Update on Bankruptcy Appellate Practice Part Three — Finality

Introductory Overview

Appeals to District Courts. District courts have jurisdiction over final judgments entered by bankruptcy judges as well as the jurisdiction to hear appeals with leave of court from interlocutory orders and decrees. 28 U.S.C. §158(a)(1). See, e.g., In re Purdue Pharma, L.P., 2021 WL 5979108, ** 41-42 (S.D.N.Y. Dec. 16, 2021) ("release of [third party] claim," in absence of consent, "a final judgment" in context of plan confirmation order; but bankruptcy court not constitutionally authorized to enter judgment on tort claim, which is subject to de novo review as a proposed legal conclusion under 28 U.S.C. §157(c)(1)); court vacated confirmation order in non-final interlocutory ruling because plan still can be modified on remand). Also, an interlocutory order issued under 11 U.S.C. §1121(d) affecting the debtor's exclusive period to file a reorganization plan is automatically appealable. 28 U.S.C. §158(a)(2). As a practical matter, the appellate jurisdiction of district courts is limited to proceedings in which bankruptcy courts are authorized to issue judicial determinations under 28 U.S.C §§1334(a) and 157(a). In re Walker, 51 F.3d 562 (5th Cir. 1995) (bankruptcy judge lacks power to hear proceedings that district court cannot hear and determine; §157 allows district court to refer cases to bankruptcy court).

Appeals to Bankruptcy Appellate Panels. A bankruptcy appellate panel (BAP) is made up of three bankruptcy judges to hear appeals from bankruptcy court final judgments, orders, and decrees. 28 U.S.C. §158(b)(1). Those who serve on the panels hear appeals from bankruptcy court orders entered in other districts. 28 U.S.C. §158 (b)(2), (5). BAPs may grant leave to appeal from bankruptcy courts' interlocutory "orders or decrees," id., but Article III courts are not bound by the decisions of BAPs. In re Cardelucci, 285 F.3d 1231, 1234 (9th Cir. 2002). BAPs must: a) be established by a judicial council of a circuit; b) be approved by a majority of the district judges for the district in which the appeals occur; and c) all parties must consent to a disposition by the panel. The district court must hear an appeal if these criteria are not satisfied. 28 U.S.C. §158(b), (c). One side to a litigation may thus preclude BAP review.