In re: Anderson News LLC
Filing
6
MEMORANDUM ORDER re 1 Conditional MOTION for Interlocutory Appeal is DENIED; 4 MOTION to Consolidate is DISMISSED AS MOOT. Signed by Judge Leonard P. Stark on 8/19/15. (ntl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
INRE:
ANDERSON NEWS, LLC,
Banla. Case No. 09-10695-CSS
Debtor.
AMERICAN MEDIA, INC., et al.,
Plaintiffs,
Adv. Pro. No. 11-53811-CSS
Civ. No. 15-mc-199-LPS
v.
ANDERSON MANAGEMENT SERVICES, INC,
et al.,
Defendants.
MEMORANDUM ORDER
At Wilmington this 19th day of August, 2015:
Having reviewed Defendants' (I) Conditional Motion Under 28 U.S.C. § 158(a) and
Federal Rule of Banlauptcy Procedure 8003 to Allow Interlocutory Appeal of the July 8, 2015
Order (the "Conditional Motion") (D.I. l); (II) Defendants' Objection Pursuant to Federal Rule
of Bankruptcy Procedure 9033(b) to the July 8, 2015 Order Denying the Motion for Summary
Judgment on Count XVI (the "Rule 9033 Objection") (D.I. 5); and (II) Defendants' Motion to
Consolidate (D.I. 4); and having further reviewed Plaintiffs' briefs in response (D.I. 2; D.I. 3);
For the reasons stated below, IT IS HEREBY ORDERED that:
1.
Defendants' Conditional Motion for Interlocutory Appeal (D.I. 1) is DENIED;
2.
Defendants' Rule 9033 Objection (D.I. 5) is DISMISSED;
3.
Defendants' Motion to Consolidate (D.I. 4) is DISMISSED AS MOOT; and
4.
The Clerk of Court is directed to CLOSE this case.
Plaintiffs are a group of creditors in the above-captioned bankruptcy case that have filed
an Adversary Complaint (Adv. Pro. No. 11-53811, D.I. 1) against Defendants seeking to avoid
certain transfers they allege to be fraudulent. (D.I. 5 at 4) Defendants seek this Court's review
of a July 8, 2015 Order of the United States Bankruptcy Court for the District of Delaware
denying their motion for summary judgment on Count XVI of the Adversary Complaint. (D .I. 12) Although Defendants disagree with the Bankruptcy Court's decision on the merits, they
appeal exclusively to dispute language in the July 8, 2015 Order stating that "this is a core
proceeding pursuant to 28 U.S.C. § 157(b)(2)." (D.I. 1 at 3) Defendants request that this Court
mandate that the Bankruptcy Court amend its July 8, 2015 Order to instead state that "this is a
non-core proceeding ... " and recast it as "Proposed Findings of Fact and Conclusions of Law."
(Id. at 4)
Procedurally, Defendants seek this outcome through two alternative approaches. First,
they have filed a "Conditional" Motion for Interlocutory Appeal. (D.I. 1) Second, Defendants
have filed the Rule 9033 Objection, and request that the Court should only consider the
Conditional Motion "if, and only if, the [Court] determines that the procedures of Bankruptcy
Rule 9033 do not apply to the July 8, 2015 Order for any reason." (D.I. 1 at 2; D.I. 5)
Defendants raise the identical underlying argument in both the Rule 9033 Objection and the
Conditional Motion. (Compare D.I. 1 at 3-5 with D.I. 5 at 2--4) Defendants contend that Count
XVI of the Complaint is a non-core Stern 1 claim and that they have not consented to the
Bankruptcy Court's authority to enter final judgment on that claim. Defendants interpret the
language in the July 8, 2015 Order to indicate that the Bankruptcy Court has erroneously found
that it possesses authority to enter final judgment on Count XVI. (D.I. 1 at 3-5; D.I. 5 at 2--4)
1
Referring to the type of claim recognized by Stern v. Marshall, 131 S. Ct. 2594 (2011).
2
Defendants' Rule 9033 Objection is improper because the July 8, 2015 Order does not
represent the Bankruptcy Court's proposed findings of fact or conclusions oflaw. (D.I. 1-2)
The Bankruptcy Court neither styled the July 8, 2015 Order as such, nor did it submit the Order
to this Court for review for final judgment under Fed. R. Bankr. P 9033(a). (Id.; see also 28
U.S.C. § 157(c)(l); Fed. R. Bankr. P. 9033(a)) This was procedurally appropriate because the
Order -- which denied Defendants' request for summary judgment -- was not a final order for
purposes of bankruptcy appeals under 28 U.S.C. § 158(a). 2 See In re White Beauty View, Inc.,
841F.2d524, 526 (3d Cir. 1988) (citing In re Smith, 735 F.2d 459, 461 (11th Cir. 1984)); In re
Coram Healthcare Corp., 2007 WL 643325, at *1 (D. Del. Mar. 1, 2007).
Defendants' premise that the July 8, 2015 Order somehow creates a Stern conflict is
misplaced. Stern addressed the Bankruptcy Court's authority to hear and enter final judgments
on a specific subset of claims. See Stern, 131 S. Ct. at 2602; see also Executive Benefits Ins.
Agency v. Arkison, 134 S. Ct. 2165, 2172-73 (2014) ("By definition, a Stern claim may not be
adjudicated to final judgment by the bankruptcy court, as in a typical core proceeding."). Even if
the Bankruptcy Court lacks constitutional authority to enter afinal judgment on Count XVI of
Plaintiffs' claim, 3 there is no constitutional constraint preventing it from entering interlocutory
orders, such as the July 8, 2015 Order, regarding that same claim. See Boyd v. King Par, LLC,
2011WL5509873, at *2 (W.D. Mich. Nov. 10, 2011) ("[E]ven ifthere is uncertainty regarding
the bankruptcy court's ability to enter a final judgment ... that does not deprive the bankruptcy
2
The Bankruptcy Court has already granted in part Defendants' Motion to Alter and
Amend, removing language from its Order stating that "the Court has judicial power to enter a
final order." (D.I. 1 at 3 n.2)
3
The Court expresses no opinion as to whether Count XVI raises a Stern claim or
whether Plaintiffs' have appropriately withheld consent to the Bankruptcy Court's authority to
enter final judgments on that claim.
3
court of the power to entertain all pre-trial proceedings, including summary judgment motions.");
In re Trinsum Grp., Inc., 467 B.R. 734, 739 (Bankr. S.D.N.Y. 2012) ("After Stern v. Marshall,
the ability of bankruptcy judges to enter interlocutory orders in non-core proceedings, or in core
proceedings as to which the bankruptcy court may not enter final orders or judgments consistent
with Article III absent consent, has been reaffirmed by the courts .... "). For the same reason,
Defendants' reliance on Gavin v. Tousignant (In re Ultimate Escapes Holdings, LLC), 2015 WL
1586644 (Bankr. D. Del. Feb. 5, 2015), is unavailing. (See D.I. 1 at 4 n.5) In that case, the order
that the Bankruptcy Court recast as proposed findings of fact and conclusions of law was a posttrial final judgment -- clearly the type of decision subject to Stern implications. See Gavin, 2015
WL 1586644, at *1.
The Court finds no basis for Defendants' Rule 9033 Motion and it will be dismissed.
Moreover, Defendants have not met their burden to demonstrate that an appeal would
involve a controlling question of law for which there are substantial grounds for a difference of
opinion. Therefore, the Court will deny their request for leave to appeal from an interlocutory
order. See 28 U.S.C. § 158(a); In re Kaiser Grp. Int'!, Inc., 400 B.R. 140, 145 (D. Del. 2009).
HjU~r'.!1=
August 19, 2015
Wilmington, Delaware
UNITED STATES DISTRICT JUDGE
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