Case Information
*3 IKUTA, Circuit Judge:
Charles Gugliuzza appeals the district court’s order reversing a bankruptcy court’s grant of summary judgment and remanding for further fact-finding. We conclude that we lack jurisdiction and therefore dismiss the appeal.
I
The Federal Trade Commission (FTC) successfully
brought an enforcement action against Charles Gugliuzza and
his former company, Commerce Planet, alleging violations of
Section 5 of the FTC Act, 15 U.S.C. § 45(a).
See FTC v.
Commerce Planet, Inc.
, 878 F. Supp. 2d 1048 (C.D. Cal.
2012). In assessing Gugliuzza’s liability, the district court
relied on the test set forth by the FTC in
In re Cliffdale
Assocs.
, 103 F.T.C. 110 (1984), which we have generally
adopted,
see FTC v. Pantron I Corp.
,
In the wake of this restitution award, Gugliuzza filed a voluntary petition for bankruptcy under Chapter 7 in November 2012. “Generally, a debtor is permitted to discharge all debts that arose before the filing of his bankruptcy petition,” Hawkins v. Franchise Tax Bd. , 769 F.3d 662, 666 (9th Cir. 2014) (citing 11 U.S.C. § 727(b)), but “the Bankruptcy Code provides for certain exceptions to that general rule,” id. (citing 11 U.S.C. § 523). One such exception is that debts obtained by “false pretenses, a false representation, or actual fraud” are not dischargeable. 11 U.S.C. § 523(a)(2)(A). [3] To establish nondischargeability [2] We affirmed the district court’s authority to enter the restitution order, but vacated the order and remanded because the district court did not “actually hold [Gugliuzza] jointly and severally liable for Commerce Planet’s restitution obligations.” FTC v. Commerce Planet, Inc. , 815 F.3d 593, 603 (9th Cir. 2016). On remand, the district court modified its order and held Gugliuzza jointly and severally liable for the restitution obligations.
[3] 11 U.S.C. § 523(a)(2)(A) provides, in pertinent part: (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition[.]
6
I N RE G UGLIUZZA
under § 523(a)(2)(A), a creditor must prove five elements:
“(1) misrepresentation, fraudulent omission or deceptive
conduct by the debtor; (2) knowledge of the falsity or
deceptiveness of his statement or conduct; (3) an intent to
deceive; (4) justifiable reliance by the creditor on the debtor’s
statement or conduct; and (5) damage to the creditor
proximately caused by its reliance on the debtor’s statement
or conduct.”
Turtle Rock Meadows Homeowners Ass’n v.
Slyman (In re Slyman)
,
In bankruptcy court, the FTC commenced an adversary
proceeding, which is “essentially [a] full civil lawsuit[]
carried out under the umbrella of the bankruptcy case,”
Bullard v. Blue Hills Bank
,
On appeal, the district court affirmed the bankruptcy court
in part, reversed in part, and remanded.
FTC v.
Gugliuzza (In re Gugliuzza)
,
II
We must first consider whether we have jurisdiction to
entertain Gugliuzza’s appeal.
Sahagun v. Landmark
Fence Co. (In re Landmark Fence Co.)
,
A
We have authority to hear appeals in bankruptcy cases under three different jurisdiction-conferring provisions, 28 U.S.C. §§ 1291, 1292, and 158(d)(1).
First, 28 U.S.C. § 1291 provides: “[t]he courts of appeals
(other than the United States Court of Appeals for the Federal
Circuit) shall have jurisdiction of appeals from all final
decisions of the district courts of the United States . . . ,
except where a direct review may be had in the Supreme
Court.” 28 U.S.C. § 1291. This section gives us “jurisdiction
over appeals from ‘final decisions by the district courts’
acting in any capacity.”
Conn. Nat’l Bank v. Germain
,
In the bankruptcy context, we have jurisdiction under
§ 1291 over appeals from rulings made by a district court
when it presides directly over a bankruptcy case.
See, e.g. Klenske v. Goo (In re Manoa Fin. Co.)
,
and, with leave of the court, from interlocutory orders and decrees , of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title. An appeal under this subsection shall be taken only to the district court for the judicial district in which the bankruptcy judge is serving. (Emphasis added.)
The repetition of the phrase “with leave of the court, from . . . interlocutory orders and decrees” appears to be an error introduced by the Bankruptcy Reform Act of 1994. As originally enacted in 1984, § 158(a) gave district courts jurisdiction to “hear appeals from final judgments, orders, and decrees, and, with leave of the court, from interlocutory orders and decrees . . . .” Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, § 104(a), 98 Stat. 333, 341. In the 1994 Act, Congress amended this provision to add the language of what is now § 158(a)(1)–(3), which includes the phrase: “with leave of the court, from other interlocutory orders and decrees,” see Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 102, 108 Stat. 4106, 4108. This redundancy *8 does not affect the subsection’s meaning.
10 I N RE G UGLIUZZA appellate capacity, jurisdiction over “interlocutory orders and decrees.” [5]
The scope of our jurisdiction under § 1291 is the same for
all district court rulings.
See Klestadt & Winters, LLP v.
Cangelosi
,
A second source of jurisdiction is provided by § 1292,
which authorizes appellate courts to hear appeals taken from
all interlocutory orders of specified types, 28 U.S.C.
§ 1292(a), as well as appeals of interlocutory orders that are
certified by the district court to meet specified criteria,
id.
§ 1292(b). This jurisdiction includes the authority to hear
appeals from a district court’s interlocutory orders issued in
a bankruptcy-appellate capacity.
Germain
,
[5]
Generally, an interlocutory order or decree may be appealed only
“with leave of the court.” 28 U.S.C. § 158(a)(3). However, an appeal
may be taken as of right from an interlocutory order and decree issued
under 11 U.S.C. § 1121(d), which provides for modification of the
exclusivity period in which only the debtor may propose a reorganization
plan. 28 U.S.C. § 158(a)(2);
see Bank of Am. Nat’l Trust & Sav. Ass’n v.
203 N. LaSalle St. P’ship
,
*9
In contrast to the grants of general jurisdiction under 28
U.S.C. § 1291 and § 1292, 28 U.S.C. § 158(d) gives us
jurisdiction specific to bankruptcy decisions of district courts
and decisions of three-judge bankruptcy appellate panels (or
BAPs).
[6]
Under § 158(d)(1), “[t]he courts of appeals shall
have jurisdiction of appeals from all final decisions,
judgments, orders, and decrees entered under subsections (a)
[defining the district courts’ jurisdiction] and (b) [defining the
jurisdiction of the bankruptcy appellate panels] of this
section.”
[7]
This language limits our appellate jurisdiction
under § 158(d)(1) to decisions, judgments, orders, and
decrees that are “final”; we have no authority under section
158(d)(1) to consider interlocutory orders and decrees.
See
Germain
,
[7] Section 158(b) (which provides for the establishment of a bankruptcy appellate panel) grants the BAP jurisdiction to hear appeals over “final judgments, orders, and decrees” as well as over “interlocutory orders and decrees” to the same extent as district courts sitting as appellate bodies in bankruptcy. See 28 U.S.C. § 158(b)(1). Accordingly, our jurisdiction under § 158(d) is the same whether the decision was entered by the BAP or, as here, by a district court.
[8] As noted in Germain , the jurisdiction provided to the federal circuit courts under § 1291 from final decisions of the district courts acting in any capacity overlaps with the jurisdiction conferred by § 158(d). This overlap notwithstanding, Germain held that interpreting § 1291 as
B
The Supreme Court has recently provided guidance on
how to interpret the scope of jurisdiction granted by § 158.
,
The debtor then appealed to the First Circuit, which dismissed the appeal for lack of jurisdiction. Id. The First Circuit reasoned that the denial of a plan confirmation was not a final order, so it lacked jurisdiction under § 158(d)(1), and the BAP had not certified the interlocutory order for review, so it also lacked jurisdiction under § 158(d)(2). Id.
On appeal to the Supreme Court, the debtor contended
that the First Circuit had jurisdiction under § 158(d) because
orders denying confirmation should be considered final
conferring the same jurisdiction as § 158(d) over final decisions of district
courts sitting as appellate bodies did not make § 1291 superfluous,
because § 158(d) “also confers jurisdiction over final decisions of the
appellate panels in bankruptcy acting under § 158(b).”
The Court acknowledged that the “rules are different in
bankruptcy,” but clarified that this difference arises because
“[a] bankruptcy case involves ‘an aggregation of individual
controversies,’ many of which would exist as stand-alone
lawsuits but for the bankrupt status of the debtor.” at 1692
(quoting 1 Alan N. Resnick & Henry J. Sommer, Collier on
*11
Bankruptcy ¶ 5.08[1][b], at 5-42 (16th ed. 2014)). That is,
because bankruptcy cases generally involve multiple parties
asserting a range of different claims, many of which are
litigated in discrete proceedings (including adversary
actions), “Congress has long provided that orders in
bankruptcy cases may be immediately appealed if they finally
dispose of discrete disputes within the larger case.”
Id.
(quoting
Howard Delivery Serv., Inc. v. Zurich Am. Ins. Co.
Bullard then provided guidance on how to discern whether a particular order was “immediately appealable” under § 158 by virtue of being final within a proceeding. Id. According to the Court, the relevant proceeding is one that results in a final order that “alters the status quo and fixes the rights and obligations of the parties.” Id. Plan confirmation satisfies this definition: “[w]hen the bankruptcy court confirms a plan, its terms become binding on debtor and creditor alike” with preclusive effect, often resulting in the vesting of property in the debtor and the distribution of funds to creditors. Id. at 1692; see id. at 1695 (holding that a plan confirmation order is appealable because it “alters the legal relationships among the parties”). Denial of confirmation followed by dismissal of the case also satisfies this definition, as “the consequences are similarly significant”: it “dooms the possibility of a discharge” and lifts the automatic stay. Id. at 1692–93. By contrast, “[a]n order denying confirmation is not final, so long as it leaves the debtor free to propose another plan.” Id. at 1692. Unlike the dramatic consequences flowing from either confirmation or dismissal, denial with leave to amend “changes little,” as “[t]he automatic stay persists” and “[t]he possibility of discharge lives on.” at 1693.
The Supreme Court then addressed the debtor’s argument that a distinct proceeding was conducted “[e]ach time the bankruptcy court reviews a proposed plan” such that the bankruptcy court’s order denying confirmation was therefore a final order within a proceeding for purposes of § 158(a), regardless whether the plan was confirmed or rejected. at 1692. Rejecting this argument, reasoned that such an approach “[did] not make much sense” because it defined “the pertinent proceeding so narrowly that the requirement of finality would do little work as a meaningful constraint on the
I N RE G UGLIUZZA 15 availability of appellate review.” Id. at 1693. By vastly expanding the class of immediately appealable orders, the debtor’s proposal gave rise to an unacceptable risk of piecemeal appeals, given that “debtors may often view . . . the prospect of appeals as important leverage in dealing with creditors.” Id. Judicial efficiency would also suffer under the debtor’s proposal. Given that “each climb up the appellate ladder and slide down the chute can take more than a year,” expanding the class of appealable orders would create precisely the “delays and inefficiencies” that finality rules sought to prevent in the first instance. Id.
For the same reason, the Court rejected the government’s argument that “an order resolving any contested matter is final and immediately appealable.” Id. at 1694 (emphasis omitted). Bullard explained that “the list of contested matters is ‘endless’ and covers all sorts of minor disagreements.” Id. (quoting 10 Resnick & Sommer, Collier on Bankruptcy ¶ 9014.01, at 9014-3). “The concept of finality cannot stretch to cover, for example, an order resolving a disputed request for an extension of time.” Id. The asymmetry produced by the Court’s analysis (plan confirmation is appealable as a final order while plan denial is not) was of little import. As explained, “it is of course quite common for the finality of a decision to depend on which way the decision goes.” Id . at 1694. For instance, “[a]n order granting a motion for summary judgment is final; an order denying such a motion is not.” Id .
The Court acknowledged that sometimes “a question will be important enough that it should be addressed immediately.” at 1695. Indeed, the Court noted that the issue in “could well fit the bill” because it “presented a pure question of law that had divided bankruptcy courts in the First Circuit and would make a substantial financial difference to the parties.” But neither the significance of the issue nor its purely legal nature warranted a more flexible finality standard; the availability of interlocutory review, such *13 as that provided under § 158(d)(2) and § 1292, was sufficient to address this concern. Id.
In sum,
Bullard
concluded that an order ending a
proceeding in a bankruptcy case is immediately appealable if
the order “alters the status quo and fixes the rights and
obligations of the parties,”
id.
at 1692, or “alters the legal
relationships among the parties,”
id.
at 1695. This
interpretation of finality in bankruptcy cases determines the
scope of the district court and BAP’s authority to hear appeals
“from final judgments, orders, and decrees” under § 158(a)(1)
as well as our authority to hear “appeals from all final
decisions, judgments, orders, and decrees” of bankruptcy
judges entered by the district court and BAP under
§ 158(d)(1), which are governed by the same constraints.
See
Powerex Corp. v. Reliant Energy Servs., Inc.
,
C
Our approach to determining jurisdiction under § 158(d)
is generally consistent with
Bullard
, as we have explained in
our post-
Bullard
decisions.
Eden Place, LLC v. Perl (In
re Perl)
, 811 F.3d 1120 (9th Cir. 2016);
In re Landmark
Fence
,
By contrast, when an appeal is taken from a district court
or BAP ruling that remands the case for further proceedings
in the bankruptcy court, we have applied a four-factor test,
considering “(1) the need to avoid piecemeal litigation;
(2) judicial efficiency; (3) the systemic interest in preserving
[9]
In re Four Seas Center
considered the scope of our jurisdiction
under a predecessor to § 158, 28 U.S.C. § 1293.
the bankruptcy court’s role as the finder of fact; and
(4) whether delaying review would cause either party
irreparable harm.”
Id.
at 1126 (quoting
In re Landmark
Fence
,
In
Landmark Fence
, our leading post- decision, a
district court held that a bankruptcy court had applied an
incorrect legal standard for assessing an element of damages
and remanded for “additional fact finding.”
Id.
at 1102. On
appeal, we concluded that we lacked jurisdiction over the
district court’s order. at 1101. Most important, we held
that the first factor, “the risk of piecemeal litigation” weighed
heavily in favor of the conclusion that the district court’s
order was not final: “When an intermediate appellate court
remands a case to the bankruptcy court, the appellate process
likely will be much shorter if we decline jurisdiction and
await ultimate review of all the combined issues.” at 1103
(quoting
Stanley v. Crossland, Crossland, Chambers,
MacArthur & Lastreto (In re Lakeshore Vill. Resort, Ltd.)
We have departed from this general rule in situations
“where the district court’s remand order is limited to ‘purely
mechanical or computational
task[s] such that the
proceedings on remand are highly unlikely to generate a new
appeal.’”
In re Landmark Fence
,
D
Gugliuzza argues that in evaluating whether the district
court’s order qualifies as a final order, we are not bound by
and
Landmark Fence
, but should apply a different
line of cases beginning with
Bonner Mall Partnership v. U.S.
Bancorp Mortgage Co. (In re Bonner Mall Partnership)
We subsequently asserted jurisdiction over interlocutory
remand orders under the second prong of the
Bonner Mall
test: whether the remand would “materially aid” the
bankruptcy court in considering a factual issue. In
Dawson
v. Washington Mutual Bank, F.A. (In re Dawson)
, for
instance, two debtors filed an adversary action against a
creditor claiming that the creditor had violated the automatic
stay by foreclosing on property owned by the debtors’
relatives.
In considering whether we had jurisdiction to hear an
appeal from the district court’s order, we acknowledged that
the “district court reversed the bankruptcy [court] on a central
issue in the case . . . and remanded the case for further factual
findings.”
Id.
at 1145. Nevertheless, we noted that the case
raised a legal question: “When, if ever, are damages for
emotional distress recoverable under 11 U.S.C. § 362(h) for
a violation of the automatic stay?” While recognizing
that “[o]ur answer will not obviate the need for all further
fact-finding,” we concluded that our resolution of this
question would “materially aid the bankruptcy court in
reaching its disposition on remand” (the second prong of the
Bonner Mall
test), and therefore asserted jurisdiction. at
1145–46;
see also Meyer v. U.S. Trustee (In re Scholz)
,
We went even further in
Price v. Lehtinen (In re
Lehtinen)
, in which we indicated that we may assert
jurisdiction over an appeal of an interlocutory BAP order
whenever “the appeal concerns primarily a question of law.”
In sum, under Bonner Mall and its progeny, we have determined that “final decisions, judgments, orders, and decrees” for purposes of our jurisdiction under § 158(d) include district court or BAP decisions remanding a central issue to the bankruptcy court for further fact-finding so long as the appeal raises a “purely legal question” or our decision on appeal could “materially aid” the bankruptcy court in its decisionmaking process.
E and Landmark Fence clearly limit the
applicability of the
Bonner Mall
line of cases.
Bullard
provides that orders that are technically interlocutory are
“final” for purposes of § 158 only when they “finally dispose
of [a] discrete dispute[] within the larger case,”
Finally, although the Supreme Court gave weight to
considerations regarding the efficiency of the judicial
process, it chose not to adopt a case-by-case approach to this
issue. Rather than evaluate whether the appeal of a specific
ruling would be efficient in a particular case, the Court
adopted the general principle that only decisions that alter the
status quo or fix the parties’ rights and obligations could be
appealed.
[10]
Bullard
,
Accordingly, to the extent
Bonner Mall
holds that we
have jurisdiction over an interlocutory order in a bankruptcy
case because ruling on a legal issue could “dispose of the
case” or “aid the bankruptcy court in reaching its
disposition,”
In re Bonner Mall
, 2 F.3d at 904, or merely
because the appeal involves “a purely legal question,”
In re
Lehtinen
,
III
We now apply these principles to this case, and consider
whether we have jurisdiction over the district court’s order
reversing in part and remanding to the bankruptcy court to
determine whether Gugliuzza had an intent to deceive.
We have no difficulty concluding that we lack jurisdiction
under §§ 1291 and 1292. We do not have jurisdiction under
§ 1291 because the district court’s order did not “end[] the
litigation on the merits and leave[] nothing for the district
court to do but execute the judgment.’”
In re Bender
We next turn to the question whether we have jurisdiction
under § 158(d)(1). The district court’s decision did not end
the bankruptcy case as a whole, but as noted in , a
*21
“technically interlocutory” ruling can be deemed to be a final
order in a bankruptcy case.
In re Perl
,
The bankruptcy court’s task on remand here, to determine
whether Gugliuzza had the requisite intent to deceive, is not
a mere “mechanical or computational task[] such that the
proceedings on remand are highly unlikely to generate a new
appeal.”
In re Landmark Fence
,
Moreover, it is doubtful that an interlocutory district court order can cause irreparable harm in light of the “parties’ rights and obligations remain[ing] unsettled,” , 135 S. Ct. at 1693, and the availability of mechanisms for interlocutory review, see id. at 1695–96. Indeed, Gugliuzza has conceded the lack of irreparable harm in this case.
Finally, we reject Gugliuzza’s argument that because the
issues on appeal in this case are purely legal in nature, and
our disposition of these issues could aid the bankruptcy court
by allowing it to aggregate all necessary fact-finding into a
single proceeding, the district court’s order should be deemed
“final” for purposes of § 158(d) under
Bonner Mall
. The
decision by the district court in this case does not mark the
conclusion of a discrete proceeding or fix the rights and
obligations of any party, , 135 S. Ct. at 1692, and
otherwise does not meet the standards set forth in
Landmark
Fence
. This four-factor test controls, even when a “case
arguably falls within” an exception to non-finality adopted in
the
Bonner Mall
line of cases.
Walthall v. United States
IV
While we have recognized the need to take a pragmatic
approach to asserting jurisdiction over orders in bankruptcy
cases under § 158(d), we have long held that where the
district court’s decision “remanded to allow the bankruptcy
judge more accurately to determine the respective rights and
obligations of the parties,” then we “need not depart from the
usual finality doctrines of 28 U.S.C. § 1291,” and lack
jurisdiction over the appeal.
In re Martinez
,
APPEAL DISMISSED.