Eleventh Circuit says “All Writs Act” not a basis to challenge foreclosure

The Eleventh Circuit affirmed a Florida district court’s rejection of a bankruptcy debtor’s attempt to use the “All Writs Act” to challenge the lender’s foreclosure on her property finding it was not the kind of case for which the All Writs Act was designed.

In Rohe v. Wells Fargo Bank, NA, No. 19-13947 (11 Cir. Feb. 18, 2017) the debtor filed for bankruptcy while her appeal of the lender’s foreclosure against her property was pending in a Florida state court. She argued before the bankruptcy court that the automatic stay operated to the stay the appeal which the bankruptcy court denied. The bankruptcy court allowed the lender to continue with the foreclosure proceedings. The debtor appealed that decision to the district court and tried to remove the state foreclosure case to the bankruptcy court.

Before the bankruptcy court could rule, the state appellate court affirmed the lender’s right to foreclose and restored the foreclosure to the state trial court judge to schedule the sale. The bankruptcy court then dismissed the removal proceedings agreeing with the lender that a state-court appeal was not removable.

Before the bankruptcy court remanded the case to the state court, the debtor filed a “Petition for Writ of All Writs” in the district court seeking an order under the “All Writs Act” codified at 28 U.S.C. § 1651(a). The debtor framed the petition as commencing an independent civil action against the lender, separate from the bankruptcy case or any appeal of bankruptcy court orders. The petition alleged the lender violated the automatic bankruptcy stay by continuing with the foreclosure proceedings. It also said the lender and the state courts violated federal law by continuing with the state proceedings after she sought to have it removed to the bankruptcy court. The district dismissed the petition, and the dismissal was affirmed on appeal. The “All Writs Act” provides that federal courts “may issue all writs necessary or appropriate in aid of their respective jurisdictions,” “The purpose of the All Writs Act is to allow courts to protect their jurisdiction, that is, to safeguard the integrity of their proceedings and judgments”. Although a violation of the automatic stay is a threat to the integrity of a bankruptcy case, the Appellate Court concluded that the bankruptcy court’s enforcement of the automatic stay could serve to protect the bankruptcy case. Because the bankruptcy case falls within the purview of the bankruptcy court, which is well-equipped to protect the proceeding’s integrity, the bankruptcy case is not a proceeding on which use of the “All Writs Act” by the district court could be predicated.
The same considerations apply to the issue of the removal stay. Whenever a case has been removed to federal court, the continued prosecution of the state case by a party and attempted further action in the case by the state court could present a threat to the federal court’s capacity to effectively adjudicate the removed case. But the removed foreclosure case is a proceeding in the bankruptcy court and, again, the bankruptcy court is well-equipped to safeguard that proceeding.

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