Lieb, Matter of

• Decision Date: 25 October 1990
• Docket Number: Nos. 89-5674,89-5693,s. 89-5674
• Citation: 915 F.2d 180
• Parties: In the Matter of Dwight L. LIEB, Debtor (Two Cases).
• Court: U.S. Court of Appeals — Fifth Circuit

Page 180

915 F.2d 180

In the Matter of Dwight L. LIEB, Debtor (Two Cases).

Nos. 89-5674, 89-5693.

United States Court of Appeals Fifth Circuit.

Oct. 25, 1990.

Rehearing Denied Dec. 13, 1990.

H. Rey Stroube, III, S. Shawn Stephens, Akin, Gump, Strauss, Hauer & Fled, Houston, Tex., for Thomson,

Law Offices of Jack Paul Leon, San Antonio, Tex., Susman & Godfrey, Houston, Tex., R. Laurence Macon, R. Glen Ayers, Jr., Cox & Smith Inc., San Antonio, Tex., for Tillman and Tilcorp.

John H. Tate, II, Raymond W. Battaglia, Oppenheimer, Rosenberg, Kelleher & Wheatley, Inc., Stephen Mark Murray, Murray, McClenahan & Sparr, San Antonio, Tex., Shelby A. Jordan, Corpus Christi, Tex., for Lieb.

Steven P. Shreder, Claiborne B. Gregory, Jr., Gresham, Davis, Gregory, Worthy & Moore, San Antonio, Tex., for City Savings and Walzem Service Corp.

Appeals from the United States District Court for the Western District of Texas.

Before JONES, DUHE, and WIENER, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Frederick L. Thomson, Paul J. Tillman, individually and as trustee, and Tilcorp, Inc. appeal from an amended order entered by the United States District Court for the Western District of Texas on December 1, 1989. The court's order temporarily restrained appellants from taking certain actions with respect to common stock that was the subject of an ongoing adversary proceeding in bankruptcy court between appellants and appellee Dwight L. Lieb. The order also set aside the court's This appeal had its genesis in a dispute between the parties about the ownership of common stock amounting to a controlling interest in CitySavings & Loan Association and related entities in San Antonio, Texas. Dwight L. Lieb, seller of the stock, filed an action against appellants, the buyers, in the district court of Bexar County, Texas. Lieb subsequently filed a voluntary petition under Chapter 11 of the Bankruptcy Code in federal district court. Pursuant to 28 U.S.C. Sec. 157(a) and local rules, the bankruptcy case was automatically referred to the United States Bankruptcy Court for the Western District of Texas. ¹ In that forum, Lieb filed an adversary proceeding against appellants and others. Eventually, the state court action was removed to the bankruptcy court and consolidated with the adversary proceeding.

previously imposed stay of the bankruptcy proceedings; severed Lieb's claims for injunctive relief; denied appellants' motion to withdraw the reference to the bankruptcy court as to the severed claims; and directed that the severed claims and application for a preliminary injunction be tried in the bankruptcy court. The court's order appeared to reaffirm that it would withdraw the reference and try several non-severed claims asserted by Lieb. Having concluded that no portion of the order appealed from is an "injunction" for purposes of 28 U.S.C. Sec. 1292(a)(1), or is "final" for purposes of 28 U.S.C. Sec. 1291, we dismiss the appeal for want of jurisdiction.

Appellants thereafter filed various motions with the district court, seeking to withdraw the reference pursuant to 28 U.S.C. Sec. 157(d), to stay proceedings in the bankruptcy court, and to dismiss Lieb's action pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). The district court initially granted the motion to stay proceedings in the bankruptcy court. Later, on November 21, 1989, Lieb filed with the district court an emergency motion for a temporary restraining order, seeking to enjoin appellants from taking certain actions with respect to the common stock of CitySavings. The district court entered an order the following day granting the motion and ruling on several other matters in the case. On December 1, 1989, the court on its own initiative entered an amended order effective the date of the original order. The amended order was identical to the original but for deletion of a paragraph mandating that certain of Lieb's claims be tried without a jury.

Appellants filed notices of appeal and petitions for writs of mandamus with respect to both orders. We denied the mandamus petitions and consolidated the two appeals. In their brief on the merits, appellants have defended their Seventh Amendment right to a jury trial on Lieb's claims and have raised serious constitutional challenges to the power of bankruptcy judges not appointed under Article III of the Constitution to preside over jury trials. On our own initiative, we questioned the jurisdictional basis of the appeals. After studying the parties' supplemental briefs and applicable law, we are unable to find any such basis.

Initially, we note that the district court's amended order effectively withdrew and replaced the original order. As noted, the two orders differed in only one respect: the amended order deleted a provision of the original that would have required certain of Lieb's claims to be tried, contrary to the demands of appellants, without a jury. As we interpret it, this sole amendment favored appellants by leaving open the question of their right to a jury trial of certain claims, and we trust that neither the bankruptcy court nor the district court will rely on the original order to avoid

ruling on appellants' jury demand. Because appellants have alleged no prejudice from the change, we consider only the amended order in our disposition of the appeal.

I. TEMPORARY RESTRAINING ORDER

The first operative portion of the district court's order granted Lieb's emergency motion for a temporary restraining order. It provided that the restraint was to continue for no more than nine days, during which time the bankruptcy court was to hold a hearing on Lieb's application to continue the restraining order into a preliminary injunction or to obtain other appropriate injunctive relief. Appellants claim that we may review this temporary restraining order under 28 U.S.C. Sec. 1292(a)(1), which grants this court jurisdiction of appeals from "[i]nterlocutory orders of the district courts of the United States ... granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions."

A temporary restraining order, however, does not qualify as an "injunction" under this section. See Overton v. City of Austin, 748 F.2d 941, 949 (5th Cir.1984). This court has long held that the denial of an application for a temporary restraining order is not appealable. Burroughs v. Wallingford, 780 F.2d 502, 503 (5th Cir.1986) (per curiam); accord Office of Personnel Mgt. v. American Fed'n of Gov't Employees, 473 U.S. 1301, 1303-04, 105 S.Ct. 3467, 3468-69, 87 L.Ed.2d 603 (Burger, Circuit Justice), stay denied, 473 U.S. 923, 106 S.Ct. 11, 87 L.Ed.2d 674 (1985). Other courts of appeals consistently have held that the grant of such an order is likewise not appealable. See, e.g., San Francisco Real Estate Investors v. Real Estate Inv. Trust of Am., 692 F.2d 814, 816 (1st Cir.1982); General Motors Corp. v. Gibson Chem. & Oil Corp., 786 F.2d 105, 108 (2d Cir.1986); Professional Plan Examiners of N.J., Inc. v. LeFante, 750 F.2d 282, 287 (3d Cir.1984); McDougald v. Jenson, 786 F.2d 1465, 1472 (11th Cir.), cert. denied, 479 U.S. 860, 107 S.Ct. 207, 93 L.Ed.2d 137 (1986); see generally 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure Sec. 3922, at 31 & n. 10 (1977 & Supp.1990).

The rule prohibiting appeals from the grant or denial of a temporary restraining order likely has its basis in concerns about mootness. Such an order must by its terms expire within ten days of issuance. Fed.R.Civ.P. 65(b). In the ordinary case, the order will have no effect after this period. Because the normal time span of an appeal is measured in months rather than days, the order would be moot long before it could be reviewed. This case provides a good example of a moot temporary restraining order. The district court's order was effective November 22, 1989, for no more than nine days, or until December 1, 1989. At that point, more than nine months ago, appellants were free of any restraint imposed by the district court on what they could do with the stock of CitySavings. In their merits brief, appellants have not asserted otherwise; indeed, they do not even mention the merits of the temporary restraint. This portion of the district court's order is not appealable.

II. WITHDRAWAL OF THE REFERENCE

The second operative portion of the district court's order "severed" certain of Lieb's claims against appellants, directing that they "continue as separate actions in the Bankruptcy Court." As to the severed claims, the order denied appellants' motion to withdraw the reference from the bankruptcy court. Appellants ask us to review the merits of these rulings either under 28 U.S.C. Sec. 1291, which grants jurisdiction of "all final decisions" of district courts, or under the Cohen collateral order doctrine, see Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949). We hold that this portion of the district court's order is neither final nor collateral.

We consider first the denial of the motion to withdraw the reference. The statute authorizing withdrawal allows district courts to withdraw a proceeding "in whole or in part." The instant order denies withdrawal "in part," although it is not entirely clear whether in so doing the court denied appellants' motion to withdraw the reference as to Lieb's other claims. This ambiguity is unimportant, however, because the appealability of withdrawal orders has received much consideration in the courts of appeals: they have uniformly construed a district court's "decision to withdraw a reference or to refuse such a withdrawal [as] interlocutory and non-reviewable." In re Powelson, 878 F.2d 976, 979 (7th Cir.1989). These courts include the Second, Third, Seventh, Ninth, Tenth, and Eleventh Circuits. See In re Chateaugay Corp., 826 F.2d 1177, 1179-80 (2d Cir.1987); In re Pruitt, 910 F.2d 1160, 1165-66 (3d Cir.1990); In re...