stated in the second conclusion of the Report adopted by the Judicial Conference of the United States in March 1961. See n. 8, above, and accompanying text.
(iii) that the integrity of the bankruptcy system and the sound functioning of the bankruptcy courts is a proper concern of judicial councils; that a trustee in bankruptcy and the attorney for a trustee are statutory officers of the bankruptcy court;
and that 11 U.S.C. § 558, cited by plaintiff, does not establish an exclusive standard for determining the disinterestedness of a trustee or his attorney.
A. the Judicial Council contends, however, that this court has no jurisdiction to grant any of the relief requested in this case. It argues --
(i) that the mere adoption of the resolution and its transmission to Judge Shaw and to the chief judges of the district courts in the circuit did not give rise to a justiciable case or controversy; that no justiciable case or controversy existed until Judge Shaw gave effect to the resolution; and that the original complaint herein was premature and was not a proper method of challenging the resolution, citing Golden v. Zwickler, 394 U.S. 103, 110, 89 S. Ct. 956, 22 L. Ed. 2d 113 (1969), and other cases;
(ii) that the May 2 order of Judge Shaw gave effect to the resolution and created a justiciable controversy, which plaintiff seeks to have resolved in his favor by means of his amended complaint filed herein on May 19;
(iii) that the May 2 order is res judicata of the issues raised by the amended complaint, which carried forward the issues raised by the original complaint;
(iv) that plaintiff has a plain, adequate and exclusive remedy to challenge the resolution by direct appeal to the Court of Appeals for the Third Circuit from the May 2 order; and that plaintiff has filed such an appeal. Plaintiff contends that the appeal to the Court of Appeals will be futile, because the members of the Judicial Council are the active judges of the Court of Appeals.
Defendant replies that "if the members of the Judicial Council should disqualify themselves from hearing plaintiff's appeal from the May 2 order, a panel consisting of either the senior judges of the Third Circuit
-- not members of the Judicial Council -- or judges from other circuits could be designated to hear the appeal. See 28 U.S.C. 291, 294."
B. (1) Plaintiff claims federal question jurisdiction under 28 U.S.C. § 1331, and seeks declaratory relief under 28 U.S.C. § 2001. He also argues:
(2) That the acts and resolutions of the Judicial Council of the Third Circuit are administrative in nature and subject to judicial review under the Administrative Procedure Act, 5 U.S.C. § 701 et seq.;
(3) That the resolution of the Judicial Council attempts to usurp the jurisdiction of this district court, and, therefore, this court has the power to issue a writ of mandamus or of prohibition in aid of its jurisdiction, citing 28 U.S.C. § 1651;
(4) That the acts of the Judicial Council are in violation and in excess of the powers of the Judicial Council, and that this court has "jurisdiction in the nature of mandamus" under 28 U.S.C. § 1361 "to prohibit the said Judicial Council from acting in excess of its authority."
A. this court concludes that the appeal which plaintiff has taken from Judge Shaw's May 2 order affords him an adequate remedy.
Judge Shaw believed that 28 U.S.C. § 332(d) required him to give effect to the resolution. The Judicial Council also takes that position. Plaintiff disagrees. But whether or not Judge Shaw was required to give effect to the resolution, his May 2 order was within the authority of the bankruptcy court. 11 U.S.C. §§ 577, 558, and General Order 44, and is subject to review by the Court of Appeals for the Third Circuit. 11 U.S.C. § 47.
B. This action does present a question of federal law, and it appears that plaintiff may well lose at least $10,000 in fees as a result of the termination of his services as attorney for the trustee. But in view of Judge Shaw's May 2 order, and plaintiff's right to appeal therefrom, which he has in fact exercised, it would be inappropriate for a judge of co-ordinate jurisdiction, sitting in the same district court, to interfere with the orderly procedure provided by the Bankruptcy Act. A declaratory judgment action cannot be used as a substitute for an appeal. Chicago Pneumatic Tool Co. v. Hughes Tool Co., 61 F. Supp. 767, 770 (D. Del. 1945), aff'd per curiam, 156 F.2d 981 (3 Cir. 1946), cert. den. 329 U.S. 781, 67 S. Ct. 204, 91 L. Ed. 670 (1946). Nor should a judge sitting in the same district court review in such a suit as this the decision of Judge Shaw in the Chapter X proceeding that he was bound to give effect to the resolution. That decision is res judicata for the purposes of the instant suit, unless and until it is reversed or modified on appeal. Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 377, 60 S. Ct. 317, 84 L. Ed. 329 (1940); Katchen v. Landy, 382 U.S. 323, 324, 86 S. Ct. 467, 15 L. Ed. 2d 391 (1966). Cf. In re Hines, 88 F.2d 423, 425 (2 Cir. 1937); Price v. Greenway, 167 F.2d 196 (3 Cir. 1948).
C. The resolution of the Judicial Council is not subject to review by this court in this proceeding under the provisions of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. Whether or not a proceeding for review of the resolution in question may be available in the Supreme Court, and whether or not review may be available in other courts in other circumstances, the fact that Judge Shaw considered the resolution and acted upon it in issuing his May 2 order, from which an appeal has been taken, makes it clearly improper for this court to undertake such a review under the A.P.A.
D. nor can plaintiff properly base his claim for relief in this action upon 28 U.S.C. § 1651(a), which provides: "The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." That statute does not authorize a party to seek a writ of mandamus or prohibition as a substitute for an appeal. Schlagenhauf v. Holder, 379 U.S. 104, 110, 85 S. Ct. 234, 13 L. Ed. 2d 152 (1964); Crowe v. Ragnar Benson, Inc., 307 F.2d 73, 75 (3 Cir. 1962), cert. den. 371 U.S. 940, 83 S. Ct. 319, 9 L. Ed. 2d 275 (1962).
E. Based upon 28 U.S.C. § 1361, see n. 16, plaintiff requests "[that] this Court issue a writ of mandamus to prevent the said Judicial Council from exceeding its jurisdictional powers and to prohibit the said Judicial Council from requiring plaintiff to terminate his services as attorney for the Trustee in the matter of Imperial '400' National, Inc."
The Court in Chandler left open the question whether § 1361 could be used by an aggrieved party to review the actions of a judicial council, on the theory that the activities of a council constitute "agency action". 398 U.S. at 87, n. 8, 90 S. Ct. 1648, 26 L. Ed. 2d 100. That such review by a district court "would present serious incongruities and practical problems" was pointed out in Justice Harlan's concurring opinion. 398 U.S. at 94, 90 S. Ct. at 1658. In Chandler the Court declined to grant the extraordinary relief of mandamus or prohibition in view of the fact that Judge Chandler had been offered an opportunity, which he had rejected, to appear before the Judicial Council of the Tenth Circuit.
The circumstances in this case are different; but this court concludes that in view of the entry of the May 2 order by Judge Shaw, and the appeal from that order taken by plaintiff, this court should deny the extraordinary relief of mandamus.
F. In his amended complaint plaintiff requested that a three-judge district court be convened.
In view of the rulings made above, it is not necessary to convene a three-judge court.
The court will enter a judgment dismissing the amended complaint, with costs.
Judicial council of the third circuit one hundred eighty-seventh meeting
A meeting of the Judicial Council of the Third Circuit was held in the Chambers of Chief Judge Seitz (Second Floor, United States Courthouse, Philadelphia, Pa.) on February 10, 1972, at 1:00 P.M. pursuant to the call of Chief Judge Seitz, who presided, Senior Circuit Judge Hastie, and Circuit Judges Van Dusen, Aldisert, Adams, Gibbons, Rosenn and Rosen. Judge Hunter was excused because of illness.
It was moved by Judge Adams, seconded by Judge Aldisert and unanimously carried that the oral call of the court for this meeting be ratified.
The minutes of the Judicial Council meeting of January 13, 1972 were approved as distributed.
The Chief Judge presented to the Council problems growing out of the reorganization of the Imperial "400" National, Inc. et al., Nos. 71-1550/1556. He presented a letter he had received dated February 7, 1972 from Judge Shaw reporting on current developments in this proceeding. It was the consensus of the Council that action on Judge Shaw's report be withheld until the end of February, 1972.
Judge Seitz also informed the Council of the communication to him under date of January 31, 1972 from Judges Van Dusen and Adams, as a result of some matters presented to them at a recent panel hearing in the Imperial "400" Reorganization proceeding. They expressed a concern on two points: One, the importance of a prompt determination of the best available plan of reorganization and two, the impropriety or appearance of impropriety because of the friction between counsel for the trustee in this proceeding (Mr. Nolan) and certain creditors. The letter pointed out that although counsel for the trustee has disqualified himself from acting on the plans, he continues to advise the trustee on a regular basis in other matters. The trustee favors the last plan filed, submitted by an important client of his counsel's law firm, although a plan favored by many creditors had been submitted months before. Judge James Rosen expressed the view that counsel for the trustee should be removed immediately. Chief Judge Seitz posed the question of what power the Council had to remove him. The Council was unanimously in favor of advising Judge Shaw that problems pertaining to counsel for the trustee had been brought to the attention of the Council by various documents that have been filed in the court and that he be instructed that it was their belief that counsel for the trustee should be removed, pointing out to him that we think that his situation gives an appearance to the public of impropriety. Moreover, in this instance, the trustee is a lawyer and his counsel appears to have a conflicting interest. Chief Judge Seitz stated that he would write an appropriate letter but would first inform Judge Augelli as a matter of courtesy as to what he proposed to do.
Upon motion of Judge Aldisert, seconded by Judge Max Rosenn and unanimously carried, it was
RESOLVED that in all bankruptcy proceedings this Council holds as incompatible the continued representation as attorney for the trustee by any lawyer or his firm who represents a third party who submits a plan for reorganization in the bankruptcy; and that the recusal by the attorney only from commenting on proposed reorganization plans is not an adequate immunization from the appearance of a conflict of interest.
The meeting was adjourned at 1:40 P.M.
March 10, 1972
Dear Judge Shaw:
* * *
I must now refer to another distasteful aspect of Imperial "400". The Third Circuit Counsel discussed at length the situation raised on certain appeals therein with respect to the status of the attorney for the trustee. The Council was advised that the law firm of the attorney for the trustee represents a client which is seeking to secure control of the assets under one of the proposed plans. The Council was further advised that in view of these circumstances the attorney for the trustee has taken the position that he will not act as attorney for the trustee in connection with any responsibilities the trustee may have with respect to the approval of a plan but that he will continue to represent the trustee in other matters of the trusteeship; further that this approach had your actual or tacit approval. Acting on these factual bases and after elaborate discussion the Council passed a resolution to the following effect:
"Where a law firm with which an attorney for a trustee in reorganization is associated represents any other entity involved in the reorganization proceedings and such relationship may create the appearance of a conflict of interest, the attorney for the trustee should not longer serve."