Boteilho Hawaii Enterprises, Inc. v. Dutch-Hawaiian Dairy Farms, LLC

Filing 12

ORDER GRANTING PLAINTIFF-APPELLEE'S MOTION TO DISMISS re 3 - Signed by CHIEF JUDGE DERRICK K. WATSON on 7/11/2023. Boteilho's motion to dismiss, Dkt. No. 3, is GRANTED. This appeal is DISMISSED WITHOUT PREJUDICE to its assertion at the appropriate time. The Clerk is instructed to CLOSE the case. (eta)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I
BOTEILHO HAWAI‘I
ENTERPRISES, INC., dba Cloverleaf
Dairy,

Civil No. 23-00147 DKW-KJM
ORDER GRANTING PLAINTIFFAPPELLEE’S MOTION TO
DISMISS

Plaintiff-Appellee,
vs.
DUTCH-HAWAIIAN DAIRY
FARMS, LLC; MAUNA KEA MOO,
LLC; and KEES KEA,
Defendant-Appellants.

Defendant-Appellants Dutch-Hawaiian Dairy Farms, LLC, Mauna Kea
Moo, LLC, and Kees Kea (collectively, “Appellants”) appeal from a March 13,
2023 decision by the United States Bankruptcy Court for the District of Hawai‘i.
See Dkt. No. 1; Dkt. No. 1-2. That decision, associated with the parties’
underlying Bankruptcy case, ordered Appellants to turn over certain cattle “not in
dispute” to Plaintiff-Appellee Boteilho Hawai‘i Enterprises, Inc. (“Boteilho”),
along with certain equipment, including a trailer and fencing panels. Dkt. No. 1-2.
Before the Court is Boteilho’s Motion to Dismiss (“MTD”), which asserts
that this Court lacks subject matter jurisdiction over the Bankruptcy appeal because
it is premature. Dkt. No. 3. This Court’s jurisdiction to hear appeals from
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decisions of the Bankruptcy Court is generally limited to “final judgments, orders,
and decrees” under 28 U.S.C. § 158(a)(1), and both parties agree that the
Bankruptcy decision at issue here is not final. Nevertheless, Appellants contend
that the decision is immediately appealable under either of two exceptions to the
general rule against interlocutory appeals: (1) the Forgay doctrine and/or (2) the
Court’s discretionary authority to grant interlocutory review under 28 U.S.C.
§ 158(a)(3). Because the Forgay doctrine does not apply, and the basis for the
appeal does not support discretionary interlocutory review, the MTD is
GRANTED.
RELEVANT BACKGROUND
On November 21, 2022, Boteilho filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District
of Hawai‘i, initiating Bankruptcy Case No. 22-00827 (RJF). See Dkt. No. 6 at 1.
Shortly thereafter, Boteilho also initiated an adversary proceeding, claiming that
Appellants were in possession of certain assets belonging to Boteilho, including
cattle and equipment. Id. On February 17, 2023, Boteilho filed a motion for
summary judgment, seeking to compel Appellants to turn over those assets. Id.
Following briefing and a March 10, 2023 hearing, the Bankruptcy Court entered a
March 13, 2023 order partially granting that motion. Id.; Dkt. No. 1-2 (“March 13
Order”). Therein, the Bankruptcy Court stated, as relevant here:
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1. [Appellants] are ordered to turn over the trailer and fencing panels
identified in [Boteilho]’s Motion for Summary Judgment.
2. [Appellants] are ordered to turn over [Boteilho]’s cattle. In
particular, the cattle subject to turnover are those cattle that
[Boteilho] delivered to [Appellants] and are not in dispute.
[Appellants] are ordered to permit [Boteilho] onto their property
for the identification, collection, and transport of the cattle.
[Appellants] are ordered to assist in the identification of the cattle
to be turned over.
3. [Boteilho] shall arrange and bear all costs of the collection and
transport of [Boteilho]’s cattle. [Boteilho] shall abide by any
applicable statutory requirements related to the movement of the
cattle.
4. The Scheduling Conference is continued to April 28, 2023 at 2:00
P.M.
5. This order is made without prejudice as to any other claims the
parties may have against one another.
Dkt. No. 1-2 at 2–3. Pursuant to this order, on March 23, 2023, the parties
attended a site inspection, and, over the course of three days, Appellants permitted
the turnover of 165 head of cattle. Dkt. No. 3 at 4. Boteilho claims that thirty-five
additional cattle are “missing” and were not turned over as ordered. Id. Boteilho
also claims ownership of all offspring of the cattle at issue, none of which were
turned over. Id.
Also on March 23, 2023, Appellants filed an appeal of the March 13 Order
in this Court. Dkt. No. 1. On April 7, 2023, Boteilho filed the instant MTD,
contending that this Court lacks subject matter jurisdiction over the appeal because
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the March 13 Order is a non-appealable, interlocutory order. Dkt. No. 3. On June
9, 2023, Appellants opposed the MTD, and, on June 16, 2023, Boteilho replied.
Dkt. Nos. 7, 9.1 The Court elected to decide these matters without a hearing
pursuant to Local Rule 7.1(c), see Dkt. No. 10, and this Order follows.
LEGAL STANDARD
28 U.S.C.A. § 158 states:
(a) The district courts of the United States shall have jurisdiction to
hear appeals
(1) from final judgments, orders, and decrees;
(2) from interlocutory orders and decrees issued under section
1121(d) of title 11 increasing or reducing the time periods referred to
in section 1121 of such title; 2 and
(3) with leave of the court, from other interlocutory orders and
decrees;
of bankruptcy judges entered in cases and proceedings referred to the
bankruptcy judges under section 157 of this title.
According to the U.S. Bankruptcy Appellate Panel of the Ninth Circuit, “finality
for purposes of jurisdiction over ‘as of right’ appeals under 28 U.S.C. § 158(a)(1)
in adversary proceedings does not differ from finality in ordinary federal civil
actions under 28 U.S.C. § 1291.” In re Belli, 268 B.R. 851, 855 (9th Cir. 2001).
Fed. R. Civ. P. 54(b) controls the analysis of finality of judgments for purposes of

1
2

Contemporaneously, the parties briefed the merits of the appeal. See Dkt. Nos. 6, 8, 11.
This provision does not apply in this case.
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appeal in federal civil actions—and, thus, for bankruptcy adversary proceedings as
well. Id. Under Rule 54(b), “any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities of fewer than all
the parties does not end the action as to any of the claims or parties . . . .” Fed. R.
Civ. P. 54(b) (emphasis added). “Rule 54(b) reflects the federal policy against
piecemeal appeals and waste of judicial resources.” In re Belli, 268 B.R. at 855.
DISCUSSION
I.

Local Rule 7.8
As a preliminary matter, as Appellants point out, Dkt. No. 7 at 2–5, Boteilho

failed to comply with Local Rule 7.8 in filing the instant MTD. Local Rule 7.8
states, as relevant here:
[C]ounsel contemplating the filing of any motion shall first contact
opposing counsel to discuss thoroughly, preferably in person, the
substance of the contemplated motion and any potential partial or
complete resolution. The conference shall take place at least seven (7)
days prior to the filing of the motion. If the parties are unable to reach
a resolution which eliminates the necessity for a motion, counsel for
the movant shall include in the motion a statement to the following
effect: “This motion is made following the conference of counsel
pursuant to LR 7.8, which took place on [date].”
In its MTD, Boteilho did not include a statement of compliance with this Local
Rule, see generally Dkt. No. 3, and, indeed, Boteilho concedes that no pre-filing
conference took place. Dkt. No. 9 at 11–12. On that ground, Appellants contend
that the MTD should be denied. Dkt. No. 7 at 2–5.
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The Court agrees with Appellants that Boteilho violated the Local Rule, and
Boteilho’s arguments as to why the rule should be waived in its favor are not
persuasive. See Dkt. No. 9 at 11–12 (contending that “there was no need to meet
and confer under Local Rule 7.8” because “[a] meet and confer would not serve the
purpose of the rule”).
However, because the question raised by the MTD is a matter of subject
matter jurisdiction, the Court must, and does, consider the issue sua sponte and is
aided herein by the parties’ presentation of the issue in their briefings.
II.

The MTD is GRANTED because the Court lacks subject matter
jurisdiction over this appeal.
Neither party disputes that the Bankruptcy Court’s March 13 Order is not

final. See Dkt. No. 7 at 5 (Appellants conceding that “[t]he order appealed from”
is “not final”). However, Appellants contend that two separate exceptions permit
interlocutory appeal. Id. at 5–11. As discussed below, the Court disagrees.
A.

The Forgay Doctrine

Appellants assert that the appeal may proceed under the Forgay doctrine
because the March 13 Order “commands the immediate disposition of property.”
Id. at 5, 6–7 (“The United States Court of Appeals for the Ninth Circuit has
recognized that orders requiring the immediate disposition of property are
immediately appealable despite the standard final judgment rule.”). In Forgay v.

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Conrad, 47 U.S. 201, 202 (1848), the Supreme Court held that a particular decree
was final because:
[i]t decides the title of all the property in dispute, decrees that it be
delivered up to the complainant, and that execution issue . . . ; nothing
is left to be done but the ministerial duty of stating an account, which
in this case is in the nature of an execution to carry out the decree.
47 U.S. at 202. In general terms, therefore, Forgay held that interlocutory orders
might be immediately appealable where they (i) directed the disposition of
property and (ii) subjected the appellant to irreparable injury absent immediate
review. See also Weingartner v. Union Oil Co. of Cal., 431 F.2d 26, 29 (9th Cir.
1970) (explaining the application of Forgay rests upon “the likelihood of
‘irreparable harm’ to a party if immediate review is not allowed”).
Forgay does not apply for two reasons. First, although Appellants pay lip
service to Forgay’s irreparable injury element 3, they have not plausibly claimed
irreparable harm absent immediate review. The Supreme Court has explained:
[T]he temporary loss of income, ultimately to be recovered, does not
usually constitute irreparable injury. . . . The key word in this
consideration is irreparable. Mere injuries, however substantial, in
terms of money, time, and energy necessarily expended in the absence
of a stay, are not enough. The possibility that adequate compensatory
or other corrective relief will be available at a later date, in the
ordinary course of litigation, weighs heavily against a claim of
irreparable harm.

3

See Dkt. No. 7 at 6 (“Every day that Appellants are deprived of the use of their livestock, their
business and livelihood is unduly and irreparably damaged.”).
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Sampson v. Murray, 415 U.S. 61, 90 (1974); see also Gonzalez v. Recht Fam.
P’ship, 51 F. Supp. 3d 989, 992 (S.D. Cal. 2014) (“Irreparable injury is that which
is substantial and not compensable by monetary damages or other legal remedies.”)
(citing L.A. Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197,
1202 (9th Cir. 1980)). There is nothing in the record here demonstrating that
review of the March 13 Order in the ordinary course of litigation (upon final
judgment or decree) would cause irreparable harm: there is, for instance, no
allegation that there is something inherently irreplaceable about the cattle at issue;
there is no claim that the cattle’s monetary value could not be accurately
determined in a future accounting; and there is no claim that adequate
compensation or other corrective relief will be unavailable at a later date.
Second, Forgay does not apply because the March 13 Order only disposes of
some of the property at issue before the Bankruptcy Court and clearly contemplates
additional substantial proceedings. See Dkt. No. 1-2 at 2–3 (calendaring a future
scheduling conference without prejudice to “any other claims the parties may have
against each other”). The decree at issue in Forgay “decide[d] the title of all the
property in dispute” where “nothing [wa]s left to be done but the ministerial duty
of stating an account.” 47 U.S. at 202 (emphasis added). 4 The parties appear to

4

A more expansive application of Forgay—e.g., the application apparently suggested by
Appellants here, that it should apply wherever an interlocutory order commands the disposition
of any property, see Dkt. No. 7 at 5—would defeat Rule 54(b)’s general policy “against
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agree that the factual circumstances here are far different. In particular, although
the March 13 order addresses the turnover of some cattle “not in dispute”, it does
not address the offspring of that cattle, nor does it address cattle that are not
“identifiable” nor cattle left to “run wild” on Appellant’s land. See e.g., Dkt. No. 6
at 14–15; Dkt. No. 7 at 8–10.
In short, interlocutory review based on the Forgay exception is not
warranted.
B.

Discretionary Review

Appellants assert that this Court has the discretionary authority to grant them
leave to appeal and that discretion should be exercised in their favor. See 28
U.S.C. § 158(a)(3) (permitting appeals from interlocutory orders “with leave of the
court”). 5 In considering whether to grant leave to appeal, courts should “look[] to

piecemeal appeals and waste of judicial resources.” See In re Belli, 268 B.R. at 855. As
Boteilho explained:
Permitting an appeal at this juncture introduces the opportunity for piecemeal
appeals. According to Defendants, if and when they are ordered to turn over the
offspring, another appeal under Forgay would be permitted. And when the
remaining “disputed” cattle are ordered to be turned over, they can again appeal
that decision. Piecemeal appeals undermine the very purpose of the finality
doctrine. [The exceptions to the rule] should not be applied so as to ‘swallow the
general rule that a party is entitled to a single appeal, to be deferred until final
judgment has been entered.’ Digit. Equip. Corp. v. Desktop Direct, Inc., 511 U.S.
863, 868 (1994).
Dkt. No. 9 at 5–6.
5
Appellants did not move for leave to appeal under 28 U.S.C. § 158(a)(3). However, this Order
treats Appellants’ brief in opposition to the MTD as such a motion. See Dkt. No. 7 at 7–10.
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the standards set forth in 28 U.S.C. § 1292(b), which concerns the taking of
interlocutory appeals from the district court to the court of appeals.” In re
Roderick Timber Co., 185 B.R. 601, 604 (B.A.P. 9th Cir. 1995). The relevant
standards under Section 1292(b) are “whether the order on appeal involves a
controlling question of law as to which there is a substantial ground for difference
of opinion and whether an immediate appeal may materially advance the ultimate
termination of the litigation.” Id.; see also Dkt. No. 7 at 7–8 (citing the same
factors as taken from a First Circuit Bankruptcy Appellate Panel case).
Here, the appeal does not involve a “controlling question of law.” The term
“question of law” means a “‘pure question of law’ rather than a mixed question of
law and fact or the application of law to a particular set of facts.” See In re Moore,
2011 WL 5593185 at *3 (D. Haw. Nov. 17, 2011) (citing In re Novatel Wireless
Sec. Litig., 2013 WL 6055270 (S.D. Cal. Nov. 19, 2013)). Appellants contend that
the March 13 Order should have decided that the cattle at issue were “running
wild” on their land. Dkt. No. 7 at 8–9. 6 This is not a pure question of law. It
involves the application of H.R.S. § 142-44 to the manner in which the cattle on
Appellants’ land were found, cared for and living. Indeed, Appellants do not
appear to have any quarrel with the legal definition adopted by the Bankruptcy
6

Section 142-44 of the Hawai‘i Revised Statutes (“H.R.S. § 142-44”) states, “All cattle, horses,
mules, donkeys, sheep, goats, and swine, over twelve months of age, not marked or branded,
which may be running wild at any time on any lands in the State, shall belong to and be the
property of the owners or lessees of the lands on which the animals are then running.”
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Judge. See Dkt. No. 7 at 8–10 (taking issue with the application of the law to the
facts, not the definition of “running wild” itself).
Nor have Appellants shown that there is any substantial ground for
difference of opinion on the relevant question of law. “To determine if a
‘substantial ground for difference of opinion’ exists under [Section] 1292(b),
courts must examine to what extent the controlling law is unclear.” Couch v.
Telescope, Inc., 611 F.3d 629, 633 (9th Cir. 2010). “Courts traditionally will find
that a substantial ground for difference of opinion exists where ‘the circuits are in
dispute on the question and the court of appeals of the circuit has not spoken on the
point, if complicated questions arise under foreign law, or if novel and difficult
questions of first impression are presented.’” Horowitz v. Sulla, 2017 WL
1352211 at *7 (D. Haw. Apr. 11, 2017) (quoting Couch, 611 F.3d at 633). Here,
Appellants have not pointed to any such indicia that the meaning of the phrase
“running wild” is treated inconsistently or presents difficult issues of first
impression.
The Court declines to exercise its 28 U.S.C. § 158(a) discretionary authority
to grant interlocutory review in the circumstances presented.

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CONCLUSION
Boteilho’s motion to dismiss, Dkt. No. 3, is GRANTED. This appeal is
DISMISSED WITHOUT PREJUDICE to its assertion at the appropriate time. The
Clerk is instructed to CLOSE the case.
IT IS SO ORDERED.
DATED: July 11, 2023 at Honolulu, Hawai‘i.

___________________________
Derrick K. Watson
Chief United States District Judge

Boteilho Hawaii Enterprises, Inc. vs. Dutch-Hawaiian Dairy Farms, LLC; et al.;
Civil No. 23-00147 DKW-KJM; ORDER GRANTING PLAINTIFFAPPELLEE’S MOTION TO DISMISS

12