United States District Court, W.D. Virginia, Roanoke Division
JASON ROYCE ALLEN, et al. Defendants-Appellants,
JOHN P. FITZGERALD, Acting Trustee for Region Four, Plaintiff-Appellee.
Michael F. Urbanski Chief United States District Judge
matter comes before the court on the Defendant-Appellants
Jason Royce Allen, Kevin Chern, Law Solutions Chicago, LLC
("Law Solutions"), and UpRight Law, LLC's
("UpRight," and collectively
'Petitioners") Motion to Stay (the
"Motion"), ECF No. 97. Previously, the court
granted a partial temporary stay until July 2, 2018 so the
parties could brief and the court could consider the
underlying issues. Order, ECF No. 95. The Motion has now been
fully briefed, and the court has considered the issues raised
in the Motion. For the reasons discussed below, the court
will DENY the Motion.
February 12, 2018, the bankruptcy court issued an Order (the
"Order"), In re Williams, No. 16-07024
(Bankr. W.D. Va. Feb. 12, 2018), ECF No. 232, in favor of the
U.S. Trustee for Region Four (die "Trustee") and
against Petitioners. At issue here, Paragraph 5 of the Order
(the "Privilege Revocation") revoked the privileges
of Petitioners to practice before the bankruptcy court for
this District for five years. In particular, the Privilege
Pursuant to the relief requested in Williams Count VI and
Scott Count V, the privileges of LSC, Upright Law, LLC, Kevin
W. Chern, and Jason Royce Allen to file or conduct cases,
directly or indirectly, in the Western District of Virginia
are revoked for a period of five (5) years. This revocation
shall include any firm that Law Solutions Chicago, Upright
Law, Jason Allen or Kevin Chern, directly or indirectly, have
an ownership interest in or control over.
¶ 5. Simultaneously, the bankruptcy court issued a
Memorandum Opinion setting forth findings of fact and
explaining the legal rationale behind its Order. Memorandum
Opinion ("Bankr. Op."), In re Williams.
No. 16-50158 (Bankr. W.D. Va. Feb. 12, 2018), ECF No. 231.
asked the bankruptcy court to alter the Privilege Revocation
and stay its effectiveness until sixty days after the Order
became final and nonappealable. Defs.' Mot. Alter Am. J.
at 2, In re Williams. No. 16-07024 (Bankr. W.D. Va.
Feb. 26, 2018), ECF No. 244. The bankruptcy court altered the
Privilege Revocation so that it came into effect on May 9,
2018, and, until that date, barred Petitioners from taking on
new clients, filing new cases, or charging currents for
services related to transitioning those clients' cases.
Order Disposing Defs.' Mot. Alter Am. J. at 2, In re
Williams.. No. 16-07024 (Bankr. W.D. Va. Mar. 12, 2018),
ECF No. 250.
March 27, Petitioners filed an appeal with this court. Bankr.
Notice Appeal, ECF No. 1. Almost one month later, on April
20, 2018, Petitioners filed a motion to stay the Privilege
Revocation with the bankruptcy court. Defs.' Mot. Limited
Stay Enforcement Bankr. Ct. Pending Appeal ("Motion to
Stay Pending Appeal") at 1, In re Williams. No.
16-07024 (Bankr. W.D. Va. Apr. 20, 2018), ECF No. 264. On May
1, 2018, Petitioners filed an additional, emergency motion to
stay with the bankruptcy court. Defs.' Emergency Mot.
Stay J. Pending Decision Mot. Stay Pending Appeal at 1,
In re Williams. No. 16-07024 (Bankr. W.D. Va. May 1,
2018), ECF No. 269. The bankruptcy court granted the
emergency temporary stay. Order Granting in Part Defs.'
Emergency Mot. Stay J. Pending Decision Mot. Stay Pending
Appeal at 1, In re Williams. No. 16-07024 (Bankr.
W.D. Va. May 3, 2018), ECF No. 271. Ultimately, however, the
bankruptcy court denied the Motion to Stay Pending Appeal.
Mem. Op. & Order Den. Defs.' Mot. Limited Stay
Pending Appeal, In re Williams. No. 16-07024 (Bankr.
W.D. Va. May 14, 2018) at 2, ECF No. 277.
court held a motion hearing on May 18, 2018, during which
Petitioners moved for another emergency stay of the Privilege
Revocation pending appeal. Minute Entry, ECF No. 94. The
court granted the emergency motion in part and stayed the
Privilege Revocation until July 2, 2018. Order
("Emergency Stay Order"), ECF No. 95. Subsequently,
on May 18, 2018, Petitioners filed the Motion presently
before this court. On July 2, 2018, due to the volume of
materials submitted during briefing on the Motion, the court
entered an order further staying the Privilege Revocation
until August 3, 2018, with the same terms as the Emergency
Stay Order. Order, ECF No. 108.
Standard of Review
court is mindful that "a stay is an 'intrusion into
the ordinary processes of administration and judicial
review.'" Nken v. Holder, 556 U.S. 418, 427
(2009) (quoting Va. Petrol. Jobbers Ass'n v.
FPC. 259 F.2d 921, 925 (D.C. Or. 1958) (per curiam)).
"A stay is not a matter of right, even if irreparable
injury might otherwise result." Id. at 433
(quoting Va. Ry. Co. v. United States. 272 U.S. 658,
672 (1926)). "Ordinarily, when a party seeking a stay
makes application to an appellate judge following the denial
of a similar motion by a trial judge, the burden of
persuasion on the moving party is substantially greater than
it was before the trial judge." Long v.
Robinson. 432 F.2d 977, 979 (4th Cir. 1970).
parties agree that the court must apply Hilton v.
Braunskill. 481 U.S. 770 (1987), and examine four
factors to determine if a stay is appropriate: "(1)
whether the stay applicant has made a strong showing that he
is likely to succeed on the merits; (2) whether the applicant
will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other
parties interested in the proceeding; and (4) where the
public interest lies." Id. at 776; see
also Nken, 556 U.S. at 426 (citing Hilton. 481
U.S. at 776); Fitzgerald v. Alcorn. No. 5:17-cv-16,
2018 WL 709979, at *1 (W.D. Va. Feb. 5, 2018) (same).
first two factors "are the most critical."
Nken, 556 U.S. at 434. Moreover, the petitioner must
show that "[m]ore than a mere possibility of relief is
required." Id. (alteration in original)
(internal quotations and citations omitted). Similarly, the
petitioner must show more than "some 'possibility of
irreparable injury.'" Id. at 434-35
(quoting Abbassi v. INS. 143 F.3d 513, 514 (9th Cir.
1998)). When the government is the respondent, the last two
factors collapse into one. Id. at 435.
Likelihood of Success on the Merits
parties disagree over the appropriate legal genus to which
the Privilege Revocation belongs. Petitioners insist that the
Privilege Revocation is actually an injunction dressed in the
language of bar admissions. See Mot. Petitioners
Stay Pending Appeal ("Stay Br."), ECF No. 97, at
21. Petitioners believe that when issuing the Privilege
Revocation, the bankruptcy court failed to engage in the
analysis attendant to injunctive relief. See Id. at
21-22. By contrast, the Trustee argues that the bankruptcy
court ordered the Privilege Revocation under its inherent
authority to control membership of its bar. Opp. U.S. Trustee
Petitioner's Mot. Stay Pending Appeal ("Stay
Opp."), ECF No. 102, at 13.
court concludes that the Trustee is correct and
Petitioner's position rests on an untenable reading of
the relevant case law. Accordingly, the court holds that the
Privilege Revocation is, as a matter of law, not an
injunction. Moreover, the court concludes that, given the
factual record before it, the court cannot find that
Petitioners have shown a strong likelihood of success on the
merits necessary to satisfy factor one of Hilton.
The Privilege Revocation ...