Opinion ID: 170980
Heading Depth: 3
Heading Rank: 2

Heading: Application of Cohen to the BAP's Order

Text: The BAP held that the bankruptcy court correctly determined that the McCarran-Ferguson Act did not apply to the claims pertaining to the Rock Springs property; thus, it concluded that the bankruptcy court properly denied WULA's motion to dismiss those claims. Therefore, that part of the BAP's order does not meet the Cohen requirements for the same reasons we have described above. As to the other claims, however, the BAP decided that the bankruptcy court properly dismissed them, but did so for the wrong reason. Specifically, the BAP determined that the bankruptcy court erred in its conclusion that the McCarran-Ferguson Act applied to those claims and thus provided a basis for dismissal. But the BAP reasoned that the bankruptcy court could have permissively abstained from hearing the claims under 28 U.S.C. § 1334(c)(1). Thus, the BAP affirmed on that basis. Ordinarily, a decision to abstain satisfies the collateral-order doctrine. See Mt. McKinley Ins. Co. v. Corning, Inc., 399 F.3d 436, 442 (2d Cir.2005). However, as to the ground for abstention at issue here, Congress has expressly limited appellate jurisdiction. 28 U.S.C. § 1334(d) provides: Any decision to abstain or not to abstain made under subsection (c) (other than a decision not to abstain in a proceeding described in subsection (c)(2)) is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title.... Here, the Debtors argue that even though § 1334(d) normally divests this court of jurisdiction over decisions to abstain under § 1334(c)(1), that jurisdictional bar is not applicable because it was the BAP, rather than the bankruptcy court, that held that abstention was warranted under § 1334(c)(1). According to the Debtors, the BAP lacked the authority to apply § 1334(c)(1) in the first instance, and the case should be remanded to the bankruptcy court for a determination whether abstention is warranted under § 1334(c)(1). In similar situations, parties have been allowed to challenge a court's authority to make a decisioneven though the merits of that decision are not reviewable. See, e.g., Ill. Mun. Ret. Fund v. Citigroup, Inc., 391 F.3d 844, 848-50 (7th Cir.2004); Kelton Arms Condo. Owners Ass'n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1191-92 (9th Cir.2003). We are persuaded by those cases, and therefore conclude that we have jurisdiction to consider the debtors' argument that the BAP lacked the authority to apply § 1334(c)(1) in the first instance. Nevertheless, we further conclude that the BAP acted within its authority in applying § 1334(c)(1). Under 28 U.S.C. § 158(d), [a] bankruptcy appellate panel has jurisdiction to decide legal matters not resolved by the trial court upon the record presented to it. Wright & Miller, § 4106, at 558. Here, the BAP's application of § 1334(c)(1) involved such legal matters. Because the BAP acted within its authority, our review of its decision may proceed no further. In light of § 1334(d), we lack jurisdiction to review the merits of the § 1334(c)(1) abstention issue.