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Civil Resource Manual 190. Bankruptcy Jurisdiction -- Appellate Jurisdiction


Bankruptcy Jurisdiction -- Appellate Jurisdiction

1. District Courts
2. Bankruptcy Appellate Panels
3. Courts of Appeals
4. Stay Pending Appeal
5. Effect of Appeal
6. Standing To Appeal
7. Procedural Requirements

 1.   District Courts.       a.    District courts have appellate authority over dispositive orders             and judgments of the bankruptcy court.  28 U.S.C. § 158(a).             i.    Final orders, judgments and decrees are appealable as of                   right;             ii.   Interlocutory orders and decrees increasing or reducing the                    time periods for filing a chapter 11 plan under § 1121                    are appeals as of right [added by Section 102 of the                   Bankruptcy Reform Act of 1994];             iii.  Other interlocutory orders are appealable by leave of                   court.  Id.; see Masters, Mates & Pilots Plans v.                    Lykes Bros. S.S. Co. (In re Lykes Bros. S.S. Co.), 200                   B.R. 933 (M.D. Fla. 1996) (court should grant                   discretionary, interlocutory review if order involves                   controlling issue of law, there is substantial ground for                   difference of opinion, and immediate appeal would                   materially advance ultimate termination of the litigation);                    Robinson v. Johns-Manville Corp. (In re Johns-Manville                   Corp.), 45 B.R. 833 (S.D.N.Y. 1984) (leave should be                   liberally granted if it facilitates expeditious resolution                   of the case); see also Brandt v. Wand                   Partners, 242 F.3d 6 (1st Cir. 2001) (bankruptcy                   court's interlocutory orders preceding withdrawal of                   reference were not properly before court of appeals on                   appeal from district court's final judgment).       b.    Concept of "finality" for bankruptcy appeals. Compare             United States Trustee v. Bloom (In re Palm Coast, Matanza             Shores L.P.), 101 F.3d 253 (2d Cir. 1996) (concept of             finality is more flexible in bankruptcy; orders may be             immediately appealable if they finally dispose of discrete             disputes within larger case) with Stanley v. Crossland,              Crossland, Chambers, MacArthur & Lastreto (In re Lakeshore Vill.             Resort, Ltd.), 81 F.3d 103 (9th Cir. 1996) (questioning use             of a flexible approach to finality of district court decisions in              bankruptcy).  See Law Offices of Nicholas A. Franke v.             Tiffany (In re Lewis), 113 F.3d 1040 (9th Cir. 1997)             (bankruptcy court order is "final" and, thus, appealable where it              (1) resolves, seriously affects substantive rights; (2) finally             determines discrete issue); Jove Eng'g, Inc. v. IRS (In re             Jove Eng'g, Inc.), 92 F.3d 1539 (11th Cir. 1996) (remand             order appealable where bankruptcy court need only perform             ministerial duty of offsetting up to $500 against IRS' claim             without exercising any discretion or making any further             findings); Masunaga v. Stoltenberg (In re Rex Montis Silver             Co.), 87 F.3d 435 (10th Cir. 1996) (order remanding to             bankruptcy court for determination of amount of sanctions was not              final); Westbury Real Estate Ventures, Inc. v. Bradlees, Inc.             (In re Bradlees Stores, Inc.), 210 B.R. 506 (S.D.N.Y. 1997)             (dismissal of creditor's breach of contract action was not final             when bankruptcy court had not resolved creditor's proofs of claim              based on same breach).       c.    Timeliness of Appeal Failure to file notice of appeal within 10             days deprives district court of subject matter jurisdiction to             review bankruptcy court's order.  Veltman v. Whetzal, 93             F.3d 517 (8th Cir. 1996); see Fed. R. Bankr. P. 8002;             see also United States ex rel. Rudd v. Schimmels (In re              Schimmels), 85 F.3d 416 (9th Cir. 1996) (failure to file             timely notice of appeal from summary judgment order was not             excused by court's alleged failure to enter separate judgment);             United States v. Henry Bros. P'ship (In re Henry Bros.             P'ship), 214 B.R. 192 (B.A.P. 8th Cir. 1997) (exceptional             circumstances doctrine did not apply to extend time for filing             notice of appeal).       d.    Does district court have authority  -- if the parties consent --             to refer bankruptcy appeal to magistrate for report and             recommendation?  Yes.  Hall v. Vance, 887 F.2d 1041              (10th Cir. 1989); accord In re Apex Oil Co., 146             B.R. 821 (Bankr. E.D. Mo. 1992).  No.  In re Elcona             Homes Corp., 810 F.2d 136 (7th Cir. 1987).         2. Bankruptcy Appellate Panels.       a.    Creation of Bankruptcy Appellate Panels             Changing prior law which made the creation of bankruptcy             appellate panels discretionary with each circuit council (and             resulted in the existence of a BAP in only one circuit, the             Ninth), the Bankruptcy Reform Act of 1994 directs circuit             councils to establish BAPs unless a council finds (i)             insufficient judicial resources or (ii) establishment of a BAP             would result in undue delay or increased cost to parties.  A BAP             cannot hear appeals in a district unless a majority of the             district judges for that district authorize such service.  Once             authorized, the BAP, upon consent of the parties, can hear and             determine appeals otherwise directed to district court.  28             U.S.C. § 158(b).  BAP's exist in the 1st, 6th, 8th, 9th and             10th Circuits.  (Note, however, a majority of the judges             in a district must authorize use of a BAP; therefore, you must             determine whether the circuit and the specific district             permits its use [e.g., in the 10th Circuit, cases in the District              of Colorado are not appealable to the 10th Circuit BAP]).  The             DC, 3d, 4th, 5th, and 11th Circuits do not intend to create BAPs             at this time.  The 7th Circuit has deferred its decision on             whether to create a BAP.  The 2d Circuit abolished its BAP.       b.    Procedure             Once authorized in a district, appeals will be heard by a panel             of three sitting bankruptcy judges unless (i) the appellant             elects when filing the appeal, or (ii) any other party elects             within thirty days after service of the notice of appeal, to have              the appeal heard by the district court. 28 U.S.C. §             158(c)(1).       c.    BAP opinions are regarded as "highly persuasive though not             binding, precedent."  Daly v. Septula (In re Carrozzella &             Richardson), 255 B.R. 267, 273 (Bankr. D. Conn. 2000);             accord In re Akram, 259 B.R. 371, 374 (Bankr. C.D.             Cal. 2001).         3. Courts of Appeals.       a.    Appeal from the district court is governed by 28 U.S.C.             §§ 158(d) and 1291-92 and the Federal Rules of             Appellate Procedure.  See Conn. Nat'l Bank v.             Germain, 503 U.S. 249 (1992) (courts of appeals are             authorized by 28 U.S.C. § 1292 to review orders of district             courts or bankruptcy appellate panels entered upon review of             interlocutory bankruptcy court order; such jurisdiction is not             limited by 28 U.S.C. § 158(d) permitting review of "final"             orders); see also In re Forty-Eight Insulations,             Inc., 115 F.3d 1294, 1300 (7th Cir. 1997) (refusal to grant             stay pending appeal of order authorizing interim distribution had              effect of denying injunction and provided jurisdiction in court             of appeals under 28 U.S.C. § 1292(a)(1)); Adams v. First             Fin. Dev. Corp. (In re First Fin. Dev. Corp.), 960 F.2d 23             (5th Cir. 1992) (court of appeals lacks jurisdiction to hear             appeal of order overruling objections to disclosure statement);             Sonnax Indus., Inc. v. Tri-Component Prods. Corp., 907             F.2d 1280 (2d Cir. 1990) (denial of relief from automatic stay is              equivalent to permanent injunction and is final, appealable             order).  But see Lievsay v. W. Fin. Sav. Bank             (In re Lievsay), 118 F.3d 661, 663 (9th Cir. 1997) (28 U.S.C.              §§ 1291 and 1292 do not apply to appeals from BAPs),             cert. denied, 522 U.S. 1149 (1998).       b.    Unlike former law, parties no longer may agree to proceed             directly to court of appeals, by-passing district court appellate              review.       c.    Courts are split on whether court of appeals has jurisdiction of             appeal from district court's order remanding final order back to             bankruptcy court.  Compare Pizza of Haw., Inc. v.             Shakey's, Inc. (In re Pizza of Haw., Inc.), 761 F.2d 1374             (9th Cir. 1985) with Buckner v. FmHA (In re             Buckner), 66 F.3d 263 (10th Cir. 1995), and In re             Fox, 762 F.2d 54 (7th Cir. 1985).  See Millers Cove              Energy Co. v. Moore (In re Millers Cove Energy Co.), 128 F.3d              449 (6th Cir. 1997); In re Nichols, 21 F.3d 690 (5th Cir.             1994) (district court order reversing bankruptcy court decision             on conversion claim and remanding for significant further             proceedings not appealable); Schneider v. FmHA (In re             Schneider), 873 F.2d 1155 (8th Cir. 1989) (district court's             reversal and remand of bankruptcy court's order overruling FmHA             objection to confirmation of chapter 12 held not to be final,             appealable order).  Cf. Things Remembered, Inc. v.             Petrarca, 516 U.S. 124 (1995) (under the bankruptcy removal             statute, 28 U.S.C. § 1452, court of appeals lacks             jurisdiction to review an order remanding a bankruptcy case to             state court).       d.    District court's denial of United States' sovereign immunity             defense to debtor's preference action is not immediately             appealable.  Pullman Constr. Indus. v. United States (In re             Pullman Constr. Indus.), 23 F.3d 1166 (7th Cir. 1994).                 4. Stay Pending Appeal.       a.    Obtaining a stay pending appeal is critical in the bankruptcy             context.  See, e.g., § 363(m) (validity of sale of             property not affected by subsequent reversal on appeal unless             stay obtained); § 364(e) (reversal of order approving             obtaining credit does not affect extension of credit, absent             stay); Ginther v. Ginther Trusts (In re Ginther), 238 F.3d              686 (5th Cir. 2001) (rejecting attempt to challenge purchaser's             good faith to avoid having appeal dismissed as moot under             363(m)), petition for cert. filed, 69 U.S.L.W. 9730 (U.S.             Apr. 30, 2001) (No. 00-1666); 255 Park Plaza Assocs. L.P. v.             Conn. Gen. Life Ins. Co. (In re 255 Park Plaza Assoc. L.P.),             100 F.3d 1214 (6th Cir. 1996) (failure to obtain stay of order             approving sale of estate's only assets renders appeal moot);             Cargill, Inc. v. Charter Int'l Oil Co. (In re Charter             Co.), 829 F.2d 1054 (11th Cir. 1987) (failure by disappointed              bidder to obtain stay as required by § 363(m) caused appeal             from order approving sale of debtor's subsidiary to become moot);              Plotner v. AT&T, 172 B.R. 337 (W.D. Okla. 1994) (appeal of              § 363 decision moot after good faith purchaser consummated             sale); Whatley Ranch Joint Venture, Ltd. v. Whatley (In re             Whatley), 169 B.R. 698 (D. Colo. 1994), aff'd, 54 F.3d              788 (10th Cir. 1995) (same); In re Tempo Tech. Corp., 202             B.R. 363 (D. Del. 1996) (district court can review bankruptcy             court's finding that buyer was in fact "good faith purchaser");             Mellon Bank v. Del. & Hudson Ry. (In re Del. and Hudson             Ry.), 129 B.R. 388 (D. Del. 1991) (same); Farmers Bank v.             Kittay (In re March), 988 F.2d 498 (4th Cir. 1993) (appeal of              foreclosure issue rendered moot by sale of property); Official              Comm. of Unsecured Creditors of LTV Aerospace & Def. Corp. v.             Official Comm. of Unsecured Creditors of LTV Steel Co. (In re             Chateaugay Corp.), 988 F.2d 322 (2d Cir. 1993)             (implementation of order authorizing payment to pension plan             rendered appeal of order moot); Dahlquist v. First Nat'l             Bank, 737 F.2d 733 (8th Cir. 1984) (appeal of cash collateral              order moot where collateral spent during appeal); Holywell             Corp. v. Bank of N.Y. (In re Holywell Corp.), 901 F.2d 931             (11th Cir. 1990) (absent stay, appeal of substantially             consummated plan is moot); Manges v. Seattle-First Nat'l Bank             (In re Manges), 29 F.3d 1034 (5th Cir. 1994) (same); In re              Specialty Equip. Cos., 3 F.3d 1043 (7th Cir. 1993) (same);             Ronit, Inc. v. Stemson Corp. (In re Block Shim Dev.             Co.-Irving), 939 F.2d 289 (5th Cir. 1991) (same); RTC v.             Best Prods. Co. (In re Best Prods. Co.), 177 B.R. 791             (S.D.N.Y.), aff'd, 68 F.3d 26 (2d Cir. 1995) (same);              Clarke v. Duck (In re Clarke), 98 B.R. 979 (B.A.P. 9th             Cir. 1989), app. dismissed, 914 F.2d 261 (9th Cir. 1990)             (same); In re Olive St. Invs., Inc., 106 B.R. 183 (E.D.             Mo. 1989) (appeal from unstayed order lifting stay was rendered             moot by foreclosure sale), app. dismissed, 972 F.2d 214             (8th Cir. 1992); White Rose Food v. Gen. Trading Co. (In re             Clinton St. Food Corp.), 170 B.R. 216 (S.D.N.Y. 1994) (appeal              of § 364 financing order granting super priority lien to             another creditor was moot); In re CGI Indus., Inc., 27             F.3d 296 (7th Cir. 1994) (same).  But see S. St.             Seaport LP v. Burger Boys, Inc. (In re Burger Boys, Inc.), 94              F.3d 755 (2d Cir. 1996) (debtor's assumption of lease did not             render moot landlord's appeal where no third party relied on             assumption and court could fashion effective relief by deeming             lease rejected); Arnold & Baker Farms v. FmHA (In re Arnold &             Baker Farms), 85 F.3d 1415 (9th Cir. 1996) (appeal moot only             when court can no longer provide effective relief or it would be             inequitable to grant relief as where third party's rights have             intervened).  See generally "Circuit Court Review Of             Orders On Stays Pending Bankruptcy Appeals," 62 Am. Bankr. L.J.             353 (1988).             The doctrine of equitable (or prudential) mootness provides that             "an appeal should . . . be dismissed as moot when, even though             effective relief could conceivably be fashioned, implementation             of that relief would be inequitable."  In re Cont'l Airlines,             Inc., 91 F.3d 553, 558-59 (3d Cir. 1996)(en banc).             Five factors when applied to plan confirmation orders: (1)             whether the plan has been substantially consummated; (2) whether             a stay has been obtained; (3) whether the relief requested would             affect the rights of parties not before the court; (4) whether             the relief requested would affect the success of the plan; and             (5) the public policy of affording finality to bankruptcy             judgments.  Nordhoff Invs., Inc. v. Zenith Elecs. Corp. (In re              Zenith Elecs. Corp.), 250 B.R. 207 (D. Del. 2000),             aff'd, 2001 WL 698000 (3d Cir. Jun. 21, 2001) (No.             00-2250, 00-2249); see also United States ex rel. FCC             v. GWI PCS 1 Inc. (In re GWI PCS 1 Inc.), 230 F.3d 788 (5th             Cir. 2000) (where temporary stay expired and plan was             substantially consummated before court heard appeal, appeal was             equitably moot), cert. denied 121 S. Ct. 2623 (2001);             In re PWS Holding Corp., 228 F.3d 224 (3d Cir. 2000)             ("equitable mootness" is limited in scope and should be             cautiously applied; here, where only narrow releases provided             under a plan were being challenged, a reversal or unraveling of             the entire plan would not occur and dismissal based on equitable             mootness would not be required).       b.    Note:  boilerplate language that closing is conditioned             upon entry of final nonappealable order may constitute a             consensual stay.  See In re Brookfield Clothes,             Inc., 31 B.R. 978 (S.D.N.Y. 1983).       c.    Right of U.S. to stay pending appeal might not be considered             automatic in the bankruptcy context.  See In re             Westwood Plaza Apts., 150 B.R. 163 (Bankr. E.D. Tex. 1993),             aff'd in part, 192 B.R. 693 (E.D. Tex. 1996).         5. Effect of Appeal.  Appeal from order does not deprive bankruptcy court of jurisdiction over all   aspects of the case.  [See discussion at pp. 66-67 below.]         6. Standing To Appeal.  Appellate standing is not defined by the Bankruptcy Code.  The courts have  applied the "person aggrieved" standard, i.e., one who is "directly and  adversely affected pecuniarily" by the challenged ruling.  Kabro Assocs.  of W. Islip, LLC v. Colony Hill Assocs. (In re Colony Hill Assocs.), 111   F.3d 269, 273 (2d Cir. 1997).         7. Procedural Requirements.  See Durkin v. Shea & Gould, 92 F.3d 1510 (9th Cir. 1996)  (circuit court lacked jurisdiction to address issues not certified to it by  district court); United States Trustee v. Hayes (In re Bishop, Baldwin,  Rewald, Dillingham & Wong, Inc.), 104 F.3d 1147 (9th Cir. 1997)  (appellant not precluded from raising issues on appeal merely because they  were not included in statement of issues on appeal submitted pursuant to  Fed. R. Bankr. P. 8006).
Updated February 19, 2015