Update on Bankruptcy Appellate Practice Part Three — Finality

This installment of our appellate practice series reviews recent cases addressing the appellate jurisdiction of district courts and the courts of appeals, referred to as the "finality" doctrine. The relevant sections of the Judicial Code — §§157, 158, 1298 and 1292 — seem straightforward and clear. As shown below, though, the courts have often been inconsistent in applying the statute. (See Part One: Appellate Standing of this series in the December 2021 issue, and Part 2: Equitable Mootness in the January 2022 issue.)

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).