Michegan State University v. Asbestos Settlement Trust ( 2012 )

Case: 10-13641 Date Filed: 11/06/2012 Page: 1 of 6
[PUBLISH]
IN TITE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 10-13641
D.C. Docket No. 8:09-cv-02444-EAK
In re: THE CELOTEX CORPORATION,
The Asbestos Settlement Trust, I
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Debtor.
A/(.V - b2012
MICHIGAN STATE UNIVERSITY,
PRINCE GEORGES' COMMUNITY COLLEGE,
ROCHESTER INSTITUTE OF TECHNOLOGY,
UNIVERSITY OF CINCINNATI,
FAIRFIELD UNIVERSITY,
CLAREMONT MCKENNA COLLEGE,
Plaintiffs - Appellants,
versus
ASBESTOS SETTLEMENT TRUST,
Defendant - Appellee.
Appeal from the United States District Court
for the Middle District of Florida
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Before BARKETT and JORDAN, Circuit Judges, and HALL, District Judge.
PER CURIAM:
This appeal arises out of a bankruptcy court proceeding involving the
Asbestos Settlement Trust ("Trust"), which was created in bankruptcy court in
1996 to pay asbestos mass tort claims for both bodily injury and property damage
against Celotex Corporation and Carey Canada, Inc. Several educational
institutions, including Michigan State University, Prince George's College,
Rochester Institute of Technology, The University of Cincinnati, Fairfield
University, and Claremont McKenna College (collectively, the "Colleges") filed
property damage claims against the Trust. The claims of the Colleges were denied
by the Trust on the grounds that they did not satisfy the legal prerequisites for
payment. The Colleges objected and the Trust sought the bankruptcy court's
review, filing for declaratory relief in an adversary proceeding. Several years later
and based on this Court's decision in a related proceeding, Asbestos Settlement
Trust v. City of New York (In re Celotex Corp.). 487 F.3d 1320 (11th Cir 2007),
the Trust reversed course and agreed to pay the Colleges under a formula used in
In re Celotex Corp.
Having paid the claims, the Trust moved to dismiss the declaratory relief
adversary proceeding in the bankruptcy court. The Colleges, however, objected to
* Honorable James Randal Hall, United States District Judge for the Southern District of
Georgia, sitting by designation.
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the dismissal, claiming that the payment was insufficient because it did not include
interest at the federal judgment rate or damages for the breach of fiduciary duty
they asserted when their initial claim was denied. The bankruptcy court held that
the plan governing the Trust did not provide for interest and dismissed the
declaratory judgment adversary proceeding, but without prejudice to the Colleges'
right to pursue their damages claim in a new bankruptcy court proceeding.1
The Colleges then filed a motion for leave to sue the Trust for damages in a
different forum than the bankruptcy court; one that would permit them to try their
claim for damages before a jury. The bankruptcy court denied the motion holding
that it had exclusive jurisdiction, pursuant to 11 U.S.C. § 524(g) and the terms of
the Joint Plan of Reorganization, over the breach of fiduciary duty and other
related claims against the Trust. The Colleges appealed the bankruptcy court's
jurisdictional ruling to the district court, which construed the Colleges' notice of
appeal as a motion for leave to appeal from an interlocutory bankruptcy court
1The Colleges appealed the ruling onthe interest rate payment claim but the bankruptcy court's
dismissal was affirmed by the district court, see Claremont McKenna College v. Asbestos
Settlement Trust fin re Celotex Corp.). No. 08-2343 (M.D. Fla. March 18, 2009), and this Court,
see Claremont McKenna College v. Asbestos Settlement Trust fin re Celotex Corp.). 613 F.3d
1318 (11th Cir. 2010).
2Out ofcaution, the Colleges, with Southern Wesleyan University acting in the capacity as the
Colleges' purported class representative, thereafter filed a separate adversary proceeding in the
bankruptcy court raising their breach of fiduciary duty claim. The bankruptcy court dismissed
that adversary proceeding, concluding that SWU did not have standing to bring the claim as the
Colleges' class representative, which ruling the district court affirmed. SWU appealed the
district court's order to our Court, which we have addressed in a separate opinion in the related
appeal. Southern Wesleyan University v. Asbestos Settlement Trust. No. 11-13737.
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order, pursuant to 28 U.S.C. § 158(a)(3). The district court denied the Colleges'
motion to appeal, concluding that the bankruptcy court's jurisdiction order did not
meet the statutory conditions necessary for the court to exercise its discretion to
grant the appeal ofthe non-final, interlocutory order, and dismissed the appeal.3
The Colleges now appeal from the district court's dismissal of their appeal from
the bankruptcy court's jurisdiction order.
"Although a district court, at its discretion, may review interlocutory
judgments and orders of a bankruptcy court, see 28 U.S.C. § 158(a), a court of
appeals has jurisdiction over only final judgments and orders entered by a district
court or a bankruptcy appellate panel sitting in review of a bankruptcy court, see §
158(d)." In re F.D.R. Hickory House. Inc.. 60 F.3d 724, 725 (11th Cir. 1995)
(emphasis added). See also In re Donovan. 532 F.3d 1134, 1136 (11th Cir. 2008)
(same): In re TCL Investors. 775 F.2d 1516. 1519 (11th Cir. 1985) (same); cf Jove
Eng'g. Inc. v. IRS. 92 F.3d 1539,1547 (11th Cir. 1996) (stating that § 158(d)
"grants [the circuit court] jurisdiction of appeals only where the district court
exercised appellate jurisdiction from a decision by a bankruptcy judge."). Neither
of the parties' briefs directly address whether, pursuant to 28 U.S.C. § 158(d), we
3District courts have discretionary jurisdiction to hear appeals from interlocutory orders and
decrees of bankruptcy judges. See 28 U.S.C. § 158(a).
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have jurisdiction to consider the Colleges' appeal ofthe district court's order.4
Nonetheless, because "we are obligated to consider jurisdiction even if it means
raising the issue sua sponte." we must determine whether the district court's order
is final or meets one of this circuit's exceptions to the final judgment rule. See In
re Donovan. 532 F.3d at 1136; see also In re F.D.R. Hickory House. Inc.. 60 F.3d
at 725.
A final judgment or order is "one which ends the litigation on the merits and
leaves nothing for the courtto do but execute the judgment." See Catlin v. United
States. 324 U.S. 229, 233 (1945): see also In re TCL Investors. 775 F.2d at 1519(applying Caitlin's finality rule in the bankruptcy appeals context). We have
explained that "to be final, a bankruptcy court order must completely resolve all of
the issues pertaining to a discrete claim, including issues as to the proper relief."
In re Donovan. 532 F.3d at 1136-37 (internal quotation marks omitted).
Here, whether it is the district court's order denying the Colleges leave to
appeal the bankruptcy court's interlocutory order or it is the bankruptcy court's
jurisdiction order under consideration, we cannot say that either of these orders are
"final" for purposes of our jurisdiction under 28 U.S.C. § 158(d). The bankruptcy
4 The Trust cites to In re Charter Co.. 778 F.2d 617,620 (11th Cir. 1985), for the proposition
that the appeals court reviews for an abuse of discretion, the district court's denial of a motion
for leave to file an interlocutory appeal. Although the Court in In re Charter Co.. did apply an
abuse ofdiscretion standard, the Court never addressed, as we do here, the preliminary
jurisdictional question of whether a district court's discretionary denial of a motion for leave to
appeal an interlocutory bankruptcy court order is a "final judgment or order" pursuant to 28
U.S.C. 158(d).
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court's ruling that it has exclusive jurisdiction to adjudicate the Colleges' breach of
fiduciary duty and other related claims for damages certainly does not resolve the
litigation on the Colleges' claim. It merely identifies the forum in which the claim
will be heard. Likewise, the district court?s order, which concluded that the
bankruptcy's jurisdiction order was interlocutory and did not satisfy the standards
necessary for the court to exercise its discretion to grant the appeal, does not
resolve the merits of the Colleges' claim against the Trust. See In re Kassover. 343
F.3d 91,94-95 (2d Cir. 2003) (explaining that a circuit court lacks jurisdiction to
review a district court's denial of leave to appeal under 28 U.S.C. § 158(a)(3)).
Instead, the district court merely remanded the matter to the bankruptcy court for
further proceedings where the Colleges could pursue their damages claims against
the Trust.5
Because neither the district court order nor the bankruptcy court order is a
final judgment or order and because neither order falls within any of the exceptions
to this circuit's final judgment rule, we lack jurisdiction to review these orders.
Accordingly, this appeal is DISMISSED.
5 Michigan State argues that the bankruptcy court's order regarding its exclusive jurisdiction
over the breach of fiduciary duty claim is not an interlocutory order but rather is a decisionthat
meets theexception to the final judgment rule of 28 U.S.C. § 1291 as enunciated by the Supreme
Courtin Cohenv. Beneficial Indus. LoanCorp.. 337 U.S. 541 (1949). We do not agreethat the
bankruptcy court's order,whichmerely required the parties to resolve their dispute in the
bankruptcycourt rather than some other forum, "fall[s] in that small class" of decisions which
determine rights that are separate from the merits of the case and that are "too important to be
denied review and too independent of the cause itselfto require that appellate consideration be
deferred until the whole case is adjudicated." Cohen. 337 U.S. at 546.
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