Dear constituency list members of the Insolvency Law Committee:
In April 2016, the Supreme Court submitted to Congress proposed revisions to the Federal Rules of Appellate Procedure (“FRAP”), Federal Rules of Bankruptcy Procedure (“FRBP”), and Federal Rules of Civil Procedure (“FRCP”). The proposed revisions will go in effect on December 1, 2016, unless Congress rejects or defers the proposed amendments.
The entire package of materials transmitted to Congress may be accessed here: http://bit.ly/2fms8Kk. Some of the proposed revisions are described below.
Bankruptcy Rule 9006(f) – Elimination of the 3-day rule when papers are served by electronic means
Current FRBP 9006(f) provides that when a party may or must act within a prescribed period after being served “and that service is by mail or under [FRCP] 5(b)(2)(D), (E), or (F),” 3 days are added to the period. FRCP 5(b)(2)(E) allows for service of papers by electronic means. Therefore, under the current rules, if a movant serves notice of a motion electronically and parties have 14 days from the date of service to file an opposition, an opposing party actually has at least 17 days to file its opposition.
Under revised FRBP 9006(f), service by electronic means is effective upon service. Three days will be added only if service is by mail or under FRCP 5(b)(2)(D) (leaving with the clerk) or (F) (other means consented to).
As discussed below, similar changes are being made to the FRAP and FRCP, where all parties in each case are more likely to be (a) small in number and (b) CM/ECF users. Eliminating the 3-day rule when parties are served via the court’s Notice of Electronic Filing (“NEF”) system generally makes sense, but the overall benefit of eliminating the rule may prove small since many notices are served by mail on at least one recipient. The revision may also create unnecessary confusion, since one class of creditors (NEF recipients) will have a certain amount of time to act while others (mail recipients) will have additional time. In jurisdictions such as the Central District of California, where movants can file motions and give notice that parties have 14 days to file objections and request hearings, courts must now do more to ensure that movants wait the right amount of time before filing declarations of non-opposition and lodging proposed orders. (The Central District has also started the process of revising its local bankruptcy forms to conform to the revised FRBP 9006(f).)
Bankruptcy Rules 7008, 7012, 7016, 9027 and 9033 – The “Stern Amendments”
Proposed “Stern Amendments” were submitted to the Supreme Court in 2013, withdrawn a few months later because the Court granted cert in Arkison, and resubmitted after Wellness was decided in 2015. Generally, the revisions remove the terms “core” and “non-core” to avoid possible confusion in light of Stern, require all parties to state whether they consent to the entry of final orders and judgment by the bankruptcy court, and revise the pretrial procedures to direct bankruptcy courts to decide how each proceeding should be treated.
Current FRBP 7008 provides that a complaint or similar pleading must state whether the proceeding is core or non-core and, if non-core, whether the pleader consents to entry of final orders or judgment by the bankruptcy court. Revised FRBP 7008 eliminates the need to state whether the proceeding is core or non-core. Now, regardless of whether the proceeding is core or non-core, the pleading must state whether the pleader consents to entry of final orders or judgment.
Similarly, revised FRBP 7012(b) eliminates the need for a defendant to admit or deny an allegation that the proceeding is core or non-core. Instead, in both types of proceedings, a responsive pleading must state whether the party consents to entry of final orders or judgment.
Likewise, revised FRBP 9027(a)(1) and (e)(3) require that, when an action is removed to the bankruptcy court, the parties who have filed pleadings must state whether they consent to entry of final orders or judgment by the bankruptcy court, regardless of whether the proceeding is core or non-core.
Current FRBP 7016 simply provides that FRCP 16 applies in adversary proceedings. New FRBP 7016(b) also provides that a bankruptcy court must decide, on its own motion or a party’s timely motion, whether (1) to hear and determine the proceeding, (2) to hear the proceeding and issue proposed findings of fact and conclusions of law, or (3) to take some other action.
Bankruptcy Rule 3002.1 – Notices given in chapter 13 cases by creditors holding claims secured by debtors’ principal residences
Current FRBP 3002.1 provides that, in chapter 13 cases, creditors whose claims are secured by the debtor’s principal residence must provide the debtor and the trustee notice of any changes in the periodic payment amount or the assessment of any fees or charges during the bankruptcy case. Revised FRBP 3002.1(a) provides that, unless the court orders otherwise, the notice requirements cease to apply when an order terminating or annulling the automatic stay becomes effective with respect to the residence that secures the claim.
Appellate Rule 26(c) – Elimination of the 3-day rule when papers are served by electronic means (and the Ninth Circuit’s retention of the 3-day rule)
FRAP 26(c) provides that when a party may or must act within a specified time after being served, 3 days are added to the period unless the paper is actually delivered on the date stated in the proof of service. Currently, a paper served electronically is not treated as having been delivered on the date stated in the proof of service. Under revised FRAP 26(c), a paper served electronically is treated as having been delivered on the date stated in the proof of service.
However, practitioners should be aware that the Ninth Circuit’s Circuit Rule 26-2 (adopted in 2009) provides that “[t]he 3-day service allowance provided by FRAP 26(c) applies to documents served by the Appellate CM/ECF system pursuant to Circuit Rule 25-5.” According to a recent Ninth Circuit notice, Circuit Rule 26-2 will remain in force notwithstanding revised FRAP 26(c).
Appellate Rules 28.1(e), 29, and 32(a)(7) – Reduction of word limits for briefs filed by parties and amici (and the Ninth Circuit’s retention of the existing word limits)
Current word limits are based on an estimate of 280 words per page. Responding to concerns about the length of appellate briefs, the conversion ratio is being reduced to 260 words per page. However, as noted below, the Ninth Circuit has adopted new local rules which maintain the current word limits.
Under revised FRAP 32(a)(7), in an appeal not involving cross-appeals, the appellant’s and appellee’s principal briefs must not exceed 13,000 words (down from 14,000), and the appellant’s reply brief must not exceed 6,500 words (down from 7,000).
Similarly, under revised FRAP 28.1(e), in an appeal involving cross-appeals, the appellant’s principal brief must not exceed 13,000 words (down from 14,000), the appellee’s principal and response brief must not exceed 15,300 words (down from 16,500), the appellant’s response and reply brief must not exceed 13,000 words (down from 14,000), and the appellee’s reply brief must not exceed 6,500 words (down from 7,000).
These changes also affect the word limits for amicus briefs addressing the merits of an appeal, which are limited to one half of the length set by the rules for a party’s principal brief. Also, under new FRAP 29(b), which applies to amicus briefs addressing whether the court should grant a panel rehearing or rehearing en banc, such amicus briefs are limited to 2,600 words.
However, by local rule or order in a particular case, a court of appeals may accept documents that do not satisfy these length limits. The Ninth Circuit has adopted new local rules, effective December 1, 2016, which “opt out” of the proposed reductions and maintain the existing word limits for briefs (http://bit.ly/2g3Ipnl).
Appellate Rules 27(d), 35(b) and 40(b) – Word limits for certain motions and petitions (and the Ninth Circuit’s retention of the existing page limits for motions)
These rules are revised to impose word limits instead of page limits when filers produce certain motions and petitions using a computer. However, as noted below, the Ninth Circuit has adopted new local rules which effectively maintain some of the current page limits.
Current FRAP 27(d) generally provides that a motion or a response to a motion must not exceed 20 pages, and a reply must not exceed 10 pages. Under revised FRAP 27(d), motions and responses to motions produced using a computer must not exceed 5,200 words, and replies produced using a computer must not exceed 2,600 words.
However, the Ninth Circuit’s local rules retain existing page limits. New Circuit Rule 27-1(1)(d) reinstates the 20/10 page limits for motions, responses and replies. In addition, revised Circuit Rule 32-3 provides that when “an order or rule of this Court” imposes a page limit for a brief or other document, a party may comply with the limit by filing a brief or document “in which the word count, divided by 280, does not exceed the designated page limit.”
Current FRAP 35(b) provides that a petition for an en banc hearing or rehearing must not exceed 15 pages. Similarly, current FRAP 40(b) provides that a petition for a panel rehearing must not exceed 15 pages. Under revised FRAP 35(b) and 40(b), such petitions produced using a computer must not exceed 3,900 words.
However, the Ninth Circuit’s revised Circuit Rule 40-1(a) provides that a petition for a panel rehearing or rehearing en banc, and any answer, may not exceed 15 pages unless it contains no more than 4,200 words.
Corresponding word limits in FRBP 8001 et seq. have NOT been reduced
In 2014, many rules in Part VIII of the FRBP were revised to mirror the FRAP. For example, like current FRAP 32(a)(7), FRBP 8015(a)(7) provides for type-volume limitations of 14,000 words for principal briefs and 7,000 words for reply briefs. When the Judicial Conference Committee on Rules of Practice and Procedure proposed to reduce the word limits in the FRAP, it did not propose reductions to the corresponding word limits in the FRBP.
The Advisory Committee on Bankruptcy Rules recently submitted proposed amendments to bring Part VIII of the FRBP into conformity with the pending amendments to the FRAP. The public comment period for the proposed amendments to Part VIII started on August 15, 2016, and will end on February 15, 2017. Assuming that these proposals follow the usual course, they are on track to become effective December 1, 2018.
Civil Rule 6(d) – Elimination of the 3-day rule when papers are served by electronic means
Like FRBP 9006(f) and FRAP 26(c), FRCP 6(d) is revised so that the 3-day rule does not apply when a party is served by electronic means under FRCP 5(b)(2)(E).
These materials were written by John N. Tedford, IV, of Danning, Gill, Diamond & Kollitz, LLP, in Los Angeles, California (firstname.lastname@example.org). Editorial contributions were provided by Kyra E. Andrassy of Smiley Wang-Ekvall, LLP in Costa Mesa, California.
Thank you for your continued support of the Committee.
Insolvency Law Committee
Asa S. Hami
SulmeyerKupetz, A Professional Corporation
Macdonald Fernandez LLP
Radmila A. Fulton
Law Offices Radmila A. Fulton
John N. Tedford, IV
Danning, Gill, Diamond & Kollitz, LLP