Port of Corpus Christi Authority v. Sherwin Alumina Co., No. 18-40557 (5th Cir. 2020)
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The Fifth Circuit denied the petitions for panel rehearing and rehearing en banc, and substituted the following opinion in place of the prior opinion.
The Port filed an adversary proceeding against debtors, seeking to invalidate the bankruptcy sale and regain its easement. The court affirmed the district court's judgment upholding the bankruptcy court's decision rejecting the Port's sovereign immunity and fraud claims.
In Tennessee Student Assistance Corporation v. Hood, the Supreme Court held that a bankruptcy court’s discharge of an individual's debt to the state of Tennessee did not violate the Eleventh Amendment. For purposes of the Eleventh Amendment, the court reasoned that the Port's easement was like Tennessee's debt claim against the estate: the state holds an interest burdening the bankruptcy res. Hood holds that a bankruptcy court's exercise of in rem jurisdiction over the debtor's estate can extinguish the state's interest burdening that res without implicating the Eleventh Amendment. Therefore, the court held that there was no Eleventh Amendment violation here. The Port's further argument to the contrary was foreclosed. The court also held that the Port failed to allege any intentional false representation under Bankruptcy Code section 1144.
This opinion or order relates to an opinion or order originally issued on August 6, 2019.
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