Heck v. Adamson

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
WILLIAM CHRISTIAN ADAMSON,
Debtor.
____________________________
BRIAN T. HECK,
Plaintiff,
v.
WILLIAM CHRISTIAN ADAMSON,
Defendant.
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Case No. 09-00623
(Chapter 7)
Adversary Proceeding No.
09-10042
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER DENYING
THE DEFENDANT’S MOTION FOR SECURITY FOR COSTS
This is an adversary proceeding to determine whether the
defendant Adamson’s judgment debt to the plaintiff Heck is
nondischargeable under § 523(a) of the Bankruptcy Code (11
U.S.C.). 	Adamson has filed a Motion for Security for Costs under
D.C. Code § 15-703(a) (2001) (authorizing a defendant to obtain
security for costs if the plaintiff is a nonresident), and
requests that the security for costs include security for
attorney’s fees that may be recoverable under 11 U.S.C. § 523(d)
The document below is hereby signed.
Signed: January 05, 2010.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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if Adamson prevails in the adversary proceeding. 	Because I
reject the motion’s premise that application of § 15-703(a) to
this proceeding is mandatory, the motion will be denied.
I
Section 15-703(a) is a statute local in nature. 	Cf. Decatur
Liquors, Inc. v. District of Columbia, 478 F.3d 360, 362-63 (D.C.
Cir. 2007) (“Laws passed by Congress that are applicable
exclusively to the District of Columbia are not federal law for
jurisdictional purposes, see 28 U.S.C. §§ 1331, 1366, so any
claims based on such laws are necessarily local.”). 	The United
States District Court at one time exercised local jurisdiction,
and applied what is now § 15-703(a) in civil actions in which its
jurisdiction was based on local jurisdiction, but that is no
longer the case. 	As explained in Jenkins v. Wash. Convention
Ctr., 236 F.3d 6, 11 (D.C. Cir. 2001):
For many years the courts of the District of Columbia
were courts of limited jurisdiction and a variety of
matters arising under District of Columbia law were
litigated in the federal courts of the District of
Columbia. 	Congress changed that in the District of
Columbia Court Reform and Criminal Procedure Act of
1970, Pub.L. 91-358, 84 Stat. 473, (July 29, 1970)
(codified at D.C. Code § 11-101 et seq. (1981)) ("Court
Reform Act"). 	Acting pursuant to Article I, Section 8,
Clause 17 of the United States Constitution, Congress
established a state-type court system for the District
of Columbia and transferred jurisdiction over matters
arising under District of Columbia law from the federal
courts to the new District of Columbia courts. As a
result, the District of Columbia courts ceased to be
courts of limited jurisdiction, and the federal courts
in the District of Columbia assumed the traditional
role of the federal courts in our judicial system.
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[Citations omitted.]
Prior to the Court Reform Act, the United States District
Court for the District of Columbia on occasion acted in a civil
action pursuant to local jurisdiction as though it were a state
court. 	See Western Urn Mfg. Co. v. Am. Pipe & Steel Corp., 284
F.2d 279, 281 (D.C. Cir. 1960) (“This suit was not brought as a
federal action, nor was jurisdiction asserted on diversity
grounds. 	Quite the contrary, the local jurisdiction of the
District Court was invoked.”). 	In such a civil action premised
on local jurisdiction, the District Court acted as the “local
trial court of general jurisdiction,” and “it [was] governed by
local legislation, embodied in the District of Columbia Code.”
Fehlhaber Pile Co. v. Tenn. Valley Auth., 155 F.2d 864, 865 (D.C.
Cir. 1946). 	When acting pursuant to such local jurisdiction, the
District Court was obligated to require security for costs
pursuant to what is now D.C. Code § 15-703(a) (2001). 	See
Western Urn Mfg., 284 F.2d at 282 n.3, citing Moyers v. Leoffler,
80 F. Supp. 221 (D.D.C. 1941), as an example of the District
Court’s requiring a nonresident to post security for costs. 	Even
when not acting pursuant to such local jurisdiction, there was a
span of more than six decades when following the local security
for costs procedures would have been mandatory:
Prior to enactment of the Federal Rules of Civil
Procedure in 1938, the Conformity Act of 1872 required
federal district courts to apply state law in various
procedural matters. 	Thus, the Act obligated courts to
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apply state law in determining whether to require
security for costs. 	With the enactment of the Federal
Rules of Civil Procedure, however, district courts were
permitted to adopt their own local rules of practice in
the absence of an applicable conflicting Federal Rule.
John A. Gliedman, Access to Federal Courts and Security for Costs
and Fees, 74 S T. JOHN 'S L. REV . 953, 960 (2000) (footnotes
omitted).
This adversary proceeding is not an exercise of any local
jurisdiction, and there no longer is any statute that might
compel adherence to the D.C. statutory procedures for cost bonds.
Accordingly, Adamson’s motion cannot succeed on either of those
two bases.
II
State procedures are made applicable to adversary
proceedings in certain circumstances. 	For example, state
procedures regarding execution on a monetary judgment are made
applicable to an adversary proceeding by Fed. R. Civ. P. 69(a)(1)
and Fed. R. Bankr. P. 7069. 	But no Federal Rule makes the
procedures of D.C. Code § 15-703(a) applicable to this adversary
proceeding.
Sometimes the Federal Rules contemplate that, independent of
state law procedures, a federal court may require security for
costs in certain circumstances. 	For example, in some instances a
federal court may require security for costs incident to granting
a stay pending appeal under Fed. R. Civ. P. 62(d). 	But there is
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1 	Because it has no local rule on the subject, the District
Court would have discretion to apply D.C. Code § 15-703(a) in a
diversity jurisdiction civil action presenting a claim arising
under D.C. law. 	See Simulnet E. Assocs. v. Ramada Hotel
Operating Co., 37 F.3d 573, 575 (9th Cir. 1994). 	But Adamson’s
motion is premised on application of D.C. Code § 15-703(a) as
being mandatory.
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no analog to D.C. Code § 15-703 (2001) under the Federal Rules
that would mandate requiring a nonresident plaintiff to post
security for costs. 	Nothing in the Federal Rules or federal
statutory law compels me to apply D.C. Code § 15-703 to this
proceeding.
III
If Heck were suing Adamson in the District Court pursuant to
its diversity jurisdiction and prosecuting a claim under District
of Columbia law, an argument could be made that the District
Court would be obligated to apply D.C. Code § 15-703(a) (2001).
See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949);
Clopper v. Merrill Lynch Relocation Mgmt., Inc. (In re Merrill
Lynch Relocation Mgmt., Inc.), 812 F.2d 1116, 1120-21 (9th Cir.
1987). 	But see Atlanta Shipping Corp. v. Chem. Bank, 818 F.2d
240, 251 (2d Cir. 1987) (stating that “[i]n diversity actions,
federal courts are not bound to follow state rules on security
for costs where a federal local rule granting discretion is
applicable, although they may look to state rules for guidance”)
(quotations and citations omitted). 1
But in this adversary proceeding, jurisdiction does not rest
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on diversity jurisdiction. 	The complaint seeks a declaration
that a debt is nondischargeable under 11 U.S.C. § 523(a), and
jurisdiction thus lies under the “arising under title 11” prong
of the bankruptcy jurisdiction statute, 28 U.S.C. § 1334(b).
Although the debt itself may have arisen under District of
Columbia law, that debt has already been reduced to judgment, and
the claim presented here is a federal one of determining whether
the debt fits within one of the exceptions of 11 U.S.C. § 523(a)
to dischargeability. 	This proceeding is premised purely on
federal jurisdiction, not local jurisdiction, over a purely
federal claim of nondischargeability that could arise only under
the Bankruptcy Code. 	Accordingly, because no Federal Rule or
federal statute compels adherence to D.C. Code § 15-703, I am not
obligated to apply that local statute to this proceeding founded
on federal law. 	See McClure v. Borne Chem. Co., 292 F.2d 824,
830, 833 (3d Cir.), cert. denied, 368 U.S. 939 (1961); Fielding
v. Allen, 181 F.2d 163, 168 (2d Cir.), cert. denied, 340 U.S. 817
(1950); 10 C HARLES ALAN WRIGHT , ARTHUR R. M ILLER , & MARY KAY KANE , FEDERAL
PRACTICE AND P ROCEDURE § 2671 n.13 (3d ed. 1998).
IV
Nevertheless, absent a Federal Rule or statute that
conflicts, a federal trial court has inherent authority to
direct, in the court’s discretion, that state procedures
governing security for costs will apply, or to direct that a
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plaintiff post security for costs even when no state procedural
statute exists that addresses the question. 	See In re Am.
President Lines, Inc., 779 F.2d 714, 716 n.18 (D.C. Cir. 1985);
Clopper v. Merrill Lynch Relocation Mgmt., Inc. (In re Merrill
Lynch Relocation Mgmt., Inc.), 812 F.2d 1116, 1121 (9th Cir.
1987).
Generally, a party’s attorney’s fees are not recoverable in
litigation and thus a cost bond generally ought not include an
amount attributable to attorney’s fees. 	See Am. President Lines,
Inc., 779 F.2d at 717. 	But logically, the cost bond may include
attorney’s fees when such are authorized to be recovered by a
fee-shifting statute. 	Cf. Montgomery & Assocs. v. CFTC, 816 F.2d
783, 784 (D.C. Cir. 1987).
Nevertheless, Adamson’s motion sought security for costs
only pursuant to D.C. Code § 15-703 (2001), as though it were a
mandatory requirement, and did not address the criteria
applicable to imposition of a requirement of security for costs
as a discretionary matter. 	See, e.g., Selletti v. Carey, 173
F.3d 104, 111 (2d Cir. 1999); Simulnet E. Assocs. v. Ramada Hotel
Operating Co., 37 F.3d 573, 576 (9th Cir. 1994); Hawes v. Club
Ecuestre el Comandante, 535 F.2d 140, 144 (1st Cir. 1976). 	If
Adamson were to file a motion requesting the court to require a
cost bond in its discretion, it is doubtful that Heck’s
nonresident status by itself would constitute a sufficient ground
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8	O:\TEEL\Judge Temp Docs\Heck v Adamson (In re Adamson) Mem Decsn & Order re Mtn to Require Security for Costs_v2.wpd
for requiring a cost bond. 	It is thus
ORDERED that Adamson’s Motion for Security for Costs is
DENIED.
[Signed and dated above.]
Copies to: All counsel of record.
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