Ritzen Group, Inc. v. Jackson Masonry, LLC (18-938)
argument 18-938Ritzen Group, Inc. v. Jackson Masonry, LLC
Supreme Court of the United States
1h 2m
6 speakers
8 chapters
transcribed 5 days ago
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What does Section 158 of the Judicial Code require for an order to be immediately appealable?
We'll hear argument next in Case 18-938, Ritson Group v. Jackson Masonry. Mr. Lehman?
Mr. Chief Justice, and may it please the Court, 28 U.S.C. Section 158 provides that district courts shall have jurisdiction to hear appeals from final order of bankruptcy judges, entered in cases and proceedings referred to bankruptcy judges under Section 157. The order in this case merely determined where the parties would litigate Ritson's contract claim. Under Section 158, such an order is not a final order entered in a case or proceeding. As this Court determined just four terms ago, In Bullard v. Blue Hills Bank, the fact that an order disposes of a proceeding is not, despite what responded and the government contends, the test for determining finality. That, in the words of the Court, slices the case too thin.
Rather, an immediately appealable order is determined by considering the larger process at issue and whether the order is final by examining whether it alters the status quo and fixes the rights and obligations of the parties. In Bullard, the relevant process was the plan confirmation process. Here, the relevant process is the claims adjudication or the claims allowance process under Chapter 5 of the Bankruptcy Code. As in Bullard, the order here did not resolve the larger process. It did not alter the status quo, nor did it fix the obligations of the parties. On the contrary, it simply continued the automatic stay so the underlying claim would proceed in bankruptcy court. In arguing otherwise, respondent and the government badly misperceived the role of the automatic stay in bankruptcy cases.
The automatic stay is not itself one of the substantive processes of bankruptcy. It is a utility provision that supports the operation of these other processes. In fact, it was Jackson who argued that Ritson's motion for relief triggered the claims adjudication process, claiming the stay motion constituted an informal proof of claim. Such an order changes little and, in the words of this Court, does not alter the status quo or fix the rights and obligations of the parties. Contrary to what the government has represented in its brief, Section 158 was not actually enacted in 1978. In fact, Section 158 was enacted in 1984. The reason this, what appears to be a small mistake, I believe is a very significant matter because it misunderstands the history of the bankruptcy jurisdictional framework.
As I understand what you've just said, you're not contesting that this was a proceeding. You're just saying it wasn't a final order in the proceeding. Is that
right? That's correct. As this Court noted in Bullard, there's an endless number of contested matters, many of which are of a less significant nature. The question is not on what is a proceeding, but what is on an immediately appealable proceeding. And in Bullard, the Court looked at the process – to determine whether or not that had the indicia of finality. And when would it become final? At the end of the case? We would submit that it would become final under this Court's test that when the status quo changed and when the rights and obligations of the parties were fixed. And
when would that be?
Well, for example, Rule 8002 actually lays out a very good framework for final orders because it determines what orders cannot be be extended in terms of timeframe. The first, under 8002D2A, is the granting of the automatic stay cannot be extended, but the denial of the automatic stay isn't mentioned. The second one, the authorization of a sale under 363, for example. The third one, the authorization of financing under 364. It goes back to the Court's reasoning in Bullard, where the Court determined that there is no symmetry in finality. That, in fact, a final rule is often determined such as the grant of a motion to dismiss, but not a denial of a motion to dismiss.
Maybe you could simplify this a little bit for me. There's a denial of relief from the stay. And when can that party, when can the party who sought relief from the stay take an appeal contesting the denial of relief from the stay?
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Chapters
8 chapters
1
What does Section 158 of the Judicial Code require for an order to be immediately appealable?
0:00–7:15
2
How does the Court apply the Bullard test to determine finality in bankruptcy proceedings?
7:15–14:30
3
Why does the automatic stay not constitute a substantive bankruptcy process for finality analysis?
14:30–23:39
4
When can a creditor appeal a denied motion to lift the automatic stay?
23:39–29:59
5
What role do Rule 8002 and Rule 502J play in identifying immediately appealable orders?
29:59–37:38
6
How do policy concerns about piecemeal appeals affect the Court’s final‑order analysis?
37:38–45:04
7
What is the impact of a plan confirmation on the status‑quo and the ability to appeal stay‑relief orders?
45:04–53:39
8
Why might the Court consider a denial of stay relief as a final order despite possible future revisions?
53:39–1:02:13