor
Welcome Homes, Inc., and Wolff representing creditor
Advantage. The Plan also provided for a “Plan Agent,” which
position was filled by Patrick J. Potter, a partner in the law firm
Pillsbury Winthrop Shaw Pittman LLC (Pillsbury). Pillsbury
acted as counsel for both the Plan Committee and the Plan
Agent. Eaton Vance resigned from the Plan Committee in June
2007.2
1
The three affiliates are Fort Washington Nursing Home, Inc.,
Greater Southeast Management Company and Greater Southeast
Community Hospital Corporation.
2
Unless otherwise noted, all dates refer to 2007.
3
On August 3, Potter and Pillsbury moved the bankruptcy
court to approve the resignations of Potter as Plan Agent and
Pillsbury as counsel and to approve payment of legal fees and
expenses that Pillsbury alleged it was owed. Ten days later, the
Plan Committee notified the bankruptcy court it had discharged
Potter and Pillsbury and appointed a new Plan Agent and a new
Plan Committee counsel—Clinton E. Jones and Shulman,
Rogers, Gandal, Pordy & Ecker, P.A., respectively—mooting
Potter’s and Pillsbury’s motions seeking approval of their
resignations.
In late November, Zupnik—with the knowledge of the Plan
Committee members and Plan Committee counsel—offered to
settle the fee dispute with Pillsbury for $100,000. 391 B.R. at
529. In early December, the Plan Committee counsel met with
Pillsbury to discuss a settlement. Id. at 529-30. According to
the Plan Committee counsel, the parties reached a settlement and
the Plan Committee counsel agreed to draft a settlement
agreement and a motion to be filed pursuant to Federal
Bankruptcy Rule 9019;3 Advantage disputed that the Plan
Committee authorized a settlement. Id. On December 7, the
Plan Committee moved to dismiss Potter’s motion for fees and
expenses.
On December 13, counsel for the Plan Committee filed
emergency motions to withdraw as counsel (because of a
conflict with the Plan Committee) and, accordingly, to continue
the trial, which had been scheduled to begin on January 8, 2008,
and to extend discovery and motion deadlines. The bankruptcy
court immediately scheduled a hearing on the motions for
December 14. Wolff responded by letter to the court that he
would be unable to attend the December hearing “ ‘because of
3
Rule 9019 provides in relevant part: “On motion by the trustee
and after notice and a hearing, the court may approve a compromise
or settlement.” Fed. R. Bankr. P. 9019(a).
4
an essential commitment made four months ago’ ” but he
supported the Plan Committee counsel’s motions to withdraw
and to continue the trial and the Plan Committee’s motion to
dismiss Pillsbury’s motion for fees and expenses. Id. at 530.
The letter further stated:
If the [Pillsbury] litigation is not dismissed, Advantage
hopes that your final scheduling order will recognize
the factors and corresponding time necessary to select
a [second] successor legal counsel by the Plan
Committee, as well as the Holiday vacation plans of
both representatives of the Plan Committee. My
family will be on vacation outside the United States
from December 19 through January 5.
Id.
At the December 14 hearing, the court directed the
withdrawing Plan Committee counsel and Potter to file a notice
of settlement of the fee dispute and a motion for approval
thereof and scheduled a settlement approval hearing for
December 21, with a deadline of 5:00 p.m. on December 19 for
filing objections to the settlement. A notice of the hearing was
electronically filed after the hearing and a copy was sent to
Wolff via e-mail. In accordance with the court’s directive, on
December 17 the Plan Committee filed a consent motion
(purportedly among the Plan Committee, Potter and Pillsbury)
seeking approval of the settlement pursuant to Fed. R. Bankr. P.
9019. The following day, the bankruptcy court issued an order
finding that “a settlement was reached among the Plan
Committee, [Pillsbury] and Potter, and that such settlement
included all of the necessary terms for an enforceable settlement
agreement” and that “[n]o evidence was presented that the Plan
Committee reached a decision that the Plan Committee should
not proceed with the settlement or that the documents that have
been drafted and exchanged among the parties . . . fail to reflect
the terms of the settlement.” Order, In re Greater Se. Cmty.
5
Hosp. Found., Inc., No. 99-1159, at 2-3 (Bankr. D.D.C. Dec. 18,
2007). Accordingly, the order deferred disposition of the
emergency motions for withdrawal and continuance pending
resolution of the Rule 9019 motion and again provided notice of
the December 21 hearing and the December 19 objection
deadline.
On December 18, Advantage submitted an objection to the
settlement signed by Wolff. Objection to Motion Pursuant to
Bankruptcy Rule 9019 for Court Approval of Settlement
Agreement, In re Greater Se. Cmty. Hosp. Found., Inc., No. 99-
1159 (Bankr. D.D.C. Dec. 19, 2007) (Objection). The Objection
asserted that Advantage had not approved the settlement as
required, the bankruptcy hearing schedule “operated to preclude
Advantage from participating in the recent and critical judicial
deliberations in th[e] litigation to the prejudice of Advantage
and of the other Unsecured Creditors” and there had not been
“full and fair disclosure” of the settlement to creditors. Id. at 7.
The Objection further requested that the impending December
21 hearing be continued until January 17, 2008, that a hearing be
held on or after January 17, 2008 to reconsider whether the
settlement was approved by the Plan Committee and that “[b]oth
hearings requested above be continued until the Plan Committee
engages new legal counsel and the new legal counsel is prepared
on the subject matter of th[e] litigation.” Id. at 8.
On December 20, Pillsbury filed a response and motion to
strike the Objection on the ground that Wolff was not a licensed
lawyer and therefore could not represent Advantage. The next
morning, the court issued an order directing that “the objection
of Advantage [be] stricken in its entirety because it was not filed
by a licensed attorney authorized to practice before the Court.”
Order, In re Greater Se. Cmty. Hosp. Found., Inc., No. 99-1159,
at 1 (Bankr. D.D.C. Dec. 20, 2007) (Striking Order). The order
also denied Wolff’s requests to reconsider the December 18
order and to reschedule the December 21 hearing. Although no
6
one representing Advantage attended, the court conducted the
December 21 hearing as scheduled and, in the absence of an
objection, issued an order approving the settlement. Order, In
re Greater Se. Cmty. Hosp. Found., Inc., No. 99-1159 (Bankr.
D.D.C. Dec. 21, 2007) (Settlement Approval Order).
Advantage and Wolff filed a notice of appeal to the district
court. Appellees Potter and Pillsbury moved for summary
affirmance of the Striking Order and to strike Wolff as an
appellant. On July 14, 2008, the district court granted the
motions to strike Wolff for lack of standing to appeal and for
summary affirmance of the Striking Order. The court also
affirmed the Settlement Approval Order.4 Advantage and Wolff
now appeal the district court’s judgment.
II.
Appellants Advantage and Wolff challenge both the district
court’s affirmance of the Striking Order as well as the court’s
grant of the motion to strike Wolff as an appellant. We address
each issue separately.
A. The Striking Order
First, both Advantage and Wolff contend the district court
erred in affirming the bankruptcy court’s order striking
Advantage’s Objection. “When a court of appeals hears an
appeal from an order of a district court that resolved an appeal
from an order of the bankruptcy court, the court of appeals ‘sits
as a second court of review and applies the same standards as
the district court.’ ” 1 Collier on Bankruptcy ¶ 5.11 (15th ed.
rev. 2009) (quoting S. Technical Coll. v. Head, 89 F.3d 1381,
1383 (8th Cir. 1996)); accord In re KMart Corp., 381 F.3d 709,
4
The district court declined to reach the appellees’ contention that
Wolff lacked standing to appeal the Striking Order. Advantage, 391
B.R. at 539.
7
712-13 (7th Cir. 2004); In re Bogdan, 414 F.3d 507, 510 (4th
Cir. 2005); see United States v. Spicer, 57 F.3d 1152, 1159
(D.C. Cir. 1995) (“district court reviews bankruptcy court’s
grant of summary judgment de novo, and court of appeals
applies same standard in reviewing district court’s affirmance”).
Accordingly, we review the bankruptcy court’s Striking Order
itself and we do so for abuse of discretion. See Jackson v.
Finnegan, Henderson, Farabow, Garrett & Dunner, 101 F.3d
145, 150 (D.C. Cir. 1996) (“Our review of the district court’s . . .
grant of the [defendant’s] motion to strike is for abuse of
discretion.”). We conclude the bankruptcy court did not abuse
its discretion.
“It has been the law for the better part of two centuries . . .
that a corporation may appear in the federal courts only through
licensed counsel.” Rowland v. Cal. Men’s Colony, 506 U.S.
194, 201-02 (1993) (citing Osborn v. President of Bank of
United States, 22 U.S. (9 Wheat.) 738, 829 (1824)); see also
Bristol Petroleum Corp. v. Harris, 901 F.2d 165, 166 n.1 (D.C.
Cir. 1990) (“As a corporation, [defendant] could not appear pro
se.” (citing Commercial & R.R. Bank of Vicksburg v. Slocomb,
Richards & Co., 39 U.S. (14 Pet.) 60 (1840))). Under this well-
established rule, Wolff was ineligible to represent Advantage in
a legal capacity5 and the bankruptcy court correctly rejected the
legal filing Wolff submitted on Advantage’s behalf. Striking a
document that was filed unlawfully falls easily “within the range
of permissible alternatives that were available” to the court so as
to be within its discretion. Jackson, 101 F.3d at 150; see
Donovan v. Road Rangers Country Junction, Inc., 736 F.2d
1004, 1005 (5th Cir. 1984) (corporation’s co-defendant and sole
5
Wolff has not at any point in this litigation disputed the
bankruptcy court’s finding that he is not “a licensed attorney
authorized to practice before the [bankruptcy c]ourt.” Striking Order
at 1.
8
shareholder “declined to hire counsel to represent the
corporation so the district court properly struck the defenses of
the corporation”); Strong Delivery Ministry Ass’n v. Bd. of
Appeals of Cook County, 543 F.2d 32, 33 (7th Cir. 1976)
(affirming dismissal of complaint filed by non-lawyer
corporation president).
The appellants argue that the bankruptcy court should have
selected a less severe “sanction” than striking the Objection,
pointing to several cases in which we have discussed dismissal
as an appropriate sanction for misconduct. See Appellants’ Br.
at 16-17. These cases are inapposite for two reasons. First, the
bankruptcy court did not strike Advantage’s Objection as a
“sanction” for misconduct but because Wolff as a non-lawyer
was not authorized to file it on the corporation’s behalf. Second,
the court did not dismiss the action or otherwise terminate
Advantage’s involvement in it. The court merely struck a single
document that should not have been accepted for filing.
Advantage was free to continue participating in the bankruptcy
proceeding by obtaining legal counsel to represent it at the
December 21, 2007 hearing or to seek reconsideration of the
settlement approval thereafter, making the same arguments in
bankruptcy court Advantage made in district court and here.
Instead, foregoing available remedies in the bankruptcy court,
Advantage filed a notice of appeal to the district court, where it
faced the heavy burden of demonstrating abuse of discretion—a
burden it could not carry. Because the bankruptcy court acted
within its discretion in striking the Objection, we affirm the
district court’s affirmance of the Striking Order.
B. Wolff’s Appellate Standing
Next, Wolff appeals the district court’s decision to strike
him as an appellant. The court concluded that Wolff lacked
prudential standing under the Bankruptcy Code to appeal the
bankruptcy court’s Settlement Approval Order because Wolff
was not a “person aggrieved” by the order. In McGuirl v. White,
9
86 F.3d 1232 (D.C. Cir. 1996), this court recognized the “rule
that limits standing to appeal bankruptcy court orders to a
‘person aggrieved,’ ” 86 F.3d at 1234, that is, to one “ ‘whose
rights or interests are ‘directly and adversely affected
pecuniarily’ by the order or decree of the bankruptcy court,’ ”
id. (quoting In re El San Juan Hotel, 809 F.2d 151, 154 (1st Cir.
1987) (quoting In re Fondiller, 707 F.2d 441, 442 (9th Cir.
1983))).6 Without such a limit, we explained, the bankruptcy
courts might be “overwhelm[ed] . . . with claims by the many
parties indirectly affected by bankruptcy court orders.” Id. at
1235 (citing Travelers Ins. Co. v. H.K. Porter Co., 45 F.3d 737,
741 (3d Cir. 1995); Fondiller, 707 F.2d at 443). On appeal,
however, Wolff does not assert he is a “person aggrieved,” as he
did in district court, 391 B.R. at 340-41, but argues instead that
he has standing as a “party in interest.” We disagree.
Wolff contends that the Bankruptcy Code expressly
authorizes an appeal by one who is a “party in interest” in the
bankruptcy proceeding, relying on 11 U.S.C. § 1109(b), which
provides:
6
“[T]he ‘person aggrieved’ standard derives from a former
provision of the bankruptcy code.” McGuirl, 86 F.3d at 1234 (citing
11 U.S.C. § 67(c) (1976) (repealed 1978)). Although the provision
has been repealed, circuit courts have continued to apply its limitation.
See In re Westwood Cmty. Two Ass’n, Inc., 293 F.3d 1332, 1334 (11th
Cir. 2002) (citing Travelers Ins. Co. v. H.K. Porter Co., 45 F.3d 737,
741 (3d Cir. 1995); Depoister v. Mary M. Holloway Found., 36 F.3d
582, 585 (7th Cir. 1994); Holmes v. Silver Wings Aviation, Inc., 881
F.2d 939, 940 (10th Cir. 1989); Kane v. Johns-Manville Corp., 843
F.2d 636, 641-42 (2d Cir. 1988); In re El San Juan Hotel, 809 F.2d
151, 154 (1st Cir. 1987); In re L.T. Ruth Coal Co., No. 85-5990, 1986
WL 17769 (6th Cir. Sept. 17, 1986) (unpublished); In re Fondiller,
707 F.2d 441, 442-43 (9th Cir. 1983)); accord In re Coho Energy Inc.
395 F.3d 198, 202 (5th Cir. 2004).
10
(b) A party in interest, including the debtor, the
trustee, a creditors’ committee, an equity security
holders’ committee, a creditor, an equity security
holder, or any indenture trustee, may raise and may
appear and be heard on any issue in a case under this
chapter.
On its face, however, this language applies only to “a case under
this chapter,” that is, under Chapter 11 of the Bankruptcy Code,
and Chapter 11 governs only proceedings in the bankruptcy
court, not appeals therefrom. See In re Am. Ready Mix, Inc., 14
F.3d 1497, 1502 (10th Cir. 1994) (“Section 1109(b) says nothing
about a party’s standing to appeal.”); In re PWS Holding Corp.,
228 F.3d 224, 248-49 (3d Cir. 2000) (§ 1109(b) “confers broad
standing at the trial level” but “courts do not extend that
provision to appellate standing”). Consequently, Wolff’s
standing in district court is governed by the rule we recognized
in McGuirl—limiting bankruptcy appeals to “persons
aggrieved”—and Wolff does not challenge the district court’s
conclusion that he was not a “person aggrieved” because his
“rights or interests” were not “directly and adversely affected
pecuniarily” by the order. McGuirl, 86 F.3d at 1234 (internal
quotation omitted). Accordingly, Wolff lacked prudential
standing to appeal the Settlement Approval Order.
For the foregoing reasons, we affirm the judgment of the
district court.
So ordered.