By: Chelsea Frankel
St. John’s University School of Law
American Bankruptcy Institute Law Review Staff
Under the “Barton doctrine,” which originated with the 1881 case of Barton v. Barbour, a lawsuit cannot be brought against a receiver or bankruptcy trustee without leave of the court that appointed the receiver or trustee.[1] In Chua v. Ekonomou, the United States Court of Appeals for the Eleventh Circuit held that the Barton doctrine is inapplicable to receivers and bankruptcy trustees when the court that appointed the receiver or trustee no longer has jurisdiction over the property that necessitated the appointment.[2] In 2006, the district attorney for the Brunswick Judicial Circuit in Georgia initiated a civil forfeiture action against Noel Chua in connection with a criminal indictment.[3] The judge who presided over both the criminal and civil proceedings froze Chua’s assets and appointed Michael Lambros as forfeiture receiver.[4] In 2015, the receivership was terminated, at which point, Lambros and his legal counsel had “depleted almost all of Chua’s assets.”[5] In 2019, Chua sued Lambros and his counsel in the United States District Court for the Northern District of Georgia, alleging that they conspired with the Brunswick judge and other Georgia state officials to convict him of multiple crimes and strip him of the “resources needed to mount a defense in the criminal trial.”[6] Because Chua had not received leave from the court that appointed Lambros as receiver, Lambros moved to dismiss on the grounds that the Barton doctrine precluded Chua’s suit.[7] The district court agreed and held that the Barton doctrine did not permit Chua to sue a receiver without first obtaining permission from the court that appointed the receiver.[8] On appeal, the Eleventh Circuit concluded that the district court erred in finding the Barton doctrine “applies [at the conclusion] of a receivership.” However, the Eleventh Circuit determined that Chua’s claims against Lambros and his counsel[9] still failed because judicial immunity for acts taken within the scope of the receivership applies to trustees and their counsel.[10]
The Eleventh Circuit explained that the Barton doctrine is “grounded in the exclusive nature of in rem jurisdiction,” which permits the court that “first exercises jurisdiction over certain property” to “exclude others from exercising jurisdiction over it.”[11] The rule, explained the court, is one of necessity; it is intended to avoid conflict among courts seeking to control “the same property at the same time.”[12] Accordingly, the Barton doctrine does not apply “when there is no longer a res controlled by a single court,”[13] and it did not apply to Chua’s claims because, at the point that Chua had filed suit against the defendants, “the receivership had already ended and Chua had forfeited his claim to his seized assets [pursuant to] a consent agreement.”[14]
The Chua holding splits from circuit courts that have held the Barton doctrine must apply beyond the conclusion of bankruptcy or forfeiture proceedings to “protect[] the court-appointed trustee [or receiver] from suit.”[15] The Eleventh Circuit responded to those concerns by noting that public policy is irrelevant in determining whether a court has subject-matter jurisdiction.[16] Moreover, according to the Eleventh Circuit, those policy concerns are unfounded because court-appointed receivers “enjoy judicial immunity for acts taken within the scope of their authority.”[17] As such, a unanimous Eleventh Circuit vacated the lower court’s dismissal of Chua’s claims for lack of subject-matter jurisdiction, but remanded with instructions to dismiss those claims with prejudice on the basis of judicial immunity.[18]
[1] See Chua v. Ekonomou, 1 F.4th 948, 951 (11th Cir. 2021) (citing Barton v. Barbour, 104 U.S. 126, 128 (1881)). Although Barton was related to receiverships, circuit courts have extended the Barton doctrine to lawsuits against bankruptcy trustees. See id. at 953 (citing Carter v. Rodgers, 220 F.3d 1249, 1252 (11th Cir. 2000)).
[2] Chua, 1 F.4th at 951; The Eleventh Circuit had already held in the 2020 case of Tufts v. Hay that “the Barton doctrine has no application [to bankruptcy trustees] when jurisdiction over a matter no longer exists in the bankruptcy court,” but the Tufts decision did not discuss the comparable application to receiverships. See 997 F.3d 1204, 1209 (11th Cir. 2020).
[3] Chua, 1 F.4th at 950. In 2005, then-doctor Chua hired a pre-med student to work in his practice. He prescribed the student hydrocodone and “increasingly stronger” pain medications, and the student ultimately moved into his home. Soon after, the student died of an apparent drug overdose in Chua’s home. Chua was indicted for, and later charged with, felony murder of the student and several violations of the Georgia Controlled Substances Act (“VGCSA”). See id.
[4] Id. at 950. Andrew Ekonomou, then a partner as Lambros’s law firm, served as counsel to Lambros in the receivership. Id.
[5] Id. at 950. During that time, Chua was convicted of felony murder and VGCSA. He was sentenced to concurrent life sentences in prison, but after launching litigation against state actors for “constitutional infirmities in his trial,” he reached a plea agreement and consent agreement with the district attorney’s office and was released from prison in 2017. Id. at 951.
[6] Id. at 950 (“Chua alleges that a conspiracy was formed to pin the blame for the student's death on him . . . . [and that the] civil-forfeiture action [was initiated] allegedly to deprive Chua of resources needed to mount a defense in the criminal trial.”). Chua also named as defendants in the lawsuit The Lambros Firm, LLC, an alleged co-conspirator Steve Berry, and the no-longer-existing law firm that Lambros and Ekonomou formerly shared. See id. at 951.
[7] Id. at 952.
[8] See id.
[9] Id. at 955. The Eleventh Circuit noted that Ekonomou and the law firms are protected by the same judicial immunity as Lambros because “[t]he protection . . . afford[ed] the Trustee . . . would be meaningless if it could be avoided by simply suing the Trustee's attorneys.” Id. (quoting In re DeLorean Motor Co., 991 F.2d 1236, 1241 (6th Cir. 1993)).
[10] Id. at 952.
[11] Id. at 954.
[12] Id. (quoting Toucey v. N.Y. Life Ins. Co., 314 U.S. 118, 134–35 (1941)) (“This rule of exclusive jurisdiction is one of ‘necessity’ because multiple courts attempting to control the same property at the same time ‘would result in unseemly conflict.’”).
[13] Id. (citing Porter v. Sabin, 149 U.S. 473, 480 (1893)) (“[W]hen there is no longer a res controlled by a single court, there is no longer a potential conflict in the exercise of jurisdiction over it. And the court that first exercised jurisdiction over the res may no longer exclude other courts from exercising jurisdiction.”).
[14] Id. at 955.
[15] See id. at 954 (referencing Satterfield v. Malloy, 700 F.3d 1231, 1236 (10th Cir. 2012); Muratore v. Darr, 375 F.3d 140, 147 (1st Cir. 2004); In re Linton, 136 F.3d 544, 545 (7th Cir. 1998); and In re Crown Vantage, Inc., 421 F.3d 963, 972 (9th Cir. 2005)).
[16] Id. (quoting In re Linton, 136 F.3d at 545).
[17] See id. at 954–55 (citing Prop. Mgmt. & Invs., Inc. v. Lewis, 752 F.2d 599, 602 (11th Cir. 1985). The court also recognized that its own prior decisions have “credited” that policy concern, but “only in dicta.” See id. at 954.
[18] See id. at 957.