Traversa v. Education Credit Management Corp. (In Re Traversa)
2007 WL 1994401, 2007 U.S. Dist. LEXIS 48836, 371 B.R. 1 (2007)
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Rule of Law:
A district court generally lacks appellate jurisdiction over a bankruptcy court's interlocutory order denying a motion to seal documents, as such an order is neither a final appealable order under the collateral order doctrine nor does it meet the requirements for a permissive appeal.
Facts:
- Mr. Traversa was a party to an ongoing bankruptcy proceeding.
- During this proceeding, Traversa filed various documents with the court.
- Traversa believed these documents contained private, confidential, or privileged information.
- Traversa sought a court order to seal the documents he had already filed and those he anticipated filing in the future, shielding them from public access.
Procedural Posture:
- In a pending bankruptcy case, Mr. Traversa filed a motion to seal certain documents in the U.S. Bankruptcy Court.
- On February 20, 2007, the Bankruptcy Court denied the motion to seal.
- Mr. Traversa filed a motion for reconsideration, which the Bankruptcy Court denied on April 24, 2007, after a hearing.
- On May 4, 2007, Mr. Traversa (appellant) filed a Motion to Appeal in the U.S. District Court, seeking to overturn the Bankruptcy Court's denial of his motion for reconsideration, with Education Credit Management Corporation as the appellee.
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Issue:
Does a federal district court have appellate jurisdiction over a bankruptcy court's interlocutory order denying a party's motion to seal documents filed in an ongoing bankruptcy proceeding?
Opinions:
Majority - Kravitz, District Judge
No, a federal district court does not have appellate jurisdiction over a bankruptcy court's interlocutory order denying a motion to seal. Such an order is not considered final and does not satisfy the criteria for either an appeal under the collateral order doctrine or a permissive appeal. The court reasoned that the denial of the motion to seal is not a 'final judgment' under 28 U.S.C. § 158(a)(1) because the underlying bankruptcy action remains pending. The court also held that the collateral order doctrine does not apply, citing Second Circuit precedent like Chase Manhattan Bank, N.A. v. Turner & Newall, PLC, which explicitly states the doctrine does not provide jurisdiction to review interlocutory discovery orders. Finally, the court denied a permissive appeal under 28 U.S.C. § 158(a)(3) because the issue did not involve a 'controlling question of law' and an immediate appeal would not 'materially advance the ultimate termination of the litigation,' as required by the standard set forth in 28 U.S.C. § 1292(b).
Analysis:
This ruling reinforces the strong federal policy against piecemeal litigation and interlocutory appeals, particularly in the context of discovery-related disputes. The court's decision clarifies that denials of motions to seal, like denials of protective orders, are generally considered non-appealable discovery matters that must await final judgment. This promotes judicial efficiency by preventing the appellate process from being clogged with disputes that do not determine the ultimate merits of a case. For litigants, this means they must typically comply with such orders or wait until the entire case concludes before seeking appellate review.
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