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omitted). The Court rejected the appellants' arguments that the more flexible jurisdictional principles that apply in bankruptcy by way of section 258 of the title 28 permitted the court to hear their appeal. The Court noted that "[o]ur more flexible standard for interlocutory appeals in the bankruptcy context applies only to appeals from orders issued by a bankruptcy appellate panel or by a district court hearing an appeal from a bankruptcy court." Here, because the order was issued from a district court sitting in bankruptcy, these flexible standards did not apply (despite the potential policy benefits of doing so). Rather, the standards applicable under section 1291 applied. Thus, the Court went on to examine the factors described above to determine whether the sanctions order was a final appealable collateral order. After discussing the relevant case law, the Court found that the "discovery sanctions are not completely separate from the merits of the underlying action....As noted above, the district court imposed the order on the Silar Parties on the ground that Debtors' bankruptcy petition was frivolous and filed for an improper purpose. But the parties vigorously dispute this issue." The Court found that "[w]hile the lenders disagree on [all of the Silar Parties' arguments as to why the bankruptcy case was filed for a proper purpose], we cannot resolve these questions without carefully inquiring into all aspects of the Silar Parties' financial and legal position leading up to the bankruptcy filing, as well as assessing the attendant benefits of filing for bankruptcy given those positions....[S]uch appellate review 'would differ only marginally from an inquiry into the merits' of the bankruptcy proceeding and thus 'counsels against application of the collateral order doctrine.' In short, because the facts established that the appeal failed to satisfy the first factor necessary for application of the collateral order doctrine, the Court found that "the sanctions order issued by the district court sitting in bankruptcy, whether supported by the district court's inherent powers or Rule 9011, was not an appealable collateral order." The Court dismissed the appeal for lack of jurisdiction. Concurrence: the concurring opinion essentially argued that the court should "simply treat jurisdiction of bankruptcy appeals under section 1291 in the same way that we treat bankruptcy appeals under section 158(d)(1)." The concurrence advocated for a reading of the Supreme Court precedent!Van Cauwenberghe v. Biard, 486 U.S. 517 (1988)-whereby a bankruptcy case would be treated as a bankruptcy case, whether arising under section 1291 or 158(d), thus granting the court the authority to apply "a special rule of finality for a category of bankruptcy cases."
v. First Owners' Association of Forty Six Hundred v. Gordon Properties, LLC, 470 B.R. 364 (E.D. Va. 2012)
Issue: 1) whether the Injunction Order is final or interlocutory; and 2) if interlocutory, whether leave to appeal should be granted.
Holding: The court denied the debtor's motion to dismiss the condo association's appeal, finding that leave to appeal, based on a substantial difference of opinion on a controlling question of law, should be granted. The court first found that the injunction order from the bankruptcy court was not a final order because it did not fully dispose of the particular dispute at issue. The court stated that "it is well-established that where, as here, a court finds a violation of the automatic stay but does not determine damages, the dispute is not yet finally resolved. Importantly, this principle
©2014 William L. Norton III
