In re: Artem Koshkalda

Opinion

FILED DEC 7 2020 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL ORDERED PUBLISHED OF THE NINTH CIRCUIT

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. NC-20-1050-SGB ARTEM KOSHKALDA, BAP No. NC-20-1051-SGB Debtor. (Related Appeals)

ARTEM KOSHKALDA, Bk. No. 18-30016 Appellant, v. Adv. No. 18-03020 E. LYNN SCHOENMANN, Chapter 7 Trustee; SEIKO EPSON CORPORATION; OPINION EPSON AMERICA, INC., Appellees.

Appeal from the United States Bankruptcy Court for the Northern District of California Hannah L. Blumenstiel, Bankruptcy Judge, Presiding

APPEARANCES: Appellant Artem Koshkalda argued pro se; Henry S. David of The David Firm argued for appellees Seiko Epson Corporation and Epson America, Inc.; Jack Praetzellis of Fox Rothschild LLP argued for appellee E. Lynn Schoenmann, Chapter 7 Trustee

Before: SPRAKER, GAN, and BRAND, Bankruptcy Judges.

SPRAKER, Bankruptcy Judge: INTRODUCTION

Chapter 71 debtor Artem Koshkalda appeals the bankruptcy court’s

orders determining that he is a vexatious litigant and imposing pre-filing

restrictions against him in his main bankruptcy and in an adversary

proceeding challenging his discharge. Though we find no error in the

bankruptcy court’s findings that Koshkalda was a vexatious litigant, we

must vacate the pre-filing order in the main case to address a few defects.

Additionally, we must reverse the vexatious litigant order entered in the

adversary proceeding. By the time the bankruptcy court entered this

vexatious litigant order, it already had disposed of the adversary

proceeding by entering summary judgment against Koshkalda. There was

insufficient postjudgment evidence of an ongoing need for pre-filing

restrictions to control his future filings in the adversary proceeding.

Accordingly, we REVERSE the adversary pre-filing order, VACATE the

case pre-filing order, and REMAND, so the bankruptcy court can make the

necessary changes to the case pre-filing order.

FACTS

A. Pre-bankruptcy litigation.

Prior to his bankruptcy filing, appellee Seiko Epson Corporation and

1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure.

2 Epson America, Inc. (jointly, “Epson”) sued Koshkalda and his affiliates in

the United States District Court for the District of Nevada for trademark

infringement, trademark counterfeiting, unfair competition, and false

advertising (“Infringement Action”). The district court eventually entered a

series of injunctions and orders prohibiting Koshkalda and the other

defendants from engaging in wrongful conduct and restricting their ability

to use or transfer assets. As a result of Koshkalda’s noncompliance with

these orders and severe and repeated discovery abuses, the district court

ultimately struck his answer and entered a default judgment for $12

million in favor of Epson on January 16, 2018.

B. Koshkalda’s chapter 11 case filing and conversion to chapter 7.

On January 5, 2018, after the district court entered default against

Koshkalda but before entry of the default judgment, Koshkalda filed a

voluntary chapter 11 petition. Koshkalda was represented by counsel at the

commencement of his bankruptcy.

Within days of the bankruptcy filing, Epson moved to dismiss the

case, asserting that it had been filed in bad faith in furtherance of

Koshkalda’s efforts to thwart the district court litigation. The bankruptcy

court declined to dismiss the case but instead ordered it converted to

chapter 7. Appellee E. Lynn Schoenmann was appointed to serve as

chapter 7 trustee. Schoenmann then employed Fox Rothschild, LLP as

counsel for the chapter 7 estate. In the declaration submitted in support of

3 Fox Rothschild’s employment, the law firm disclosed that Epson was a

current client in unrelated matters. The application to employ Fox

Rothschild and the declaration in support were mailed to Koshkalda and

his counsel. The court approved the estate’s employment of Fox Rothschild

as counsel for the estate without objection.

In June 2018, Epson obtained an order annulling the automatic stay.

This order retroactively validated the district court’s entry of the $12

million default judgment and also permitted Koshkalda to proceed with his

appeal from that judgment. The Ninth Circuit affirmed that judgment in

December 2019.

During the course of the case, Schoenmann liquidated over $5 million

in estate assets, often over Koshkalda’s objections. After the costs of sale,

the payoff of secured claims, and the payment of administrative expenses,

it is unclear to what extent, if any, there will be funds left over for a

distribution to Koshkalda’s unsecured creditors. Much of the

administrative expenses incurred can be attributed to Koshkalda’s

litigation conduct.

C. The Epson Adversary Proceeding.

In May 2018, Epson commenced an adversary proceeding objecting

to Koshkalda’s discharge under § 727 and seeking to except the judgment

debt from discharge under § 523 (“Epson Adversary Proceeding”). The

bankruptcy court later stayed some of the § 523 claims pending resolution

4 of Epson’s § 727(a) claims and its claims under § 523 based on fraud.2

In September 2019, the bankruptcy court granted Epson summary

judgment on its claims under §§ 727(a)(2)(A), (a)(3), and (a)(7). The

bankruptcy court then dismissed as moot the rest of the claims and entered

final judgment in Epson’s favor.

For our purposes, the most salient feature of the Epson Adversary

Proceeding was not the judgment itself. Rather, it was the amount of

motion practice and discovery disputes it generated. As the bankruptcy

court later observed in its order determining Koshkalda to be a vexatious

litigant (“Vexatious Litigant Ruling”):

The court entered orders concerning twelve discovery disputes initiated through the court’s informal discovery procedures, every single one of which arose from either Mr. Koshkalda’s unreasonable demands or his obstinate, baseless refusal to cooperate with Seiko Epson’s legitimate discovery requests. At one point, the court found Mr. Koshkalda in contempt and imposed issue and monetary sanctions against him for abusive discovery practices.

In addition to the dozen discovery disputes attributable to Mr. Koshkalda’s belligerence, he also filed eighteen motions in the AVP, all of which the court denied. All but two of these motions were entirely lacking in merit. The court ruled on many of them without oral argument, and a few without even requiring an opposition.

2 Schoenmann also commenced a denial of discharge adversary proceeding against Koshkalda. (Adv. No. 18-03059.) This adversary proceeding also was stayed pending the outcome of the Epson Adversary Proceeding.

5 D. The withdrawal of Koshkalda’s counsel and the resulting matters filed by Koshalda.

On September 26, 2018, the bankruptcy court granted the motion to

withdraw filed by Koshkalda’s counsel. Unrestrained by counsel,

Koshkalda mounted continuous and repetitive challenges to Schoenmann’s

administration of the estate. Koshkalda filed a series of motions to compel

her to abandon estate property back to him, even though some of the

property was subject to ongoing sale or settlement efforts.

In addition, Koshkalda began a concerted effort to remove

Schoenmann and her counsel for their failure to litigate against Epson and

its claim. As part of these efforts, Koshkalda objected to the continued

employment and compensation of both the trustee and her counsel. On a

number of occasions, his arguments in these objections overlapped with

positions he took in the Epson Adversary Proceeding as part of his motions

and discovery practice. Koshkalda’s actions in the main case and the Epson

Adversary Proceeding largely took place between October 2018 and

January 2020.

E. Schoenmann’s motion for a pre-filing order and Epson’s Joinder.

On December 26, 2019, Koshkalda filed his motion to vacate the

court’s order retaining Fox Rothschild, seeking to set aside the law firm’s

employment by the estate. Koshkalda filed this motion roughly a week

after the court denied his prior motion to disqualify Fox Rothschild as the

6 trustee’s counsel. Together with her opposition to the motion to vacate,

Schoenmann requested that the court enter “a pre-filing order . . . requiring

that he obtain court-permission before being permitted to file any further

papers in this bankruptcy case.” To support her request, Schoenmann

listed eleven separate motions Koshkalda filed in the bankruptcy case. She

urged that each of these motions demonstrated his vexatious conduct, as

well as those he filed in the Epson Adversary Proceeding. She further

pointed out that both the bankruptcy court and the district court already

had imposed other forms of sanctions against Koshkalda but that these

lesser sanctions had not proven successful in curbing Koshkalda’s

vexatious conduct. The next day, the bankruptcy court entered an order

denying the motion to vacate and set the vexatious litigant motion for

hearing in February 2020.

A few days after entry of the court’s scheduling order, Epson joined

Schoenmann’s vexatious litigant motion. But the “joinder” actually sought

additional relief over and above the trustee’s motion. Epson sought to

extend the pre-filing order to adversary proceedings filed in Koshkalda’s

bankruptcy case – including the Epson Adversary Proceeding. In support

of its joinder, Epson maintained that Koshkalda’s frivolous filings and

abusive litigation tactics occurred not only in the bankruptcy case but also

in the district court Infringement Action and in the Epson Adversary

Proceeding. Epson proceeded to discuss numerous specific examples of

7 Koshkalda’s vexatious conduct in the Epson Adversary Proceeding.

Koshkalda opposed both Schoenmann’s motion and Epson’s “joinder

motion.”

The bankruptcy court vacated the hearing and took the matter under

submission. On February 18, 2020, the bankruptcy court entered its

Vexatious Litigant Ruling, in which it granted Schoenmann and Epson the

relief they requested. In its decision, the bankruptcy court detailed the

history of Koshkalda’s actions and examined roughly 44 of Koshkalda’s

filings in the bankruptcy case and the Epson Adversary Proceeding. In

almost every instance, the bankruptcy court found that each specific paper

was frivolous, filed with the intent to harass, or both.

The court then explained that the impetus for its ruling was not the

sheer volume of papers Koshkalda filed, but “[r]ather, it is the lack of merit,

falsity, and duplicative nature of the disputes instigated by Mr. Koshkalda

that forces the court to its conclusion.” The court went on to elaborate:

Each and every time, Mr. Koshkalda raised arguments the court rejected, sometimes several times over. He made factual allegations that were half-true or completely untrue. He lied to the court repeatedly in order to evade Seiko Epson’s efforts to trace allegedly fraudulent transfers in which Mr. Koshkalda had involved his parents. In this judge’s seven years on the bench, no single litigant has soaked up and wasted more resources than Mr. Koshkalda.

The court further found that, as a result of Koshkalda’s “frivolous

8 and harassing litigation,” estate funds that otherwise could have been used

to pay the estate’s creditors would necessarily be used to compensate

Schoenmann’s counsel. The court therefore determined that entry of a pre-

filing order in the bankruptcy case (“Case Pre-filing Order”) would serve

the best interests of the estate and its creditors. The court observed that

Koshkalda’s “strategy since the withdrawal of his counsel has been to

impose as great a burden as possible on the court, on [Ms.] Schoenmann,

and on Seiko Epson.” The court, therefore, additionally concluded that it

was appropriate to enter a pre-filing order in the Epson Adversary

Proceeding as well (“Adversary Pre-filing Order”).

The bankruptcy court entered both pre-filing orders on February 18,

2020. Koshkalda timely appealed both orders.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334

and 157(b)(2)(A) and (J). We have jurisdiction under 28 U.S.C. § 158, subject

to the finality issue discussed immediately below.

In non-bankruptcy federal civil litigation, pre-filing orders entered

against parties are not final and appealable until a judgment is entered

concluding the ligation. See Molski v. Evergreen Dynasty Corp., 500 F.3d 1047,

1055-56 (9th Cir. 2007). This is a concern for the Case Pre-filing Order

because the bankruptcy case remains open. In contrast, the Adversary

Pre-filing Order is final because the bankruptcy court already entered final

9 judgment in the Epson Adversary Proceeding.

We express no opinion as to whether principles of “pragmatic” or

“flexible” finality applicable in bankruptcy cases render the Case Pre-filing

Order final. See generally Jue v. Liu (In re Liu), 611 B.R. 864, 870-79 (9th Cir.

BAP 2020) (examining the finality of orders denying motions to dismiss

bankruptcy cases). To the extent the appeal from the Case Pre-filing Order

is interlocutory, we grant leave to appeal under Rule 8004(d). Because the

Adversary Pre-filing order is final and immediately appealable as of right,

and because the two appeals present factually-interrelated issues, delaying

the appeal from the Case Pre-filing Order would do nothing but waste the

resources of the courts and the parties. Under these circumstances, we

grant leave to appeal. See Galloway v. Ford (In re Galloway), BAP No.

AZ-13-1085–PaKiTa, 2014 WL 4212621, at *4 n.9 (9th Cir. BAP Aug. 27,

2014) (granting leave to appeal under similar circumstances).

ISSUE

Did the bankruptcy court abuse its discretion when it entered the pre-

filing orders?

STANDARD OF REVIEW

We review pre-filing orders entered against vexatious litigants for an

abuse of discretion. Ringgold-Lockhart v. Cty. of L.A., 761 F.3d 1057, 1062 (9th

Cir. 2014); Molski, 500 F.3d at 1056. The bankruptcy court abuses its

discretion if it applies an incorrect legal rule or its factual findings are

10 illogical, implausible, or without support in the record. United States v.

Hinkson, 585 F.3d 1247, 1262–63 & n.21 (9th Cir. 2009) (en banc).

DISCUSSION

Bankruptcy courts have inherent authority to sanction “bad faith” or

“willful” litigation misconduct. Dyer v. Lindblade (In re Dyer), 322 F.3d 1178,

1196 (9th Cir. 2003) (citing Caldwell v. Unified Capital Corp. (In re Rainbow

Magazine, Inc.), 77 F.3d 278, 284 (9th Cir. 1996)). This includes the power to

sanction vexatious litigation occurring in that court. In re Rainbow Magazine,

Inc., 77 F.3d at 284.3

Before a court can impose pre-filing restrictions against a vexatious

litigant, it must:

(1) give litigants notice and an opportunity to oppose the order before it is entered; (2) compile an adequate record for appellate

3 There is at least one additional source of authority presumably enabling bankruptcy courts to restrict the improper litigation tactics of vexatious litigants. Under the All Writs Act, 28 U.S.C. § 1651(a), “[t]he Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” This statute permits federal courts to enjoin abusive litigation activity. Ringgold-Lockhart, 761 F.3d at 1061 (citing De Long v. Hennessey, 912 F.2d 1144, 1147 (9th Cir. 1990)). Though the Ninth Circuit has not specifically held whether bankruptcy courts fall within the scope of the All Writs Act, we have previously reached this conclusion. See, e.g., Sui v. Marshack (In re Sui), BAP No. CC-13-1572-TaSpD, 2014 WL 5840246, at *6 (9th Cir. BAP Nov. 10, 2014); Richardson v. Melcher (In re Melcher), BAP No. NC–13–1168-DJKi. 2014 WL 1410235, at *9 (9th Cir. BAP Apr. 11, 2014); see also Lakusta v. Evans (In re Lakusta), Case No. C 06-6105- PJH, 2007 WL 2255230, at *3 (N.D. Cal. Aug. 3, 2007), aff'd, 328 F. App’x 385 (9th Cir. 2009) (“Bankruptcy courts have the power to regulate vexatious litigation pursuant to 11 U.S.C. § 105(a) and 28 U.S.C. § 1651(a).”).

11 review, including a listing of all the cases and motions that led the district court to conclude that a vexatious litigant order was needed; (3) make substantive findings of frivolousness or harassment; and (4) tailor the order narrowly so as “to closely fit the specific vice encountered.

Ringgold-Lockhart, 761 F.3d at 1062 (citations, brackets, and internal

quotation marks omitted). The first two factors are procedural and the

latter two are substantive. Id. (citing Molski, 500 F.3d at 1058). The first

substantive factor assists the court in defining who qualifies as a vexatious

litigant and the second substantive factor assists the court in tailoring an

appropriate remedy. Ringgold-Lockhart, 761 F.3d at 1062.4

A. Koshkalda had adequate notice and opportunity to oppose the entry of the pre-filing orders.

Koshkalda claims that he was denied adequate notice and a

reasonable opportunity to oppose Schoenmann’s vexatious litigant motion.

As he puts it, the bankruptcy court specifically considered as evidence of

his vexatious litigation no less than 44 of his filings, but Schoenmann’s

motion specifically addressed less than 11 of these filings. Thus, Koshkalda

concludes that he had no way of knowing that his opposition needed to

address the 33 additional papers the bankruptcy court relied on but

4 Ringgold-Lockhart further indicated that Safir v. U.S. Lines, Inc., 792 F.2d 19, 24 (2d Cir. 1986), provides a “helpful framework” for evaluating the two substantive factors. Ringgold-Lockhart, 761 F.3d at 1062 (quoting Molski, 500 F.3d at 1058 (9th Cir. 2007)). Though the bankruptcy court here did not specifically reference Safir, all of Safir’s underlying considerations are subsumed within the Vexatious Litigant Ruling.

12 Schoenmann did not address.

Koshkalda frames his argument as a denial of due process. But the

notice aspect of the due process requirement is a relatively minimal

standard. Strickland v. U.S. Tr. (In re Wojcik), 560 B.R. 763, 768 (9th Cir. BAP

2016). It merely requires “notice reasonably calculated, under all the

circumstances, to apprise interested parties of the pendency of the action

and afford them an opportunity to present their objections.” Id. (quoting

Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)). Koshkalda

completely ignores the filings specifically addressed in Epson’s joinder, as

well as the documents inter-related to those specifically addressed by

Schoenmann and Epson. When these additional filings are accounted for, it

turns out that the vast majority of the documents the bankruptcy court

focused on were well within the focus of the vexatious litigant motion and

the joinder.

More importantly, Schoenmann stated that the basis for her motion

was “Koshkalda’s filings in his bankruptcy case and the adversary

proceedings.” She reiterated her reliance on all of Koshkalda’s filings

elsewhere in her motion. Schoenmann additionally made it clear that,

“Koshkalda’s filings are not limited to the Bankruptcy Case and the

Trustee’s Adversary Proceeding, but also consist of numerous filings in the

Seiko Epson Adversary Proceeding.” Schoenmann’s motion and Espon’s

joinder placed Koshkalda on notice that all of his bankruptcy case filings

13 and adversary proceeding filings were at issue. And it was clearly proper

for the bankruptcy court to consider all of Kohskalda’s filings. See

Ringgold-Lockhart, 761 F.3d at 1063-64 (alleged vexatious litigant’s entire

litigation history can help inform the court’s assessment of the litigant’s

conduct as abusive); Molski, 500 F.3d at 1058 (same). Koshkalda had

sufficient notice that all of his filings in the bankruptcy case and the Epson

Adversary Proceeding were in play when he filed his opposition.

Koshkalda alternately argues that he was denied due process because

the bankruptcy court set a 10-page limit on his legal brief in support of his

opposition. This argument is without merit. Koshkalda devoted just under

four pages in his opposition to specifically and directly challenging

Schoenmann’s vexatious litigant motion. The remainder of his opposition is

devoted to other matters.5 Moreover, he has failed show that the page limit

prevented him from presenting any evidence or arguments. There is

simply no indication that he was prejudiced by the alleged lack of notice

and opportunity to respond. See Rosson v. Fitzgerald (In re Rosson), 545 F.3d

764, 776–77 (9th Cir. 2008).

Accordingly, we reject Koshkalda’s due process arguments. The

record establishes that he was provided adequate notice and a reasonable

5 Furthermore, the bankruptcy court specified that its page limitation did not apply to declarations and exhibits filed in support of the opposition. In fact, Koshkalda filed a declaration with exhibits totaling more than 275 pages.

14 opportunity to oppose the entry of the pre-filing orders, and he did so.

B. The bankruptcy court compiled an adequate record for review.

Koshkalda next argues that the bankruptcy court did not compile an

adequate record for review. He contends that, even though the court

specifically cited and discussed 44 of his filings as supporting its findings

of frivolousness and harassment, this did not constitute an adequate record

because Koshkalda was not provided with any opportunity to respond to

most of them. This argument does nothing more than restate Koshkalda’s

due process argument in slightly different terms and does not address the

adequacy of the record.

“An adequate record for review should include a listing of all the

cases and motions that led the district court to conclude that a vexatious

litigant order was needed.” Ringgold-Lockhart, 761 F.3d at 1063 (citing De

Long, 912 F.2d at 1147). The bankruptcy court clearly detailed the filings it

relied on in makings its decision. Its Vexatious Litigant Ruling complied

with the necessary procedural requirements as set forth in Ringgold-Lockart

and other Ninth Circuit precedent.

C. The bankruptcy court’s findings of frivolousness and harassment were not clearly erroneous.

Koshkalda’s principal argument on appeal challenges the bankruptcy

court’s factual findings that his filings were frivolous and made for the

purpose of harassment. Again we turn to Ringgold-Lockhart, which instructs

15 that before entering a pre-filing order,“it is incumbent on the court to make

‘substantive findings as to the frivolous or harassing nature of the litigant’s

actions.’” Id. at 1064 (quoting De Long, 912 F.2d at 1148).

As for an evaluation of frivolousness for purposes of vexatiousness,

the Ninth Circuit has emphasized that “[f]rivolous litigation is not limited

to cases in which a legal claim is entirely without merit.” Molski, 500 F.3d at

1060. Frivolous filings include those that have “some measure of a

legitimate claim to make false assertions.” Id. at 1060-61. Importantly, a

frivolous filing alone is not enough. Neither is mere litigiousness. Ringgold-

Lockhart, 761 F.3d at 1064. Rather, the frivolous filings must be “inordinate”

in number. Id. Courts must, therefore, “look at ‘both the number and

content of the filings as indicia’ of the frivolousness of the litigant’s claims.”

Id. (quoting De Long, 912 F.2d at 1148).

The Ninth Circuit has explained that a pattern of harassment can be

“an alternative to frivolousness” and can support a vexatious litigant

finding. Id. at 1064. Ringgold-Lockhart cautioned, however, that “courts

must be careful not to conclude that particular types of actions filed

repetitiously are harassing, and must instead . . . discern whether the filing

of several similar types of actions constitutes an intent to harass the

defendant or the court.” Id. (quoting De Long, 912 F.2d at 1148 n.3) (internal

brackets and quotation marks omitted).

The bankruptcy court entered detailed findings that Koshkalda made

16 numerous frivolous filings in a pattern of harassment throughout the

Epson Adversary Proceeding and in the main case. Koshkalda contends

that these findings are erroneous because he is right and the bankruptcy

court was wrong. But Koshkalda has taken little or no concrete steps to

point to meaningful error in the merits determinations of his underlying

filings. Nor are we aware of any. As a result, and because the bankruptcy

court articulated the correct legal standards for finding vexatious conduct,

we focus our review on the court’s findings of frivolousness and

harassment largely to determine whether these findings are illogical,

implausible, or unsupported by the record.

The bankruptcy court examined each of the 44 filings it identified and

concluded that they were frivolous and filed to harass Schoenmann, Epson,

or the court. Koshkalda argues that the court could not consider his actions

in the Epson Adversary Proceeding, and that he was merely preserving his

challenges to Schoenmann and Fox Rothschild while he awaited his

opportunity to appeal the bankruptcy court’s decisions not to remove them

from his case.6 We address the court’s findings and Koshkalda’s arguments

against them within the context of the analysis articulated in Ringgold.

6 At the time the issuance of this Panel's decision, the bankruptcy court’s orders denying removal of Schoenmann and Fox Rothschild were not yet final and appealable.

17 1. Koshkalda’s actions in the Epson Adversary Proceeding.

We begin with Koshkalda’s actions in the Epson Adversary

Proceeding as they are the first significant batch of activity identified by the

court when considered chronologically. The court entered its first order

resolving an informal discovery dispute on February 14, 2019, and entered

its last order resolving an informal discovery dispute on June 12, 2019. The

court entered ten other orders resolving informal discovery disputes

between those dates.

Though both Epson and Koshkalda liberally invoked the court’s

informal discovery dispute resolution process, the bankruptcy court found

that “all of these disputes arose because Mr. Koshkalda made unreasonable

demands in propounding his own discovery or obstinately refused to

cooperate in good faith with Seiko Epson’s legitimate efforts to conduct

discovery.” In marching through the twelve discovery disputes, the court

found most of them to be obstreperous and baseless efforts by Koshkalda

to evade Epson’s legitimate discovery. The court began its analysis noting

that, though Koshkalda was proceeding pro se by this point, he knew that

serious consequences could result from abusive discovery tactics given the

case ending discovery sanctions imposed against him in Epson’s district

court Infringement Action. The bankruptcy court observed that Epson did

not particularly distinguish itself in handling these disputes, but the court

concluded that “[w]hile Seiko Epson’s conduct was frustrating, it was clear

18 that Mr. Koshkalda was continuing to engage in abusive, harassing

discovery tactics, which supports entry of a pre-filing order.” Given that

the bankruptcy court presided over the Epson Adversary Proceeding and

these discovery disputes, it was uniquely situated to assess Koshkalda’s

actions and intent. Its determination of frivolousness and harassment with

respect to the informal discovery disputes was not clearly erroneous.

Similarly, the bankruptcy court identified fifteen motions Koshkalda

filed in the Epson Adversary Proceeding that supported the pre-filing

orders. Of these, the court found that “[a]ll but two of these motions were

entirely lacking in merit.” Koshkalda filed seven of these motions during a

two-week period between August 20 and September 3, 2019. The timing of

these motions, the relief sought, and the content of the filings all reflected

Koshkalda’s strong desire to derail the resolution of Epson’s motion for

partial summary judgment. Indeed, in the process of evaluating one of

these motions, the bankruptcy court stated: “The court believed then and

believes now that this motion, and those upon which it was based, were

filed for no purpose other than to delay this action, which means they were

frivolous and they justify issuance of a pre-filing order.” The record

supports this finding.

Koshkalda argues that his actions in the Epson Adversary Proceeding

cannot be considered as part of the vexatious litigant assessment because

Epson failed to litigate whether they were frivolous or harassing in the

19 Epson Adversary Proceeding. He contends that issue and claim preclusion

barred both Epson and Schoenmann from using any of his conduct in the

Epson Adversary Proceeding to establish that he is a vexatious litigant.

Issue preclusion does not apply because the vexatious litigant issue was

not necessary to resolve Epson’s discharge claims. See Skilstaf, Inc. v. CVS

Caremark Corp., 669 F.3d 1005, 1022–23 (9th Cir. 2012) (holding that issue

preclusion applied where the first district court “necessarily had to

adjudicate” the same objections the same litigant raised in the second

district court). And claim preclusion does not apply because the vexatious

litigation “claims” did not exist as of the filing of the Epson Adversary

Proceeding. See Media Rights Techs., Inc. v. Microsoft Corp., 922 F.3d 1014,

1024 (9th Cir. 2019) (holding that claim preclusion did not bar claims that

arose after first lawsuit was commenced). Additionally, Schoenmann was

not a party to the Epson Adversary Proceeding. Therefore, she was not

bound by it. See Taylor v. Sturgell, 553 U.S. 880, 892–96 (2008) (recognizing

general rule prohibiting application of claim and issue preclusion against a

person who was not a party in the previous lawsuit).

Kohskalda further argues that there are no cases in which a defendant

has been determined to be a vexatious litigant. The absence of such cases

makes sense. Implicit within the concept of vexatious litigation is volitional

activity, and one does not volitionally undertake to be a serial defendant.

Moreover, courts more commonly control defendants’ abusive litigation

20 conduct by using other sanctions, including monetary and case terminating

sanctions – as the district court employed against Koshkalda in the

Infringement Action and as the bankruptcy court imposed in the Epson

Adversary Proceeding.

In any event, by focusing on his role as the defendant, Koshkalda

ignores the true significance of the bankruptcy court’s assessment of his

litigation conduct. The court relied on his actions to develop a broad

picture of his intent to file frivolous matters for the purpose of harassing

Schoenmann, Epson, and the court. As noted above, the court marched

through 27 distinct examples of Koshkalda’s litigation conduct in the

Epson Adversary Proceeding , all of which, it concluded, evidenced his

unwarranted and illegitimate efforts to frustrate Epson’s discharge claims.

Tellingly, Koshkalda offers no defense of these actions but rather merely

states that they cannot be considered. We find no error with the bankruptcy

court’s use of Koshkalda’s conduct in the Epson Adversary Proceeding to

establish an overall pattern of frivolous and harassing filings.

2. Koshkalda’s conduct in the main bankruptcy case.

After the court entered its judgment against him in the Epson

Adversary Proceeding, Koshkalda shifted his attention to the main case.

The bankruptcy court observed that “[e]leven of [Koshkalda’s motions]

were filed during a frantic four-month period between September 23, 2019

and January 2, 2020, after the court denied Mr. Koshkalda’s discharge.” The

21 filings in the main case identified by the court as supporting the pre-filing

orders reflected repeating patterns of conduct. The bankruptcy court noted

that Koshkalda had filed numerous motions to compel Schoenmann to

abandon estate property even when she was actively administering the

asset or had a sale pending. The court listed two of Koshkalda’s

abandonment motions as the first instances of conduct demonstrating his

specific intent to harass the estate with frivolous filings. At best, the

repetitive nature of the frivolous abandonment motions reflected

Koshkalda’s intolerance for, and impatience with, Schoenmann’s efforts to

administer the estate’s assets. At worst, the motions were part of a

calculated and cynical scorched earth strategy that Koshkalda implemented

with the intent to prevent his creditors – especially Epson – from ever

recovering any significant amount from the liquidation and distribution of

the estate’s assets. The bankruptcy court found the latter. That finding was

supported by the record and, hence, was not clearly erroneous.

After his counsel withdrew, Koshkalda began to attack Schoenmann

and her professionals directly by belatedly challenging their employment

and compensation. One of his first pro se challenges, filed late in 2018,

sought to remove Schoenmann as trustee seven months into the case.

Koshkalda based his request on Schoenmann’s prior actions involving

Epson – actions to which Koshkalda did not originally object.

Though the court identified the motion to remove Schoenmann as an

22 example of Koshkalda’s litigousness, it did not identify it as a frivolous or

harassing filing. Rather, it was the subsequent repetitive challenges that the

court found frivolous and harassing. These challenges included: (1) a

motion to disqualify Fox Rothschild as Schoenmann’s counsel filed roughly

a year after its employment, to which Koshkalda did not originally object

despite notice; (2) objections to the professionals’ interim fee applications;

(3) a motion for authority to sue both Schoenmann and Fox Rothschild in

state court, filed despite the denial of Koshkalda’s prior challenges; (4) a

motion to vacate as void the order authorizing Fox Rothschild’s

employment; and (5) various related reconsideration motions.

At the same time, Koshkalda continued his attempts to impede

Schoenmann’s efforts to administer the estate by opposing Schoenmann’s

compromise and sale motions. Koshkalda also continued to file additional

abandonment motions – particularly those related to Koshkalda’s asserted

claims against Epson allegedly arising from Epson’s prepetition seizure of

Koshkalda’s assets and its prosecution of the district court Infringement

Action.

Additionally, Koshkalda consistently sought reconsideration of

adverse rulings as a matter of course despite the bankruptcy court’s

repeated explanation of the limited grounds available to justify amendment

or modification of court orders. As the court similarly explained in its

review of filings in the Epson Adversary Proceeding, the motions for

23 reconsideration demonstrated “Mr. Koshkalda’s habitual misuse of

motions for reconsideration, which can only be granted on very narrow

grounds. Rather than making any effort whatsoever to establish grounds

for reconsideration, he uses them to rehash the same arguments he

originally made or to raise additional arguments for the first time.” The

court found this to be strong evidence of Koshkalda’s use of frivolous

filings to harass the trustee, Epson, and the court.

In support of its Vexatious Litigant Ruling, the bankruptcy court also

relied on six oppositions Koshkalda filed in the main bankruptcy case. The

court’s reliance on oppositions to support its Vexatious Litigant Ruling

gives us pause and must be carefully examined. In Ringgold-Lockhart, the

Ninth Circuit raised similar concerns when the district court partially based

its determination of vexatiousness on the litigant’s response to a tentative

order. As Ringgold-Lockhart explained:

Most troubling, the district court’s list includes the Ringgolds’ response to its tentative order finding them vexatious. As explained, the Ringgolds had a due process right to be heard on this matter. The district court faults the Ringgolds for “reiterating old facts and arguments” in their response to the court order. As the Ringgolds had to argue that their filings were not frivolous, such repetition was inevitable. What’s more, the district court invited their response, so it is particularly inappropriate to hold it against them.

Ringgold-Lockhart, 761 F.2d at 1065.

24 Koshkalda similarly had a right to be heard in opposition to

Schoenmann’s motions.7 While it is inappropriate to penalize Koshkalda

for exercising this right, what he said in these oppositions and how he said

it provided meaningful context for the court’s frivolousness and

harassment findings. Of the six oppositions, three of them were objections

to the fee applications filed by Schoenmann and her professionals.

Koshkalda did not challenge the billings, but rather continued to reargue

his disagreement with Schoenmann’s decision not to challenge Epson’s $12

million claim or to actively pursue his asserted claims against Epson. By

the time Koshkalda made these objections, the bankruptcy court already

had considered and rejected as meritless Koshkalda’s underlying positions

a number of times in a number of different matters.

7 Not all chapter 7 debtors have standing to challenge a trustee’s administration of the bankruptcy estate. A debtor’s standing to object to matters such as claims objections, allowance of fees, sales of property, and settlements generally depends upon having a pecuniary interest in the estate. Where the bankruptcy estate cannot pay all creditors in full and no surplus will be returned to the chapter 7 debtor, that debtor cannot generally demonstrate injury in fact to object to the trustee’s administration of the estate and lacks standing. An-Tze Cheng v. K&S Diversified Invs., Inc. (In re Cheng), 308 B.R. 448, 454 (9th Cir. BAP 2004), aff’d, 160 F. App’x 644 (9th Cir. 2005). But where the estate has a surplus to return to the debtor, or where a debtor’s discharge is denied, that debtor has a pecuniary interest in the administration of the estate and has standing to challenge the trustee’s actions. Wellman v. Ziino (In re Wellman), 378 B.R. 416 (table), 2007 WL 4105275, at 1* n.5 (9th Cir. BAP Nov. 9, 2007)(unpublished) (citing Heath v. Am. Express Travel Related Servs. Co. (In re Heath), 331 B.R. 424, 429 (9th Cir. BAP 2005)). Here, Koshkalda had a pecuniary interest in the administration of the estate as a result of the denial of his discharge, and had standing to object to the trustee’s administration of the estate.

25 The other three oppositions concerned proposed settlements of the

estate’s claims. Like the compensation-related objections, each of these

three oppositions were founded on positions that lacked merit and which

the court already had rejected in prior matters. Thus, even though the

oppositions ordinarily should not be considered as direct evidence of

vexatious conduct, here they provide additional context for the assessment

of Koshkalda’s other filings and for the bankruptcy court’s findings that

they were frivolous and harassing. The bankruptcy court’s discussion of

Koshkalda’s oppositions does not constitute reversible error.

In summary, Koshkalda’s filings run the gamut – from repeated

challenges to Schoenmann’s administration of the estate and continuous

discovery disputes in the Epson Adversary Proceeding – to a never-ending

battle against employment and compensation of Schoenmann and Fox

Rothschild. Underlying the vast majority of Koshkalda’s filings was his

ongoing dispute with Epson. The bankruptcy court cogently described the

interrelationship between his challenges against Schoenmann and Fox

Rothschild, his efforts to thwart estate administration, his animus for

Epson, and his disdain for any court ruling that might have resulted in

Epson actually realizing a recovery on some part of its $12 million

judgment. This is seen in both the Epson Adversary Proceeding and the

main bankruptcy case. We find no error – clear or otherwise – in the

bankruptcy court’s frivolousness and harassment findings.

26 3. The number of Koshkalda’s frivolous and harassing filings within his bankruptcy was inordinate.

Koshkalda contends that any pre-filing order against him is

inappropriate because he only commenced his bankruptcy and was a

defendant in the Epson Adversary Proceeding. He argues that his

involvement in these proceedings cannot support a vexatious litigant

finding because it lacks the required numerosity.8 In support of his

argument, he cites to Ringgold-Lockhart, where the Ninth Circuit reviewed a

pre-filing order issued by the district court based primarily on the

plaintiffs’ motions practice in two federal lawsuits. Id. at 1064-65. The

Ninth Circuit acknowledged that the two federal lawsuits commenced by

the plaintiffs were “far fewer than what other courts have found

inordinate.” Id. at 1064-65 (citations and internal quotation marks omitted).

Importantly, the Ninth Circuit in Ringgold-Lockhart declined to set a

minimum number of actions a litigant must commence before he or she can

be found to be a vexatious litigant. It remarked, however, that “[s]uch a

situation would at least be extremely unusual, in light of the alternative

8 The Ninth Circuit’s requirement that a litigant’s vexatious claims must be inordinate arises within its discussion of frivolous filings. In re Ringgold, 761 F.3d at 1064; Molski, 500 F.3d at 1059. While not phrased in the same terms, any consideration of harassment in support of a pre-filing order also requires evidence of a pattern. Ringgold-Lockhart, 761 F.3d at 1064 (quoting De Long, 912 F.2d at 1148). Accordingly, our discussion concerning the numerosity of frivolous filings applies equally to the establishment of a pattern of harassment.

27 remedies available to district judges to control a litigant’s behavior in

individual cases.” Id. at 1065. Ringgold-Lockhart emphasized that “[i]n light

of the seriousness of restricting litigants’ access to the courts, pre-filing

orders should be a remedy of last resort.” Id. at 1062. As a result, it

considered the question of whether other remedies would be sufficient

under the circumstances to be “particularly important.” Id. This led the

Ninth Circuit to conclude in Ringgold-Lockhart that the district court erred

by failing to consider other remedies to curb the abuse, including sanctions

under Civil Rule 11. Id. at 1065.

In the matter before us, the bankruptcy court attempted to address

Koshkalda’s actions through a series of increasingly severe sanctions.

Initially, the court addressed Koshkalda’s discovery abuses through an

informal discovery dispute resolution process. Unfortunately, Kohskalda’s

abusive conduct in the Epson Adversary Proceeding continued with

frivolous and harassing motions seeking to prevent discovery and forestall

Epson’s summary judgment motion. The court ultimately imposed

monetary and issue terminating sanctions on Koshkalda, finding that he

repeatedly lied to the court and baselessly refused to provide required

contact information for his parents so that they could be deposed in regard

to numerous challenged transfers involving them, Koshkalda and his

affiliated business entities.

After Koshkalda shifted his attention to the main bankruptcy case,

28 the bankruptcy court similarly attempted to dissuade him from filing

frivolous and harassing matters. The court denied a prior request to impose

monetary sanctions against Kohskalda under 28 U.S.C. § 1927 for

vexatiously and in bad faith multiplying the proceedings in the bankruptcy

case. In its decision, the bankruptcy court explained that, at that time, it

wanted to give leeway to Koshkalda as a pro se litigant and that it was not

prepared to conclude at that time that he was motivated by an improper,

bad-faith purpose – like harassment.

Yet, the record demonstrates that Koshkalda continued to press his

complaints against Schoenmann’s administration of the estate and Epson’s

claim despite prior rulings. While the court repeatedly described the

actions undertaken in the identified filings as baseless, it typically made

these determinations only after it had previously considered and rejected

the same arguments in prior rulings. This appears to be why the court did

not include the original motion to remove Schoenmann in its listing of

frivolous and harassing matters. Rather, the court relied on subsequent

filings that continued to relitigate the same underlying issues.

In a similar vein, the bankruptcy court identified as vexatious some

but not all of Koshkalda’s motions seeking to compel Schoenmann to

abandon estate property. In fact, the court’s identification of Koshkalda’s

frivolous abandonment motions begins with Koshkalda’s seventh

abandonment motion. The bankruptcy court did not rely on the prior six

29 abandonment motions (or two subsequently granted motions). After six

prior orders explaining the standards for abandonment, there is no

legitimate doubt that Koshkalda – even as a pro se litigant – was well

aware of what must be shown. Yet, as the bankruptcy court pointed out,

Koshkalda continued to seek abandonment of assets that Schoenmann

actively was administering. This is illustrative of the vast majority of

matters the bankruptcy court relied on to support its Vexatious Litigant

Ruling. More importantly, this history amply demonstrates that the court

considered and applied less severe sanctions in an attempt to control

Koshkalda’s conduct before it entered the pre-filing orders. At bottom, the

lesser sanctions imposed support the conclusion that such sanctions did

not, and would not, work with Koshkalda.

The bankruptcy court imposed the Case Pre-filing Order as a

measure of last resort, and it did so amidst concerns that Koshkalda’s

filings were exhausting the bankruptcy estate. Both Schoenmann and the

court expressed concerns that Koshkalda’s actions were turning a solvent

estate into one that was administratively insolvent without sufficient funds

to pay the costs of administering the chapter 7 case, much less to make a

distribution to unsecured creditors.

The Second Circuit considers whether or not a litigant has caused

needless expense or posed an unnecessary burden when evaluating

whether the challenged filings are frivolous and harassing. Safir, 792 F.2d at

30 24. While the Ninth Circuit did not specifically incorporate this

consideration into its articulation of the vexatious litigant factors, it has

more generally recognized that the Safir factors provide a “helpful

framework” for considering whether filings are frivolous and whether a

pre-filing order is narrowly tailored. Molski, 500 F3d at 1058.

An examination of unnecessary burden is particularly relevant in

bankruptcy cases because vexatious litigation may waste the estate’s

limited resources and deprive creditors of any distribution. See, e.g.,

Tangwall v. Compton (In re Bertan), BAP No. AK–17–1139–LBF, 2018 WL

1704306 at *6 (9th Cir. BAP April 6, 2018) (affirming pre-filing order where

bankruptcy court found that the litigant had “caused needless expense to

other parties” and the trustee and court were concerned that the continued

actions would needlessly “burden the bankruptcy estate’s resources and

the court”); Melcher v. Richardson (In re Melcher), BAP No.

NC–14–1573–TaDJu, 2015 WL 8161915 at *4 (9th Cir. BAP Dec. 7, 2015)

(affirming pre-filing order where “[t]here is no question that a once solvent

estate is now insolvent due to the Debtor’s protracted efforts to stall the

sale of Stonewall and other real properties”); In re Sui, 2014 WL 5840246 at

*8 (vacating pre-filing order as inconsistent with Ninth Circuit authority,

but quoting with approval the bankruptcy court’s concern that repetitive

filings had to stop or “there’s not going to be any money left for anyone”).

In support of his argument that he did not file an inordinate number

31 of frivolous and harassing matters, Koshkalda directs our attention to cases

involving traditional litigation in which the vexatious litigant filed multiple

lawsuits. But his argument ignores the reality of bankruptcy cases. As the

Supreme Court has recognized“[a] bankruptcy case involves an

‘aggregation of individual controversies,’ many of which would exist as

stand-alone lawsuits but for the bankrupt status of the debtor.” Bullard v.

Blue Hills Bank, 575 U.S. 496, 135 S. Ct. 1686, 1692 (2015) (quoting 1 Collier

on Bankruptcy ¶ 5.08[1][b], p. 5-42 (16th ed. 2014)).

Though Koshkalda only commenced a single bankruptcy case, he

initiated numerous disputes within the bankruptcy case and in the Epson

Adversary Proceeding by pressing his unreasonable and baseless positions.

This caused the bankruptcy estate to expend time and incur attorney fees to

address frivolous matters in the main bankruptcy case. At the time the

bankruptcy court imposed its Case Pre-filing Order, it had exhausted less

drastic measures to no effect, and Koshkalda’s pattern of filing frivolous

and harassing matters was depleting the bankruptcy estate to the detriment

of his creditors.

Koshkalda fails to state what effective sanctions the bankruptcy court

could have imposed short of entering the Case Pre-filing Order. In general

civil litigation, the court retains the ability to impose case ending sanctions

against the offending party - as the district court did in the Infringement

Action. See generally Sui v. Marshack, 691 F. App’x 374 (9th Cir. 2017)

32 (recognizing district court’s inherent equitable power to impose case

terminating sanctions (citing TeleVideo Sys. Inc. v. Heidenthal, 826 F.2d 915,

916 (9th Cir. 1987))). Bankruptcy cases, however, generally afford no

similar opportunity. The closest analog to terminating sanctions in a

chapter 7 bankruptcy is dismissal for cause, including a debtor’s refusal to

cooperate with the trustee. See § 707(a). But in some asset cases, dismissal

of the chapter 7 case is exactly what the debtor wants. In this case, for

instance, dismissal would have rewarded Koshkalda for his lack of

cooperation by returning to him assets Schoenmann was in the process of

liquidating for the benefit of the estate.

Denial of the debtor’s discharge often is identified as another

potential remedy for debtor misconduct. See Law v. Siegel, 571 U.S. 415, 427

(2014). But even if we assume that Kohskalda’s litigation conduct could

support denial of his discharge, he already had been denied his discharge

on other grounds. Law also identified the court’s sanctioning authority

under Rule 9011, § 105(a), and the court’s inherent powers as additional

remedies available to the bankruptcy court to discourage debtor

misbehavior. Id. In light of the denial of his discharge, however, Koshkalda

already was saddled with a nondischargeable $12 million judgment debt

despite being in bankruptcy for years. Under such circumstances, the

imposition of monetary sanctions on top of a large nondischargeable debt

typically is likely to have little or no effect in regulating a debtor’s litigation

33 conduct. Even then, the estate would be left to collect from a litigious

debtor with more than $12 million in nondischargeable debts.

As instructed by Ringgold-Lockhart, the bankruptcy court properly

considered whether Koshkalda’s frivolous and harassing filings were

inordinate in number to support the pre-filing orders. It examined the

relevant circumstances as appeared in this case, including: (1) Kohskalda’s

litigation history; (2) his patterns of frivolous and harassing filings; (3) the

ineffectiveness of alternative remedies to control his behavior; and (4) the

need to avoid further depletion of the bankruptcy estate. We acknowledge

that the only action Koshkalda filed was his bankruptcy. Yet, the absence of

multiple lawsuits does not mean that the bankruptcy court must stand by

impotently while the estate’s assets are exhausted to litigate Koshkalda’s

repetitive, frivolous, and harassing filings after other less severe measures

have proven inadequate. The bankruptcy court properly took this into

account when finding that Koshkalda’s filings were inordinate and

imposing the pre-filing orders as a matter of last resort.9

D. Necessity and narrow tailoring of pre-filing restrictions.

Though we agree that Koshkalda qualified as a vexatious litigant,

Ringgold-Lockhart also requires that the pre-filing restrictions “must be

9 Because we are reversing the Adversary Pre-filing Order on other grounds, we express no opinion whether the number of frivolous and harassing filings was inordinate for purposes of the Adversary Pre-filing Order.

34 narrowly tailored to the vexatious litigant’s wrongful behavior.” Id. at 1066

(quoting Molski, 500 F.3d at 1061). Therefore, we consider whether the

bankruptcy court’s pre-filing orders were necessary to prevent continuing

vexatious conduct and whether the specific restrictions were narrowly

tailored.

The Case Pre-filing Order required Koshkalda to submit for pre-filing

review any proposed motions or other papers he desired to file that could

impact – or oppose arguments made by – Schoenmann, Epson, their

counsel, or the estate’s professionals. This order further dictated that, as

part of its pre-filing review, the court would determine whether the

proposed motions or other papers had merit “such that they should be

briefed and heard.” The order excluded from the restrictions any notice of

appeal filed from the Case Pre-filing Order or from the Vexatious Litigant

Ruling. But it did not exclude notices of appeal that he might desire to file

from any other court rulings the court might render. As for the Adversary

Pre-filing Order, it contained similar provisions, but applied to proposed

motions and papers impacting Epson, its employees, its agents, its

affiliates, and its counsel.

In Ringgold-Lockhart the pre-filing order at issue was overbroad in

two respects. First, the pre-filing order impermissibly provided for an

assessment of the merits of the proposed new action. As Ringgold-Lockhart

explained, the pre-filing screening process is ill-suited procedurally for a

35 merits determination. Id.

Second, the subject pre-filing order was overbroad because it

restricted the vexatious litigants’ ability to file any action pertaining to

administration of state courts or probate courts. Ringgold-Lockhart reasoned

that this restriction easily could extend to factual scenarios having nothing

to do with the dispute at the heart of the vexatious litigation:

Sometimes a rancorous dispute leaves a person with a bitter taste that does not fade, no matter how many resources are expended and no matter how many years pass. From our review of the case law discussing vexatious litigants, it is not uncommon for district courts to enjoin litigants from relitigating a particular case, such as when a litigant refuses to accept the finality of an adverse judgment. But in such cases, courts generally tailor the scope of a litigation restriction so as to restrain litigants from reopening litigation based on the facts and issues decided in previous lawsuits. The underlying litigation here attempts to reopen a case that has reached final judgment. A narrowly tailored injunction would address only filings in that or related actions.

Id. at 1067 (citations, internal brackets, and quotation marks omitted).

Koshkalda asserts that a pre-filing order was not necessary in either

the bankruptcy case or in the Espon Adversary Proceeding. As the

bankruptcy case remains open, Koshkalda’s pattern of frivolous and

harassing filings warrants the Case Pre-filing order. We agree, however,

with Koshkalda that there was no need for a pre-filing order in the

completed Epson Adversary Proceeding. As Koshkalda has pointed out, by

36 the time the court issued its Adversary Pre-filing Order, a final judgment

already had been entered, he had commenced his appeal from that

judgment, and he already had ceased filing papers in the Epson Adversary

Proceeding.10

We are aware that Koshkalda filed three post-judgment motions in

the Epson Adversary Proceeding: (1) a motion for reconsideration of the

court’s summary judgment ruling; (2) a motion for reconsideration of the

court’s order denying his motion to strike certain bank records produced

by Epson after Epson obtained them from Bank of America; and (3) a

motion to compel additional responses to his document production

requests. The bankruptcy court did not list the summary judgment

reconsideration motion as an example of Koshkalda’s vexatious litigation

conduct. Nor did it make any findings that this filing was frivolous or

intended to harass. But the court did make frivolous and harassment

findings as to the other two post-judgment motions.

Koshkalda filed the two frivolous post-judgment discovery motions

in October 2019. After that, he did not file anything else in the Epson

Adversary Proceeding before entry of the pre-filing orders several months

later. Admittedly, these two motions were no less frivolous or harassing

10 In contrast, for the same reasons we upheld, above, the bankruptcy court’s frivolousness, harassment, and numerosity findings, we further hold that the Case Pre- filing Order was necessary.

37 than the court’s other examples from the Epson Adversary Proceeding.

Even so, under the circumstances, these two motions were insufficient to

establish a continuing and ongoing need for the Adversary Pre-filing

Order.

Additionally, Koshkalda argues that both pre-filing orders were

overbroad. We also agree with this point. The pre-filing orders did not

expressly limit their restrictions on filing to Koshkalda’s bankruptcy case

and to the Epson Adversary Proceeding. Since the court made no findings

regarding frivolous or harassing filings outside of these two matters, there

was no demonstrated need for broader restrictions. Indeed, neither

Schoenmann nor Epson ever requested that the bankruptcy court impose

broader restrictions. In addition, the Case Pre-filing Order also potentially

infringed on Koshkalda’s right to appeal from future orders entered in the

bankruptcy case.

Finally, both pre-filing orders contravened Ringgold-Lockhart’s

prohibition against pre-filing procedures that contemplate merits

screening. As discussed above, Ringgold-Lockhart held that merits reviews

should not be part of any narrowly-tailored pre-filing procedures imposed.

Ringgold-Lockhart, 761 F.3d at 1066; see also In re Sui, 2014 WL 5840246, at *8.

CONCLUSION

For the reasons set forth above, we VACATE AND REMAND with

respect to the Case Pre-filing Order. On remand, the bankruptcy court will

38 need to amend the Case Pre-filing Order to remove any provision for a

merits review as part of the pre-filing review process. It also should limit

the scope of this order to cover only papers filed in Koshkalda’s

bankruptcy case and to exclude notices of appeal. As for the Adversary

Pre-filing Order, we REVERSE.11

11 In her responsive brief in NC-20-1051, Schoenmann has asked this Panel to enter a pre-filing order. She claims that Koshkalda has filed numerous, frivolous harassing appeals and that a BAP pre-filing order is necessary to prevent additional litigation misconduct. We disagree and hereby DENY that request. Most of his appeals have been dismissed as interlocutory. Bankruptcy finality is a complicated issue and continues to be an unsettled area of law. See generally Bullard, 575 U.S. 496, 135 S. Ct. at 1692–94 (explaining why an order denying confirmation of a chapter 13 plan is interlocutory); see also In re Liu, 611 B.R. at 872-73 (reiterating the Ninth Circuit’s advice that “litigants in bankruptcy who are unsure about the finality of an order [should] file a notice of appeal to preserve their rights whether the matter was final or interlocutory”). Furthermore, the burden on appellees arising from interlocutory appeals, especially when we deny leave to appeal and dismiss them as interlocutory, is minimal.