Opinion
NOT FOR PUBLICATION
Argued and Submitted at San Francisco, California, March 24, 2005
Appeal from the United States Bankruptcy Court for the Northern District of California. Bk. No. 97-13375 AJ, Adv. No. 99-01249 AJ. Honorable Alan Jaroslovsky, Bankruptcy Judge, Presiding.
Before: PERRIS, SMITH and BARR, [ Bankruptcy Judges.
Hon. James N. Barr, U.S. Bankruptcy Judge for the Central District of California, sitting by designation.
MEMORANDUM
This is an appeal after remand. The issues raised by the appellant are the same as those decided by this Panel in the earlier appeal. We AFFIRM under the law of the case doctrine.
Rather than repeat much of the background information and analysis in the prior memorandum decision, we focus here on the issue of whether the decision of the prior Panel is law of the case.
In 1999, the chapter 7 trustee in this bankruptcy case filed a Complaint to Avoid Post-Petition Transfers (" the complaint") against Charles D. Aalfs (" Aalfs") pursuant to § 549. In the first claim for relief, the trustee sought to avoid transfers of certain accounts receivable. In the second claim for relief, the trustee sought to avoid transfers of inventory and cash. After a trial, the bankruptcy court found that the transfers of the accounts receivable were avoidable, and entered judgment for the trustee on the first claim. The judgment did not dispose of the second claim for relief.
Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. § § 101-1330.
Section 549(a) states that, with certain exceptions and limitations not implicated here, the trustee may avoid a transfer of property of the estate-
The complaint also set forth a third claim for relief, which simply combined the first two. As a result, we only refer to the first two claims for relief.
Aalfs appealed, arguing that the bankruptcy court erred in entering judgment for the trustee on the first claim. The trustee cross-appealed on the second claim for relief. We concluded that the judgment was not final, because it did not dispose of the second claim for relief, and granted leave to appeal the interlocutory order pursuant to 28 U.S.C. § 158. We issued an unpublished memorandum decision affirming the bankruptcy court on the first claim for relief, and remanding for the bankruptcy court to make findings and enter judgment on the second claim. See In re Straightline Invs., Inc., BAP Nos. NC- 02-1218-RyKMa; NC-02-1241-RyKMa (December 24, 2002).
Aalfs appealed to the Ninth Circuit, which dismissed the appeal for lack of jurisdiction, because it was an appeal from an interlocutory order. See In re Straightline Invs., Inc., 97 Fed.Appx. 79 (9th Cir. 2004). The Ninth Circuit remanded, with instructions that we remand to the bankruptcy court for it to dispose of the second claim for relief.
On remand, the bankruptcy court held a non-evidentiary hearing and issued a Memorandum on Remand which states, in pertinent part, as follows:
The court did not intend to issue an interlocutory decision in this case. It neglected to mention the transfer of cash and inventory only because it was concentrating fully on the transfer of accounts; almost all of the testimony and argument related to the accounts. The court has reviewed the entire trial transcript and issues these supplemental findings and conclusions in order to correct its oversight.
The case involved allegations that $25, 000.00 in cash, $76, 000.00 in inventory and $200, 000.00 in accounts were improperly transferred to defendant Aalfs during the Chapter 11 proceedings. (Transcript, p. 178 lines 15-18). The court has explained its reasoning as to the accounts. . . .
The evidence was insufficient for the court to find that the transfer of anything other than the accounts was improper. Since the plaintiff had not met his burden of persuasion as to the rest, the court did not award anything further in its judgment.
Memorandum on Remand, at 1-2. The court then entered judgment granting the same relief with regard to the first claim as it had in the original judgment. The court clarified that " [a]ll other claims for relief are denied." Judgment After Remand, at 2. Aalfs timely appealed. The trustee did not appeal the bankruptcy court's judgment denying his second claim.
ISSUE
Whether we should affirm under the law of the case doctrine.
DISCUSSION
The trustee argues in his opening brief that our December 24, 2002 memorandum decision constitutes the law of the case and thus is binding in this appeal. We agree.
" Law of the case is a jurisprudential doctrine under which an appellate court does not reconsider matters resolved on a prior appeal." Jeffries v. Wood, 114 F.3d 1484, 1488-89 (9th Cir. 1997)(en banc), overruled on other grounds, Lindh v. Murphy, 521 U.S. 320, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997). See also In re Tsurukawa, 287 B.R. 515, 518 n.2 (9th Cir. BAP 2002)(law of the case doctrine generally precludes reconsideration of an issue that has already been decided by the same court).
Law of the case rules are founded upon " the sound public policy that litigation must come to an end. An appellate court cannot efficiently perform its duty to provide expeditious justice to all if a question once considered and decided by it were to be litigated anew in the same case upon any and every subsequent appeal." Kimball, 590 F.2d at 771 (quotations omitted). This doctrine also serves to maintain consistency.
Jeffries, 114 F.3d at 1489. The law of the case doctrine applies to interlocutory decisions of the same or higher tribunals. United States v. Real Prop. Located at Incline Vill., 976 F.Supp. 1327, 1354 (D. Nev. 1997)(citing Ridgeway v. Mont. High School Ass'n, 858 F.2d 579, 587-88 (9th Cir. 1988)).
Law of the case is a nonjurisdictional, discretionary doctrine. However, a court does not enjoy unfettered discretion in deciding whether to apply the doctrine. The earlier decision should be followed, unless:
1. substantially different evidence was produced at a subsequent trial;
2. there has been an intervening change in controlling authority; or
3. the decision was clearly erroneous and its enforcement would work a manifest injustice. Jeffries, 114 F.3d at 1489; In re Sonoma V, 34 B.R. 758, 760-61 (9th Cir. BAP 1983). The burden is on Aalfs to establish that one of these three exceptions applies. Sonoma, 34 B.R. at 761.
Aalfs raises a number of arguments in this appeal in support of his position that the bankruptcy court erred in entering the Judgment After Remand. Aalfs argues that he purchased the receivables outright, and that the bankruptcy court erred in finding that the transactions were disguised, impermissible loans rather than sales. In addition, Aalfs contends that a transfer must diminish the estate to be avoidable under § 549. Aalfs also argues that the bankruptcy court erred in rejecting his " ordinary course" defense. Finally, Aalfs argues that the recoupment and earmarking doctrines apply. We discussed at length and rejected each of these arguments in our December 24, 2002 memorandum decision.
Aalfs has not shown that any one of the three exceptions to the law of the case doctrine set forth above applies. First, no substantially different evidence was produced in the bankruptcy court on remand. The bankruptcy court did not even conduct an evidentiary hearing on remand. Second, there has not been an intervening change in controlling authority with regard to any of the issues we decided in the earlier appeal. The only case cited by Aalfs in his appellate briefs that was decided after entry of our memorandum decision is The Cadle Co. v. Mangan, 316 B.R. 11 (D. Conn. 2004). This case discusses the earmarking doctrine, but it does not constitute an intervening change in controlling authority. Finally, our decision in the earlier appeal is not clearly erroneous. In addition, Aalfs has not shown that enforcement of the earlier decision would work a manifest injustice. " The existence of exceptional circumstances is required before finding a manifest injustice." Jeffries, 114 F.3d at 1492. No exceptional circumstances are present in this case.
CONCLUSION
For the reasons set forth above, we AFFIRM under the law of the case doctrine.
(1) that occurs after the commencement of the case; and
(2) (A) that is authorized only under section 303(f) or 542(c) of this title; or
(B) that is not authorized under this title or by the court.