A Primer on Bankruptcy Appeals

By C. Daniel Lins

Every lawyer knows that judges are infallible -- particularly when you are at the lectern appearing before one at any given time. But to paraphrase Justice Robert Jackson, judges are infallible only to the extent they have the final word. See Brown v. Allen, 344 U.S. 443, 540 (1953) (Jackson, J., concurring) ("We are not final because we are infallible, but we are infallible only because we are final.") As much as it might pain lawyers to do so, occasionally, the circumstances require that a losing party in bankruptcy court test the bankruptcy judge's infallibility by appealing a particular judgment, order, or decree. This article provides a concise overview of that process.

I.  Which Court to Choose?

When seeking to appeal a bankruptcy decision, a party has an initial decision to make: should I appeal to the district court or the Bankruptcy Appellate Panel (or "BAP")? The BAP is the default forum for bankruptcy appeals unless either party elects to have the appeal heard by the district court. The appellant must make this election at the time of filing the appeal, and all other parties must make their elections within 30 days after service of notice of the appeal. 28 U.S.C § 158(c)(1).

The district court and BAP have jurisdiction to hear appeals as of right (including final judgments, orders, and decrees, and certain interlocutory orders and decrees related to plan exclusivity), and appeals from purely interlocutory orders and decrees, with leave of court. 28 U.S.C §§ 158(a), -(b)(1). An appellant may also choose to appeal directly to the Court of Appeals in limited circumstances. Fed. R. Bankr. P. 8001(f).

II.  Filing the Notice of Appeal

To take an appeal as of right, a party must file a notice of appeal with the bankruptcy clerk within 14 days of the date of the entry of the relevant judgment or order. Fed. R. Bankr. P. 8001, 8002. The notice of appeal must conform substantially to the official form, must contain the names of all the parties to the order appealed from, the contact information of their respective attorneys, and be accompanied by the appropriate fee. Fed. R. Bankr. P. 8001

To take an appeal from an interlocutory judgment or order, a party must file a notice of appeal along with a motion for leave to appeal. The motion for leave to appeal must contain:

(1) a statement of the facts necessary to an understanding the issues presented by the appeal;
(2) a statement of the issues and the relief sought;
(3) the reasons why an appeal should be granted; and
(4) a copy of the judgment, order, or decree complained of and of any opinion or memorandum relating thereto.

Fed. R. Bankr. P. 8003(a).

An adverse party has 14 days after service of the motion to file its answer in opposition. Id. After all parties have filed answers (or the time for filing an answer has expired), the bankruptcy clerk then transmits the notice of appeal, the motion for leave to appeal and any answer to the clerk of the chosen appellate court. Fed. R. Bankr. P. 8003(b). If a notice of appeal is filed when a motion for leave to appeal should have been filed, the appellate court may consider the notice of appeal as a motion for leave to appeal and grant or deny leave to appeal as appropriate. Fed. R. Bankr. P. 8003(c).

III.  Designating the Record

Within 14 days after filing the notice of appeal, the appellant must file (1) a designation of the items to be included in the record on appeal and (2) a statement of the issues to be presented on appeal. The appellee then has 14 days to file its own designation of additional items to be included in the record on appeal. Any party filing a designation of the record must provide to the clerk a copy of the designated items, or the clerk will prepare the copy at the party's expense. If the record includes a transcript of a proceeding, the party must request and pay for an official transcript immediately after filing the designation. Fed. R. Bankr. P. 8006.

IV.  Filing the Appellate Brief

When the appellate record is complete, the bankruptcy clerk is responsible for transmiting a copy to the clerk of the appellate court. Upon receipt of the record, the appellate court clerk enters the appeal on the docket and notifies all parties of the date on which the appeal was docketed. Fed. R. Bankr. P. 8007(b). This notice typically contains a briefing schedule for the appellate briefs. Unless otherwise specified by local rule, the appellant's brief is due 14 days after entry of the appeal on the appellate court docket. The appellee's brief is due 14 days later. The appellant may then file a reply 14 days after that. No further briefs are permitted absent leave of court. Fed. R. Bankr. P. 8009. By local rule in the U.S. District Court for the Middle District of Tennessee, failure by the appellant to comply with these rules results in summary affirmance of bankruptcy court's opinion.

The appellant's brief must contain the following:

(1) a table of contents;
(2) a table of authorities;
(3) a statement of the basis of appellate jurisdiction;
(4) a statement of the issues presented;
(5) the applicable standard of appellate review;
(6) a brief statement of the case, including nature of the case, the procedural history, and the disposition in the court below;
(7) a statement of the facts with appropriate references to the record;
(8) an argument section with citations to the authorities, statutes, and relevant parts of the record; and
(9) a short conclusion stating the precise relief sought.

Fed. R. Bankr. P. 8010(a)(1).

The appellee's brief must also contain all of the foregoing, except that the appellee need not include a statement of the basis of appellate jurisdiction, of the issues, or of the case, unless the appellee is dissatisfied with those in the appellant's brief. Fed. R. Bankr. P. 8010(a)(2). Unless otherwise specified by local rule, principal briefs shall not exceed 50 pages, and reply briefs shall not exceed 25 pages (not counting the table of contents, table of authorities and relevant attachments to the brief). Fed. R. Bankr. P. 8010(c).

V.  Oral Argument

Oral argument is allowed in all cases unless the appellate court determines that oral argument is not needed. Both parties may file a statement setting forth the reasons they think oral argument should be allowed. However, oral argument will not be allowed if the appeal is frivolous, the dispositive issues have been recently authoritatively decided, or the facts and legal arguments are adequately presented in the briefs and record and the court would not be significantly aided by oral argument. Fed. R. Bankr. P. 8012. In the Middle District of Tennessee, oral argument is not permitted absent a specific order of the Court. L.R. 81.01.

VI.  Standard of Review

In disposing of bankruptcy appeals, the appellate court is required to give due weight to the bankruptcy court's findings of fact. Such findings of fact, whether based on oral or written evidence, may not be set aside unless clearly erroneous. The appellate court must also give due regard to the opportunity of the bankruptcy court to judge the credibility of any witnesses. Ultimately, the appellate court may affirm, modify, or reverse a bankruptcy court's judgment or remand with instructions for further proceedings. Fed. R. Bankr. P. 8013. Like the court below, the appellate court's decision is also infallible -- unless, of course, a party decides to appeal the issues further.