Sometimes appellate advocates argue that the circuit court panel in their case should align with the decisions of one or two other circuits in order to avoid creating a circuit split. In one recent case, the lawyer stretched the argument too far, arguing that the Seventh Circuit actually needed to reverse its own prior precedent in order to align with the Third Circuit - "in order to avoid creating a circuit split," even though the Third Circuit had already created the split by rejecting the Seventh Circuit's prior precedent.
In a new decision from Judge Posner on the Seventh Circuit, the court includes a (vintage Posner) gem of admonition for appellate advocates. The case is In Re: C.P. Hall Co., (decided April 24), and the appeal concerned the question of whether a nonparty to a bankruptcy proceeding should be entitled to intervene in the proceeding. An excess insurer that was a non-party to a Chapter 7 proceeding appealed from a Bankruptcy Court's refusal to consider its objection to debtor's settlement with its primary insurer. The Seventh Circuit held that the insurer in this case did not have right to object to the settlement. Here is the discussion of the "avoid a circuit split" argument:
As an aside we note that if, contrary to what we've said, Global and Thorpe are inconsistent with James Wilson and the cases following James Wilson, it would not follow, as Columbia rather impertinently argues in its reply brief, that unless we overruled James Wilson the Seventh Circuit would be “decid[ing] to split with its sister circuits on the proper rule for bankruptcy court standing.” The implication is that if another court disagrees with one of our decisions, we shall be guilty of “splitting” if we fail to overrule our decision. If Global and Thorpe unconsciously (for remember that both purport to adopt our approach in James Wilson ) rejected our decision, it would be the Third and Ninth Circuits that had “split” with us, not us with them.