Rhino Energy v. C.O.P. Coal Development

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT September 16, 2016
_________________________________
Elisabeth A. Shumaker
Clerk of Court
In re: C.W. MINING COMPANY,
Debtor.
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RHINO ENERGY LLC; CASTLE
VALLEY MINING LLC,
Plaintiffs - Appellees,
v. No. 15-4108
(D.C. No. 2:13-CV-00924-TC)
C.O.P. COAL DEVELOPMENT (D. Utah)
COMPANY; ANR COMPANY, INC.,
Defendants - Appellants.
_________________________________
ORDER
_________________________________
Before PHILLIPS, McHUGH, and MORITZ, Circuit Judges.
_________________________________
Our jurisdiction to hear bankruptcy appeals is limited to appeals from final
decisions, judgments, orders, and decrees entered by the district court. 28 U.S.C.
§ 158(d)(1) (2012). A district court’s order is not final if it remands to the bankruptcy
court for significant further proceedings. Cascade Energy & Metals Corp. v. Banks
(In re Cascade Energy & Metals Corp.), 956 F.2d 935, 937 (10th Cir. 1992). We
must determine whether the district court’s order reversing the bankruptcy court’s
order is final. Because the district court remanded for significant further proceedings,
we lack jurisdiction under 28 U.S.C. § 158(d)(1) and dismiss this appeal.1
BACKGROUND
This case presents an appeal involving the bankruptcy estate of C.W. Mining
Company, a former coal-mining operator in Utah. Rhino Energy LLC and Castle
Valley Mining LLC (collectively referred to as Rhino) purchased certain assets from
the bankruptcy estate, including leases with C.O.P. Coal Development Company and
ANR Company, Inc. (collectively referred to as COP). After COP claimed that Rhino
defaulted under those leases, Rhino filed an adversary proceeding in C.W. Mining
Company’s bankruptcy, seeking a declaratory judgment defining its obligations to
COP.2 In response, COP filed seven counterclaims against Rhino.3 Though Rhino
sought summary judgment on its claims, the bankruptcy court did not resolve any
1
Although we lack jurisdiction over this appeal, “we have jurisdiction to
determine our own jurisdiction.” Combs v. PriceWaterhouseCoopers LLP, 382 F.3d
1196, 1204 (10th Cir. 2004).
2
Rhino’s amended adversary complaint asserted claims for: (1) declaratory
judgment as to the royalties owed under the operating agreement with COP Coal
Development Company; (2) declaratory judgment as to the royalties owed under the
operating agreement with ANR Company, Inc.; (3) declaratory judgment as to an
alleged default for changing the mining practices under the Resource Recovery and
Protection Plan; (4) declaratory judgment as to notice of alleged default of the
continuous operations clause and other miscellaneous alleged defaults; (5) issuance
of an injunction against COP from issuing notice of termination or forfeiture; and
(6) declaratory judgment against COP as to claims for damages based on the
Resource Recovery and Protection Plan.
3
COP asserted counterclaims for: (1) breach of contract; (2) breach of the
implied covenant of good faith and fair dealing; (3) unjust enrichment;
(4) conversion; (5) negligence; (6) trespass; and (7) intentional interference with
economic relations.
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claims on summary judgment. Instead, it dismissed four of Rhino’s claims and all of
COP’s counterclaims for lack of jurisdiction. Specifically, the bankruptcy court
dismissed claims three through six in Rhino’s amended adversary complaint. The
bankruptcy court did not dismiss Rhino’s first and second claims, which sought a
declaratory judgment regarding the amount of royalties owed to COP.
In reversing the bankruptcy court, the district court held that the bankruptcy
court erred in concluding that it lacked jurisdiction to hear Rhino’s claims and COP’s
counterclaims. Thus, the district court remanded this case to the bankruptcy court to
consider Rhino’s summary-judgment motion on the merits. Rather than accept the
district court’s remand to litigate in the bankruptcy court, COP filed this appeal,
challenging the district court’s ruling that the bankruptcy court has jurisdiction to
resolve the issues before it. In response to COP’s notice of appeal, Rhino filed a
motion to dismiss for lack of jurisdiction, arguing that the district court’s order is not
final.
DISCUSSION
Because the district court remanded for significant further proceedings, the
district court’s order is not a final appealable order under 28 U.S.C. § 158(d)(1).
Also, the collateral-order doctrine does not apply because the district court’s order is
ultimately reviewable on appeal.
Our jurisdiction extends only to appeals from final orders of the district court.
28 U.S.C. § 158(d)(1). If the district court’s order is not final, we must dismiss the
appeal for lack of jurisdiction. Strong v. W. United Life Assurance Co. (In re Tri-
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Valley Distrib., Inc.), 533 F.3d 1209, 1214 (10th Cir. 2008). To determine whether an
order is final, we must consider whether the district court remanded the case to the
bankruptcy court for significant further proceedings. State Bank of Spring Hill v.
Anderson (In re Bucyrus Grain Co., Inc.), 905 F.2d 1362, 1365 (10th Cir. 1990). A
district court remands for significant further proceedings when a bankruptcy court
must decide claims in the first instance. Cascade Energy & Metals Corp., 956 F.2d at
937.
Here, we do not have jurisdiction because the district court remanded for
significant further proceedings. The bankruptcy court dismissed the claims and
counterclaims in the adversary proceeding for lack of subject-matter jurisdiction
without ruling on the merits of the claims. The district court reversed the bankruptcy
court, concluding that the bankruptcy court had jurisdiction over Rhino’s claims and
COP’s counterclaims. “[A] district court order reversing and remanding a bankruptcy
court's order dismissing an adversary proceeding for lack of subject matter
jurisdiction is not a final order for purposes of § 158(d).” Id. Instead, “[s]ignificant
further proceedings will be had in the bankruptcy court [because] the court must
decide [the] claims in the first instance.” Id.; see also In re Tri-Valley Distrib., Inc.,
533 F.3d at 1214 (explaining that when a bankruptcy court dismisses for lack of
jurisdiction, and the bankruptcy appellate panel reverses, the panel’s order is not final
because significant further proceedings will occur in the bankruptcy court).
The procedural posture of this case is similar to that in Cascade Energy &
Metals Corp., 956 F.2d at 937. There, the bankruptcy court granted summary
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judgment to the debtor on a judgment-lien issue, but concluded that it lacked subject-
matter jurisdiction over the remaining claims. Id. The district court determined that
the bankruptcy court had jurisdiction over the claims and reversed the bankruptcy
court’s dismissal of the claims. Id. Like COP in this case, the defendant in Cascade
Energy & Metals Corp. appealed the district court’s order to this court. We dismissed
the appeal and stated that the district court’s reversal of the bankruptcy court’s
dismissal for lack of subject-matter jurisdiction was not a final appealable order
under § 158(d). Id. at 937, 939.
As in Cascade Energy & Metals Corp., COP and ANR appeal from a district
court order reversing and remanding a bankruptcy court’s order dismissing an
adversary proceeding for lack of subject-matter jurisdiction. Like in Cascade Energy
& Metals Corp., significant further proceedings will occur in the bankruptcy court
because it must decide claims in the first instance. Therefore, just as we held in
Cascade Energy & Metals Corp., the district court’s order is not final, meaning we
lack jurisdiction to consider this appeal.
Appellants also argue that we should exercise our discretion to hear this appeal
under the collateral-order doctrine. But the collateral-order doctrine does not apply
because the district court’s order is ultimately reviewable on appeal. To qualify as a
collateral order, “the order must conclusively determine the disputed question …,
resolve an important issue completely separate from the merits of the action, and be
effectively unreviewable on appeal from a final judgment.” Tri-Valley Distrib., Inc.,
533 F.3d at 1215 (quoting In re Magic Circle Energy Corp., 889 F.2d 950, 954 (10th
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Cir. 1989)). We have explained that an “[a]ppellant[’]s remedy is to challenge the
bankruptcy court’s exercise of jurisdiction by bringing an appeal from the final
judgment ultimately rendered by that court.” Cascade Energy & Metals Corp., 956
F.2d at 937 (quoting Magic Circle, 889 F.2d at 954). Therefore, because the order is
effectively reviewable on appeal, the collateral-order doctrine is inapplicable.
CONCLUSION
Rhino’s motion to dismiss for lack of jurisdiction is GRANTED and this
appeal is DISMISSED for lack of appellate jurisdiction.
Entered for the Court
Gregory A. Phillips
Circuit Judge
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