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SUPREME COURT OF THE UNITED STATES
_________________
No. 18–938
_________________
RITZEN GROUP, INC., PETITIONER
v.
JACKSON MASONRY, LLC
on writ of certiorari to the united states
court of appeals for the sixth circuit
[January 14, 2020]
Justice Ginsburg delivered the opinion of the
Court.
Under the Bankruptcy Code, filing a petition for
bankruptcy automatically “operates as a stay” of creditors’
debt-collection efforts outside the umbrella of the bankruptcy
case. 11 U. S. C. §362(a). The question this case
presents concerns the finality of, and therefore the time allowed
for appeal from, a bankruptcy court’s order denying a creditor’s
request for relief from the automatic stay. In civil litigation
generally, a court’s decision ordinarily becomes “final,” for
purposes of appeal, only upon completion of the entire case,
i.e., when the decision “terminate[s the] action” or “ends
the litigation on the merits and leaves nothing for the court to do
but execute the judgment.”
Gelboim v.
Bank of America
Corp.,
574 U.S.
405, 409 (2015) (internal quotation marks omitted). The regime
in bankruptcy is different. A bankruptcy case embraces “an
aggregation of individual controversies.” 1 Collier on Bankruptcy
¶5.08[1][b], p. 5–43 (16th ed. 2019). Orders in bankruptcy
cases qualify as “final” when they definitively dispose of discrete
disputes within the overarching bankruptcy case.
Bullard v.
Blue Hills Bank, 575 U.S. 496, 501 (2015).
The precise issue the Court today decides: Does
a creditor’s motion for relief from the automatic stay initiate a
distinct proceeding terminating in a final, appealable order when
the bankruptcy court rules dispositively on the motion? In
agreement with the courts below, our answer is “yes.” We hold that
the adjudication of a motion for relief from the automatic stay
forms a discrete procedural unit within the embracive bankruptcy
case. That unit yields a final, appealable order when the
bankruptcy court unreservedly grants or denies relief.
I
In civil litigation generally, 28
U. S. C. §1291 governs appeals from “final decisions.”
Under that provision, a party may appeal to a court of appeals as
of right from “final decisions of the district courts.”
Ibid. A “final decision” within the meaning of §1291 is
normally limited to an order that resolves the entire case.
Accordingly, the appellant must raise all claims of error in a
single appeal. See
In re Saco Local Development Corp.,
711 F.2d 441, 443 (CA1 1983) (Breyer, J.) (“Traditionally, every
civil action in a federal court has been viewed as a ‘single
judicial unit,’ from which only one appeal would lie.”). This
understanding of the term “final decision” precludes “piecemeal,
prejudgment appeals” that would “undermin[e] efficient judicial
administration and encroac[h] upon the prerogatives of district
court judges.”
Bullard, 575 U. S., at 501 (quoting
Mohawk Industries, Inc. v.
Carpenter,
558 U.S.
100, 106 (2009); internal quotation marks omitted).
The ordinary understanding of “final decision”
is not attuned to the distinctive character of bankruptcy
litigation. A bankruptcy case encompasses numerous “individual
controversies, many of which would exist as stand-alone lawsuits
but for the bankrupt status of the debtor.”
Bullard, 575
U. S., at 501 (internal quotation marks omitted). It is thus
common for bankruptcy courts to resolve discrete controversies
definitively while the umbrella bankruptcy case re- mains pending.
Delaying appeals from discrete, controversy- resolving decisions in
bankruptcy cases would long postpone appellate review of fully
adjudicated disputes. Moreover, controversies adjudicated during
the life of a bankruptcy case may be linked, one dependent on the
outcome of another. Delaying appeal until the termination of the
entire bankruptcy case, therefore, could have this untoward
consequence: Reversal of a decision made early on could require the
bankruptcy court to unravel later adjudications rendered in
reliance on an earlier decision.
The provision on appeals to U. S. district
courts from decisions of bankruptcy courts is 28 U. S. C.
§158(a). Under that provision, an appeal of right lies from “final
judgments, orders, and decrees” entered by bankruptcy courts “in
cases and proceedings.”
Ibid. By providing for appeals from
final decisions in bankruptcy “proceedings,” as distinguished from
bankruptcy “cases,” Congress made “orders in bankruptcy cases . . .
immediately appeal[able] if they finally dispose of discrete
disputes within the larger [bankruptcy] case.”
Bullard, 575
U. S., at 501 (quoting
Howard Delivery Service, Inc. v.
Zurich American Ins. Co., 547 U.S. 651, 657, n. 3
(2006)); see
In re Saco Local Development Corp., 711
F. 2d, at 444–447. In short, “the usual judicial unit for
analyzing finality in ordinary civil litigation is the case, [but]
in bankruptcy[,] it is [often] the proceeding.” Brief for United
States as
Amicus Curiae 10.
Correct delineation of the dimensions of a
bankruptcy “proceeding” is a matter of considerable importance. An
erroneous identification of an interlocutory order as a final
decision may yield an appeal over which the appellate forum lacks
jurisdiction. Conversely, an erroneous identification of a final
order as interlocutory may cause a party to miss the appellate
deadline.
II
The dispute at hand involves a contract in
which Ritzen Group, Inc. (Ritzen) agreed to buy land in Nashville,
Tennessee from Jackson Masonry, LLC (Jackson). The land sale was
never effected. Blaming Jackson for the deal’s unraveling, Ritzen
sued for breach of contract in Tennessee state court. After over a
year of litigation, just days before trial was to begin, Jackson
filed for bankruptcy under Chapter 11 of the Bankruptcy Code. By
operation of the Bankruptcy Code’s automatic stay provision, 11
U. S. C. §362(a), the state-court litigation was put on
hold.
Ritzen filed a motion in the Federal Bankruptcy
Court for relief from the automatic stay, seeking an order allowing
the trial to proceed in state court. Ritzen argued that relief
would promote judicial economy and that Jackson had filed for
bankruptcy in bad faith. After a hearing, the Bankruptcy Court
denied the motion. The Bankruptcy Code and Federal Rules of
Bankruptcy Procedure require parties to appeal from a final order
“within 14 days after entry of the . . . order . . . being
appealed.” 28 U. S. C. §158(c)(2); Fed. Rule Bkrtcy.
Proc. 8002(a). Ritzen did not appeal from the order refusing to
lift the stay within the prescribed period.
In pursuit of the breach-of-contract claim
initially commenced in state court, Ritzen filed a proof of claim
against the bankruptcy estate. Following an adversary proceeding,
the Bankruptcy Court found that Ritzen, not Jackson, was the party
in breach of the land-sale contract because Ritzen failed to secure
financing by the closing date. The court therefore disallowed
Ritzen’s claim against the bankruptcy estate. Without objection
from Ritzen, the court confirmed Jackson’s plan of reorganization.
The plan permanently enjoined all creditors from the “commencement
or continuation of any . . . proceeding against [d]ebtor . . . on
account of [c]laims against [d]ebtor.” Debtor’s Plan of
Reorganization in No. 3:16–bk–02065 (MD Tenn.), p. 15.
Thereafter, Ritzen filed two separate notices of
appeal in the District Court for the Middle District of Tennessee.
First, Ritzen challenged the Bankruptcy Court’s order denying
relief from the automatic stay. Second, Ritzen challenged the
court’s resolution of its breach-of-contract claim.
The District Court rejected the first of
Ritzen’s appeals as untimely, holding that under §158(c)(2) and
Federal Rule of Bankruptcy Procedure 8002(a), time to appeal
expired 14 days after the Bankruptcy Court’s entry of the order
denying relief from the automatic stay. Turning to the appeal from
the Bankruptcy Court’s rejection of Ritzen’s breach-of-contract
claim, the District Court ruled against Ritzen on the merits.
On further appeal, the Court of Appeals for the
Sixth Circuit affirmed the District Court’s dispositions. As to the
timeliness of the first notice of appeal, the Court of Appeals
rendered this determination: Adjudication of Ritzen’s motion for
relief from the automatic stay qualified as a discrete
“proceeding,” commencing with the filing of the motion, followed by
procedural steps, and culminating in a “[dispositive] decision
based on the application of a legal standard.”
In re Jackson
Masonry,
LLC, 906 F.3d 494, 499–500 (2018).[
1] The 14-day appeal clock, the Court
of Appeals therefore concluded, ran from the order denying the
motion to lift the stay, a disposition “(1) entered in a proceeding
and (2) final[ ly] terminating that proceeding.”
Id.,
at 499 (alterations omitted).
We granted certiorari to resolve whether orders
denying relief from bankruptcy’s automatic stay are final,
therefore immediately appealable under §158(a)(1). 587 U. S.
___ (2019).
III
A
This Court’s opinion in
Bullard v.
Blue Hills Bank, 575 U.S. 496, guides our application of
§158(a)’s finality requirement. Addressing repayment plan
confirmations under Chapter 13, we held in
Bullard that a
bankruptcy court’s order rejecting a proposed plan was not “final”
under §158(a) because it did not conclusively resolve the relevant
“proceeding.”
Id., at 499, 502–503. The plan-confirmation
process, the
Bullard opinion explains, involves back and
forth negotiations. See
id., at 502. Plan proposal
rejections may be followed by amended or new proposals. Only plan
approval, we observed, “alters the status quo and fixes the rights
and obligations of the parties.”
Ibid. “Denial of
confirmation with leave to amend,” by contrast, leaves the
“parties’ rights and obligations . . . unsettled,” and therefore
cannot be typed “final.”
Id., at 503. The appropriate
procedural unit for determining finality, we concluded, is not a
plan proposal, it is “the process of attempting to arrive at an
approved plan.”
Id., at 502.
B
We take up next the application of
Bullard’s analysis to a bankruptcy court’s order denying
relief from the automatic stay. As earlier stated, see
supra, at 1, under the Bankruptcy Code, the filing of a
bankruptcy petition automatically halts efforts to collect
prepetition debts from the bankrupt debtor outside the bankruptcy
forum. 11 U. S. C. §362(a). The stay serves to
“maintai[n] the status quo and preven[t] dismemberment of the
estate” during the pendency of the bankruptcy case. 1 Collier
¶1.05[1], p. 1–19; 3
id., ¶362.03, p. 362–23. Among
other things, the stay bars commencement or continuation of
lawsuits to recover from the debtor, enforcement of liens or
judgments against the debtor, and exercise of control over the
debtor’s property. §362(a).
A creditor may seek relief from the stay by
filing in the bankruptcy court a motion for an order “terminating,
annulling, modifying, or conditioning” the stay, asserting in
support of the motion either “cause” or the presence of specified
conditions. §362(d). A majority of circuits and the leading
treatises regard orders denying such motions as final, immediately
appealable decisions.[
2] We
reach the same conclusion.
Bullard instructs that we inquire “how to
define the immediately appealable ‘proceeding’ in the context of
[stay- relief motions].” 575 U. S., at 502. Jackson urges
that, as the Court of Appeals held, adjudication of a stay-relief
motion is a discrete “proceeding.” Ritzen urges that stay-relief
adjudication is properly considered a first step in the process of
adjudicating a creditor’s claim against the estate.
We agree with the Court of Appeals and Jackson
that the appropriate “proceeding” is the stay-relief adjudication.
A bankruptcy court’s order ruling on a stay-relief motion disposes
of a procedural unit anterior to, and separate from,
claim-resolution proceedings. Adjudication of a stay-relief motion,
as just observed, occurs before and apart from proceedings on the
merits of creditors’ claims: The motion initiates a discrete
procedural sequence, including notice and a hearing, and the
creditor’s qualification for relief turns on the statutory
standard,
i.e., “cause” or the presence of specified
conditions. §362(d), (e); Fed. Rules Bkrtcy. Proc. 4001(a)(1) and
(2), 9014 (describing procedure for adjudicating motions for relief
from automatic stay). Resolution of stay-relief motions does not
occur as part of the adversary claims-adjudication process,
proceedings typically governed by state substantive law. See
Butner v.
United States,
440 U.S.
48, 54–55 (1979). Under
Bullard, a discrete dispute of
this kind constitutes an independent “proceeding” within the
meaning of 28 U. S. C. §158(a). 575 U. S., at
502–505.
Our conclusion that the relevant “proceeding” is
the stay-relief adjudication is consistent with statutory text. See
id., at 503. A provision neighboring §158(a), §157(b)(2)(G),
types motions to terminate, annul, or modify the automatic stay as
“core proceedings” arising in a bankruptcy case. Section 157(b)(2)
lists those motions separately from the “allowance or disallowance
of claims against the estate.” §157(b)(2)(B), (G). Although the
discrete “core proceedings” listings “hardly clinc[h] the matter,”
as the “provision’s purpose is not to explain appealability,” they
are a “textual clue” that Congress viewed adjudication of
stay-relief motions as “proceedings” distinct from claim
adjudication.
Bullard, 575 U. S., at 503.
C
In Ritzen’s view, the position Jackson
advances and we adopt “slic[es] the case too thin.”
Id., at
502. Ritzen asserts that an order denying stay relief simply
decides the forum for adjudication of adversary claims—bankruptcy
court or state court—and therefore should be treated as merely a
preliminary step in the claims-adjudication process. Brief for
Petitioner 19–21, 26–28.
Courts, we agree, should not define “proceeding”
to include disputes over minor details about how a bankruptcy case
will unfold. As we put it in
Bullard, “[t]he concept of
finality cannot stretch to cover, for example, an order resolving a
disputed request for an extension of time.” 575 U. S., at
505.
But Ritzen incorrectly characterizes denial of
stay relief as determining nothing more than the forum for claim
adjudication. Resolution of a motion for stay relief can have large
practical consequences. See 3 Collier ¶362.03, pp. 362–23 to
362–24. Disposition of the motion determines whether a creditor can
isolate its claim from those of other creditors and go it alone
outside bankruptcy. It can also affect the manner in which
adversary claims will be adjudicated. See 11 U. S. C.
§502 (permitting summary adjudication or estimation of amounts due
in bankruptcy claims adjudication). These are not matters of minor
detail; they can significantly increase creditors’ costs. Leaving
the stay in place may,
inter alia, delay collection of a
debt or cause collateral to decline in value. See Brief for United
States as
Amicus Curiae 14.
Ruling on a motion for stay relief, it is true,
will determine where the adjudication of an adversary claim will
take place—in the bankruptcy forum or state court. But that effect
does not render a ruling nonfinal. Orders denying a plaintiff the
opportunity to seek relief in its preferred forum often qualify as
final and immediately appealable, though they leave the plaintiff
free to sue elsewhere. Notably, dismissal for want of personal
jurisdiction ranks as a final decision. See
Daimler AG v.
Bauman,
571 U.S.
117, 124–125 (2014). So too, dismissal for improper venue, or
under the doctrine of
forum non conveniens. See
United
States v.
Wallace & Tiernan Co.,
336 U.S.
793, 794–795, n. 1 (1949); 15A C. Wright, A. Miller, &
E. Cooper, Federal Practice and Procedure §§3914.6, 3914.12 (2d ed.
1992 and Supp. 2019) (collecting cases on appealability of
dismissal without prejudice to filing in another forum).[
3]
Ritzen’s position encounters a further shoal:
Many motions to lift the automatic stay do not involve adversary
claims against the debtor that would be pursued in another forum
but for bankruptcy. Bankruptcy’s embracive automatic stay stops
even nonjudicial efforts to obtain or control the debtor’s assets.
See §362(a). Motions for stay relief may, for example, seek
permission to repossess or liquidate collateral, to terminate a
lease, or to set off debts.
Ibid. These matters do not
concern the forum for, and cannot be considered part of, any
subsequent claim adjudication. See Brief for National Association
of Consumer Bankruptcy Attorneys as
Amicus Curiae 23–24. We
see no good reason to treat stay adjudication as the relevant
“proceeding” in only a subset of cases. As we have held in another
context, “the issue of appealability” should “be determined for the
entire category to which a claim belongs.”
Digital Equipment
Corp. v.
Desktop Direct, Inc.,
511
U.S. 863, 868 (1994) (addressing collateral order
doctrine).
Ritzen alternatively argues that, even if an
order denying stay relief is not part of the claims-adjudication
process, the order should nonetheless rank as nonfinal where, as
here, the bankruptcy court’s decision turns on a substantive issue
that may be raised later in the litigation. Brief for Petitioner
45. Specifically, Ritzen stresses that it based its stay-relief
motion largely on an argument that Jackson filed for bankruptcy in
bad faith, an issue that could have been urged again later in the
bankruptcy case.
Ibid.
That argument is misaddressed. Section 158(a)
asks whether the order in question terminates a procedural unit
separate from the remaining case, not whether the bankruptcy court
has preclusively resolved a substantive issue. It does not matter
whether the court rested its decision on a determination
potentially pertinent to other disputes in the bankruptcy case, so
long as the order conclusively resolved the movant’s entitlement to
the requested relief.
Finally, Ritzen protests that the rule we adopt
will encourage piecemeal appeals and unduly disrupt the efficiency
of the bankruptcy process.
Id., at 48–52. As we see it,
classifying as final all orders conclusively resolving stay-relief
motions will avoid, rather than cause, “delays and inefficiencies.”
Bullard, 575 U. S., at 504. Immediate appeal, if
successful, will permit creditors to establish their rights
expeditiously outside the bankruptcy process, affecting the relief
sought and awarded later in the bankruptcy case. The rule Ritzen
urges “would force creditors who lose stay-relief motions to fully
litigate their claims in bankruptcy court and then, after the
bankruptcy case is over, appeal and seek to redo the litigation all
over again in the original court.” 906 F. 3d, at 503.
This case is illustrative. After the Bankruptcy
Court denied Ritzen’s motion for relief from the automatic stay,
Ritzen filed a claim against Jackson in the Bankruptcy Court. The
parties and court expended substantial resources definitively
litigating the dueling breach-of- contract allegations, and Ritzen
lost. The Bankruptcy Court thereafter considered and confirmed
Jackson’s reorganization plan. By endeavoring now to appeal the
stay-relief order, after forgoing an appeal directly after the
denial, Ritzen seeks to return to square one. Its aim, to
relitigate the opposing contract claims in state court. Nevermind
that the Bankruptcy Court has fully adjudicated the contract claims
and has, without objection from Ritzen, approved Jackson’s
reorganization plan. The second bite Ritzen seeks scarcely advances
the finality principle.
IV
Because the appropriate “proceeding” in this
case is the adjudication of the motion for relief from the
automatic stay, the Bankruptcy Court’s order conclusively denying
that motion is “final.” The court’s order ended the stay- relief
adjudication and left nothing more for the Bankruptcy Court to do
in that proceeding.[
4] The
Court of Appeals therefore correctly ranked the order as final and
immediately appealable, and correctly affirmed the District Court’s
dismissal of Ritzen’s appeal as untimely.
* * *
For the reasons stated, the judgment of the
Court of Appeals is
Affirmed.
