Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00598/USCOURTS-azd-2_11-cv-00598-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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 Although the parties requested oral argument, the Court finds that this case is

suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2); LRBankr 8018-1

(stating that when the local rules are silent, the district court should apply the Federal Rule

of Appellate Procedure).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Red Mountain Machinery Co., 

Debtor _________________________________

Comerica Bank, 

Appellant, 

vs.

United States Bankruptcy Court Decision,

Appellee. 

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No. CV 11-598-PHX-JAT

ORDER

Background

In this appeal, Appellant seeks to have this Court amend and/or strike some

unfavorable language found in the bankruptcy court’s decision.1

 More specifically,

Appellant moved to recuse the bankruptcy judge; the judge denied recusal, but nonetheless

reassigned the case to avoid the distraction the recusal issue had become. In denying recusal,

the judge said Appellant’s motion was a “fall-back litigation strategy,” judge shopping, and

“classic scorched earth litigation.” Doc. 16 at 18. On appeal, Appellant seeks primarily to

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 Owen Cowing, Linda Cowing, and Red Mountain Machinery Company.

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have this Court remove these statements from the opinion below. To this end, Appellant

seeks to have this Court reverse the bankruptcy’s judge’s decision that recusal under § 455

was not mandated, because, Appellant argues, such a holding by this Court would prove

Appellant’s motion to be well taken. However, preliminarily this Court notes that even if

recusal was mandated by § 455, all of the bankruptcy judge’s statements may nonetheless

have been accurate.

Regardless of the accuracy of the bankruptcy judge’s statements, the real parties in

interest,2

 move this Court to dismiss this appeal for lack of jurisdiction. Doc. 14.

Specifically, they argue that the relief sought by Appellant was a new judge. Appellant

received a new judge. Therefore the entire issue is moot or otherwise non-appealable.

Appellant responds and argues that the statements “harm” them, therefore an appealable issue

remains before this Court. Doc. 16 at 10.

Issue on appeal

Obviously the issue of whether Appellant is entitled to a new judge is moot. Thus,

this Court is left to resolve two issues: 1) may a prevailing parties appeal to have the

appellate court give them a different or preferable reason for prevailing (standing); and/or

2) does an appellate court have the ability to effectively line-item-veto sentences from the

lower court’s decision (mootness).

Standing

“A prevailing party usually may not appeal a decision in its favor.” Ruvalcaba v. City

of Los Angeles, 167 F.3d 514, 520 (9th Cir. 1999). There are some exceptions to the general

rule. Id. “[A] prevailing party may appeal a collateral adverse ruling.” Id. “If the adverse

ruling can serve as the basis for collateral estoppel in subsequent litigation, the prevailing

party has standing to appeal.” Id.

In this case, citing cases from the Third, Fourth and Fifth Circuits, Appellant argues

it can appeal because it was “adversely affected” in this litigation. Doc. 16 at 17. First, the

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Ninth Circuit does not appear to recognize an exception that would allow a prevailing party

to appeal if that party is impacted in this litigation. Moreover, the Fourth Circuit case relied

on heavily by Appellant, like the Ninth Circuit case, dealt with the collateral consequences

in a separate state court litigation. Custer v. Sweeney, 89 F.3d 1156, 1164 (4th Cir. 1996).

Thus, legally Appellant does not fall within any exception to the general rule that a prevailing

party does not have standing to appeal.

Appellant’s argument that it is prejudiced in the adversary proceeding with Red

Mountain is also factually unavailing because the bankruptcy judge’s statements were both

limited to the recusal motion and not binding on any future court in this or any other

litigation. Thus, based on the foregoing, the Court finds Appellant, as the prevailing party

who has suffered no collateral consequences, does not have standing to appeal.

Mootness

As the Ruvalcaba court notes, even if Appellant had standing to appeal, “Article III

of the Constitution limits federal courts to the adjudication of actual, ongoing controversies

between litigants.” 167 F.3d at 520-21. “If there is no longer a possibility that an appellant

can obtain relief for his claim, that claim is moot and must be dismissed for lack of

jurisdiction.” Id. at 521. 

Here, the relief sought on appeal — to eliminate certain statements from the

bankruptcy judge’s order — is not relief this Court can grant. See Platt Elec. Supply, Inc.

v. EOFF Elec. Inc., 522 F.3d 1049, 1059, n.3 (9th Cir. 2008) (noting that appellate courts

“review judgments, not statements in opinions.” (citation omitted)). Further, the relief sought

below, to obtain another judge, has been granted. Thus, alternatively, the Court also finds

that this case must be dismissed for lack of jurisdiction because the relief requested is moot.

Conclusion

IT IS ORDERED that the motion to dismiss for lack of jurisdiction (Doc. 14) is

granted.

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IT IS FURTHER ORDERED that pursuant to Federal Rule of Bankruptcy

Procedure 8016(a), the Clerk of the Court shall enter judgment dismissing this appeal, with

prejudice. The Court reads 28 U.S.C. § 158(d) as requiring only a judgment, and not a

mandate, from this Court. However, if either party disagrees, that party may move for

issuance of a mandate within 21 days.

DATED this 2nd day of February, 2012.

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