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The Divestiture Rule Explained: A Judge-Made Doctrine Doesn’t Necessarily Deprive a Lower Court of Ongoing Subject Matter Jurisdiction

The “divestiture rule is not truly jurisdictional,” a Florida Bankruptcy court held in the recent ECI Pharmaceuticals case, which shows how one court analyzed when or when not to apply the divestiture rule.

6 minute read July 01, 2025 at 12:01 AM
By
Daniel A. Lowenthal
The Divestiture Rule Explained: A Judge-Made Doctrine Doesn’t Necessarily Deprive a Lower Court of Ongoing Subject Matter Jurisdiction

The filing of an appeal in federal court generally divests the lower court of jurisdiction. This rule of appellate jurisdiction applies both to appeals from a district court to a court of appeals and from a bankruptcy court to a district court.

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