Universal Life Ins. Co. v. Flowery
23-1219
| 2d Cir. | Jun 13, 2024Background
- PB Life & Annuity Co., Ltd. ("PB"), an insolvent Bermuda company, is under liquidation in Bermuda and recognized as a “foreign main proceeding” in U.S. bankruptcy court under Chapter 15.
- Universal Life Insurance obtained a $524 million arbitration award against PB, contributing to PB's insolvency.
- Universal sued the Lindberg and Flowery Defendants, alleging they were special-purpose vehicles controlled by Greg Lindberg that received fraudulent transfers from PB.
- The bankruptcy court dismissed Universal's adversary proceeding for lack of jurisdiction; the district court reversed, finding “related to” bankruptcy jurisdiction under 28 U.S.C. § 1334(b) and remanded for further proceedings.
- The Lindberg and Flowery Defendants appealed to the Second Circuit, challenging the district court’s jurisdictional ruling.
- The Second Circuit dismissed the appeal for lack of appellate jurisdiction, holding that the district court order was not final or appealable at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court’s finding of subject matter jurisdiction is appealable now | Universal: The remand is not a final order, so not immediately appealable | Lindberg/Flowery: The issue is immediately appealable and the district court lacked jurisdiction | Not appealable now; not a final decision |
| Whether denial of a motion to dismiss for lack of jurisdiction is a final decision | Universal: Denial does not end litigation; only lets the case proceed | Lindberg/Flowery: Order effectively ends their argument about jurisdiction, so should be final | Not a final decision; not appealable |
| Applicability of the collateral order doctrine | Universal: Collateral order doctrine does not apply | Lindberg/Flowery: Doctrine applies; court must review jurisdiction now | Doctrine does not apply here |
| Court’s ability to review district court’s jurisdictional ruling now | Universal: Review only after final judgment | Lindberg/Flowery: Court must always have jurisdiction to review lower court jurisdiction | Only has power if it has appellate jurisdiction; not now |
Key Cases Cited
- Conn. Nat'l Bank v. Germain, 503 U.S. 249 (statute governing bankruptcy appeals and interplay with other appellate statutes)
- Bullard v. Blue Hills Bank, 575 U.S. 496 (defines finality in bankruptcy appeals)
- Catlin v. United States, 324 U.S. 229 (only orders that end litigation are final)
- Will v. Hallock, 546 U.S. 345 (immunity denials are immediately appealable)
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (court must assess its own jurisdiction before merits)