Tuesday, October 19, 2021

In re Stevens (9th Cir. - Oct. 19, 2021)

I have only one question about this Ninth Circuit opinion from this morning.  My query doesn't have anything at all to do with the merits.

It's a totally hum-drum, super low level appeal.  Jasper Stevens and his wife, Brenda Stevens, have a house, but it gets foreclosed upon, at which point Mr. and Mrs. Stevens file a pro se lawsuit against the company that serviced their mortgage.  They also declare bankruptcy.

Nothing unusual there, right?  Happens all the time.

In their bankruptcy proceeding, Mr. and Mrs. Stevens don't list the state court litigation on the relevant bankruptcy schedules, but do list it elsewhere.  The trustee for the bankruptcy ultimately decides to settle the pro se lawsuit for $50,000, with the money going to the estate -- and hence to the creditors of Mr. and Mrs. Stevens.  (I'm getting the $50,000 figure, by the way, from the briefs; it isn't mentioned in the actual opinion.)

Mr. and Mrs. Stevens appeal -- to the Bankruptcy Appellate Panel, and then to the Ninth Circuit -- claiming that the lawsuit (and hence money) belongs to them, not the estate, because the trustee had "abandoned" this property because he knew about it and it was listed on other forms, even though the litigation wasn't listed on the proper schedule.  Both the BAP and the Ninth Circuit disagree, and affirm the bankruptcy court's decision.

So a $50,000 dispute, easily and simply affirmed.  Nothing crazy there.

Moreover, the dispute is simply about who owns a pro se complaint that's almost certainly going nowhere and that, even if it were worth anything, only requests six figures dripping wet.  This is not a high-stakes litigation.  Sure, Mr. and Mrs. Stevens think it's worth it; it's their bankruptcy, and they feel like spending the time.  But that's fairly idiosyncratic.  In the scheme of things, it's not a big deal.  Nor is the underlying legal issue either complicated or, quite frankly, especially important.  Particularly in the context of a $50,000 dispute.

So here's my only question:

Why in the world is the chair of Gibson Dunn's appellate practice group (unsuccessfully) representing the Stevens?

It's not a critical pro bono case.  It's not an important litigation.  It's not a high-value dispute worth the underlying legal fees.  And Mr. and Mrs. Stevens appear to be neither rich nor influential; by all I can tell, they're just another bankrupt homeowner in Temecula who lost their house and who've filed a pro se complaint against their mortgage company.  Nothing unusual at all.

To be clear:  I'm all for big firms representing the little guy, and doing pro bono work -- if that's what this is.  But, seriously, there aren't more important cases than this one?  Or bigger fish to fry?

What gives?

Seriously:  I would love to live in a world in which everyone had such high-quality, sophisticated legal representation -- for free, no less -- that the only pro bono or other pickings left for great lawyers were pro se bankruptcy mortgage litigations like this one.  But I'm pretty darn sure that's not where the actual world's at these days.  And no way the underlying case merits actually paying for such high-priced legal talent.

So I have no idea what these lawyers are doing on this case.  Seriously.

P.S. - Gibson Dunn's opening brief in this appeal begins with a bold, extremely self-confident statement:  "This case involves one of the clearest instances of abandonment on an asset by a bankruptcy trustee that this Court will ever see."

Apparently not.