By: Donald L Swanson
A 2021 opinion out of the U.S. Eighth Circuit Court of Appeals takes a minority view on two separate issues. The opinion is FishDish, LLP v. Vero Blue Farms USA, Inc. (In re Veroblue Farms USA, Inc.), 6 F.4th 880 (8th Cir. 2021).
In it, the Eighth Circuit rules that the 14-days appeal deadline in Fed.R.Bankr.P. 8002(a) is “mandatory” but not “jurisdictional.”
This article, (i) summarizes the Eighth Circuit’s “mandatory” v. “jurisdictional” analysis, and (ii) asks what the practical significance of such a distinction might be.
Facts
Debtor files Chapter 11 bankruptcy and achieves a confirmed plan.
Meanwhile, an objection is filed to a creditor’s proof of claim, asserting that the claim should be recharacterized from debt to equity.
The claim objection is overruled by the Bankruptcy Court, and the objector appeals to the District Court.
The District Court dismisses the appeal under Fed.R.Bankr.P. 8002(a), because the notice of appeal is filed more than 14 days after entry of the order.
Appellant then appeals to the Eighth Circuit Court of Appeals, which affirms.
However, the Eighth Circuit takes up the question of whether the 14-days appeal deadline in Rule 8002(a) is “jurisdictional” or merely “mandatory”—and finds it to be the latter.
Analysis
Bankruptcy Rule 8002(a)(1) provides: “a notice of appeal must be filed with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed.”
The U.S. Supreme Court has declared:
- Bankruptcy Rules, prescribed by the Supreme Court for the practice and procedure in bankruptcy cases, “do not create or withdraw federal jurisdiction” (Kontrick v. Ryan, 540 U.S. 443, 453 (2004)); but
- a rule is “jurisdictional” if the legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional” (Gonzalez v. Thaler, 565 U.S. 134, 141 (2012)).
The appellate jurisdiction of a district court, a court of appeals, or a bankruptcy appellate panel to review a bankruptcy court order is governed by 28 U.S.C. § 158, which provides that an appeal from a bankruptcy court:
- “shall be taken in the same manner as appeals in civil proceedings generally are taken to the courts of appeals from the district courts, and in the time provided by Rule 8002 of the Bankruptcy Rules.”
The jurisdictional issue is whether incorporating Rule 8002(a)(1)’s time limit in 28 U.S.C. § 158(c)(2) creates a statutory limitation on a federal district courts’ subject-matter jurisdiction. If it does:
- then the District Court should have addressed this issue before addressing another issue that is non-jurisdictional; and
- that’s because “a court cannot issue a ruling on the merits when it has no jurisdiction” (Brownback v. King, 592 U.S. 209, 218 (2021).
–Precedents & Split Decisions
The Eighth Circuit previously upheld the dismissal of a bankruptcy appeal for failure to comply with Rule 8002 in In re Delta Engineering Intern., Inc., 270 F.3d 584, 586 (8th Cir. 2001).
But the Eighth Circuit has not held that the 14-day deadline in Rule 8002 is jurisdictional:
- the Eighth Circuit BAP has so ruled, but its rulings are not controlling on this Article III issue; and
- a number of sister circuits have concluded that Rule 8002 is jurisdictional, like Rule 4(a)(6) of the Federal Rules of Appellate Procedure.
But after careful consideration of the contrary cases, the Eighth Circuit concludes that Rule 8002’s 14-day deadline is “mandatory but not jurisdictional.”
–28 U.S.C. § 158 & In re Tennial
In In re Tennial, 978 F.3d 1022, 1025-26, 1028 (6th Cir. 2020), the Court explains:
- Congress merely referred, in 28 U.S.C. § 158, to an appeal deadline created by the Bankruptcy Rules;
- nothing about that reference indicates that Congress meant to attach subject matter jurisdiction consequences to deadlines established by the Bankruptcy Rules;
- much less did it do so “clearly” with that modest reference;
- if deadlines established by the rules process alone create jurisdictional limits, that would mean the rules committee could change the scope of federal court subject matter jurisdiction on its own; but
- the Constitution gives that power to Congress alone.
The rules committees have changed the bankruptcy appeal deadline since 28 U.S.C. § 158 was enacted — from 10 to 14 days. How, then, can we say that Congress “specified” the 14-days deadline?
The 14-days deadline in Rule 8002(a) for filing a notice of appeal does not create a jurisdictional imperative. Even so, the deadline remains mandatory.
Because the appeal deadline is mandatory, and because appellant missed it, the In re Tennial appeal must be dismissed as dilatory.
–Application Here
As in Tennial, Appellant in this case missed the mandatory 14-days deadline in appealing the claim objection order, and the District Court properly dismissed the appeal because of the time deadline accordingly.
The Eighth Circuit holds: “As it is undisputed” that Appellant missed the mandatory 14-day deadline, the District Court’s order dismissing the appeal of the claim objection order “is affirmed.”
Practical Effect?
So, what’s the practical difference between missing an appeal deadline that is “jurisdictional” and missing an appeal deadline that is “mandatory.”
Perhaps it’s this, as suggested by the Eighth Circuit in its FishDish opinion: when a notice of appeal is filed after the 14-days deadline expires,
- if the deadline is jurisdictional, then the appeal must be dismissed; but
- if the deadline is merely mandatory (and not jurisdictional), then the appellate courts may consider related matters?
Conclusion
The Eighth Circuit’s analysis makes sense.
It will be interesting to see how the “jurisdictional” v. “mandatory” distinction works out in future cases.
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