Will the Third Circuit Abrogate Equitable Mootness?

In re One2One Communications, LLC, 805 F.3d 428 (3d Cir. 2015).  This post about In re Semicrude, L.P., 728 F.3d 314 (3d Cir. 2013), which discussed the bankruptcy doctrine of equitable mootness noted that “the Third Circuit is not wild about equitable mootness,” but that “the panel could not, of course, overrule the en banc decision in [In re] Continental [Airlines, 91 F.3d 553 (3d Cir. 1996) (en banc)].”  Continental had adopted the doctrine by a 7-6 vote.

Today, in an opinion by Judge Greenaway, a different panel faced an equitable mootness case.  The District Court had dismissed an appeal based on equitable mootness.  Appellants made two different arguments to the Third Circuit.  First, they argued that the District Court had abused its discretion in granting dismissal based on equitable mootness.  Second, they urged the panel to overrule Continental.

Judge Greenaway stated that “[t]his panel is not free to overturn a precedential opinion.  In the absence of an en banc reversal, we are bound by Continental.”  He observed that every Circuit except the Eighth Circuit had “endorsed some form of the equitable mootness doctrine.”  As he rightly noted, the only way that a panel, as opposed to the Third Circuit en banc, could undo Continental would be if that decision contravened Supreme Court of the United States precedent.

Appellants argued that Continental had to be reevaluated in light of Stern v. Marshall, 131 S.Ct.2594 (2011).  Judge Greenaway did not agree.  However, he did conclude that the District Court had abused its discretion in invoking equitable mootness, which “must be construed narrowly and applied in limited circumstances.”

In a lengthy concurring opinion, Judge Krause condemned this “legally ungrounded and practically unadministrable” doctrine.  She found it “painfully apparent” that there is no statutory basis for the equitable mootness doctrine, and she perceived “serious constitutional questions” in the doctrine.  She therefore “urge[d] our Court to consider eliminating, or at the very least, reforming, equitable mootness.”  Her concurrence is a powerful call for the Third Circuit to grant en banc review if appellants seek it, as they certainly should since they are armed with Judge Krause’s opinion as well as the opinion in Semicrude.