• March 22, 2012

Update (March 22, 2012):  Plaintiffs have voluntarily dismissed their case.  Apparently, the filing of the complaint sufficed for the airing of grievances.  

Original post (March 7, 2012):  Our federal bankruptcy system uses court-appointed “bankruptcy trustees” who are entrusted to preside over bankrupt estates and, through the bankruptcy court system, to maximize the value of the estates.

What is to stop bankruptcy trustees from making up allegations of financial wrong-doing against innocent people to “shake them down” and force them to hand-over money to the trustee?  What is to stop them from recklessly or thoughtlessly making half-baked or simply incorrect criminal allegations that can tarnish or ruin the reputations of otherwise successful businesses and business people?  Anything?

As well-known Minnesota businessman, Irwin Jacobs, might find out in his complaint against Charles Ries, bankruptcy trustee in the Genmar bankruptcy, maybe not.

A system of justice has to be built on a foundation of legitimacy.  Otherwise, a “justice system” cannot truly exist.  And if a society creates a system to separate right from wrong, how could it be that the system judges itself to be in the wrong?  This is one way to understand sovereign immunity (that is, the concept that, “The King can do no wrong”).

In a democracy, one of the ways this plays out is that judges enjoy a broad “judicial immunity” under which it is established U.S. law that judges are absolutely immune from monetary liability for their judicial acts, even when such acts are in excess of their jurisdiction, and are alleged to have been done maliciously or corruptly.  This system safeguard, in turn, spills over for the benefit of court-appointed officials such as bankruptcy trustees.

The 1978 U.S. Supreme Court case of Stump v. Starkman, the leading case on judicial immunity, is a vivid illustration of the wide breadth given to judicial actors in our system.  The case involved a mother who conspired with a lawyer, a doctor, and a court to sterilize her teen-age daughter without the daughter’s knowledge or consent.  Years later, the adult daughter brought an action against these co-conspirators, including the state court judge.  The case against the judge was thrown out based on judicial immunity by the federal trial court, reinstated by the Court of Appeals, and thrown out for good by the U.S. Supreme Court (but with three Justices dissenting).

When the justice system must turn its inquiry in on itself, the issues are thorny and complex.

The Jacobs v. Ries case was originally assigned to U.S. District Court Joan Ericksen (D. Minn.).  She recused herself, however, and the case was reassigned to Judge Patrick J. Schiltz (D. Minn.).

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