Third Circuit Denies Debtors' Appeal from Order Denying Request for Hearing on Chapter 7 Trustee's Eligibility to Serve, Finding That Order Was Not Final and Jurisdiction Was Therefore Lacking
In re Truong, 513 F.3d 91 (3d Cir. 2008) (per curiam) (Precedential)
The debtors in this Chapter 7 case filed a motion in the Bankruptcy Court to hold a hearing on whether the Chapter 7 Trustee should be removed under 11 U.S.C. § 324 (a) because of a conflict of interest. The Bankruptcy Court denied the motion, and the District Court dismissed the debtors’ appeal. The Third Circuit held that the appeal was from an interlocutory appeal, and that it therefore lacked jurisdiction under 28 U.S.C. § 158(d).
In this Chapter 7 case, the debtors filed a motion to hold a hearing to determine whether there was cause to remove the Chapter 7 trustee because of the debtors’ allegations that there was a conflict of interest between the trustee and the assets of the bankruptcy estate. The United States Bankruptcy Court for the District of New Jersey denied the debtors’ motion for a hearing. The District Court dismissed the debtors’ appeal from the order because the debtors failed to follow the procedural requirements of Fed. R. Bankr. P. 8001(a). The debtors also filed a motion for reconsideration, which the District Court denied. The debtors then filed a timely notice of appeal to the United States Court of Appeals for the Third Circuit. The threshold question before the Third Circuit was whether the Bankruptcy Court order was a final order over which the District Court and Third Circuit possessed jurisdiction under 28 U.S.C. § 158.
Under section 158(d), a United States Circuit Court of Appeals only possesses jurisdiction over an appeal from a final order; the Court lacks jurisdiction over appeals from interlocutory orders. The inquiry, therefore, was whether the Bankruptcy Court order was final.
The Third Circuit held that the Bankruptcy Court order was interlocutory because it did not dispose of any discrete claim or cause of action. Instead, it related only to the conduct of litigation before the Court, and was therefore not a final, appealable order. Accordingly, the Court held that it lacked jurisdiction under section 158(d), and dismissed the appeal on that basis.
