In re Landmark Fence

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Bankruptcy Law
  • Date Filed: 09-11-2015
  • Case #: 13-55509, 13-55574
  • Judge(s)/Court Below: Circuit Judge McKeown for the Court; Circuit Judges Reinhardt and Smith
  • Full Text Opinion

Appellate courts have jurisdiction over appeals from a non-final order in the bankruptcy court in consideration of these factors: (1) the need to avoid piecemeal litigation; (2) judicially efficiency; (3) systemic interest in preserving the bankruptcy court’s role as the fact finder; and (4) delaying the review would cause either party irreparable harm.

James Sahagun and Gerardo Garcia (collectively “Sahagun”) filed a class action suit against their former employer Landmark Fence Company (“Landmark”) for allegedly failing to pay various wages pursuant to California law. However prior to the trial, Landmark filed for bankruptcy. The bankruptcy court awarded Sahagun roughly $15 million for unpaid wages, interest, penalties, and accounted for the employees’ travel costs to-and-from worksites. The district court affirmed the bankruptcy court’s ruling regarding the damages, but remanded the case for further fact finding because the bankruptcy court applied an incorrect standard regarding Landmark’s obligation to pay wages for its former employees’ travel time between worksites. On appeal, the Ninth Circuit resolved the issue of whether it had jurisdiction over the appeal subsequent to the district court’s order vacating and remanding the case back to the bankruptcy court. The panel explained that it has jurisdiction over an appeal from a non-final order in the bankruptcy court if: “(1) [there is a] need to avoid piecemeal litigation; (2) it is judicially efficiency; (3) [there exists a] systemic interest in preserving the bankruptcy court’s role as the fact finder; and (4) delaying the review would cause either party irreparable harm.” When the district court had specifically remanded the case back to the bankruptcy court with instruction to “further fact-find,” the appellate court would be divesting the bankruptcy court of its opportunity to act as the fact finder regarding the wages owed to the former employees for their travel costs. Thus, the panel held that the explicit order by the district court to the bankruptcy court to act as the fact finder in conjunction with the other factors manifested the panel's lack of jurisdiction, and moreover, gave the panel no authority to grant Landmark’s request to vacate the district court’s orders. DISMISSED.

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