James Sahagun v. Landmark Fence Co.
801 F.3d 1099
| 9th Cir. | 2015Background
- Landmark Fence filed bankruptcy after a certified 2007 California wage-and-hour class action brought by Sahagun (Sahagun and Garcia).
- Sahagun filed a claim in bankruptcy; the bankruptcy court held a six-day trial and awarded the class about $15 million, including wages for travel to/from public worksites and fabrication time.
- Landmark appealed to the district court under 28 U.S.C. § 158(a)(1). The district court affirmed liability for fabrication wages but reversed the travel-time legal standard and remanded to the bankruptcy court for "additional fact-finding" about contracts and jobsite conditions to reassess damages.
- Sahagun appealed the district court’s remand decision to the Ninth Circuit; Landmark cross‑appealed the fabrication-wage ruling.
- The Ninth Circuit raised jurisdiction sua sponte and dismissed the appeal, holding the district court’s order remanding for further factfinding was not a final appealable order under § 158(d)(1).
Issues
| Issue | Plaintiff's Argument (Sahagun) | Defendant's Argument (Landmark) | Held |
|---|---|---|---|
| Whether the district court’s order remanding for further factfinding is a final, appealable order under 28 U.S.C. § 158(d)(1) | The remand effectively ends the case because plaintiffs cannot prove damages under the district court’s legal standard, so review now is appropriate | District court’s remand is non-final because it directs further factfinding and reexamination of damages | Court held the order is non-final and dismissed the appeal for lack of jurisdiction |
| Whether the Ninth Circuit should apply a flexible finality test in bankruptcy appeals | Seek immediate review under the circuit’s flexible four-factor test to avoid delay | Argue remand preserves bankruptcy court fact-finding and is non-final, so no appellate jurisdiction | Court applied the flexible test and found factors (piecemeal risk, judicial efficiency, preserving fact-finder role, no irreparable harm) weigh against jurisdiction |
| Whether remand was a ‘‘purely mechanical or computational task’’ permitting interlocutory review | Plaintiffs asserted remand raised no new factual development likely to produce another appeal | Landmark argued remand requires substantive factfinding about contract/jobsite conditions | Court found remand required substantial further factfinding (not merely mechanical), reinforcing non-finality |
| Whether the appeal was moot due to dismissal of the bankruptcy petition during appeal and whether the court could vacate lower courts’ orders | Plaintiffs argued dismissal did not moot appeal and vacatur would be unjust because some damages were final | Landmark asked to dismiss as moot and vacate orders given dismissal of bankruptcy petition | Court declined to reach mootness because it first must resolve jurisdiction; denied motion for judicial notice and refused to address mootness or vacatur without jurisdiction |
Key Cases Cited
- Bullard v. Blue Hills Bank (In re Bullard), 135 S. Ct. 1686 (2015) (Supreme Court on finality in bankruptcy appeals and cautioning against premature review)
- Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981) (definition of a final decision that ends litigation on the merits)
- Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978) (finality as leaving nothing for the court to do but execute judgment)
- In re Lakeshore Vill. Resort, Ltd., 81 F.3d 103 (9th Cir. 1996) (Ninth Circuit’s four-factor flexible test for bankruptcy finality)
- In re Saxman, 325 F.3d 1168 (9th Cir. 2003) (interlocutory review allowed only when remand is a purely mechanical/computational task)
- In re Vylene Enters., Inc., 968 F.2d 887 (9th Cir. 1992) (discussion of avoiding merits resolution in jurisdictional inquiry)
- In re Bender, 586 F.3d 1159 (9th Cir. 2009) (tension between circuit’s flexible standard and Supreme Court precedents on finality)