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99.

Solicitor General's Guidelines for Direct Certified Appeals in Bankruptcy Cases

U.S. Department of Justice
Office of the Solicitor General
The Solicitor General
Washington, D.C. 20530

May 5, 2006

MEMORANDUM

TO: Assistant Attorney General
Civil Division Assistant Attorney General
Environment & Natural Resources Division Assistant Attorney General
Tax Division Director
Executive Office for United States Attorneys Director
Executive Office for United States Trustees
FROM: Paul D. Clement
Solicitor General
SUBJECT: Guidelines for Direct Certified Appeals in Bankruptcy Cases
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), Pub. L. 109-8, 119 Stat. 23, amended Section 158 of Title 28 to give the courts of appeals under certain conditions jurisdiction to hear an appeal from ajudgment or order of the bankruptcy court, thereby bypassing a district court's or bankruptcy appellate panel's intermediate review. BAPCPA § 1233 (complete text attached). This memo provides an explanation of the amendment (and accompanying interim rules) and guidance on how Department appeals taken pursuant to 28 U.S.C. 158(d)(2) are to be pursued.

BAPCPA Section 1233

BAPCPA amended Section 158 of Title 28 by adding subsection (d)(2), which consists of five subparts designated (A) through (E).

Subpart (A) creates a certification procedure and vests in the courts of appeals, if they authorize the direct appeal, jurisdiction over the certified appeal. The certification may pertain to any judgment described in Section 158(a), which includes final and interlocutory orders of a bankruptcy court. If a bankruptcy court judgment is certified and direct appeal is authorized, the intermediate level of appeal is eliminated. Section 158(d)(2)(A) provides that the certification can be made by (1) the involved bankruptcy court, district court, or bankruptcy appellate panel acting either on its own motion or at the request of any party to the judgment; or (2) all the appellants and appellees (if any) acting jointly.

The basis for the certification must be one or more of the following circumstances listed in subsection (d)(2)(A)(i)-(iii):
(I) the judgment, order, or decree involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court, or involves a matter of public importance;

(ii) the judgment, order or decree involves a question of law requiring resolution of conflicting decisions; or

(iii) an immediate appeal from the judgment, order, or decree may materially advance the progress of the case or proceeding in which the appeal is taken.

Even if such a certification is made, however, Section 158(d)(2)(A)provides that the court of appeals will not take jurisdiction of the appeal unless it exercises its discretion to authorize a direct appeal of the judgment, order or decree.

Subpart (B) amplifies the certification process. The bankruptcy court, district court, or bankruptcy appellate panel "shall" make the certification if it determines that at least one of the circumstances specified in Section 158(d)(2)(A)(i)-(iii) exists. 28 U.S.C. 158(d)(2)(B)(i). Alternatively, the involved court "shall" certify the judgment when it receives a request to that effect made by a majority of the appellants and a majority of appellees (if any). 28 U.S.C. 158(d)(2)(B)(ii).

Subpart (C) provides that the parties may supplement the certification with a short statement of the basis for the certification. Such a statement appears necessary if the involved court certifies under Section 158(d)(2)(B)(ii) and did not independently determine that any ofthe circumstances required for certification existed.

Subpart (D) provides that an appeal under Section 158(d)(2) does not stay any proceeding unless the court in which the certification is made or the court of appeals issues a stay pending appeal.

Subpart (E) requires that the request for certification be made not later than 60 days after the entry of the judgment which is the subject of the certification.

Section 1233 applies only to cases filed after BAPCP A's October 17, 2005 effective date. BAPCPA § 1501(a).

Interim Bankruptcy Rules

To implement the substantive and procedural changes mandated by BAPCPA, the Committee on Rules of Practice and Procedure of the United States Judicial Conference and the Judicial Conference ofthe United States have approved Interim Bankruptcy Rules (the "Interim Rules") proposed by the Advisory Committee on Bankruptcy Rules. Courts have since adopted the Interim Rules as local rules in nearly every district. Included in the Interim Rules are two new rules pertaining to direct appeals to the court of appeals, Rules 8001(f) and 8003(d). The complete text of these rules is attached to this memo.

Interim Rule 800I(f) makes clear the following procedural steps not addressed in the amendment to Section 158(d)(2):

  • the 10-day period within which to petition the court of appeals to authorize a direct appeal after certification under Section 158(d)(2)(A) does not commence until a timely appeal has been taken from the judgment of the bankruptcy court and the notice of appeal has become effective;

  • a certification under Section 158(d) must be filed in the court in which a matter is "pending" and notice of the filing shall be served in the same manner required for service of a notice of appeal under Rule 8004;

  • a matter is "pending" in the bankruptcy court until the (I) docketing at the district court or the bankruptcy appellate panel of the appeal of a final judgment, order, or decree in accordance with Rule 8007(b), or (ii) the grant of leave to appeal an interlocutory judgment, order, or decree by the district court or bankruptcy appellate panel;

  • only a bankruptcy court can make a certification on request or on its own initiative while the matter is pending in the bankruptcy court;

  • a matter is "pending" in the district court or bankruptcy appellate panel after an appeal has been docketed in accordance with Rule 8007(b) or leave to appeal has been granted;

  • only the district court or bankruptcy appellate panel may make a certification on request of the parties or on its own initiative while the matter is pending in the district court or bankruptcy appellate panel;

  • a party may file a response to a request for certification or cross-request within 10 days after service of the notice, but Rule 9014 does not apply and oral argument is not heard unless the court otherwise directs; and

  • if a court certifies an appeal on its own initiative, it shall do so in a separate document, served on the parties in accordance with Rule 8004, and parties may file short, supplementary statements of the basis for certification within 10 days of the certification.

Interim Rule 8003(d) provides that a court of appeals' authorization under Section 158(d)(2) satisfies the requirement for leave to appeal if such leave is required under Section 158(a) and was not previously granted.

Interim Appellate Rules

Section 1233(b) of BAPCPA prescribes procedural rules that apply to appeals under Section 158(d)(2) until rules of practice and procedure are promulgated or amended. To date, the Advisory Committee on Appellate Rules has not proposed amendments to the Federal Rules of Appellate Procedure in response to Section 158(d)(2). Accordingly, the appellate procedural rules in Section 1233(b) apply. Specifically, Section 1233(b) specifies that (1) an appeal to a court of appeals under Section 158(d)(2) shall be taken in the manner prescribed in subdivisions (a)(l), (b), (c), and (d) of Rule 5 of the Federal Rules of Appellate Procedure, and (2) a petition requesting permission to appeal based on a Section 158(d)(2) certification must be filed with the circuit clerk no later than 10 days after the certification is entered on the docket of the bankruptcy court, the district court, or the bankruptcy appellate panel from which the appeal is taken. A copy of the certification must be attached to the petition.

Department Guidance Regarding Section 158(d)(2)

The Solicitor General has responsibility, in consultation with each agency or official concerned, for determining whether, and to what extent, the government will pursue appeals in the courts of appeals, USAM 2-1.000, including whether to request a district court to certify an issue for interlocutory appeal under 28 U.S.C. 1292(b). USAM 2-2.311. A request for certification under Section 158(d)(2) is similar to a request to certify an issue for appeal under Section 1292(b) and Rule 5 of the Federal Rules of Appellate Procedure. Therefore, the Department's procedures for requesting Section 158(d)(2) certifications are similar to those for requests to certify an issue for interlocutory appeal. To illustrate, those procedures for cases handled by United States Attorneys' Offices are as follows:

  • the chief of the appellate section of the appropriate division should be immediately advised via telephone or electronic mail in every case in which the United States Attorney believes that the government should seek a Section 158(d)(2) certification or in which a bankruptcy court, district court, or bankruptcy appellate panel, sua sponte, issues such a certification;

  • whenever counsel for another party requests that the government join in a request for a certification under Section 158(d)(2)(B)(ii),the United States Attorney should promptly notify the chief of the appellate section of the appropriate division;

  • whenever counsel for another party files a request for a Section 158(d)(2) certification without the government joining the request, the United States Attorney should promptly notify the chief of the appellate section of the appropriate division and consult with that chief concerning whether to oppose, acquiesce, or (with the authorization of the Solicitor General) join in the request;

  • the Solicitor General's approval is not necessary when the United States Attorney, in consultation with the chief of the appellate section of the appropriate division, decides to oppose or acquiesce in another party's request for certification of a judgment (as long as any such acquiescence constitutes merely a decision not to oppose the other party's request and is not subject to being misconstrued as a joinder in that request for purposes of the mandatory certification provisions, 28 U.S.C. 158(d)(2)(A) and (B)(ii)), but the chief ofthe appellate section may decide that consultation with the Solicitor General's office is appropriate;

  • if a United States Attorney believes that the government, either acting alone or jointly upon request of counsel for another party, should request a Section 158(d)(2) certification, the United States Attorney should promptly request authorization from the Solicitor General through the appellate section of the appropriate division via a report and recommendation in the format prescribed in Section 2-2.111 of the USAM;

  • the United States Attorney's report and recommendation should highlight the anticipated dates by which (1) the appeal will be docketed under Rule 8007(b) with the district court or the bankruptcy appellate panel or leave to appeal will be granted by the district court or bankruptcy appellate panel, and (2) the opening briefs will be due in the district court or bankruptcy appellate panel;

  • the United States Attorney, either acting alone or jointly with another party, should not request a Section 158(d)(2) certification until receiving the Solicitor General's authorization to proceed, and only upon receipt of that authorization should the United States Attorney apply for certification to the court in which the matter is then "pending" (as defined in Interim Rule 8001(f)), except that in extraordinary circumstances and with the concurrence of a Deputy Solicitor General the United States Attorney may submit a protective request for a Section 158(d)(2) certification, clearly denominated as such, if it appears that the Solicitor General will not decide whether to authorize the request for certification and direct appeal within the period established by Section 158(d)(2)(E); and

  • if a bankruptcy court, district court, or bankruptcy appellate panel issues a Section 158(d)(2) certification of an adversejudgment before the United States has determined whether to seek such a certification, the United States Attorney, in addition to notifying the chief of the appellate section of the appropriate division, should immediately forward to that chief all papers, including the United States Attorney's report and recommendation, necessary for the Solicitor General to determine whether the government should petition the court of appeals for permission to appeal, as the deadline for filing such a petition is 10 days after docketing of the certification. BAPCPA § 1233(b)(4)(A).

Of utmost importance to preserving the government's rights, remember that nothing in Section 158(d)(2) or the Interim Rules changes the requirement for a timely filed notice of appeal in accordance with Rules 8001 and 8002.

Finally, it is important to keep in mind that, in line with their practice under other interlocutory appeals provisions, the courts of appeals will likely exercise their authority to hear interlocutory appeals under Section 158(d)(2) quite sparingly.

[cited in Civil Resource Manual 69] [Added December 2006]