SECOND BOOK REVIEW
This is my second foray into the book review arena. You might recall that my first was on the book by Corinne Cooper and Catherine E. Vance titled Attorney Liability in Bankruptcy, a book that examined an attorney’s liability in light of the then recently enacted BAPCPA.
This time around the subject matter is Appeals. The book is written by Samuel R. Maizel and Jessica D. Gabel, edited by Richard M. Meth and published by the American Bankruptcy Institute. Its title: Bankruptcy Appeals Manual -Winning Your Bankruptcy Appeal. This book shows us that Finley Peter Dunne’s definition of an appeal is not what we want to pursue: “An appeal is when you ask one court to show its contempt for another court.” It is one of those rare books where, literally, each sentence is loaded with valuable on-point relevant information. There is no waste of words here.
The text itself is presented in eleven (11) sections throughout 116 pages. Those sections are: 1- Introduction 2- Who May Appeal: Standing 3- What May Be Appealed 4- Time Limits 5- Forums 6- Standard Of Review 7- Obstacles To A Successful Appeal 8- Stays Pending Appeal 9- Miscellaneous Issues 10- Documents Involved In Filing An Appeal and, 11- Tips On Appellate Argument. Almost all of its 400 footnotes contain relevant citations to jurisprudence expanding on the theme of the particular text being examined.
The Manual has nine (9) Appendixes that include, among other things, the Appellate Rules, examples of orders subject to review for abuse of discretion, examples of factual findings subject to review for clear error and an example of an appellate brief.
Here is a synopsis of each section of the book.
1. Introduction. The authors describe their work as a monograph intended to provide the practitioner with a reference on the law and mechanics of pursuing a bankruptcy appeal.
2- Who May Appeal: Standing. Standing is explained as a concept that serves to limit access to the judicial system; a doctrine that operates akin to natural selection. They recognize that in bankruptcy there are a myriad of parties thus, the rule for standing are to a degree altered in bankruptcy appeals. The basic tenet is that in order to have standing the party must be aggrieved by the order. The review of this concept in turn looks upon two criteria: whether the appellant is a party in interest and whether the appellant has a pecuniary interest. The last sentence of this section states: “Standing is a “threshold” issue that parties can raise at any time and that the courts may raise sua sponte even if parties to an appeal fail to discuss it.”
3- What May Be Appealed. Because bankruptcy cases may remain open for years and involve numerous proceedings, special rules concerning when appeals may be taken have evolved. The authors catalog for example, Final Orders or Judgments (they provide examples in Appendix D). We are told that finality in bankruptcy does not require that the entire case be concluded being finality liberally applied to discrete disputes. The authors then present the two tests developed by some courts to determine whether a bankruptcy court decision is final. The Delaware test has four criteria and the Eight Circuit has a three part review. And for dessert on this topic, they present three exceptions to the finality rule.
The appeal of Collateral Orders is also discussed in this section. It is that “…order that finally determines claims of right, separable from, and collateral to, rights asserted in the action too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” The four factors to consider are explained in the text.
Interlocutory orders. They describe this type of order as one that “only decides some intervening matter pertaining to the case, and that requires further steps be taken in order to enable the court to adjudicate the cause on the merits.” As to these orders they tell us that “normally the failure to take an interlocutory appeal does not preclude an appeal from a final judgment.” Obviously caution has to be exercised because of the adverb at the beginning of the statement, “normally”.
Injunctive orders.
Appeals of Injunctive Orders from the Bankruptcy Court
District Courts and BAPs have discretion to hear appeals from interlocutory orders. Leave to take an appeal is granted for the same reasons that the Circuit Court would hear appeals from interlocutory orders of the District Court. The authors state that most cases do not favor appeals of interlocutory orders and that leave to appeal them should be let for cases of “exceptional circumstances.” That’s the bad news. The good news they convey is that over the years the Circuit Courts have relaxed the “exceptional circumstances.” requirement. Thus, District Courts and BAP’s look at three standards:
a. controlling question of law, b. over which there is substantial ground for difference of opinion and 3. an immediate appeal may materially advance the ultimate termination of the litigation. These three standards are further dissected in the text.
Appeals of Interlocutory Orders from the District Courts/BAPs
Here we are told that Circuit Courts have appellate jurisdiction over interlocutory orders granting, continuing, modifying, refusing or dissolving injunctions issued by the District Courts. The really interesting discussion on this subject, in my view, deals with the appeal of interlocutory orders that do not expressly address an injunction. The three factors to consider an appeal of such an order are presented and as to one, that the order be “injunctive in nature” is further explored.
Procedure for Interlocutory Appeals
An appeal from an interlocutory order will include the notice of appeal and a motion for leave to appeal. The elements that the motion should address are presented in the text as well as a description of the documents to attach.
Writs of Mandamus
An extraordinary remedy for extraordinary circumstances when an interlocutory order is not otherwise appealable. The five guidelines used by the Courts for the issuance of a writ of mandamus are presented. Not all five have to be met in order for the writ to ensue.
Discretionary Direct Appeals to the Circuit Court
After BAPCPA Circuit Courts have discretion to take appeals directly from the Bankruptcy Court, District Court or BAP. This is done if any of the lower Courts, sua sponte, or on request of a party or by all parties to the potential appeal jointly certify that the ruling: 1. involves a question of law for which there is no controlling decision by the Circuit Court for that Circuit or by the Supreme Court or involves a matter of public importance. 2. the ruling involves a question of law requiring resolution of conflicting decisions or 3. an immediate appeal from the ruling may materially advance the progress of the case or proceeding.
Appeals of Remand or Abstention Orders
Bankruptcy Courts decisions to remand a case to state court can only be appealed to District Court or BAP. On the other hand appellate courts generally may not review an order abstaining.
4- Time Limits.
Appeals from Bankruptcy Court to District Court/BAP
A- 10 days within which to file the Notice of Appeal from the date of entry on docket of the order or judgment being appealed. (An extension of time is possible)
B- 10 days within which to file notice of appeal from entry of order disposing of a timely post-judgment motion.
C- 10 days within which to file a cross appeal from the date the notice of appeal was filed.
D- 10 days from the filing of the notice of appeal for appellant to file Statement of the Issues and Designation of the Record on Appeal.
E- 14 days within which any other party may file a notice of appeal from the filing of the first notice of appeal. Here the authors explain how a party to an appeal can “piggyback” on an otherwise void appeal.
F- 15 days from docketing of the appeal in the District Court appellant’s opening brief to be filed.
G- 15 days thereafter, appellee’s response. (Not mandatory).
H- 10 days thereafter for appellant to file a reply to appellee’s response.
Items D, F and G are not jurisdictional. Failure to file or, filing them late does not mandate dismissal. BUT, courts have discretion to dismiss an appeal for failure to comply. The Fourth Circuit has developed a five step analysis to determine whether to dismiss the appeal for non compliance with these non jurisdictional items.
Appeals to the Circuit Courts
30 days to file notice of appeal in the district court or BAP from the date of entry of the order on the docket. There is a possibility of extending the time to appeal.
40 days for appellant to file the opening brief after the record is filed.
30 days thereafter for appellee to file a response
14 days for appellant to file a reply
60 days from entry of judgment to file a request for certification for a direct appeal to the Circuit Court.
5- Forums
Generally, heard by the District Court or the BAP. When hearing an appeal from the Bankruptcy Court the District Court acts as an appellate court. The authors alert us to the fact, that while they should not do so, some District Courts will refer a bankruptcy appeal to a Magistrate Judge.
A Bankruptcy Appellate Panel will hear appeals unless the appellant chooses the District Court or if any other party, within 30 days after service of the notice of appeal, elects to have the appeal heard by the District Court
From the BAP or USDC the appeal is taken to the Circuit Court. With the BAPCPA amendment to the Code we now have the opportunity of making a request for a direct
appeal to the Circuit.
6- Standard Of Review
The monograph presents the concept of standard of review as “…a “shorthand” expression for the deference an appellate court gives to the trial court when reviewing the trial court’s conclusions.” Regarding a bankruptcy court order, the appellate courts will independently review the order without deference to the lower court’s determination.
Under the banner of standard of review the judge’s decision is classified into three categories:
Questions of law - reviewable de novo (Examples in App. G)
Questions of fact - reviewable for clear error (Examples in App. E)
Matters of discretion` - reviewable for “abuse of discretion”
Regarding questions of law the appellate court decides the matter as if it were the trial court.
As to questions of fact the general criteria is provided (clearly erroneous) and they mention the exception that gives way to the “special scrutiny” standard. The facts that allow for the exception are in page 42. Counsel is advised to ESTABLISH, PRESERVE and PERFECT the record for appeal.
The authors caution that the proper labeling of a question as one of fact or law is sometimes “slippery”. This cautionary note we deem most appropriate as an introduction for their next theme: mixed questions of law and fact. The mix occurs when the facts are established, the rule of law undisputed and, the issue is whether the facts satisfy the legal rule. They illustrate how some courts have dealt with this review and finish by saying that “In the end, bankruptcy practitioners can likely find precedent for whatever standard of review best serve their purposes when dealing with mixed questions of fact and law.”
In the third category of discretionary determinations the review is intended to determine whether there has been abuse. If the decision is procedural, the review will grant varying degrees of hues, the authors quote the following from a case: “[w]hat we mean when we say that a court has abused its discretion is merely that we think that [the court] made a mistake. May I add, how simple yet how confounding! [1]
7- Obstacles To A Successful Appeal
Mootness
We face mootness when a controversy no longer has adverse parties with sufficient personal interest to maintain the litigation. It is a jurisdictional issue, reviewable de novo and can be raised at any point of the appeal.
Statutory mootness involves situations where the law provides certain “insulation” to acts performed there under, if the party affected thereby does not execute in turn an act to protect its rights on appeal. Absent stay orders pending appeal, the granting of authority to incur credit under 11 U.S.C. sec. 364 and for a sale under section 363 are not affected by reversals on appeal.
The authors make a clear and blunt recommendation: “Counsel should always seek a stay pending appeal; failure to do so will support later arguments by the opposition that their appeal is moot.”
Mootness and substantial consummation of a confirmed Chapter 11 plan of reorganization is a theme that occupies a number of paragraphs of the monograph.
The last topic covered under the mootness heading is the exception to mootness: dismissals. Dismissal of the underlying bankruptcy does not necessarily entail dismissal of an appeal taken therein. A brief discussion of the repetition/evasion exception is made by the authors.
8- Stays Pending Appeal
Reference is made to Bankruptcy Rule 7062 and Fed. R. of Civ P. 62 and the stay as a matter of right in cases involving monetary judgments with the posting of a supersedeas bond.[2] Alternatives to a supersedeas bond are explored. Likewise, we are told that courts show flexibility as to the amount of security required.
What if an appellant is not entitled to a stay as a matter of right? Then a discretionary stay must be applied to from the bankruptcy court.
Bankruptcy Rule 8005 stays are briefly examined starting with the opinion that the rule is not a model of clarity.
The standards for a stay pending appeal are governed by the similar standard for the issuance of an injunction:
a) likelihood of success on the merits; b) the prospect of irreparable harm to the moving party if stay is denied; c) the possibility of harm to other interested parties if relief is granted and; d) whether a stay will serve the public interest. The authors expose that in some courts if evidence is missing on one of the standards the motion is doomed. Other courts juggle the “balance of the hardships” and yet others are more flexible and will grant the stay with a strong showing on one factor to offset the absence of another factor. The beauty I find in this diversity of approaches regarding the standards, is in a quote by the authors where a court stated: “These are not separate tests, but the outer reaches of a single continuum.”
9- Miscellaneous Issues
A- Impact of Notice of appeal on Lower Court’s jurisdiction
The notice of appeal grants jurisdiction on the appellate court and divests the lower court of control over the matters subject of the appeal.
B- New Issues, Arguments or Law
If raised for the first time on appeal they will not be reviewed, that is the general rule. And since they say that no rule is without exception, this general rule has its own. For example, jurisdiction.
C- Stare Decisis: Are District Court/BAP Decisions Binding?
Stare decisis (to stand by a decision) requires lower courts be bound by the decisions of the superior courts. Stability and predictability is the goal. Although the precedent of other circuits are not binding, lower federal courts should not ignore the fact that an issue has already been decided by another circuit. Stare decisis seems to take a detour in bankruptcy. Many bankruptcy courts have held they are not bound by the prior appellate decisions of district court judges. The authors cite from the case of In re Gaylor the five reasons articulated by the bankruptcy court why it was not bound by the prior district court ruling. They also believe the Gaylor decision does not hold much water. They devote several pages expounding on the problems posed by this “unstare” state of the doctrine and, possible solutions. [3]
D- Can Appellants Proceed in Forma Pauperis?
The answer lies in 28 USC §1915(e).
F- Frivolous Appeals
Where the result is obvious or the arguments wholly without merit it exposes the party to sanctions.
10- Documents Involved In Filing An Appeal
Here the authors discuss the most common documents required in an appeal and make general suggestions for their text. Some of the documents examined are: the notice of appeal, statement of issues on appeal, the elements of appellate briefs, etc.
Of the 12 tips offered by the authors on appellate writing, my favorite is: DO NOT ASSUME ANYTHING. The runner –up is: “The quality of the writing in a brief generally reflects, for better or worse, the quality of the thinking that preceded it.”
They offer sound advice on how to develop the Statement of the Case. Among other areas covered under this topic they speak of the three kinds of facts that it may include: legally significant facts, emotionally significant facts and background facts. Honesty and accuracy should exist throughout the statement.
It is the authors’ opinion that the summary of the argument is the most important component of the brief. Regarding tips on how to draft the argument they refer to an analysis method termed CRAAC. It is described in page 110 of the book.
11- Tips On Appellate Argument.
This section starts off with the following maxim: “Words are the tools of appellate advocacy”. This is followed by the belief that “Generally success in oral argument is predicated on preparation…” Here I am reminded of the words by coach Tom Waldron: “Failure to prepare is preparing for failure.” The authors submit that the preparation process for an oral hearing includes: mastering the facts; predicting questions (thirteen common sense concerns by the court are given as examples of predictable questions).
This ends our review. I wish to remind the reader of the existence of the Bankruptcy Appellate Panel For The First Circuit Local Rules effective November 3, 1997. Lastly I strongly encourage you read the monograph since, aside from the appellate level, many of its tips have a place in our day to day advocacy.
[1] Robert Frost, seems to have found one court that makes no mistakes, yet was somewhat perplexed by it. His question was: “Isn’t it funny that anything the Supreme Court says is right?”
[2] If the reader “googles” the word supersedeas the search engine will present several results. The first (as of 04.15.08) is an article that describes the subject titled The Name's Bond, Supersedeas Bond
A look at staying money judgments on appeal Howard
J. Bashman Special to Law.com
June 26, 2006
[3] A related, but not interchangeable concept is “law of the case” n. once a judge has decided a legal question during the conduct of a lawsuit, he/she is unlikely to change his/her views and will respond that the ruling is the "law of the case." http://dictionary.law.com/default2.asp?typed=law+of+the+case&type=1&submit1.x=50&submit1.y=14. The Puerto Rico Supreme Court has stated: "Es doctrina reiterada en nuestro sistema de Derecho que los derechos y obligaciones adjudicados en el ámbito judicial, mediante dictamen firme, constituyen la ley del caso...(citas omitidas).
"Por otro lado, hemos resuelto que cuando la ley del caso es errónea y puede causar una gran injusticia, puede emplearse una norma de derecho diferente. (Citas omitidas)." Management Adminstration Services Corp. v. E.L.A. 2000 JTS 189, pág. 439. See also Doral Motgage Corp v. Alicea 146 D.P.R.___,99 TSPR 31 y BBV de PR v. Mun. de Vega Baja 2001 JTS 63.