640 F.3d 108 (3rd Cir. 2011), 07-2151, In re Caterbone

Docket Nº:07-2151.
Citation:640 F.3d 108
Opinion Judge:BARRY, Circuit Judge.
Party Name:In re Stanley J. CATERBONE, Stanley J. Caterbone, Appellant.
Attorney:Stanley J. Caterbone, Lancaster, PA, pro se. William Kanter, Esq., Jeffrica J. Lee, Esq., Department of Justice, Washington, DC, Catherine L. Sakach, Esq., Court Appointed Amicus Curiae on Behalf of the Court, Duane Morris LLP, Cherry Hill, NJ.
Judge Panel:Before: BARRY, CHAGARES and ROTH, Circuit Judges.
Case Date:April 04, 2011
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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640 F.3d 108 (3rd Cir. 2011)

In re Stanley J. CATERBONE,

Stanley J. Caterbone, Appellant.

No. 07-2151.

United States Court of Appeals, Third Circuit

April 4, 2011

Submitted Under Third Circuit LAR 34.1(a) March 17, 2011.

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Stanley J. Caterbone, Lancaster, PA, pro se.

William Kanter, Esq., Jeffrica J. Lee, Esq., Department of Justice, Washington, DC, Catherine L. Sakach, Esq., Court Appointed Amicus Curiae on Behalf of the Court, Duane Morris LLP, Cherry Hill, NJ.

Before: BARRY, CHAGARES and ROTH, Circuit Judges.


BARRY, Circuit Judge.

This case involves an untimely notice of appeal to the District Court after the Bankruptcy Court's dismissal, for cause, of a Chapter 11 petition. The question before us is whether, pursuant to 28 U.S.C. § 158(c)(2) and the Federal Rules of Bankruptcy Procedure, an untimely filing such as the one at issue here deprives subsequent reviewing courts— here, both the District Court and this Court— of jurisdiction over the appeal. We conclude that it does. Accordingly, we will dismiss the instant appeal and remand to the District Court with instructions to dismiss the appeal to it from the Bankruptcy Court for lack of subject matter jurisdiction.

I. Background

Appellant Stanley J. Caterbone filed a Chapter 11 bankruptcy petition in May

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2005. The United States Trustee subsequently moved to dismiss the petition for cause, and the Bankruptcy Court granted the motion on October 3, 2006, citing various substantive and procedural deficiencies. See 11 U.S.C. § 1112(b).

The order of dismissal was mailed to Caterbone by first class mail on October 5, 2006. On October 16, he sent a notice of appeal by first class mail and electronic mail. However, the notice of appeal was filed with the District Court on October 19, rendering it untimely because it occurred outside the ten-day window, then in place, for filing a notice of appeal. See Fed. R. Bankr.P. 8002(a) (2006).1 It is undisputed that Caterbone did not file a " request to extend the time for filing a notice of appeal ... by written motion ... before the time for filing a notice of appeal ha[d] expired," nor did the Bankruptcy Court grant such an extension following " a motion filed not later than 20 days after the expiration of the time for filing a notice of appeal ... upon a showing of excusable neglect." Id. 8002(c)(2).

Despite its untimely filing, Caterbone's appeal was docketed in the District Court on November 14, and the Trustee did not argue that it was untimely. On March 15, 2007, the Court sua sponte dismissed the appeal, citing Caterbone's failure to comply with Fed. R. Bankr.P. 8006, which requires that a petitioner designate " items to be included in the record on appeal and a statement of the issues to be presented." Caterbone appealed to this Court. Shortly thereafter, the Trustee moved to dismiss the appeal, citing, for the first time, Caterbone's initial untimely notice of appeal, and arguing that, as a result of the untimely filing, the District Court lacked subject matter jurisdiction.

Following various intervening events, including the appointment of amicus curiae, the case is now before us. The Trustee argues that, consistent with Bowles v. Russell, 551 U.S. 205, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007), Section 158(c)(2) established a mandatory, jurisdictional deadline that statutorily encompasses Rule 8002(a)'s specified timeline for appealing the judgment of a bankruptcy court, such that the timeline is not akin to a freestanding, waivable " claim-processing rule" within the meaning of Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004). Amicus argues similarly. Caterbone, on the other hand, elides the Bowles analysis and argues, inter alia, that his untimely filing should be addressed, and excused, under the standard of " excusable neglect" set forth in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993).

For the reasons explained below, we hold that the prescribed timeline within which an appeal from a bankruptcy court must be filed is mandatory and jurisdictional, thus affirming, in light of Bowles, the rule that we applied in Shareholders v. Sound Radio, Inc., 109 F.3d 873, 879 (3d Cir.1997).

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II. Jurisdiction and Standard of Review

Jurisdiction is the threshold issue in this case, and we must address its relevance both to the decision rendered by the District Court, and to our review of that decision. Thus, as an initial matter, we note that we have jurisdiction over the final decision that the District Court rendered on Caterbone's appeal from the Bankruptcy Court. 28 U.S.C. § 158(d)(1). Our authority includes reviewing whether the District Court's own exercise of jurisdiction, per § 158(a), was proper. That is because " subject-matter jurisdiction, because it involves a court's power to hear a case, can never be forfeited or waived[, such that courts] ... have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party." Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (internal quotation marks and citation omitted).

Ordinarily, we apply plenary review to final orders of a district court sitting as an appellate court reviewing the decision of a bankruptcy court. In re Carnegie Ctr. Assocs., 129 F.3d 290, 294 (3d Cir.1997). However, following from our obligation to determine the threshold issue of subject matter jurisdiction, see Arbaugh, 546 U.S. at 514, 126 S.Ct. 1235, and where, as here, a party " contest[s] our jurisdiction and that of the District Court, ... [w]e exercise de novo review over [the] question [ ] of subject matter jurisdiction." Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 163 (3d Cir.2010). This is the case even where, again as here, a district court " exercis[es its] jurisdiction" and dismisses a cause of action for some other reason. Id. If our independent review yields the conclusion that the District Court lacked subject matter jurisdiction over an appeal from the Bankruptcy Court, the appropriate disposition is dismissal of the appeal. In re Caribbean Tubular Corp., 813 F.2d 533, 535 (1st Cir.1987) (holding that where it is found that a district court lacked appellate jurisdiction over a bankruptcy court order, the court of appeals must dismiss the appeal to it, and remand to the district court with instructions to vacate its order and to dismiss the appeal from the bankruptcy court).

III. Discussion

An appeal from a decision of a bankruptcy court is subject to the requirements of 28 U.S.C. § 158(c)(2), which provides that appeals " 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." When Caterbone filed his appeal, that rule provided, in relevant part, that " notice of appeal shall be filed with the clerk within 10 days of the date of the entry of the judgment, order, or decree appealed from." Fed. R. Bankr.P...

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