Ashmore v. CGI Group, Inc.
860 F.3d 80
2d Cir.2017Background
- Benjamin Ashmore sued CGI under Sarbanes-Oxley in 2011 claiming wrongful termination for reporting fraud; CGI denied the allegations.
- Ashmore filed bankruptcy in 2013, listed the pending lawsuit on his SOFA but did not list it on Schedule B; he informed the bankruptcy Trustee of the claim.
- The Trustee signaled initial interest in administering the claim, later filed a Report of No Distribution, and Ashmore’s bankruptcy case was closed after discharge.
- A September 2013 private letter agreement (not disclosed to courts) had the Trustee agree conditionally to let Ashmore continue prosecuting the suit while reserving rights to reopen the case and administer proceeds.
- In district court proceedings, CGI argued the claim belonged to the bankruptcy estate; the district court dismissed Ashmore for lack of standing, finding the Trustee did not abandon the asset under 11 U.S.C. § 554(c), and allowed the Trustee to move to be substituted.
- Ashmore appealed immediately; before merits review, the Trustee was substituted as plaintiff and this Court held Ashmore’s appeal was interlocutory and dismissed for lack of jurisdiction, vacating a temporary stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court’s dismissal of Ashmore is a final appealable order under 28 U.S.C. § 1291 | Ashmore: dismissal effectively ousted him and deprived the court of subject-matter jurisdiction, so the order is final and immediately appealable | CGI: dismissal was interlocutory because the Trustee was allowed to be substituted and litigation continues | Held: Not final — substitution of Trustee keeps the case ongoing; dismissal as to one plaintiff is interlocutory and reviewable after final judgment |
| Whether the collateral order doctrine permits immediate appeal of dismissal/substitution | Ashmore: order conclusively resolves a separable important right (standing/ownership) that would be effectively unreviewable if delayed | CGI: any harm is remediable on appeal after final judgment; no irreparable, unreviewable right shown | Held: Not collateral — fails the third prong (effectively unreviewable); final-judgment appeal will adequately vindicate rights |
| Whether Trustee’s alleged abandonment under 11 U.S.C. § 554(c) makes Ashmore the proper plaintiff now | Ashmore: Trustee abandoned the lawsuit by operation of law, so he retained the action and can prosecute it | CGI & Trustee: Trustee did not properly abandon because the claim was not scheduled as an estate asset; Trustee may prosecute or be substituted | Held: Court did not reach the merits on abandonment due to lack of appellate jurisdiction; district court previously concluded no abandonment, but this opinion dismisses appeal for jurisdictional reasons |
Key Cases Cited
- Coopers & Lybrand v. Livesay, 437 U.S. 463 (U.S. 1978) (finality requirement limits piecemeal appeals)
- Wabtec Corp. v. Faiveley Transp. Malmo AB, 525 F.3d 135 (2d Cir. 2008) (orders that allow litigation to continue are not final)
- Slayton v. American Exp. Co., 460 F.3d 215 (2d Cir. 2006) (dismissal with leave to permit substitution or amendment is non-final)
- Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370 (U.S. 1987) (orders denying intervention as of right can be immediately appealable)
- Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (U.S. 1994) (single appeal deferred until final judgment generally required)
- Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (U.S. 2009) (collateral-order third prong requires that delayed review would destroy the right’s value)
- Sell v. United States, 539 U.S. 166 (U.S. 2003) (example where delayed review would cause irreversible harm)
- Mt. McKinley Ins. Co. v. Corning Inc., 399 F.3d 436 (2d Cir. 2005) (collateral-order appeal permitted where stay would give preclusive effect and block later review)