March 27, 2014 Articles

Applying the Doctrine of Exclusive Appellate Jurisdiction to Bankruptcy Appeals

Identify what can hurt clients when you prosecute an appeal.

By Gregory W. Werkheiser and Christopher M. Hayes

In civil litigation, except in those rare instances in which review of an interlocutory or collateral order is authorized, appeals are prosecuted only after the entry of a final judgment terminating the entire case. Bankruptcy appeals, however, are often of a different species altogether. In bankruptcy cases, courts generally take what has been labeled a “pragmatic” or “flexible” approach to determining which orders are deemed final and immediately appealable. See, e.g., In re Lehman Bros. Holdings, Inc., 697 F.3d 74, 77 (2d Cir. 2012); In re McKinney, 610 F.3d 399, 402 (7th Cir. 2010); In re Blatstein, 192 F.3d 88 (3d Cir. 1999). Thus, it is possible to be prosecuting an appeal of one order while the action in the underlying bankruptcy case continues as to other matters.

In substance, this means that the bankruptcy appellate litigator must have eyes in the back of his or her head to maintain a heightened awareness of events transpiring in the bankruptcy case during the pendency of the appeal. To paraphrase a line from the omnipresent ad of a certain insurance company (not the one with the gecko), when pursuing a bankruptcy appeal, “what you don’t know [about events in the bankruptcy case] can hurt you.”

This article endeavors to help bankruptcy practitioners identify some of the things that can hurt them and their clients when prosecuting an appeal while the underlying bankruptcy case continues. To that end, this article briefly reviews the doctrine of exclusive appellate jurisdiction, before examining some of the ways the pragmatic concept of finality affect the application of the exclusive appellate jurisdiction doctrine in bankruptcy proceedings.

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