California Public Employees' Retirement System v. City of San Bernardino

260 F. Supp. 3d 1216
CourtDistrict Court, C.D. California
DecidedDecember 13, 2013
DocketCase No. CV 5:13-01952 DMG; Bankruptcy Case No. CV 6:12-28006 MJ
StatusPublished
Cited by2 cases

This text of 260 F. Supp. 3d 1216 (California Public Employees' Retirement System v. City of San Bernardino) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Public Employees' Retirement System v. City of San Bernardino, 260 F. Supp. 3d 1216 (C.D. Cal. 2013).

Opinion

ORDER RE APPELLANT’S MOTION FOR LEAVE TO APPEAL AND MOTION REQUESTING CERTIFICATION FOR DIRECT APPEAL TO NINTH CIRCUIT

DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Appellant California Public Employees’ Retirement -System’s (“CalPERS”) motion for leave to appeal and motion requesting 'certification for direct appeal to the Unites States Court of Appeals for the Ninth Circuit. [Doc. ## 3, 6.] The Court held a [1218]*1218hearing on the motions on December 13, 2013.

Having duly considered the respective positions of the parties, the Court now renders its decision. For the reasons set forth below, the motion for leave to appeal is GRANTED, and the motion requesting certification for direct appeal to the Ninth Circuit is DENIED as moot.

I.

PROCEDURAL HISTORY1

On August 1, 2012, the City of San Bernardino (“the City”) filed its petition for bankruptcy protection under chapter 9 of the Bankruptcy Code in the Central District of California. CalPERS filed objections to the City’s eligibility for relief on two grounds: (1) the City did not “desire to effect a plan to adjust debts” pursuant to 11 U.S.C. § 109(c)(4); and (2) the City did not file the petition in good faith as required under 11 U.S.C. § 921(c).2 At the request of the parties, the bankruptcy court did not set a discovery deadline or issue an order staying discovery.

At a status conference in April or May 2013, the bankruptcy court questioned whether there were any disputed material facts regarding the contested eligibility issues that would require formal discovery. In June 2013, the bankruptcy court suggested that the remaining issues could be addressed in a summary judgment motion. After CalPERS objected that additional discovery was required, the court directed CalPERS to brief the issue, setting the argument for the same date as the argument on the City’s summary judgment motion.

On August 28, 2013, the bankruptcy court held a hearing on the City’s motion for summary judgment on eligibility and CalPERS’ motion for additional discovery and for summary judgment of a nonmov-ant under Fed. R. Civ. P. 56(d) and 56(f)(1). (Mot. for Leave at 6-7 [Doc. # 3].) On September 17, 2003, the bankruptcy court entered an Order granting the City’s motion for summary judgment on eligibility, denying CalPERS’ motion for additional discovery and summary judgment, and granting the City relief under chapter 9. (Id. at 7.) The court concluded that the discovery CalPERS sought was either irrelevant or, even if the court accepted the facts CalPERS alleged as true, they would not defeat summary judgment in favor of the City. On October 16, 2013, the court issued its Eligibility Opinion discussing its findings of fact and conclusions of law. (Id.)

On September 27, 2013, the bankruptcy court entered an order approving a stipulation by the parties to extend, pursuant to Federal Rule of Bankruptcy Procedure 8002(c)(2), CalPERS’ time to file appeals from the court’s orders. (Id.)

On October 25, 2013, CalPERS filed a motion for leave to appeal in this Court. [Doc. # 3.] On November 15, 2013, the City filed an opposition. [Doc. #8.] On November 29, 2013, CalPERS filed a reply. [Doc. # 15.]

On October 22, 2013, CalPERS filed in the bankruptcy court a motion for certification of direct review of the court’s eligi[1219]*1219bility orders. (Mot. for Cert, at 5.) The bankruptcy court denied CalPERS’ motion at a hearing on October 29, 2013. [Doc. #9-1, Exh. 2.] The court reconsidered CalPERS’ motion at a hearing on November 13, 2013, [Doc. #9-1, Exh. 3], and denied the motion on November 15, 2013. [Doc. # 9-1, Exh. 4.]

On November 15, 2013, CalPERS filed a motion in this Court requesting certification for direct appeal to the Ninth Circuit. [Doc. #6.] On November , 22, 2013, the City filed an opposition. [Doc. #9.] On November 29, 2013, CalPERS filed a reply. [Doc. # 13.]

On November 26, 2013, the Court received a Certificate of Readiness and Completion of Record with a copy of the docket from the bankruptcy court. [Doc. # 10.]

II. JURISDICTION

In relevant part, 28 U.S.C. § 158(a) provides:

[t]he district courts of the United States shall have jurisdiction to hear appeals (1) from final judgments, orders, and decrees; [and]
⅜ ⅜ ⅜
(3) with leave of the court, from other interlocutory orders and decrees;
and, with leave of the court, from interlocutory orders and decrees, of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title.. An appeal under this subsection shall be taken only to the district court for the judicial district in which the bankruptcy judge is serving.

28 U.S.C. § 158(a).

CalPERS contends that (1) the bankruptcy court’s eligibility orders constitute final orders, and thus it may appeal them as of right under section 158(a)(1); (2) in the alternative, the eligibility orders should be subject to the collateral order doctrine established by the Supreme Court in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 545-57, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); and (3) in the alternative, if the Court construes the bankruptcy court’s eligibility orders to be interlocutory, the Court should grant CalPERS leave to appeal under section. 158(a)(3).

The City opposes CalPERS’ motion for leave to appeal on the grounds that (1) the eligibility orders are not final orders; (2) the collateral order doctrine is not available; and (3) CalPERS has not met the standard for leave to appeal under section 158(a)(3). '

III.

DISCUSSION

A. The Bankruptcy Order Is Not A Final Order

The Ninth Circuit has considered whether a bankruptcy court’s denial of a motion to dismiss a chapter 9 bankruptcy is a final order and held that such orders are not final. In re City of Desert Hot Springs, 339 F.3d 782, 787-92 (9th Cir. 2003), cert. denied, 540 U.S. 1110, 124 S.Ct. 1076, 157 L.Ed.2d 897 (2004). The Desert Hot Springs court noted that the Ninth Circuit had previously held that a bankruptcy court’s déhial of a creditor’s motion to dismiss was not a final decision in the chapter 11 context, but “significant differences between a chapter 11 bankruptcy and a chapter 9 bankruptcy” changed the analysis in the chapter 9 context. Id. at 788-89. Specifically, the court noted that chapter 9 offers fewer protections to creditors than other chapters of the bankruptcy code. Id. at 789. Nonetheless, the

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Bluebook (online)
260 F. Supp. 3d 1216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-public-employees-retirement-system-v-city-of-san-bernardino-cacd-2013.