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Bankruptcy stays in Louisiana courts of appeal

Earlier this month, the Louisiana Fifth Circuit adopted new Local Rule 13, governing motions for a stay of a matter in that court because of an automatic stay triggered by a party’s bankruptcy. The new rule is similar in substance to the Louisiana Fourth Circuit’s Local Rule 20.1. Both rules impose certain obligations on the party moving for the stay in the court of appeal to keep the court of appeal informed of the status of the bankruptcy-caused stay and to notify the court timely of any lifting or cancellation of the automatic stay.

I did a quick check of the local rules of other Louisiana courts of appeal about what happens when a party’s bankruptcy triggers an automatic stay. I found that the Louisiana First Circuit’s Local Rule 4, governing abandonment of a civil appeal, includes a provision for abandonment after one year “unless the appellant in the meantime files a motion showing why the appeal should not be dismissed.” La. 1st Cir. R. 4(B).

Reviewing these rules reminds me of another bankruptcy-related quirk in Louisiana appellate procedure: what happens when a case is removed to federal court1 after an appealable judgment has been rendered but before a party has moved for a devolutive or suspensive appeal. This sometimes happens when a party’s post-judgment bankruptcy creates federal jurisdiction under 28 U.S.C. § 1334(b), providing for federal jurisdiction over cases related to a bankrupty proceeding. If the bankruptcy occurs while the appeal clock is ticking, it interrupts the time to take a devolutive or suspensive appeal. See La. Code Civ. P. arts. 2087(E) (for devolutive appeal) and 2123(D) (suspensive appeal). 

Questions I don’t know the answer to (so don’t ask):

  1. What happens to the case in federal court after it’s removed under art. 2087(E) or 2123(D)? Appeal to the U.S Fifth Circuit?
  2. Can a case be removed after a party has perfected a devolutive or suspensive appeal? If so, what happens to the appeal in the federal system?

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