Ritzen Group, Inc. v. Jackson Masonry, LLC
140 S. Ct. 582
SCOTUS2020Background
- Ritzen sued Jackson in Tennessee state court for breach of a land‑sale contract; days before trial Jackson filed Chapter 11 and the automatic stay under 11 U.S.C. §362(a) halted the state proceedings.
- Ritzen moved in bankruptcy court for relief from the automatic stay to proceed with the state trial; the bankruptcy court denied the motion after a hearing.
- Ritzen did not appeal the stay‑relief denial within the 14‑day window required by 28 U.S.C. §158(c)(2) and Fed. R. Bankr. P. 8002(a).
- Ritzen later filed a proof of claim; the bankruptcy court disallowed the claim and confirmed Jackson’s plan, which permanently enjoined creditors from pursuing claims outside the plan.
- After confirmation, Ritzen filed a late appeal in district court challenging the earlier denial of stay relief; the district court and Sixth Circuit held the appeal untimely because the stay‑relief order was final and appealable when entered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an order denying relief from the automatic stay is a final, immediately appealable order under 28 U.S.C. §158(a) | Denial of stay relief is a preliminary, nonfinal step in claim adjudication (it only decides forum) | Adjudication of a stay‑relief motion is a discrete proceeding that conclusively resolves that procedural unit and is therefore final | Order denying stay relief is final and immediately appealable under §158(a) |
| Whether the fact that the stay denial rests on substantive issues that may recur renders the order nonfinal | Because underlying issues (e.g., bad faith) might be litigated later, the stay denial should be nonfinal | Finality looks to whether the procedural unit was terminated, not whether the court resolved substantive issues that may reappear | Resolution of substantive issues does not prevent finality so long as the stay‑relief proceeding is conclusively ended |
| Whether allowing immediate appeals will create undue piecemeal appeals and inefficiency in bankruptcy | Immediate appeals of stay rulings will promote inefficiency and piecemeal litigation | Immediate appeals prevent needless relitigation and allow creditors to secure rights outside bankruptcy sooner | Immediate appeals do not unduly disrupt the process and can prevent later relitigation and wasted proceedings |
| Whether statutory text and practice support treating stay adjudications as separate from claim allowance proceedings | Stay adjudications are merely preparatory to claim resolution and should not be treated as separate proceedings | Statutory scheme (e.g., §157(b)(2)(G)) and procedural rules treat stay motions as distinct core proceedings separate from claim allowance | Statutory structure and practice support treating stay‑relief adjudications as independent, appealable proceedings |
Key Cases Cited
- Bullard v. Blue Hills Bank, 575 U.S. 496 (2015) (defines finality in bankruptcy by reference to discrete proceedings rather than the whole case)
- Gelboim v. Bank of America Corp., 574 U.S. 405 (2015) (ordinary final‑decision rule in civil litigation: decision is final when it ends the litigation on the merits)
- Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009) (discourages piecemeal, prejudgment appeals that impede judicial administration)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (dismissals for lack of personal jurisdiction are final and appealable)
- Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994) (appealability should be determined for entire categories of claims)