In Re: Christopher Martin Ridgeway
ORDER AND REASONS: IT IS ORDERED that Debtor's 1 Motion for Leave to Appeal is DENIED, as set forth in document. IT IS FURTHER ORDERED that Debtor's 9 Motion to Expedite is DISMISSED as moot. Signed by Judge Ivan L.R. Lemelle on 11/16/2017. (jls)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CHRISTOPHER MARTIN RIDGEWAY
NO. 17-9507 W/
Related Case No. 177857
STRYKER CORPORATION, ET AL.
ORDER AND REASONS
Considering Appellant-Debtor Christopher
(“Debtor”) Motion and Memorandum in Support for Leave to Appeal
Order Denying Debtor’s Motion to be Reconsidered (Rec. Doc. 1) and
Corporation (collectively, “Appellees”), Response in Opposition to
Motion for Leave to Appeal. Rec. Doc. 6. Also before the Court is
Debtor’s Motion to Expedite Appeal (Rec. Doc. 9). For the following
IT IS ORDERED that Debtor’s Motion for Leave to Appeal is
IT IS FURTHER ORDERED that Debtor’s Motion to Expedite is
DISMISSED as moot.
FACTS AND PROCEDURAL HISTORY
Before the Court is a request by the Debtor seeking leave to
appeal a decision of the Bankruptcy Court that struck his common
core doctrine objections to Appellees proofs of claim for attorney
fees and costs. Rec. Doc. 1. In particular, Appellees proofs of
claim for attorney’s fees and costs were submitted based on an
underlying judgment in federal court in the Western District of
Michigan (“Michigan Case”). Id.
brought a claim against Debtor—former employee of Appellees—in
part, for violation of a non-compete under the Michigan Uniform
Trade Secrets Act (“MUTSA”). Rec. Doc. 1 at 7-11. Following jury
trial, judgment was entered in favor of Appellees and against the
Debtor on March 9, 2016. Rec. Doc. 1 at 8-9. Debtor appealed the
judgment, which was affirmed by the Sixth Circuit. Id. Shortly
thereafter, Debtor filed a voluntary petition for Chapter 11
Ridgeway, No. 16-10643 (E.D. LA 2017).
The instant appeal deals with a pre-hearing, evidentiary
ruling from the Bankruptcy Court. In July of 2016, Appellees filed
proofs of claim with the Bankruptcy Court seeking an award for
attorney fees and costs based on the Michigan Case judgment.
Appellees claim is in the amount of $3,432,147.71: $745,195 for
actual damages, and the bulk of the remaining $2.2 million for
attorneys’ fees and costs. Rec. Docs. 1 and 6. Appellees cite the
Michigan Uniform and Trade Secrets Act, MCL 445.1901 et seq.,
(“MUTSA”) and “common core” doctrine as one basis for an award of
costs and fees. See Bankr. Dkt. Nos. 288 and 384.
In December 2016, Debtor filed his Objections to Appellees
Proof of Claim, asserting that Appellees were not entitled to
recover certain attorneys’ fees under MUTSA and the common core
doctrine. Bankr. Dkt. No. 288.
Honorable Judge Douglass Dodd held an initial status conference
with the Parties (the “April Conference”). Rec. Doc. 1 at 15.
Unfortunately, due to a lack of any transcript for the April
Nevertheless, in pertinent part, the April Conference order reads:
IT IS ORDERED that:
1) Not later than May 15, 2017, debtor shall file and
serve on Stryker and Howmedica's counsel a list of
time entries in Stryker and Howmedica's counsel's
objectionable, specifying for each entry the
debtor's basis for claiming that the debtor should
not be liable for the charges relating to the time
entry, with a concluding summary of the total
amounts for each objection category.
2) Stryker and Howmedica shall file and serve on
debtor's counsel its response to each of debtor's
Bankr. Dkt. No. 354.
Debtor filed his Supplemental Objection according to the
April Conference order on May 15, 2017. Bankr. Dkt. No. 384.
However, the subject of this current appeal involves Debtor’s
failure to include specifically identified time entries for the
Debtor’s common-core objections. On June 5, 2017, Appellees filed
a motion to strike Debtor’s common-core objections, arguing that
Debtor failed to identify specific time entries, as verbally
ordered in the April Conference Bankr. Dkt. No. 391. The Motion to
Strike Debtor’s common-core objections was granted in part on July
specific, objectionable time entries.” Bankr. Dkt. No. 438.
On August 14, 2017, Debtor filed a Motion to Reconsider the
Bankruptcy Court’s Order on Appellees Motion to Strike. Bankr.
Dkt. No. 445. Debtor’s Motion to Reconsider was denied on September
8, 2017. Bankr. Dkt. No. 494. Thereafter, Debtor timely filed the
instant appeal, seeking this Court’s review of the Bankruptcy
Court’s denial of Debtor’s Motion to Reconsider.
Debtor contends that he already submitted his common-core
objections in his original objections filed in December 2016. Rec.
objections to the Appellees claim for attorneys’ fees and costs.
Further, Debtor argues that the Bankruptcy Court struck his commoncore objections pursuant to Federal Rule of Bankruptcy Procedure
7016, which legally does not apply. Id.
Appellees assert that Debtor’s appeal is interlocutory and
not an appeal as of right. Rec. Doc. 6. Further, Appellees contend
that Debtor does not meet the threshold requirements for this Court
to grant leave of interlocutory appeal. Finally, Appellees argue
that Debtor likely estopped from challenging common-core doctrine
in this matter.
LAW AND ANALYSIS
Appeals from Bankruptcy Court are governed by 28 U.S.C. §
158, Federal Rule of Bankruptcy Procedure 8001 et seq., and Local
Rules 83.4.2, 83.4.3 and 83.4.4. While parties have an absolute
right of appeal of final orders, parties must be granted leave for
interlocutory review of issues by the District Court. 28 U.S.C. §
threshold consideration of the nature of this appeal. The order by
the Bankruptcy Court striking Debtor’s common-core objections is
in regards to an evidentiary hearing to be held on November 30,
2017. 28 U.S.C § 158(a) provides:
(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; and
(3) with leave of the court, from other
interlocutory orders and decrees;
and, with leave of the court, from interlocutory
orders and decrees, of bankruptcy judges entered
in cases and proceedings referred to the
bankruptcy judges under section 157 of this
title. An appeal under this subsection shall be
taken only to the district court for the judicial
district in which the bankruptcy judge is
28 U.S.C.A. § 158 (emphasis added).
To become final, the decision, order, or decree must end the
litigation, or dispose of a complete claim for relief, and leave
nothing for the court to do but execute the judgment. Elliott v.
Four Seasons Properties (In re Frontier Properties, Inc.), 979
F.2d 1358, 1362 (9th Cir.1992); In re Kashani, 190 B.R. 875, 882
(B.A.P. 9th Cir. 1995). “An interlocutory appeal is one which stems
from a judgment, order, or decree which does not finally determine
a cause of action, but instead decides only an intervening matter.”
In re Kashani, 190 B.R. at 882. Here, the underlying order striking
Debtor’s claims does not dispose of the dispute between Debtor and
Appellees. “In the bankruptcy context, discovery orders also are
appealable.” In re Royce Homes LP, 466 B.R. 81, 89 (S.D. Tex.
2012). The issue of admissibility of Appellees’ proofs of claims
remains pending before the Bankruptcy Court. As a result, Debtor’s
requested review by this Court is interlocutory in nature.
Bankruptcy Court’s order 1) involves a controlling question of
law, as to which, 2) there is substantial ground for difference of
opinion, and 3) that an immediate appeal from the order may
materially advance the ultimate termination of the litigation. 28
U.S.C.A. § 1292 (emphasis added). Section 158 does not explicitly
process regarding interlocutory appeals. In re Gray, 447 B.R. 524,
533 (E.D. Mich. 2011). “Although the Fifth Circuit has expressly
reserved the question,” see In re Ichinose, 946 F.2d 1169, 1177
(5th Cir.1991), district courts in the Fifth Circuit have looked
to the above-mentioned § 1292(b) factors for requisite guidance.
In re Royce Homes LP, 466 B.R. 81, 93 (S.D. Tex. 2012).
No Controlling Issue of Law
On interlocutory review, “[t]he question of law must refer to
a pure question of law that the reviewing court could decide
quickly and cleanly without having to study the record.” In re
Royce Homes LP, 466 B.R. 81, 94 (S.D. Tex. 2012)(emphasis added).
Similarly, it is a well-accepted that:
Questions that arise during the course of a
bankruptcy proceeding concerning the appropriate scope
of discovery and that do not involve controlling
questions of law are left to the sound discretion of the
court that is fully familiar with the entire proceeding—
the bankruptcy judge.
In re Towers Fin. Corp., 164 B.R. 719, 721 (S.D.N.Y. 1994).
Here, Debtor’s attempt to tie this issue to Federal Rule of
Bankruptcy Procedure 7016 is unconvincing. The issue before us is
one of discretion pertaining to what the Debtor will be allowed to
present during the pre-trial, evidentiary hearing set for November
Review of Debtor’s request would require this Court to
delve into the factual Bankruptcy record, as well as the record in
the Michigan Case. The request by Debtor does not involve, as
determination by an appellate court without a trial record.” In re
Gray, 447 B.R. 524, 534 (E.D. Mich. 2011). Further, Debtor has
failed to meet his burden of proving any exceptional circumstances
that would require this Court to take such an undertaking.
No Material Advancement of Ultimate Termination of the Litigation
Additionally, hearing this discovery issue on interlocutory
appeal would do nothing to further the ultimate termination of
approaching determinative evidentiary hearing.
Based on the foregoing, Debtor’s motion for leave to appeal
New Orleans, Louisiana, this 16th day of November, 2017.
SENIOR UNITED STATES DISTRICT JUDGE
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