Remand To Bankruptcy Court Deprives Seventh Circuit Of Jurisdiction

Diana Holland, who owned real property in Florida, filed her Chapter 7 Bankruptcy in Illinois. She asserted that Florida law exempted the Florida property from the bankruptcy. The bankruptcy trustee argued that Illinois law applied, and that it did not exempt the Florida property. The bankruptcy court ruled that Illinois law applied, but did not consider whether the property was exempted. On appeal, the district court reversed, ruled that Florida law applied, and remanded the issue of exemption back to the bankruptcy court.

The trustee appealed to the Seventh Circuit Court of Appeals. But the Seventh Circuit dismissed the appeal and ruled it did not have appellate jurisdiction because the district court’s order was not final and appealable. Although the federal circuits are split on the question, for the Seventh Circuit, the district court’s remand order made the difference.

Our circuit precedent accords with the majority view: “[E]ven if the decision of the bankruptcy court is final, a decision by the district court on appeal remanding the bankruptcy court’s decision for further proceedings in the bankruptcy court is not final, and so is not appealable to this court, unless the further proceedings contemplated are of a purely ministerial character . . . .” What remains to be decided here is hardly ministerial: the bankruptcy court still has to answer the $350,000 question whether Holland is entitled to an exemption under Florida law. … Only then—after the bankruptcy court has made its final ruling, the district court has revisited the case, and a fresh notice of appeal to our court has been filed—can we exercise jurisdiction over the matter.

Read the whole case, In re Holland, No. 07-1949 (8/19/08), by clicking here.