1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 In re CESAR MONTIEL PEREZ, Case No.: 21-CV-83 JLS (MSB)
12 Debtor. ORDER GRANTING MOTION TO 13 DISMISS APPEAL MAURICE GRAYTON, 14 Appellant, (ECF No. 7) 15 v. 16 UNITED STATES TRUSTEE 17 Appellee. 18 19 20 Presently before the Court is Appellee United States Trustee Tiffany Carroll’s 21 Motion to Dismiss Appeal (“Mot.,” ECF No. 7). The Court took the matter under 22 submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See generally 23 ECF No. 10. Appellant Maurice Grayton (“Appellant” or “Mr. Grayton”), proceeding pro 24 se, never filed an opposition to the motion. 25 On March 11, 2021, the Court vacated merits briefing on the present appeal pending 26 resolution of Appellee’s motion to dismiss. ECF No. 10 at 1. The Court ordered Appellant 27 to file an opposition to Appellee’s motion by April 1, 2021. Id. at 2. The Court warned 28 Appellant that it “may treat a failure to timely file an opposition to the motion to dismiss 1 as Appellant’s consent to the granting of the motion.” Id. at 2. In lieu of filing an 2 opposition, Appellant filed his opening brief on March 31, 2021. See ECF No. 12. 3 The Ninth Circuit has held that pursuant to a local rule, a district court may properly 4 grant a motion to dismiss for failure to respond. See generally Ghazali v. Moran, 46 F.3d 5 52, 53 (9th Cir. 1995) (affirming dismissal for failure to file timely opposition papers where 6 plaintiff had notice of the motion and ample time to respond). The Court could grant 7 Appellee’s Motion and dismiss the appeal on this basis; however, given Appellant’s pro se 8 status and public policy favoring disposition of cases on their merits, see, e.g., Hernandez 9 v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998), the Court examines the question of 10 its own appellate jurisdiction on the merits. Having carefully reviewed the relevant law, 11 the Court GRANTS Appellee’s Motion to Dismiss. 12 BACKGROUND 13 On January 3, 2020, the United States Trustee initiated an adversary proceeding 14 against Mr. Grayton in the United States Bankruptcy Court for the Southern District of 15 California. Mot. at 2; see generally United States Trustee v. Grayton, No. 3:20-ap-90002- 16 MM (Bankr. S.D. Cal.). Appellee alleges that Mr. Grayton “repeatedly refused to 17 cooperate” with discovery requests in the bankruptcy court action. Mot. at 2. Therefore, 18 Appellee filed two motions: one seeking to compel Mr. Grayton to produce initial 19 disclosures, and another to compel Mr. Grayton to appear for his deposition. Id.; see United 20 States Trustee v. Grayton, No. 3:20-ap-90002-MM (Bankr. S.D. Cal.), (ECF Nos. 106, 21 114).1 Appellee also sought associated fees and costs. Mot. at 2. Mr. Grayton did not 22 respond to the motions. Id. On January 18, 2021, the bankruptcy court granted the United 23 States Trustee’s motions and awarded costs. Id.; see United States Trustee v. Grayton, No. 24 3:20-ap-90002-MM (Bankr. S.D. Cal.), (“Sanctions Order,” ECF No. 162), (“Dep. Order,” 25 ECF No. 162). 26
27 1 A court “may take notice of proceedings in other courts, both within and without the federal judicial 28 system, if those proceedings have a direct relation to matters at issue.” Bias v. Moynihan, 508 F.3d 1212, 1 On January 15, 2021, Mr. Grayton filed a notice of appeal. See generally “Notice 2 of Appeal,” ECF No. 1. Under the section where Mr. Grayton must identify the subject of 3 this appeal, he lists “Motion to Compel Initial Discovery, Motion for Attendance 4 Deposition, Motion for Sanctions.” Id. at 1. The Court liberally construes this statement 5 to mean Mr. Grayton seeks to appeal the bankruptcy court orders granting the 6 aforementioned motions. This action is one of four appeals2 filed by Appellant in this 7 District related to the underlying bankruptcy action, which is still pending before the 8 bankruptcy court. See generally Docket of United States Trustee v. Grayton, No. 3:20-ap- 9 90002-MM (Bankr. S.D. Cal.). On March 10, 2021, Appellee filed the present Motion to 10 Dismiss Appeal for lack of jurisdiction. ECF No. 3. 11 LEGAL STANDARD 12 Federal district courts have jurisdiction over appeals of “final judgments, orders, and 13 decrees” of bankruptcy courts. See 28 U.S.C. § 158(a)(1). Generally, district courts lack 14 jurisdiction over appeals from interlocutory orders of bankruptcy judges except where the 15 district court grants leave to appeal under 28 U.S.C. § 158(a)(3). 16 A determination of whether an order is final or interlocutory is jurisdictional and 17 therefore can be raised sua sponte and reviewed de novo by an appellate court. See In re 18 Bonham, 229 F.3d 750, 760–61 (9th Cir. 2000); In re Belli, 268 B.R. 851, 853 (B.A.P. 9th 19 Cir. 2001). Denial of leave to appeal is left to the sound discretion of the court. See In re 20 City of Desert Hot Springs, 339 F.3d 782, 787 (9th Cir. 2003). 21 ANALYSIS 22 I. Appeal as of Right 23 Under section 158(a)(1), parties may appeal to a district court “final” orders in 24 bankruptcy cases and proceedings “as of right.” 28 U.S.C. § 158(a)(1); see Ritzen Grp., 25 Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582, 587 (2020); Bullard v. Blue Bills Bank, 575 26 U.S. 496 (2015). In the context of an adversary proceeding, an order is final if it would be 27
28 1 considered an appealable final order in an ordinary federal civil action under 28 U.S.C. 2 § 1291. In re Belli, 268 B.R. at 855 (“Finality for purposes of jurisdiction over ‘as of right’ 3 appeals under 28 U.S.C. § 158(a)(1) in adversary proceedings does not differ from finality 4 in ordinary federal civil actions under 28 U.S.C. § 1291.”). Federal Rule of Civil Procedure 5 54(b) “controls the analysis of finality of judgments for purposes of appeal in federal civil 6 actions, including bankruptcy adversary proceedings.” Id. (citing Fed. R. Civ. P. 54(b), 7 incorporated by Fed. R. Bankr. P. 7054(a)); see Matter of King City Transit Mix, Inc., 738 8 F.2d 1065, 1066–67 (9th Cir. 1984) (applying Rule 54(b) in bankruptcy adversary 9 proceedings). If there is a Rule 54(b) certification, it is treated as a final order over which 10 appellate jurisdiction exists “as of right” under 28 U.S.C. § 158(a)(1). 11 However, the Ninth Circuit has held that “the fluid and sometimes chaotic nature of 12 bankruptcy proceedings necessitates a degree of jurisdictional flexibility.” In re Landmark 13 Fence Co., Inc., 801 F.3d 1099, 1102 (9th Cir. 2015). “Congress has long provided that 14 orders in bankruptcy cases may be immediately appealed if they finally dispose of discrete 15 disputes within the larger case.” Howard Delivery Service, Inc. v. Zurich American Ins.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 In re CESAR MONTIEL PEREZ, Case No.: 21-CV-83 JLS (MSB)
12 Debtor. ORDER GRANTING MOTION TO 13 DISMISS APPEAL MAURICE GRAYTON, 14 Appellant, (ECF No. 7) 15 v. 16 UNITED STATES TRUSTEE 17 Appellee. 18 19 20 Presently before the Court is Appellee United States Trustee Tiffany Carroll’s 21 Motion to Dismiss Appeal (“Mot.,” ECF No. 7). The Court took the matter under 22 submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See generally 23 ECF No. 10. Appellant Maurice Grayton (“Appellant” or “Mr. Grayton”), proceeding pro 24 se, never filed an opposition to the motion. 25 On March 11, 2021, the Court vacated merits briefing on the present appeal pending 26 resolution of Appellee’s motion to dismiss. ECF No. 10 at 1. The Court ordered Appellant 27 to file an opposition to Appellee’s motion by April 1, 2021. Id. at 2. The Court warned 28 Appellant that it “may treat a failure to timely file an opposition to the motion to dismiss 1 as Appellant’s consent to the granting of the motion.” Id. at 2. In lieu of filing an 2 opposition, Appellant filed his opening brief on March 31, 2021. See ECF No. 12. 3 The Ninth Circuit has held that pursuant to a local rule, a district court may properly 4 grant a motion to dismiss for failure to respond. See generally Ghazali v. Moran, 46 F.3d 5 52, 53 (9th Cir. 1995) (affirming dismissal for failure to file timely opposition papers where 6 plaintiff had notice of the motion and ample time to respond). The Court could grant 7 Appellee’s Motion and dismiss the appeal on this basis; however, given Appellant’s pro se 8 status and public policy favoring disposition of cases on their merits, see, e.g., Hernandez 9 v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998), the Court examines the question of 10 its own appellate jurisdiction on the merits. Having carefully reviewed the relevant law, 11 the Court GRANTS Appellee’s Motion to Dismiss. 12 BACKGROUND 13 On January 3, 2020, the United States Trustee initiated an adversary proceeding 14 against Mr. Grayton in the United States Bankruptcy Court for the Southern District of 15 California. Mot. at 2; see generally United States Trustee v. Grayton, No. 3:20-ap-90002- 16 MM (Bankr. S.D. Cal.). Appellee alleges that Mr. Grayton “repeatedly refused to 17 cooperate” with discovery requests in the bankruptcy court action. Mot. at 2. Therefore, 18 Appellee filed two motions: one seeking to compel Mr. Grayton to produce initial 19 disclosures, and another to compel Mr. Grayton to appear for his deposition. Id.; see United 20 States Trustee v. Grayton, No. 3:20-ap-90002-MM (Bankr. S.D. Cal.), (ECF Nos. 106, 21 114).1 Appellee also sought associated fees and costs. Mot. at 2. Mr. Grayton did not 22 respond to the motions. Id. On January 18, 2021, the bankruptcy court granted the United 23 States Trustee’s motions and awarded costs. Id.; see United States Trustee v. Grayton, No. 24 3:20-ap-90002-MM (Bankr. S.D. Cal.), (“Sanctions Order,” ECF No. 162), (“Dep. Order,” 25 ECF No. 162). 26
27 1 A court “may take notice of proceedings in other courts, both within and without the federal judicial 28 system, if those proceedings have a direct relation to matters at issue.” Bias v. Moynihan, 508 F.3d 1212, 1 On January 15, 2021, Mr. Grayton filed a notice of appeal. See generally “Notice 2 of Appeal,” ECF No. 1. Under the section where Mr. Grayton must identify the subject of 3 this appeal, he lists “Motion to Compel Initial Discovery, Motion for Attendance 4 Deposition, Motion for Sanctions.” Id. at 1. The Court liberally construes this statement 5 to mean Mr. Grayton seeks to appeal the bankruptcy court orders granting the 6 aforementioned motions. This action is one of four appeals2 filed by Appellant in this 7 District related to the underlying bankruptcy action, which is still pending before the 8 bankruptcy court. See generally Docket of United States Trustee v. Grayton, No. 3:20-ap- 9 90002-MM (Bankr. S.D. Cal.). On March 10, 2021, Appellee filed the present Motion to 10 Dismiss Appeal for lack of jurisdiction. ECF No. 3. 11 LEGAL STANDARD 12 Federal district courts have jurisdiction over appeals of “final judgments, orders, and 13 decrees” of bankruptcy courts. See 28 U.S.C. § 158(a)(1). Generally, district courts lack 14 jurisdiction over appeals from interlocutory orders of bankruptcy judges except where the 15 district court grants leave to appeal under 28 U.S.C. § 158(a)(3). 16 A determination of whether an order is final or interlocutory is jurisdictional and 17 therefore can be raised sua sponte and reviewed de novo by an appellate court. See In re 18 Bonham, 229 F.3d 750, 760–61 (9th Cir. 2000); In re Belli, 268 B.R. 851, 853 (B.A.P. 9th 19 Cir. 2001). Denial of leave to appeal is left to the sound discretion of the court. See In re 20 City of Desert Hot Springs, 339 F.3d 782, 787 (9th Cir. 2003). 21 ANALYSIS 22 I. Appeal as of Right 23 Under section 158(a)(1), parties may appeal to a district court “final” orders in 24 bankruptcy cases and proceedings “as of right.” 28 U.S.C. § 158(a)(1); see Ritzen Grp., 25 Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582, 587 (2020); Bullard v. Blue Bills Bank, 575 26 U.S. 496 (2015). In the context of an adversary proceeding, an order is final if it would be 27
28 1 considered an appealable final order in an ordinary federal civil action under 28 U.S.C. 2 § 1291. In re Belli, 268 B.R. at 855 (“Finality for purposes of jurisdiction over ‘as of right’ 3 appeals under 28 U.S.C. § 158(a)(1) in adversary proceedings does not differ from finality 4 in ordinary federal civil actions under 28 U.S.C. § 1291.”). Federal Rule of Civil Procedure 5 54(b) “controls the analysis of finality of judgments for purposes of appeal in federal civil 6 actions, including bankruptcy adversary proceedings.” Id. (citing Fed. R. Civ. P. 54(b), 7 incorporated by Fed. R. Bankr. P. 7054(a)); see Matter of King City Transit Mix, Inc., 738 8 F.2d 1065, 1066–67 (9th Cir. 1984) (applying Rule 54(b) in bankruptcy adversary 9 proceedings). If there is a Rule 54(b) certification, it is treated as a final order over which 10 appellate jurisdiction exists “as of right” under 28 U.S.C. § 158(a)(1). 11 However, the Ninth Circuit has held that “the fluid and sometimes chaotic nature of 12 bankruptcy proceedings necessitates a degree of jurisdictional flexibility.” In re Landmark 13 Fence Co., Inc., 801 F.3d 1099, 1102 (9th Cir. 2015). “Congress has long provided that 14 orders in bankruptcy cases may be immediately appealed if they finally dispose of discrete 15 disputes within the larger case.” Howard Delivery Service, Inc. v. Zurich American Ins. 16 Co., 547 U.S. 651, 657, n.3 (2006) (internal quotation marks and emphasis omitted). 17 Section 158 provides the appellate court with jurisdiction over orders in bankruptcy cases 18 that alter “the legal relationships among the parties.” Bullard, 575 U.S. at 506. Therefore, 19 to determine whether a particular order is final, the court examines “whether the 20 bankruptcy court’s decision: ‘1) resolves and seriously affects substantive rights and 2) 21 finally determines the discrete issue to which it is addressed.’” In re Gugliuzza, 852 F.3d 22 884, 894 (9th Cir. 2017) (quoting In re Perl, 811 F.3d 1120, 1126 (9th Cir. 2016)). If 23 “further proceedings in the bankruptcy court will affect the scope of the order, the order is 24 not subject to review.” In re Tech. Knockout Graphics, Inc., 833 F.2d 797, 800 (9th Cir. 25 1987) (quoting In re 405 N. Bedford Dr. Corp., 778 F.2d 1374, 1377 (9th Cir. 1985)). 26 The bankruptcy court’s orders granting Appellee’s discovery motions and awarding 27 costs are not final orders that Appellant may appeal as of right. See Nascimento v. Dummer, 28 508 F.3d 905, 909 (9th Cir. 2007) (“Discovery orders . . . are interlocutory and thus not 1 usually subject to immediate appeal.”); City of Las Vegas v. Foley, 747 F.2d 1294, 1297 2 (9th Cir. 1984) (“A discovery order, unlike a final order, is interlocutory and non- 3 appealable . . .”); David v. Hooker, Ltd., 560 F.2d 412, 415 (9th Cir. 1977) (“[D]iscovery 4 orders and sanctions in the form of civil penalties are held in most cases to be interlocutory 5 and hence non-appealable as to the parties involved in the suit . . . .”). A review of the 6 docket of the bankruptcy court proceedings reveals there has been no Rule 54(b) 7 certification in Appellant’s case. See generally Docket of United States Trustee v. Grayton, 8 No. 3:20-ap-90002-MM (Bankr. S.D. Cal.). Further, the bankruptcy court’s orders did not 9 adjudicate the parties’ respective rights and liabilities. The bankruptcy court may revise or 10 revisit its findings in these orders as the case progresses. 11 Therefore, the Court finds that the bankruptcy court’s orders are not appealable as a 12 matter of right. The Court now turns to whether to exercise its discretion and grant 13 interlocutory review. 14 II. Interlocutory Appeal 15 If an order is not final, the district court has jurisdiction to hear an appeal of an 16 interlocutory order of a bankruptcy court if the district court grants leave to appeal. See 28 17 U.S.C. § 158(a); Fed. R. Bankr. P. 8002, 8004(a)(2)(b). In deciding whether to grant leave 18 to appeal under Section 158(a)(3), courts look to the analogous provisions of 28 U.S.C. 19 § 1292(b) governing review of interlocutory district court orders by the courts of appeal. 20 See In re Belli, 268 B.R. at 858; In re Wilson, No. BR 13-11374 AJ, 2014 WL 122074, at 21 *1 (N.D. Cal. Jan. 10, 2014). Therefore, leave to appeal a bankruptcy court’s interlocutory 22 order is appropriate where (1) there is a controlling question of law, (2) as to which a 23 substantial ground for a difference of opinion exists, and (3) an immediate appeal could 24 materially advance the ultimate termination of the litigation. In re Cement Antitrust Litig. 25 (MDL No. 296), 673 F.2d 1020, 1026 (9th Cir. 1981); see also In re NSB Film Corp., 167 26 B.R. 176, 180 (B.A.P. 9th Cir. 1994) (“Leave to appeal should not be granted unless refusal 27 would result in wasted litigation and expense, the appeal involves a controlling question of 28 law as to which there is a substantial ground for difference of opinion, and an immediate 1 appeal would materially advance the ultimate termination of the litigation.”). Additionally, 2 “[i]nterlocutory appeals are generally disfavored and should only be granted where 3 extraordinary circumstances exist.” In re Cameron, No. C 13-02018 SI, 2014 WL 4 1028436, at *4 (N.D. Cal. Mar. 17, 2014). 5 As an initial matter, Appellant has not filed a motion for leave to appeal the 6 bankruptcy court’s interlocutory orders. See Fed. R. Bankr. P. 8004(a) (requiring a party 7 seeking to appeal an interlocutory order under 28 U.S.C. § 158(a)(3) to file with his notice 8 of appeal a motion for leave to appeal with certain required information). However, the 9 Court “may treat a notice of appeal as a motion for leave to file an interlocutory appeal.” 10 In re Belice, 461 B.R. 564, 572 (B.A.P. 9th Cir. 2011); see also Balistreri v. Pacifica Police 11 Dep’t, 901 F.2d 696, 699 (9th Cir. 1988) (“This court recognizes that it has a duty to ensure 12 that pro se litigants do not lose their right to a hearing on the merits of their claim due to 13 ignorance of technical procedural requirements.” (citations omitted)). 14 Here, Appellant does not carry his burden to show that the orders meet the § 1292(b) 15 test. Appellant offers no argument as to how this appeal involves a controlling question of 16 law as to which there is a substantial ground for difference of opinion, and the existence of 17 such a question is not readily apparent to the Court from the interlocutory orders 18 themselves. In his opening brief, Appellant argues his positions on the issues he wishes to 19 appeal. See generally ECF No. 12. However, this information is not pertinent to the legal 20 framework under which this Court analyzes a motion for leave to file an interlocutory 21 appeal. Granting leave to appeal in this instance would waste judicial resources, increase 22 litigation expense, and would only serve to delay the ultimate termination of this action. 23 Accordingly, the Court declines to exercise its discretion to hear this interlocutory 24 appeal. 25 CONCLUSION 26 For the reasons stated above, the Court finds the bankruptcy court’s orders granting 27 Appellee’s discovery motions and awarding fees are interlocutory orders. Further, the 28 Court finds interlocutory review is not warranted, and Appellant has not identified another 1 for jurisdiction. Accordingly, Appellee’s motion to dismiss the appeal for lack of 2 jurisdiction is GRANTED. The Court DISMISSES the appeal for lack of jurisdiction. 3 || The Clerk of Court SHALL CLOSE the file. 4 IT IS SO ORDERED. 5 Dated: April 27, 2021 . tt f Le 6 on. Janis L. Sammartino 7 United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28