El Paso Electric Co v. Nowlin

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 96-50068
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IN RE EL PASO ELECTRIC COMPANY,

Petitioner.

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Petition for Writ of Mandamus from the United States
District Court for the Western District of Texas
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February 27, 1996

Before JOLLY, DeMOSS, and STEWART, Circuit Judges:

PER CURIAM:

The petitioner, El Paso Electric Company ("El Paso"), a debtor

in bankruptcy, seeks a writ of mandamus directing the United States

District Court for the Western District of Texas, Austin Division,

Nowlin, J. (the "district court"), to withdraw the reference to

bankruptcy court of El Paso's action against Central and Southwest

Corporation ("CSW") and CSW's action seeking declaratory judgment.1

Those actions arise out of an unconsummated Agreement and Plan of

Merger between CSW and El Paso (the "Agreement") that provided for

CSW's acquisition of El Paso as a wholly-owned subsidiary. The

Agreement formed the foundation of El Paso's Third Amended Plan of

Reorganization, which was confirmed on December 8, 1993, by the

1
At our request, CSW has filed in this court a response to El
Paso's petition.
United States Bankruptcy Court for the Western District of Texas,

Austin Division (the "Austin Bankruptcy Court"). On June 9, 1995,

CSW sent El Paso a letter alleging breach by El Paso and

terminating the Agreement. Both parties filed suit.

On June 9, 1995, El Paso filed suit in state district court in

El Paso County, asserting various state law tort and contract

claims against CSW arising from the failure to successfully

complete the merger (the "Merger Agreement Action"). El Paso

timely requested a jury trial. On June 15, 1995, CSW filed its

Complaint for Termination Fees and for Declaratory Judgment in the

district court to recover termination fees as administrative

expenses under the Agreement (the "Administrative Expense Action").

On the same date, CSW removed the Merger Agreement Action from

state court to the district court. Pursuant to 28 U.S.C. § 157(a)

and a standing order of the district court, the district court

automatically referred both proceedings to the United States

District Court for the Western District of Texas, El Paso Division.

By agreed order, both actions were subsequently transferred to the

Austin Bankruptcy Court.

A flurry of motions, not directly relevant here, followed in

the Austin Bankruptcy Court. On October, 19, 1995, El Paso filed

two motions in the district court requesting the withdrawal of the

reference to the Austin Bankruptcy Court of the Merger Agreement

Action and the Administrative Expense Action. The district court

denied the motions on November 15, 1995, reasoning that both

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actions constituted "core proceedings" under 28 U.S.C. § 157

(b)(2)(C) and thus fell within the jurisdiction of the Austin

Bankruptcy Court.

On November 27, 1995, El Paso filed with the district court

two separate motions requesting the court to reconsider its

November 15th orders denying the withdrawal of the reference. By

orders dated December 11, 1995, the district court denied El Paso's

motions to reconsider.

El Paso apparently has not sought the district court's

certification for interlocutory appeal under 28 U.S.C. § 1292(b) of

the "controlling question[s] of law" raised in its motions for

withdrawal and for reconsideration. Instead, on January 29, 1996,

El Paso filed this petition for mandamus, asserting that the

district court's orders refusing to withdraw the reference of the

cases to the bankruptcy court would deny El Paso its right to a

trial by jury. We deny the writ.

I

A writ of mandamus issues only where the district court has

committed a "clear abuse of discretion" or engaged in "conduct

amounting to 'usurpation of power.'" Mallard v. United States

District Court, 490 U.S. 296, 309 (1989). To be entitled to a

writ, "petitioners must show that they lack adequate alternative

means to obtain the relief they seek" and that their "right to

issuance of the writ is 'clear and indisputable.'" Id.

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 Prior to the Supreme Court's recent opinion in Connecticut

National Bank v. Germain, 112 S.Ct. 1146 (1992), we had held that

we lacked jurisdiction under 28 U.S.C. § 158(d) to review district

court orders as to bankruptcy matters when the order was not final.

Hester v. NCNB Tex. Nat'l Bank, 899 F.2d 361, 365 (5th Cir. 1990)

(finding lack of jurisdiction over appeal from district court order

denying stay). Neither could we review such orders of the district

court under 28 U.S.C. § 1292, governing interlocutory appeals. Id.

Jurisdiction was lacking under § 1292, we had held, "because the

bankruptcy scheme embedded in 28 U.S.C. § 158 clearly supersedes 28

U.S.C. § 1291, and, by inference, also supersedes section 1292."

Id. Because no review was available, we viewed "mandamus [as] the

only remedy available to Debtors seeking relief from [district

court orders.]" Id. See also In re Jensen, 946 F.2d 369 (5th Cir.

1991) ("[W]e are persuaded that a writ of mandamus is an

appropriate remedy to protect the valued right of trial by jury and

to avoid costly, multiple trials.").

Since our opinion in Hester and In re Jensen, the United

States Supreme Court has considered the jurisdiction of appeals

courts to hear appeals of interlocutory orders issued by district

courts sitting as appellate courts in bankruptcy matters. In

Connecticut National Bank v. Germain, 112 S.Ct. 1146 (1992), the

Supreme Court made it clear that § 1292 allows for circuit court

review of an interlocutory order of a district court in a

bankruptcy proceeding. The Court specifically found that § 158,

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which gives the courts of appeals jurisdiction over appeals from

all final orders of district courts sitting as appellate courts in

bankruptcy, "is silent as to review of interlocutory orders." Id.

at 1150. Because of this silence, the Court concluded, "[t]here is

no reason to infer from either § 1292 or § 158(d) that Congress

meant to limit appellate review of interlocutory orders in

bankruptcy proceedings." Id.

Germain overrules our prior precedent as to interlocutory

appeals. In the light of this intervening Supreme Court precedent,

we conclude that El Paso could have sought certification from the

district court of its order denying withdrawal of the reference.

Consequently, we conclude that El Paso does not lack an "adequate

alternative means to obtain the relief they seek" and is therefore

not entitled to the extraordinary remedy of mandamus. Mallard v.

United States District Court, 490 U.S. 296, 309 (1989).

Furthermore, we are not convinced, with respect to the merits of

its claim, that El Paso has demonstrated that their right to

mandamus relief is clear and indisputable. Although we expressly

do not pass on the merits of the underlying claim, on the basis of

the record before us, we are unable to conclude that the district

court erred in refusing to withdraw the reference. Accordingly,

the petition for writ of mandamus is

D E N I E D.

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