Grayton v. United States Trustee
Filing
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ORDER Granting 7 Motion to Dismiss Appeal. Signed by Judge Janis L. Sammartino on 4/27/2021. (Bankruptcy Court Case Number: 18-07545-MM7) (All non-registered users served via U.S. Mail Service) (tcf)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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In re CESAR MONTIEL PEREZ,
Case No.: 21-CV-83 JLS (MSB)
Debtor.
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ORDER GRANTING MOTION TO
DISMISS APPEAL
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MAURICE GRAYTON,
(ECF No. 7)
Appellant,
v.
UNITED STATES TRUSTEE
Appellee.
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Presently before the Court is Appellee United States Trustee Tiffany Carroll’s
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Motion to Dismiss Appeal (“Mot.,” ECF No. 7). The Court took the matter under
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submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See generally
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ECF No. 10. Appellant Maurice Grayton (“Appellant” or “Mr. Grayton”), proceeding pro
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se, never filed an opposition to the motion.
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On March 11, 2021, the Court vacated merits briefing on the present appeal pending
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resolution of Appellee’s motion to dismiss. ECF No. 10 at 1. The Court ordered Appellant
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to file an opposition to Appellee’s motion by April 1, 2021. Id. at 2. The Court warned
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Appellant that it “may treat a failure to timely file an opposition to the motion to dismiss
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as Appellant’s consent to the granting of the motion.” Id. at 2. In lieu of filing an
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opposition, Appellant filed his opening brief on March 31, 2021. See ECF No. 12.
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The Ninth Circuit has held that pursuant to a local rule, a district court may properly
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grant a motion to dismiss for failure to respond. See generally Ghazali v. Moran, 46 F.3d
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52, 53 (9th Cir. 1995) (affirming dismissal for failure to file timely opposition papers where
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plaintiff had notice of the motion and ample time to respond). The Court could grant
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Appellee’s Motion and dismiss the appeal on this basis; however, given Appellant’s pro se
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status and public policy favoring disposition of cases on their merits, see, e.g., Hernandez
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v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998), the Court examines the question of
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its own appellate jurisdiction on the merits. Having carefully reviewed the relevant law,
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the Court GRANTS Appellee’s Motion to Dismiss.
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BACKGROUND
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On January 3, 2020, the United States Trustee initiated an adversary proceeding
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against Mr. Grayton in the United States Bankruptcy Court for the Southern District of
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California. Mot. at 2; see generally United States Trustee v. Grayton, No. 3:20-ap-90002-
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MM (Bankr. S.D. Cal.).
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cooperate” with discovery requests in the bankruptcy court action. Mot. at 2. Therefore,
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Appellee filed two motions: one seeking to compel Mr. Grayton to produce initial
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disclosures, and another to compel Mr. Grayton to appear for his deposition. Id.; see United
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States Trustee v. Grayton, No. 3:20-ap-90002-MM (Bankr. S.D. Cal.), (ECF Nos. 106,
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114).1 Appellee also sought associated fees and costs. Mot. at 2. Mr. Grayton did not
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respond to the motions. Id. On January 18, 2021, the bankruptcy court granted the United
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States Trustee’s motions and awarded costs. Id.; see United States Trustee v. Grayton, No.
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3:20-ap-90002-MM (Bankr. S.D. Cal.), (“Sanctions Order,” ECF No. 162), (“Dep. Order,”
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ECF No. 162).
Appellee alleges that Mr. Grayton “repeatedly refused to
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A court “may take notice of proceedings in other courts, both within and without the federal judicial
system, if those proceedings have a direct relation to matters at issue.” Bias v. Moynihan, 508 F.3d 1212,
1225 (9th Cir. 2007) (quoting Bennett v. Medtronic, Inc., 285 F.3d 801, 803 n.2 (9th Cir. 2002)).
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On January 15, 2021, Mr. Grayton filed a notice of appeal. See generally “Notice
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of Appeal,” ECF No. 1. Under the section where Mr. Grayton must identify the subject of
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this appeal, he lists “Motion to Compel Initial Discovery, Motion for Attendance
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Deposition, Motion for Sanctions.” Id. at 1. The Court liberally construes this statement
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to mean Mr. Grayton seeks to appeal the bankruptcy court orders granting the
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aforementioned motions. This action is one of four appeals2 filed by Appellant in this
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District related to the underlying bankruptcy action, which is still pending before the
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bankruptcy court. See generally Docket of United States Trustee v. Grayton, No. 3:20-ap-
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90002-MM (Bankr. S.D. Cal.). On March 10, 2021, Appellee filed the present Motion to
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Dismiss Appeal for lack of jurisdiction. ECF No. 3.
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LEGAL STANDARD
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Federal district courts have jurisdiction over appeals of “final judgments, orders, and
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decrees” of bankruptcy courts. See 28 U.S.C. § 158(a)(1). Generally, district courts lack
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jurisdiction over appeals from interlocutory orders of bankruptcy judges except where the
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district court grants leave to appeal under 28 U.S.C. § 158(a)(3).
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A determination of whether an order is final or interlocutory is jurisdictional and
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therefore can be raised sua sponte and reviewed de novo by an appellate court. See In re
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Bonham, 229 F.3d 750, 760–61 (9th Cir. 2000); In re Belli, 268 B.R. 851, 853 (B.A.P. 9th
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Cir. 2001). Denial of leave to appeal is left to the sound discretion of the court. See In re
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City of Desert Hot Springs, 339 F.3d 782, 787 (9th Cir. 2003).
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ANALYSIS
I.
Appeal as of Right
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Under section 158(a)(1), parties may appeal to a district court “final” orders in
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bankruptcy cases and proceedings “as of right.” 28 U.S.C. § 158(a)(1); see Ritzen Grp.,
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Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582, 587 (2020); Bullard v. Blue Bills Bank, 575
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U.S. 496 (2015). In the context of an adversary proceeding, an order is final if it would be
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See case nos. 3:20-cv-01616, 3:20-cv-02152, and 3:20-cv-02433.
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considered an appealable final order in an ordinary federal civil action under 28 U.S.C.
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§ 1291. In re Belli, 268 B.R. at 855 (“Finality for purposes of jurisdiction over ‘as of right’
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appeals under 28 U.S.C. § 158(a)(1) in adversary proceedings does not differ from finality
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in ordinary federal civil actions under 28 U.S.C. § 1291.”). Federal Rule of Civil Procedure
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54(b) “controls the analysis of finality of judgments for purposes of appeal in federal civil
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actions, including bankruptcy adversary proceedings.” Id. (citing Fed. R. Civ. P. 54(b),
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incorporated by Fed. R. Bankr. P. 7054(a)); see Matter of King City Transit Mix, Inc., 738
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F.2d 1065, 1066–67 (9th Cir. 1984) (applying Rule 54(b) in bankruptcy adversary
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proceedings). If there is a Rule 54(b) certification, it is treated as a final order over which
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appellate jurisdiction exists “as of right” under 28 U.S.C. § 158(a)(1).
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However, the Ninth Circuit has held that “the fluid and sometimes chaotic nature of
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bankruptcy proceedings necessitates a degree of jurisdictional flexibility.” In re Landmark
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Fence Co., Inc., 801 F.3d 1099, 1102 (9th Cir. 2015). “Congress has long provided that
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orders in bankruptcy cases may be immediately appealed if they finally dispose of discrete
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disputes within the larger case.” Howard Delivery Service, Inc. v. Zurich American Ins.
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Co., 547 U.S. 651, 657, n.3 (2006) (internal quotation marks and emphasis omitted).
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Section 158 provides the appellate court with jurisdiction over orders in bankruptcy cases
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that alter “the legal relationships among the parties.” Bullard, 575 U.S. at 506. Therefore,
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to determine whether a particular order is final, the court examines “whether the
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bankruptcy court’s decision: ‘1) resolves and seriously affects substantive rights and 2)
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finally determines the discrete issue to which it is addressed.’” In re Gugliuzza, 852 F.3d
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884, 894 (9th Cir. 2017) (quoting In re Perl, 811 F.3d 1120, 1126 (9th Cir. 2016)). If
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“further proceedings in the bankruptcy court will affect the scope of the order, the order is
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not subject to review.” In re Tech. Knockout Graphics, Inc., 833 F.2d 797, 800 (9th Cir.
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1987) (quoting In re 405 N. Bedford Dr. Corp., 778 F.2d 1374, 1377 (9th Cir. 1985)).
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The bankruptcy court’s orders granting Appellee’s discovery motions and awarding
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costs are not final orders that Appellant may appeal as of right. See Nascimento v. Dummer,
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508 F.3d 905, 909 (9th Cir. 2007) (“Discovery orders . . . are interlocutory and thus not
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usually subject to immediate appeal.”); City of Las Vegas v. Foley, 747 F.2d 1294, 1297
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(9th Cir. 1984) (“A discovery order, unlike a final order, is interlocutory and non-
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appealable . . .”); David v. Hooker, Ltd., 560 F.2d 412, 415 (9th Cir. 1977) (“[D]iscovery
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orders and sanctions in the form of civil penalties are held in most cases to be interlocutory
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and hence non-appealable as to the parties involved in the suit . . . .”). A review of the
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docket of the bankruptcy court proceedings reveals there has been no Rule 54(b)
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certification in Appellant’s case. See generally Docket of United States Trustee v. Grayton,
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No. 3:20-ap-90002-MM (Bankr. S.D. Cal.). Further, the bankruptcy court’s orders did not
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adjudicate the parties’ respective rights and liabilities. The bankruptcy court may revise or
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revisit its findings in these orders as the case progresses.
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Therefore, the Court finds that the bankruptcy court’s orders are not appealable as a
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matter of right. The Court now turns to whether to exercise its discretion and grant
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interlocutory review.
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II.
Interlocutory Appeal
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If an order is not final, the district court has jurisdiction to hear an appeal of an
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interlocutory order of a bankruptcy court if the district court grants leave to appeal. See 28
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U.S.C. § 158(a); Fed. R. Bankr. P. 8002, 8004(a)(2)(b). In deciding whether to grant leave
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to appeal under Section 158(a)(3), courts look to the analogous provisions of 28 U.S.C.
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§ 1292(b) governing review of interlocutory district court orders by the courts of appeal.
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See In re Belli, 268 B.R. at 858; In re Wilson, No. BR 13-11374 AJ, 2014 WL 122074, at
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*1 (N.D. Cal. Jan. 10, 2014). Therefore, leave to appeal a bankruptcy court’s interlocutory
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order is appropriate where (1) there is a controlling question of law, (2) as to which a
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substantial ground for a difference of opinion exists, and (3) an immediate appeal could
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materially advance the ultimate termination of the litigation. In re Cement Antitrust Litig.
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(MDL No. 296), 673 F.2d 1020, 1026 (9th Cir. 1981); see also In re NSB Film Corp., 167
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B.R. 176, 180 (B.A.P. 9th Cir. 1994) (“Leave to appeal should not be granted unless refusal
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would result in wasted litigation and expense, the appeal involves a controlling question of
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law as to which there is a substantial ground for difference of opinion, and an immediate
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appeal would materially advance the ultimate termination of the litigation.”). Additionally,
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“[i]nterlocutory appeals are generally disfavored and should only be granted where
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extraordinary circumstances exist.”
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1028436, at *4 (N.D. Cal. Mar. 17, 2014).
In re Cameron, No. C 13-02018 SI, 2014 WL
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As an initial matter, Appellant has not filed a motion for leave to appeal the
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bankruptcy court’s interlocutory orders. See Fed. R. Bankr. P. 8004(a) (requiring a party
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seeking to appeal an interlocutory order under 28 U.S.C. § 158(a)(3) to file with his notice
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of appeal a motion for leave to appeal with certain required information). However, the
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Court “may treat a notice of appeal as a motion for leave to file an interlocutory appeal.”
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In re Belice, 461 B.R. 564, 572 (B.A.P. 9th Cir. 2011); see also Balistreri v. Pacifica Police
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Dep’t, 901 F.2d 696, 699 (9th Cir. 1988) (“This court recognizes that it has a duty to ensure
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that pro se litigants do not lose their right to a hearing on the merits of their claim due to
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ignorance of technical procedural requirements.” (citations omitted)).
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Here, Appellant does not carry his burden to show that the orders meet the § 1292(b)
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test. Appellant offers no argument as to how this appeal involves a controlling question of
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law as to which there is a substantial ground for difference of opinion, and the existence of
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such a question is not readily apparent to the Court from the interlocutory orders
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themselves. In his opening brief, Appellant argues his positions on the issues he wishes to
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appeal. See generally ECF No. 12. However, this information is not pertinent to the legal
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framework under which this Court analyzes a motion for leave to file an interlocutory
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appeal. Granting leave to appeal in this instance would waste judicial resources, increase
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litigation expense, and would only serve to delay the ultimate termination of this action.
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Accordingly, the Court declines to exercise its discretion to hear this interlocutory
appeal.
CONCLUSION
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For the reasons stated above, the Court finds the bankruptcy court’s orders granting
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Appellee’s discovery motions and awarding fees are interlocutory orders. Further, the
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Court finds interlocutory review is not warranted, and Appellant has not identified another
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basis for jurisdiction. Accordingly, Appellee’s motion to dismiss the appeal for lack of
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jurisdiction is GRANTED. The Court DISMISSES the appeal for lack of jurisdiction.
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The Clerk of Court SHALL CLOSE the file.
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IT IS SO ORDERED.
Dated: April 27, 2021
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