Third District Court of Appeal
State of Florida
Opinion filed March 10, 2021.
Not final until disposition of timely filed motion for rehearing.
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No. 3D20-1612
Lower Tribunal No. 16-1332
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Jacqueline Calderin, etc., et al.,
Petitioners,
vs.
Quartz Hill Mining, LLC, etc., et al.,
Respondents.
A Case of Original Jurisdiction – Prohibition.
Shendell & Pollock, P.L., and Diran V. Seropian (Boca Raton), for
petitioners.
St. Denis & Davey, P.A., and Brian W. Davey and Eric M. Bradstreet
(Jacksonville), for respondents.
Before EMAS, C.J., and GORDO and BOKOR, JJ.
EMAS, C.J.
INTRODUCTION
Petitioners Jacqueline Calderin, Esq., Robert Paul Charbonneau,
Esq., and the law firm of Ehrenstein Charbonneau Calderin seek a writ of
prohibition to restrain the further exercise of jurisdiction by the Eleventh
Judicial Circuit Court in a lawsuit for legal malpractice allegedly committed
during the course of a federal bankruptcy proceeding. The question squarely
presented is whether federal courts have exclusive or concurrent subject-
matter jurisdiction over such actions.
FACTS AND PROCEDURAL BACKGROUND
Petitioners (the defendants below) contend that the federal court
possesses exclusive jurisdiction over the malpractice claim. Respondents
Quartz Hill Mining, LLC and Superior Gold, LLC (plaintiffs below) contend
that the state and federal courts possess concurrent jurisdiction over the
cause of action and, because petitioners failed to timely seek removal to
federal court, the action is properly before the state court. We agree with
respondents that concurrent jurisdiction exists over the action below, and
deny the petition, as the trial court has not exceeded its jurisdiction. See
English v. McCrary,
348 So. 2d 293, 296 (Fla. 1977) (providing: “Prohibition
is an extraordinary writ, a prerogative writ, extremely narrow in scope and
operation, by which a superior court, having appellate and supervisory
2
jurisdiction over an inferior court . . . may prevent such inferior court . . . from
exceeding jurisdiction or usurping jurisdiction over matters not within its
jurisdiction.”)
The relevant facts are not in dispute. Respondents were debtors in a
bankruptcy proceeding filed in federal bankruptcy court. During the course
of those proceedings, the bankruptcy court approved the representation of
respondents in the bankruptcy matter by petitioners-attorneys Calderin,
Charbonneau and their law firm. After the bankruptcy matter was concluded,
respondents filed suit in Miami-Dade Circuit Court, alleging that petitioners
committed legal malpractice during their representation of respondents in the
bankruptcy case. Petitioners did not seek to remove the case to federal
court,1 but did file a motion to dismiss, alleging the state court was without
subject-matter jurisdiction and that the federal district court had exclusive
jurisdiction over the legal malpractice claim. The trial court denied the
motion, and this petition followed.
DISCUSSION AND ANALYSIS
28 U.S.C., section 1334 provides in pertinent part:
1
The time for filing a motion to remove the case to federal court had already
expired when petitioner filed a motion to dismiss for lack of subject-matter
jurisdiction. See
28 U.S.C. §§ 1452(a), 1446(b).
3
(a) Except as provided in subsection (b) of this section, the
district courts shall have original and exclusive
jurisdiction of all cases under title 11.
(b) Except as provided in subsection (e)(2), and
notwithstanding any Act of Congress that confers exclusive
jurisdiction on a court or courts other than the district
courts, the district courts shall have original but not
exclusive jurisdiction of all civil proceedings arising
under title 11, or arising in or related to cases under
title 11.
...
(e) The district court in which a case under title 11 is
commenced or is pending shall have exclusive
jurisdiction—
(1) of all the property, wherever located, of the debtor as of
the commencement of such case, and of property of the
estate; and
(2) over all claims or causes of action that involve
construction of section 327 of title 11, United States Code,
or rules relating to disclosure requirements under section
327.
(Emphasis added).
Taken together, subsections (a) and (b) delineate four categories over
which the district court has jurisdiction: (1) “cases under” the Bankruptcy
Code; (2) proceedings “arising under” the Code; (3) proceedings “arising in”
a case under the Code; and (4) proceedings “related to” a case under the
Code. In re Atherotech, Inc.,
582 B.R. 251, 257 (Bankr. N.D. Ala. 2017)
(citing In re Wood,
825 F.2d 90, 92 (5th Cir. 1987)).
4
For our purposes, the statutory language appears plain and
unambiguous: federal district courts have exclusive jurisdiction “of all cases
under title 11,” but enjoy “original but not exclusive jurisdiction of all civil
proceedings arising under title 11 or arising in or related to cases under title
11.” Thus, we must determine whether this legal malpractice claim is a
“case[] under title 11” or is instead a “civil proceeding[] arising under title 11
or arising in or related to a case under title 11.”
“Cases under title 11,” as provided in subsection (a) above, “refers
merely to the bankruptcy petition itself, over which federal district courts (and
their bankruptcy units) have original and exclusive jurisdiction.” In re Wood,
825 F.2d at 92; In re Weinberg,
153 B.R. 286, 290 n.8 (S.D. 1993) (noting:
“A title 11 case is commenced when the bankruptcy petition is filed.”) Thus,
only “cases under title 11” are within the exclusive jurisdiction of the federal
district courts, as provided in section 1334(a). And because the matter
pending in the circuit court is a legal malpractice case, it is self-evidently not
a bankruptcy petition, and thus this matter does not fall within the exclusive
jurisdiction of the federal court under subsection (a).
The three remaining types of cases are delineated in subsection (b),
and all expressly fall within the “original but not exclusive jurisdiction” of the
5
federal district courts. 2 See Matter of Brady, Texas, Mun. Gas Corp.,
936
F.2d 212, 218 (5th Cir. 1991) (holding: “Although the district courts ‘have
original and exclusive jurisdiction of all cases under title 11,’ the district
courts do not have ‘exclusive jurisdiction of all civil proceedings arising under
title 11 or arising in or related to cases under title 11.’” (quoting
28 U.S.C.A.
§ 1334(b)); In re Weinberg,
153 B.R. 286, 290 (S.D.S.D. 1993) (noting: “Non-
exclusive jurisdiction means other federal and state courts are not deprived
of jurisdiction over civil proceedings”); In re Apex Oil Co., Inc.,
406 F.3d 538,
2
Under subsection (b) “‘[a]rising under’ proceedings are matters invoking a
substantive right created by the Bankruptcy Code[.]” In re Staggs,
562 B.R.
790, 794 (Bankr. N.D. Ala. 2016) (quoting In re Toledo,
170 F.3d 1340, 1345
(11th Cir. 1999)). In other words, to come within this category, the case must
“‘involve a cause of action created or determined by a statutory provision of
title 11.’” In re Wood,
825 F.2d at 96. Proceedings “arising in” a case under
the Bankruptcy Code are “‘generally thought to involve administrative-type
matters[.]’” Staggs, 562 B.R. at 794. Such matters arise only in bankruptcy
cases and “‘would have no existence outside of bankruptcy.’” Wood,
825
F.2d at 97.
And “a proceeding ‘related to’ a case under title 11 is the kind of
proceeding with the most tenuous federal jurisdictional basis.” In re Nassau
Dev. of Village West Corp.,
547 B.R. 857, 860 (Bankr. S.D. Fla. 2016). In
Matter of Lemco Gypsum, Inc.,
910 F.2d 784, 788 (11th Cir. 1990), the
Eleventh Circuit Court of Appeals adopted the “Pacor formulation” for
“determining whether a civil proceeding is sufficiently related to bankruptcy
to confer federal jurisdiction on the district court,” which considers the effect
of the civil proceeding’s outcome on the estate being administered in
bankruptcy. Where the connection between the civil proceeding and the
estate is tenuous, the federals courts are without jurisdiction.
Id. at 789
(citing Pacor, Inc. v. Higgins,
743 F.2d 984 (11th Cir. 1990)).
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542-43 (8th Cir. 2005) (noting: “Congress granted state courts concurrent
jurisdiction to consider bankruptcy issues arising from Chapter 11
proceedings.”)
It is thus clear that this legal malpractice claim is one subject not to
exclusive federal jurisdiction, but to concurrent jurisdiction with state courts.
See In re Gersten,
2008 WL 8444810 (9th Cir. Bankr. App. 2008)
(recognizing concurrent jurisdiction of state courts over malpractice action
arising out of bankruptcy litigation); (In re Tronox,
603 B.R. 712, 722 (Bankr.
S.D.N.Y. 2019) (denying a motion to remand a legal malpractice case to
state court because “the alleged acts of malpractice occurred entirely during
the bankruptcy case . . . and there [was] no allegation that [the defendants]
provided services outside of the bankruptcy case,” but implicitly recognizing
the state court’s concurrent jurisdiction).
Nonetheless, petitioners assert that the federal court does have
exclusive jurisdiction, citing four cases in support thereof: Schultze v.
Chandler,
765 F.3d 945 (9th Cir. 2014); Baker v. Simpson,
613 F.3d 346 (2d
Cir. 2010); Capitol Hill Group v. Pillsbury, Winthrop, Shaw, Pittman, LLC,
569
F.3d 485 (D.C. Cir. 2009); and In re Seven Fields Dev. Corp. v. Ernst Young,
LLP,
505 F.3d 237, 260 (3d Cir. 2007). However, these cases stand only for
the proposition that “core proceedings,” such as (perhaps) the legal
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malpractice claim here, are ones in which federal courts are empowered to
exercise jurisdiction, but such jurisdiction is nevertheless concurrent with
that of the state courts. The issue in those cases was whether a federal
court should abstain (or alternatively was required to abstain) from exercising
its concurrent jurisdiction in a given case, a point which establishes that there
is, in fact, no exclusive jurisdiction resting in the federal courts in such “core
proceedings.”
In like fashion, federal courts in Florida have remanded such causes
of action to state court, again supporting the conclusion that state courts
have concurrent jurisdiction over legal malpractice claims against attorneys
employed on behalf of a bankruptcy debtor or trustee. See, e.g., In re Trujillo,
485 B.R. 797 (Bankr. M.D. Fla. 2013) (remanding to state court a legal
malpractice action filed against a Chapter 11 debtor’s counsel); In re Olympia
Holding Corp.,
215 B.R. 254 (Bankr. M.D. Fla. 1997) (remanding to state
court a legal malpractice action brought against special litigation counsel
hired by a bankruptcy trustee).
As the action below is related to the actual bankruptcy proceeding, and
alleges actionable conduct engaged in by attorneys in the course of that
bankruptcy proceeding, it falls within the original, but not exclusive,
jurisdiction of the federal district court. See Weinberg,
153 B.R. at 290
8
(noting: “Non-exclusive jurisdiction means other federal and state courts are
not deprived of jurisdiction over civil proceedings.”) Thus, petitioners’ failure
to timely remove the case to federal court, which would have given that court
the opportunity to either exercise its concurrent jurisdiction or abstain
therefrom, is not a basis upon which this court can exercise its prohibition
power.
Finally, petitioners argue that the federal court’s jurisdiction is
exclusive pursuant to subsection 28 U.S.C. section 1334(e)(2), which
provides that the federal courts have exclusive jurisdiction over “all claims or
causes of action that involve construction of section 327 of title 11, United
States Code.” However, we conclude that subsection is inapplicable to the
proceedings in the state court, as the malpractice claim does not “involve
construction of section 327.” (Emphasis added).
11 U.S.C. section 327, entitled “Employment of Professional Persons”
provides in pertinent part that a trustee may employ attorneys, with the
bankruptcy court’s approval, “to represent or assist the trustee in carrying
out the trustee’s duties under this title.” However, section 327 does not
establish standards of conduct which an attorney must follow during such
representation, or otherwise provide regulatory language that would need to
be construed in adjudicating a claim for legal malpractice arising out of such
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representation. We therefore conclude that subsection (e)(2) does not vest
exclusive jurisdiction in the federal courts over this legal malpractice claim
against a bankruptcy court-appointed attorney.3
Accordingly, because we conclude that under the plain and
unambiguous language of 28 U.S.C. section 1334, federal courts have
3
We likewise reject petitioners’ reliance on cases involving legal malpractice
claims relating to patent law, because jurisdiction for such claims is provided
separately under
28 U.S.C. § 1338(a), which confers upon district courts
“original jurisdiction of any civil action arising under any Act of Congress
relating to patents, plant variety protection, copyrights and trademarks” and
further provides that “[n]o State court shall have jurisdiction over any claim
for relief arising under any Act of Congress relating to patents, plant variety
protection, or copyright.” Therefore, if a legal malpractice claim is one
“arising under” federal patent law, federal courts have exclusive jurisdiction
under the plain language of § 1338(a). By contrast, if a legal malpractice
claim is one “arising under” the Bankruptcy Code, district courts have
“original but not exclusive” jurisdiction under § 1334(b). Such stark
differences in statutory language render any attempted comparisons of
these two provisions (and cases construing them) largely unhelpful. See
also Gunn v. Minton,
568 U.S. 251 (2013) (holding that Minton’s state law
legal malpractice claim, though premised upon his attorney’s alleged
mishandling of his patent case, did not “arise under” federal patent law, and
therefore § 1338(a) did not deprive the state court of jurisdiction over the
malpractice claim); Solar Dynamics, Inc. v. Buchanan Ingersoll & Rooney,
P.C.,
211 So. 3d 294, 297 (Fla. 2d DCA 2017) (observing: “Indisputably,
federal courts exercise exclusive jurisdiction over ‘any civil action arising
under any Act of Congress relating to patents.’”); Schachel v. Closet
Concepts, Inc.,
405 So. 2d 487 (Fla. 3d DCA 1981). Indeed, to the extent
28 U.S.C. § 1338(a) is relevant at all, it serves to demonstrate that Congress
knows precisely how to craft a statute if it wishes to confer exclusive
jurisdiction on federal courts to adjudicate certain claims “arising under”
federal law.
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“original, but not exclusive jurisdiction,” and that the Eleventh Judicial Circuit
court has concurrent jurisdiction over the pending action, we deny the
petition for writ of prohibition.
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