"Prior Panel Precedent" Rule

Cannot Overrule Prior Panel 

In McNeal v. GMAC Mortgage, LLC, 735 F.3d 1263 (11th Cir. 2012)(wholly underwater liens still avoidable in chapter 7) the 11th Circuit Court of Appeals was presented with the issue whether it could recede from its prior decision in Folendore v. Small Business Administration, 862 F.2d 1537 (11th Cir. 1989), in view of the subsequent Supreme Court decision in Dewsnup v.Timm, 502 U.S. 410 (1992).  The Court held that it was bound to follow its decision in Folendore based on the "prior panel precedent" rule. Under the prior precedent rule, "a panel cannot overrule a prior one's holding even though convinced it was wrong." United States v. Steele, 147 F. 3d 1316 (11th Cir. 1998)(en banc).

Clearly Contrary Opinion Required

This article explains that the 11th Circuit in the case of Main Drug, Inc. v. Aetna U.S. Healthcare, Inc., 475 F.3d 1228 (11th Cir. 2007), held that “‘[w]ithout a clearly contrary opinion of the Supreme Court or of this court sitting en banc, we cannot overrule a decision of a prior panel of this court.’” To constitute and "overruling", the Supreme Court decision "must be clearly on point." Garrett v. Univ. of Ala. at Birmingham Bd. of Trs., 344 F.3d 1289, 1292 (11th Cir.) and "actually abrogate or directly conflict with, as opposed to merely weaken, the holding of the prior panel." In re Provenzano, 215 F.3d 1233, 1235 (11th Cir. 2000).

Applies Also to Decisions Based on State Law 

The Court in Broussard v. Souther Pac. Transp. Co, 665 F.2d 1387 (5th Cir. 1982) related that "[t]his rule applies with equal force to cases in which state law provides the substantive rule of decision" and that the Court is therefore bound by this Court's prior decisions on what is the law of a state in a diversity case."  Provenzo  noted that the "prior panel precedent" rule would also not apply if there was an overruling in an intervening case  by the Florida Supreme Court.