In re VeroBlue Farms USA, Inc.

In re VeroBlue Farms USA, Inc.

Opinion

 [*883]  LOKEN, Circuit Judge.

Debtors in this Chapter 11 bankruptcy proceeding are VeroBlue Farms USA, Inc., and affiliated entities ("Debtors"). A VeroBlue preferred shareholder, FishDish, LLP ("FishDish"), appeals the district court's order granting appellees' motions to dismiss FishDish's appeal of the bankruptcy court order confirming Debtors' Chapter 11 plan of reorganization over FishDish's objections, and certain pre-confirmation orders. Appellees are VeroBlue Farms, the reorganized debtor; Alder Aqua, Ltd. ("Alder Aqua"), Debtors' plan of reorganization sponsor; and senior secured creditor Broadmoor Financial, L.P. ("Broadmoor"). In dismissing the appeal, the district court invoked equitable mootness, a bankruptcy doctrine adopted by our sister circuits (though not uniformly), and by the Eighth Circuit Bankruptcy Appellate Panel and Eighth Circuit district courts. We have never expressly adopted the doctrine,¹ nor has the Supreme Court. Alternatively, the court considered appellees' jurisdictional defenses, including timeliness, and concluded it did have [**3]  subject matter jurisdiction. Broadmoor cross appeals the district court's ruling that FishDish's appeal from one order, the "Claim Objection Order," though untimely under Rule 8002(a)(1) of the Federal Rules of Bankruptcy Procedure, was not subject to dismissal under 28 U.S.C. § 158(c)(2) because the statute only applies to appeals from the "final judgments, orders, and decrees" referred to in § 158(a)(1).

We agree that the district court and this court have statutory subject matter jurisdiction. However, we conclude the district court erred in limiting the mandatory but non-jurisdictional timeliness requirements of Rule 8002 to appeals from final bankruptcy court orders. As FishDish has conceded its appeal from the pre-confirmation Claim Objection Order was untimely under Rule 8002, we affirm the grant of appellees' Partial Motion to Dismiss Appeal on this alternative ground.

Regarding the central issue on appeal, what has misleadingly come to be known as "equitable mootness," like the Tenth Circuit ] we agree with "[e]very other circuit to consider the issue . . . that 'equitable,' 'prudential,' or 'pragmatic' considerations can render an appeal of a bankruptcy court decision moot even when the appeal is not constitutionally moot." In re Paige, 584 F.3d 1327, 1337 (10th Cir. 2009). However, invoking this doctrine often results in "the refusal [**4]  of the Article III courts to entertain a live appeal over which they indisputably possess statutory jurisdiction and in which meaningful relief can be awarded." In re Continental Airlines, 91 F.3d 553, 571 (3d Cir. 1996) (Alito, J., dissenting), cert. denied sub nom. Bank of New York v. Continental Airlines, 519 U.S. 1057, 117 S. Ct. 686, 136 L. Ed. 2d 610 (1997). An Article III appellate court has a "virtually unflagging obligation" to exercise its subject matter jurisdiction. In re Semcrude, L.P., 728 F.3d 314, 320 (3d Cir. 2013) (quotation omitted). Therefore, as in Paige, Semcrude, and numerous other circuit court decisions, we conclude that the district court did not apply a sufficiently rigorous test to determine when bankruptcy equities and pragmatics justify foregoing Article III judicial review of a bankruptcy court order confirming a Chapter  [*884]  11 plan. Accordingly, we remand for further district court proceedings.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.