English-Speaking Union v. Johnson, 02-7086.

• Decision Date: 16 January 2004
• Docket Number: No. 02-7086.,02-7086.
• Parties: The ENGLISH-SPEAKING UNION, Appellant, v. James JOHNSON, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

353 F.3d 1013

The ENGLISH-SPEAKING UNION, Appellant, v. James JOHNSON, et al., Appellees.

No. 02-7086.

United States Court of Appeals, District of Columbia Circuit.

Argued October 14, 2003.

Decided January 16, 2004.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Appeal from the United States District Court for the District of Columbia (No. 02cv00605).

Frederic W. Schwartz Jr. argued the cause and filed the briefs for appellant.

M. Bradley Blommer argued the cause for appellee. With him on the brief was Roger A. Hayden II.

Before: HENDERSON, TATEL, and ROBERTS, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge:

Exercising its appellate jurisdiction to review orders of the bankruptcy court, the district court dismissed an appeal for want of prosecution after the appellant missed the deadline for filing its brief. This appeal presents two questions: whether the district court had jurisdiction to dismiss the case in view of the fact that appellant had previously filed an appeal to this court, and if so, whether the district court properly exercised its discretion to dismiss for failure to prosecute. We conclude that the district court retained jurisdiction, but because it failed to explain why the harsh sanction of dismissal was necessary under the circumstances of this case, we reverse.

I.

In 1993, The English-Speaking Union (ESU), an organization established to promote strong relations among Commonwealth nations, sold its Washington, D.C. branch headquarters to James and Geraldine Johnson, who, before paying ESU its note for part of the building's purchase price, filed for bankruptcy. In November 2001, the United States Bankruptcy Court for the District of Columbia entered a settlement order dismissing ESU's claim to funds from the estate and favoring appellee The Elm Company (Elm). See English-Speaking Union v. Johnson, No. 99-10076, slip op. at 1 (Bankr.D.D.C. Nov. 29, 2001).

Dissatisfied with the bankruptcy court's conclusions, ESU appealed to the United States District Court for the District of Columbia. The district court, exercising its appellate jurisdiction over final orders of the bankruptcy court, see 28 U.S.C. § 158(a) (2000 & Supp. III 2003), docketed ESU's appeal on March 29, 2002, starting the clock ticking on the fifteen days allotted for ESU to file its brief. See Fed. R. Bankr.P. 8009(a)(1) ("Unless the district court ... excuses the filing of briefs or specifies different time limits ... [t]he appellant shall serve and file a brief within 15 days after entry of the appeal on the docket...."). Before that deadline arrived, ESU filed a motion for an extension of time, explaining that the transcript of the bankruptcy court proceedings was not yet complete. The district court granted ESU's request and gave it until June 12, warning "[t]here will be no further extensions." English-Speaking Union v. Johnson, No. 02-605, slip op. at 2 (D.D.C. Apr. 25, 2002).

On June 12, with the transcript still unavailable, ESU filed a second motion requesting an additional extension of time. Eight days later, the district court, unaware that ESU had submitted such a motion, dismissed ESU's appeal with prejudice for failure to prosecute. English-Speaking Union v. Johnson, No. 02-605, slip op. at 3 (D.D.C. June 20, 2002) (June Dismissal Order). In that order, the district court also dismissed ESU's "Second Amended Appeal," which ESU had filed after its original appeal to the district court in order to include in its appeal a May 2002 bankruptcy court order requiring ESU to pay certain costs incurred by its adversaries. The district court found that it lacked jurisdiction over this cost appeal because ESU had failed to file a timely notice of appeal. Id. at 2-3. On July 1, ESU filed a motion to vacate the June Dismissal Order pursuant to Federal Rule of Civil Procedure 60, arguing that it had in fact filed a pleading by the June 12 deadline and that its cost appeal was timely.

On July 19, while its motion to vacate was still pending in the district court, ESU appealed to this court, seeking reversal of the district court's June Dismissal Order. In August, after the appeal was docketed, the district court granted part of ESU's motion:

For a reason unknown to the Court, counsel, or the Clerk's Office staff, Appellant's motion to amend the briefing schedule never appeared on the docket in this action, nor was the Court's copy sent to Chambers. As such, when the Court issued its June 20, 2002, Order dismissing the appeal for want of prosecution, it was without Appellant's motion to extend the time in which to file its brief. Despite the Court's admonition in its April 25, 2002, Order to counsel that no further extensions of the briefing schedule would be permitted, the Court would have allowed Appellant the opportunity to late file its brief, had it received Appellant's motion, because counsel should have a certified transcript when preparing briefing for an appeal.

English-Speaking Union v. Johnson, No. 02-605, slip op. at 2 (D.D.C. Aug. 27, 2002). The court thus resurrected ESU's appeal (but not its cost appeal) and gave the organization until September 9 to submit its brief. Id. at 2-4.

The September 9 deadline passed without ESU filing a brief. On September 12 the district court — on its own initiative — again dismissed ESU's appeal for want of prosecution. English-Speaking Union v. Johnson, No. 02-605, slip op. at 5 (D.D.C. Sept. 12, 2002) (September Dismissal Order). In response, ESU amended its appeal to this court to include this second dismissal order. Because that order constitutes a final judgment, we have jurisdiction to consider ESU's challenge here. See 28 U.S.C. § 158(d).

II.

We begin with ESU's challenge to the district court's dismissal of its appeal. In ESU's view, the district court lacked jurisdiction to enter its September Dismissal Order because the organization's July notice of appeal to this court divested the district court of authority to issue orders in this case. Whether the district court retained jurisdiction to dismiss ESU's appeal following the organization's appeal to this court turns on whether ESU's motion to vacate was governed by Bankruptcy Rule 8015 (as the district court ruled) or Federal Rule of Civil Procedure 60 (as ESU argues) — a legal question that we review de novo. See Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C.Cir.1992).

Bankruptcy Rule 8015 expressly authorizes litigants to ask district courts exercising bankruptcy appellate jurisdiction to reconsider unfavorable rulings and tolls the time for seeking further review in the courts of appeals. It states:

Unless the district court ... by local rule or by court order otherwise provides, a motion for rehearing may be filed within 10 days after entry of the judgment of the district court.... If a timely motion for rehearing is filed, the time for appeal to the court of appeals for all parties shall run from the entry of the order denying rehearing or the entry of a subsequent judgment.

Fed. R. Bankr.P. 8015. If despite this tolling provision a litigant files an appeal while the Rule 8015 motion is pending, the rules of appellate procedure postpone appellate review until the district court decides the motion: "A notice of appeal filed after the district court ... announces or enters a judgment, order, or decree — but before disposition of the motion for rehearing [under Bankruptcy Rule 8015] — becomes effective when the order disposing of the motion for rehearing is entered." Fed. R.App. P. 6(b)(2)(A)(i). Therefore, district courts retain jurisdiction over pending Rule 8015 motions whether or not the litigant simultaneously seeks appellate court review.

Federal Rule of Civil Procedure 60 also enables parties to challenge adverse district court decisions. It authorizes district courts to correct clerical errors, see Fed.R.Civ.P. 60(a), or to relieve parties from judgments in cases of mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, or fraud, among other reasons, see Fed.R.Civ.P. 60(b). Like Bankruptcy Rule 8015 motions, Rule 60 motions filed within ten days of judgment toll the time for appealing to the court of appeals and preclude appellate review during their pendency. Federal Rule of Appellate Procedure 4 provides:

If a party timely files in the district court [a Rule 60 motion within ten days after judgment is entered], the time to file an appeal runs for all parties from the entry of the order disposing of the... motion.... If a party files a notice of appeal after the [district] court announces or enters a judgment — but before it disposes of any motion [for relief under Rule 60 if the motion is filed no later than ten days after judgment is entered] — the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered.

Fed. R.App. P. 4(a)(4). This rule, however, does not apply to challenges to district court bankruptcy appellate orders. See Fed. R.App. P. 6(b)(1)(A) (stating that Federal Rule of Appellate Procedure 4(a)(4) does not apply to appeals from district court orders when the court acts in its bankruptcy appellate capacity). As a result, appeals court review could begin, at least in theory, before the district court disposes of the Rule 60 motion, which in turn would divest the district court of jurisdiction to grant the motion. See Hoai v. Vo, 935 F.2d 308, 312 (D.C.Cir.1991) (stating that a district court may consider but not grant a pending Rule 60(b) motion while appellate review is ongoing unless the court of appeals remands the case).

In this case, even though ESU filed its motion to vacate pursuant to Rule 60, the district court held that Bankruptcy Rule 8015 represented the only post-judgment mechanism available to the organization. See September Dismissal Order, No. 02-605, slip op. at 3 n.3. Treating ESU's...