Credit One Financial v. Anderson (In re Anderson)

550 B.R. 228, 2016 U.S. Dist. LEXIS 21632
CourtDistrict Court, S.D. New York
DecidedFebruary 22, 2016
DocketNo. 15-cv-4227 (NSR)
StatusPublished
Cited by20 cases

This text of 550 B.R. 228 (Credit One Financial v. Anderson (In re Anderson)) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Credit One Financial v. Anderson (In re Anderson), 550 B.R. 228, 2016 U.S. Dist. LEXIS 21632 (S.D.N.Y. 2016).

Opinion

OPINION & ORDER

NELSON S. ROMAN, United States District Judge

Credit One (“Defendant”) submits the current motion seeking leave to appeal the United States Bankruptcy Court for the Southern District of New York’s (the “Bankruptcy Court”) order of May 14, 2015 (the “May Order”) (ECF No. 3, Exhibit A), denying Defendant’s motion to strike class allegations and motion to dismiss for lack of subject matter jurisdiction. In the May Order, the Bankruptcy Court additionally denied Credit One’s motion to compel arbitration, and Credit One has appealed that decision as of right. For the reasons set forth below, the motion for leave to appeal the additional issues is DENIED.

BACKGROUND

Plaintiff Orrin Anderson (“Plaintiff’) incurred a debt with Defendant Credit One by opening a credit card account in 2002. In 2011, Plaintiff defaulted on the account, and the account was closed in December 201L Plaintiff filed a voluntary bankruptcy with the Bankruptcy Court on January 31, 2014. As a result of the bankruptcy proceedings, Mr. Anderson received a discharge of consumer debt, including the Credit One account. Despite the discharge, the debt remained on Mr. Anderson’s credit report as “charged off’ (i.e., not discharged in bankruptcy). Plaintiff subsequently contacted Defendant to notify it that the debt had been discharged in bankruptcy and to request that Defendant update his credit report. According to Plaintiff, Defendant took no action and Plaintiffs credit report continues to show the debt as charged off rather than discharged in bankruptcy.

On October 17, 2014, Plaintiff moved to reopen the bankruptcy proceeding and after a hearing, the Bankruptcy Court reopened the case to “permit the Debtor to commence and pursue an adversary proceeding .., against Credit One Bank with respect to alleged violations of the Debt- or’s discharge injunction,” (Bank. Doc. 14-22147-rdd, ECF No. 26.) Thereafter, Plaintiff filed an Amended Class Action Complaint (the “Class Action Complaint”), seeking to represent a class of persons having credit reports with remaining entries for discharged debts. In the Class Action Complaint, Plaintiff asserts a cause of action pursuant to 11 U.S.C. § 524 (“§ 524”) and 11 U.S.C. § 105 (“§ 105”). Under § 524, a discharge in a bankruptcy action acts as an injunction against all efforts to collect a discharged debt. 11 [233]*233U.S.C. § 524. Section 105(a) of the Bankruptcy Code empowers a bankruptcy court with authority to issue “any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code].” 11 U.S.C. § 105(a).

On March 3, 2015, Credit One filed a combined motion to compel arbitration, motion to strike class allegations, and motion to dismiss for lack of subject matter jurisdiction. The Bankruptcy Court held a hearing on May 5, 2015 (the “May Hearing”) and denied Defendant’s motions. Credit One appealed, as of right, the denial to compel arbitration. Credit One additionally seeks leave to appeal the denials to strike class allegations and dismiss for lack of subject matter jurisdiction.

STANDARD OF REVIEW

A. Pendent Appellate Jurisdiction

Under the doctrine of pendent appellate jurisdiction, a court may, in its discretion, consider nonappealable issues in a case once it has taken jurisdiction over a related issue. See San Filippo v. U.S. Trust Co. of N.Y., 737 F.2d 246, 255 (2d Cir.1984) (“[U]nder the doctrine of pendent appellate jurisdiction, once we have taken jurisdiction over one issue in a case, we may, in our discretion, consider other nonappealable issues in the case as well____”). The Supreme Court has cautioned, however, that “a rule loosely allowing pendent appellate jurisdiction would encourage parties to parlay [appealable] collateral orders into multi-issue interlocutory appeal tickets.” See Swint v. Chambers County Comm’n, 514 U.S. 35, 49, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). Therefore, a careful exercise of discretion is required in granting pendent jurisdiction.

The Second Circuit has held that an exercise of pendent appellate jurisdiction is appropriate only “over an independent but related question that is ‘inextricably intertwined’ with the [appealable issue] or is ‘necessary to ensure meaningful review’ of that issue.” Kaluczky v. City of White Plains, 57 F.3d 202, 207 (2d Cir. 1995) (quoting Swint, 514 U.S. at 51, 115 S.Ct. 1203). A question is “inextricably intertwined” where there is “sufficient overlap in the factors relevant to the appeal-able and nonappealable issues to warrant our exercising plenary authority over the appeal.” Kaluczky, 57 F.3d at 207 (internal citation omitted). In other words, “issues usually will not be considered inextricably intertwined where review of the unappealable issue is ‘not necessary for review of the issue over which we have appellate jurisdiction.’” Lamar Advert, of Penn, LLC v. Tovm of Orchard Park, New York, 356 F.3d 365, 372 (2d Cir.2004) (citing Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748, 759 (2d Cir.1998)). See also Sivint, 514 U.S. at 50-51, 115 S.Ct. 1203 (suggesting courts may exercise pendent jurisdiction where an issue is “inextricably intertwined” with an issue over which the court properly has appellate jurisdiction, or where review of a ju-risdictionally insufficient issue is “necessary to ensure meaningful review” of a jurisdictionally sufficient one); Davidson v. Chestnut, 193 F.3d 144, 151 (2d Cir.1999) (refusing to assert jurisdiction over plaintiffs cross-appeal where “[n]one of [the cross-appealed] issues overlaps with” the issues on direct appeal). Therefore, where a court can consider and decide the appealable issue without addressing or considering the nonappealable issue(s), an exercise of pendent appellate jurisdiction is not warranted. Rein, 162 F.3d at 759 (finding, inter alia, issues of subject matter jurisdiction and personal jurisdiction not inextricably intertwined where court can resolve the former “without at all considering” the latter).

[234]*234 B. Interlocutory Appeal

Under 28 U.S.C. § 158(a)(3), “with leave of the court,” district courts have jurisdiction to hear appeals from “interlocutory orders and decrees” of the bankruptcy courts. 28 U.S.C. § 158(a)(3). To determine whether leave to appeal should be granted, district courts apply the standards prescribed in 28 U.S.C. § 1292(b). See In re Kassover, 343 F.3d 91 (2d Cir.2003); In re Enron Corp., No. 01-16034, 2006 WL 2548592, at *3 (S.D.N.Y. Sept. 5, 2006).

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550 B.R. 228, 2016 U.S. Dist. LEXIS 21632, Counsel Stack Legal Research, https://law.counselstack.com/opinion/credit-one-financial-v-anderson-in-re-anderson-nysd-2016.