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Act in time. If an appeal is not filed within time, i.e. within 14 days of the entry of order appealed, then that appeal is useless as the appellate court will not have any jurisdiction over the appeal. However, if you have filed any motions (1) to amend or make additional findings (Rule 7052 applying in adversary proceeding), whether or not granting the motion would alter the judgment; (2) to alter or amend the judgment under Rule 9023; (3) for a new trial under Rule 9023; or (4) for relief from judgment or order under Rule 9024 if the motion is filed within 14 days after the judgment is entered, then the 14 days commences from the time of disposition of these motion and the entry of that order.
Perfection of the appeal entails several other additional steps and is addressed under the heading, Perfecting the Appeal.
Bankruptcy Appeals
Bankruptcy appeals are unlike appeals in any other area of law and can be a minefield for clients. The appeal process in bankruptcy cases is not clearly codified, creating great uncertainty and legal risk and making the guidance of a skilled and knowledgeable attorney an imperative.
The bankruptcy appeal arises from the judgment of the bankruptcy court and or from the decisions of the district courts affirming or denying the bankruptcy court’s submission of proposed findings of fact and conclusions of law. See 28 U.S.C. 157(c), Rule 9033. Of course, appeals are from the orders or judgments against the appellant (the one filing appeal). “Ordinarily, only a party aggrieved by a judgment or order of a district court may exercise the statutory right to appeal therefrom.” Deposit Guar. Nat. Bank, Jackson, Miss.v. Roper, 445 U.S. 326 (1980). There could a single appeal for several aggrieved parties in a particular decision. Bankruptcy Rule 8003(b) allows such a filing: “When two or more parties are entitled to appeal from a judgment, order, or decree of a bankruptcy court and their interests make joinder practicable, they may file a joint notice of appeal.” Appeals from the bankruptcy judge’s orders are only permissible if the underlying dispute is characterized as a “Core” proceeding, where the bankruptcy court had the authority to enter a binding decision. 28 USC § 157(b)(1). The below mentioned matters or issues are deemed to be “Core” issues:
(A) matters concerning the administration of the estate;
(B) allowance or disallowance of claims against the estate or exemptions from property of the estate, and estimation of claims or interests for the purposes of confirming a plan under chapter 11, 12, or 13 of Title 11 but not the liquidation or estimation of contingent or unliquidated personal injury tort or wrongful death claims against the estate for purposes of distribution in a case under Title 11;
(C) counterclaims by the estate against persons filing claims against the estate;
(D) orders in respect to obtaining credit;
(E) orders to turn over property of the estate;
(F) proceedings to determine, avoid, or recover preferences;
(G) motions to terminate, annul, or modify the automatic stay;
(H) proceedings to determine, avoid, or recover fraudulent conveyances;
(I) determinations as to the dischargeability of particular debts;
(J) objections to discharges;
(K) determinations of the validity, extent, or priority of liens;
(L) confirmations of plans;
(M) orders approving the use or lease of property, including the use of cash collateral;
(N) orders approving the sale of property other than property resulting from claims brought by the estate against persons who have not filed claims against the estate;
(O) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor or the equity security holder relationship, except personal injury tort or wrongful death claims; and
(P) recognition of foreign proceedings and other matters under Chapter 15 of Title 11.
But this list is not binding. The characterization of a bankruptcy court’s rulings as “core” or “noncore” proceedings have been admonished by Justice Brenan in Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 60–61 (1989) (“Congress simply reclassified a pre-existing, common- law cause of action that was not integrally related to the reformation of debtor-creditor . . . . This purely taxonomic change cannot alter our Seventh Amendment analysis. Congress cannot eliminate a party's Seventh Amendment right to a jury trial merely by relabeling the cause of action to which it attaches and placing exclusive jurisdiction in an administrative agency or a specialized court of equity”). This line of reasoning was followed in 2011 by the Supreme Court in Stern v. Marshall, wherein the Chief Justice held that designating state law-based counterclaims as core proceedings to enter a final judgment by the bankruptcy court was unconstitutional. 564 U.S. 462, 504, 131 (2011).
The best course of action for bankruptcy litigants is not to stay silent in the proceedings and instead to take affirmative steps in demanding to be heard by an article III judge (district court) — this way you are preserving your rights. A client can then have the ability to revive his or her arguments twice, before a judgment is entered against the client. Silence on your part in the bankruptcy court means that you are consenting to that court’s judgment, even when the judgment is against your interest. The Supreme Court in Wellness Int'l Network, Ltd. v. Sharif, 575 U.S. 665, 686 (2015) has provided the bright line rule, i.e. Article III permits bankruptcy courts to decide Stern claims (state law-based counterclaims) submitted to them by consent. This means that as long as the disputes are characterized as “core” by the bankruptcy judge, which generally occurs, the bankruptcy judge decision is final and appealable.
If the underlying proceeding is not a core proceeding, then the bankruptcy court would forward its findings of facts and conclusions of law to the district court (just as a magistrate would to a district judge). 28 U.S.C. § 157(c). If that is the case, you must file your objection to the bankruptcy judge’s findings pursuant to Bankruptcy Rule 9033 within 14 days. This is key - you might not have a right to appeal the potential district court judgment if you have not filed a timely objection to the bankruptcy courts proposal.
Once the district court enters an order affirming or denying the bankruptcy court decision, it becomes appealable as a regular appeal to the court of appeals pursuant to 28 USC § 1291. The Notice of Appeal (to be filed with the district court) must be filed within 30 days. See Rule 4 of Federal Rules of Appellate Procedure.
Which issues can be successfully appealed is also equally important to know through the guidance of an experienced bankruptcy lawyer. Not all orders with which you do not agree are appealable.
When there are no issues remaining for the court entering a decision to make a ruling on, other than executing the judgment, it is a final judgment and thus appealable as a matter of right. 28 USC § 1291. Anything short of that might still be a final judgment depending on circumstances of the case referred to as “narrow class of exception” to the final judgment rule. This narrow class of exception is colloquially referred to as the collateral order doctrine. If the appealed judgment is not final, then the appellate courts could treat this as a writ of mandamus. This happens routinely in federal cases.
But the rules are different in bankruptcy. A bankruptcy case involves an aggregation of individual controversies, “many of which would exist as stand-alone lawsuits but for the bankrupt status of the debtor.” Bullard v. Blue Hills Bank, 575 U.S. 496, 501 (2015). Thus, it is tricky to understand the finality of a judgment in a bankruptcy setting. “The current bankruptcy appeals statute reflects this approach: It authorizes appeals as of right not only from ‘final judgments in cases but from final judgments, orders, and decrees ... in cases and proceedings.’ § 158(a).” Id. So-called interlocutory orders might be final orders, and therefore appealable in a bankruptcy setting.
Before we dive into this issue, we must be clear that the judgment appealed has been formally entered as a judgment on a sperate document in compliance with Bankruptcy Rule 7058 (after Rule 58 of FRCP). The time to appeal does not start (at least for 150 days under Rule 8002) unless there is a formal entry of order, judgment, or decision on a separate document, especially those dealing with adversary proceedings. The separate judgment document rule might not even apply to the contested matter. Once again, the appellant can forgo this separate document judgment and have an appeal based on the impugned order. See Bankers Tr. Co. v. Mallis, 435 U.S. 381, 386 (1978) (“The need for certainty as to the timeliness of an appeal, however, should not prevent the parties from waiving the separate judgment requirement where one has accidentally not been entered.”). Rule 8002 states the same: “A failure to set out a judgment, order, or decree in a separate document when required by Rule 58(a) F.R.Civ.P. does not affect the validity of an appeal from that judgment, order, or decree.”
The orders from the adversary proceeding need further clarity. The adversary proceeding shall subsume several contested matters within it. Before the entry of a final judgment in an adversary proceeding, only orders would be considered final which determine collateral rights that cannot be protected on appeal from the final judgment. Non-dispositive orders are not appealable and include orders issued in adversary proceedings such as denials of motions to dismiss, entry of summary judgment or entry of final judgment on fewer than all claims or all parties, discovery disputes, denying a chapter 13 confirmation where a debtor can propose a new plan and the case is not being dismissed (though note that a confirmation of Plan is a final order, United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, (2010)), denial or withdrawal of reference under 28 U.S.C. § 157 or remand to the bankruptcy courts. Summary judgment itself might not be deemed final and appealable if there are some pending issues that which has not concluded, for instance where damages remain to be decided.
Despite the foregoing, injunction related orders—granting, denying, dissolving, modifying etc. are appealable, provided that a party can show that such a grant or denial of injunction could result in serious irreparable harm. See Ritzen Grp., Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582, 589 (2020) (A creditor may seek relief from the stay by filing in the bankruptcy court a motion for an order “terminating, annulling, modifying, or conditioning” the stay, asserting in support of the motion either “cause” or the presence of specified conditions. § 362(d). A majority of circuits and the leading treatises regard orders denying such motions as final, immediately appealable decision. We reach the same conclusion.”).
How do you commence an appeal? It is done by filing a notice of appeal with the court that entered the decision that you wish you to appeal. What must be in the notice of appeal? That is very important. You must mention in the notice of appeal the specific order or issue or entire judgment you are appealing from. The applicable Federal Rule of Appellate Procedure, Rule 3(c) governs the content of notices of appeal: Notices “shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name the court to which the appeal is taken.” You have to attach with the notice of appeal the copy of the judgment or order being appealed and ensure that the notice complies with bankruptcy Rule 8003. Rule 8003 states that the notice of appeal must conform substantially to the appropriate Official Form. The Official From 417A is the official form, which includes statements about the subject of the appeal and also asks you to describe the “judgment, order or decree appealed.” This brings your appeal in conformity with Rule 3 of FRAP. If you comply with Rule 3 of FRAP, you will not have issues with Bankruptcy Rule 8003.