Postscript on Equitable Mootness

Shortly after our September article went to press, the Third Circuit handed down another important equitable mootness decision, In re Tribune Media Co., 2015 WL 4925923 (3d Cir. Aug. 19, 2015). It held that one of the two appeals before it was equitably moot because: 1) the plan had been “consummated”; 2) the appellant had “spurned the offer of a stay accompanied by a bond”; and 3) “it would be unfair” to unravel “the most important aspect of the overwhelmingly approved Plan.” Id. at *11. The appellant there had sought to revoke a settlement that was “central” to the substantially consummated plan but had failed “to post a bond to obtain a stay pending appeal” after being given “the opportunity to” do so. Id. at *7-*8. Nevertheless, the court in Tribune held the second appeal, where the appellant had challenged the plan's allocation of funds among two classes of creditors, not to be equitably moot because relief could be granted to the appellant; third parties would not be harmed; and because the plan would not be fatally scrambled. Id. at *9-*10.

Moreover, two of the three judges (Ambro and Vanaskie) in Tribune issued a supplemental opinion, responding to parts of Judge Krause's concurring opinion in One2One Communications. They sought “to lay out briefly why this judge-made doctrine is abided by every Court of Appeals.” Id. at *1. Judge Ambro's supplemental opinion reasoned that: 1) the equitable mootness doctrine does not violate Article III of the constitution; 2) the Bankruptcy Code (“Code”) does not bar the doctrine; and that 3) equitable mootness “can be beneficial as a practical matter.” Id. at 14. Thus, the doctrine can be used in “those few cases [when] shutting an appellant out of the courthouse does substantally less harm than locking a debtor inside.” Id. at *15. Still, Judge Ambro stressed that “equitable mootness remains a last-ditch discretionary device for protecting the finality of an unstayed plan that has been consummated.” Id. at *15.