ARIEL PREF. RETAIL GRP v. CW CAPITAL MGMT.(Barton Doctrine)

The Court determined that it lacks subject matter jurisdiction over the Receiver and the property manager pursuant to the Receivership Order, and under the Barton doctrine.. In Barton v. Barbour, the United States Supreme Court held that absent statutory authority, a receiver cannot be sued (or initiate suit) without leave of the appointing court. Barton v. Barbour, 104 U.S. 126, 136, 26 L.Ed. 672 (1881). This rule, known as the “Barton Doctrine” has been consistently upheld by federal courts since its announcement in 1881. The Barton Doctrine is not without exceptions. It does not apply to acts by the Receiver outside the scope of its authority as the receiver. The Court held that the Barton rationale extends to agents who are ‘the functional equivalent of a trustee [or in this case, a receiver], where they act at the direction of the trustee [or receiver] and for the purpose of administering the estate or protecting its assets.”