Caldwell-Baker Co v. Parsons, Fred L. ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 04-1546
THE CALDWELL-BAKER COMPANY;
BAKER GROUP, L.C.; and CARLE E.
BAKER, JR., as Trustee of the MTY
Profit Sharing Plan & Trust,
Plaintiffs-Appellants,
v.
FRED L. PARSONS,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 03-CV-00471-DRH—David R. Herndon, Judge.
____________
ARGUED NOVEMBER 30, 2004—DECIDED DECEMBER 16, 2004
____________
Before BAUER, POSNER, and EASTERBROOK, Circuit
Judges.
EASTERBROOK, Circuit Judge. Caldwell-Baker Company
and affiliates (collectively Caldwell-Baker) leased several
hundred railroad cars to Southern Illinois Railcar Company.
When the business relation went sour, Caldwell-Baker sued
the Railcar Company plus Fred Parsons, its manager and
principal investor, for breach of contract and fraud. (For
some of the details, see Caldwell-Baker Co. v. Southern
2 No. 04-1546
Illinois Railcar Co., 225 F. Supp. 2d 1243 (D. Kan. 2002).)
Both the corporation and Parsons now are debtors in bank-
ruptcy, and Caldwell-Baker has filed adversary proceedings
seeking damages; it also wants orders denying discharge.
There are two bankruptcy proceedings—one for the corp-
oration and an identically named limited liability company,
the other for Parsons. We call these the “corporate bank-
ruptcy” and the “personal bankruptcy.” Bankruptcy Judge
Meyers is handling both, but appeals under 28 U.S.C.
§158(a) have been assigned to different district judges—
Judge Reagan in the corporate bankruptcy, Judge Herndon
in the personal bankruptcy.
All three debtors have moved to dismiss the adversary
proceedings. Caldwell-Baker asked the district judges to
withdraw the references and adjudicate the claims them-
selves under 28 U.S.C. §157(d). Withdrawing the references,
Caldwell-Baker contended, would enable it to receive jury
trials. Before the district judges had ruled on these re-
quests, Bankruptcy Judge Meyers dismissed both adversary
proceedings. On appeal in the corporate bankruptcy,
District Judge Reagan affirmed in part and remanded in
part; because of the remand, his decision is not “final” and
cannot yet be appealed to us under 28 U.S.C. §158(d). On
appeal in the personal bankruptcy, District Judge Herndon
has yet to render a decision. But he has denied the motion
to withdraw the reference, concluding that he will act in an
appellate rather than an original role.
Caldwell-Baker filed a notice of appeal from Judge
Herndon’s order denying the motion to withdraw—and it
contends that, because Judge Herndon referred to Judge
Reagan’s decision, the notice authorizes us to review that
order as well. Pendent appellate jurisdiction has not flour-
ished since Swint v. Chambers County Commission, 514
U.S. 35, 43-51 (1995). Though we have held that a vestige
of the doctrine survives, see Montano v. Chicago, 375 F.3d
593, 599-600 (7th Cir. 2004), this claim would have been
No. 04-1546 3
baseless even before Swint. See United States ex rel. Valders
Stone & Marble, Inc. v. C-Way Construction Co., 909 F.2d
259, 262 (7th Cir. 1990). The corporate bankruptcy and the
personal bankruptcy are different pieces of litigation. To our
knowledge, no appellate court has reviewed an order in
Case #2 as “pendent” to an order in Case #1, and we cannot
imagine any circumstances that would justify such a step.
A timely and proper notice of appeal is a jurisdictional
necessity. See Torres v. Oakland Scavenger Co., 487 U.S.
312 (1988). Caldwell-Baker’s notice was filed in Judge
Herndon’s case, not Judge Reagan’s.
So the only decision even arguably within our jurisdiction
is Judge Herndon’s order declining to withdraw the re-
ference of the personal bankruptcy. And that order, which is
not a final decision by any stretch of the imagination, may
not be appealed under 28 U.S.C. §1291. (Section 158(d) does
not apply, because a motion to withdraw the reference
invokes the district judge’s original rather than appellate
jurisdiction in bankruptcy; anyway, both §158(d) and §1291
limit appeals to district courts’ final decisions.) No court of
appeals has engaged in appellate review of an order either
granting or denying withdrawal of a reference. See Tringali
v. Hathaway Machinery Co., 796 F.2d 553, 559 (1st Cir.
1986) (grant is not final); In re Chateaugay Corp., 826 F.2d
1177 (2d Cir. 1987) (neither grant nor denial is final); In re
Pruitt, 910 F.2d 1160, 1165-66 (3d Cir. 1990) (grant is not
final); In re Lieb, 915 F.2d 180, 184 (5th Cir. 1990) (denial
is not final); In re McGaughey, 24 F.3d 904, 908 (7th Cir.
1994) (grant is not final); Abney v. Kissel Co., 105 F.3d 1324
(9th Cir. 1997) (denial is not final); In re Dalton, 733 F.2d
710, 714-15 (10th Cir. 1984) (grant is not final); In re King
Memorial Hospital, Inc., 767 F.2d 1508, 1510 (11th Cir.
1985) (denial is not final).
The adversary proceeding continues; it is under advise-
ment before Judge Herndon. If he affirms, that decision will
be final because the adversary proceeding will be over, and
4 No. 04-1546
Caldwell-Baker then can argue to us (if it still matters) that
Judge Herndon should have acted in an original rather than
an appellate capacity. The order denying immediate
withdrawal is no more a “final decision” than an order de-
nying summary judgment or denying a request for addi-
tional discovery; the litigation proceeds and the issue will
be reviewed if it turns out to make a difference to an order
that is independently appealable. See In re Powelson, 878
F.2d 976 (7th Cir. 1989). What Caldwell-Baker really wants
is not review of the procedural decision about which court
would make the initial substantive decision, but review of
the substantive decision itself. Most of Caldwell-Baker’s
brief is devoted to substance. But whether the adversary
complaint presents a viable claim is the very issue still
pending before Judge Herndon. It would be premature for
us to weigh in.
According to Caldwell-Baker, rules deferring appellate
review until entry of a final decision are out the window
because it wants a jury trial, which it believes is possible
only if a district judge rather than a bankruptcy judge
handled the proceeding. Of course, neither court would af-
ford a jury trial if the claim fails at the pleading stage or on
summary judgment, as Bankruptcy Judge Meyers found.
Only at the end will it be clear whether Caldwell-Baker has
presented the sort of contention in which withdrawal of the
reference might make a difference. That’s one of the many
reasons why the cry “I want a jury trial!” does not dispense
with a need for finality. See, e.g., First National Bank of
Waukesha v. Warren, 796 F.2d 999 (7th Cir. 1986); Moens
v. FDIC, 800 F.2d 173, 175-76 (7th Cir. 1986). If denial of a
jury trial threatens injury that is irreparable in the sense
that appellate review would not avail—perhaps because the
judge’s decision would be preclusive in some other piece of
litigation—then mandamus could be available. See Beacon
Theatres, Inc. v. Westover, 359 U.S. 500, 511 (1959); Dairy
Queen, Inc. v. Wood, 369 U.S. 469, 472 (1962). Our opinion
No. 04-1546 5
in Bank of Waukesha covers this subject in depth.
Caldwell-Baker does not face any adverse effect that could
not be repaired on appeal in the regular course. If it is
entitled to a jury trial but does not receive one, that claim
can be vindicated on appeal from a final decision. See
Allegheny International, Inc. v. Allegheny Ludlum Steel
Corp., 920 F.2d 1127, 1133-34 (3d Cir. 1990). Many kinds of
error may require retrials; the prospect that two trials will
be necessary does not make the final-decision rule vanish.
Interlocutory decisions often become irrelevant before the
case’s end; that’s a reason to defer rather than accelerate
appellate review.
The appeal is dismissed for want of jurisdiction.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-16-04