Court Opinion

ID: 2924442
Source: CourtListenerOpinion
Date Created: 2015-09-11 17:00:56.872144+00
Date Added: 2024-06-11T15:22:07.270044
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 IN RE LANDMARK FENCE COMPANY,                    Nos. 13-55509
 INC.,                                                 13-55574
                         Debtor,
                                                     D.C. No.
                                                  5:12-cv-01582-
 JAMES SAHAGUN and GERARDO                            AHM
 GARCIA,
         Appellants/Cross-Appellees,
                                                     OPINION
                     v.

 LANDMARK FENCE COMPANY, INC.,
 a California corporation,
            Appellee/Cross-Appellant.

        Appeal from the United States District Court
            for the Central District of California
        Alvin Howard Matz, District Judge, Presiding

                  Submitted April 7, 2015*
              Submission Deferred April 7, 2015
               Resubmitted September 4, 2015
                    Pasadena, California

                   Filed September 11, 2015

  *
    The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2                    IN RE LANDMARK FENCE

    Before: Stephen Reinhardt, M. Margaret McKeown,
         and Milan D. Smith, Jr., Circuit Judges.

                  Opinion by Judge McKeown

                           SUMMARY**

                            Bankruptcy

    The panel dismissed for lack of jurisdiction an appeal and
a cross-appeal from the district court’s order in a bankruptcy
case.

    The bankruptcy court ruled, after a trial, that the
bankruptcy debtor had committed violations of California
wage and hour laws, and it awarded damages to a plaintiff
class. The district court affirmed in part but held that the
bankruptcy court had applied an incorrect legal standard for
assessing whether the debtor was required to pay prevailing
wages for the time class members spent traveling to and from
public worksites. The district court remanded for additional
fact finding on the terms of the debtor’s public works
contracts and the practical conditions of the jobsite to
determine what damages might be justified.

    The panel held that it lacked jurisdiction because the
district court’s order vacating the bankruptcy court’s
judgment and remanding for further factfinding was not a
final order. The panel concluded that the risk of piecemeal

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                  IN RE LANDMARK FENCE                      3

litigation was significant; judicial efficiency would not be
enhanced by exercising jurisdiction; preserving the
bankruptcy court’s role as the finder of fact tipped in favor
of declining jurisdiction; and neither party would suffer
irreparable harm if the panel declined jurisdiction.

                        COUNSEL

Rudy Ginez, Jr., Ginez, Steinmetz & Associates, Santa Ana,
California, for Plaintiffs-Appellants/Cross-Appellees.

Marc J. Winthrop and Peter W. Liandes, Winthrop Couchot
P.C., Newport Beach, California; John E. Lattin and Spencer
W. Waldron, Fisher & Phillips LLP, Irvine, California, for
Defendant-Appellee/Cross-Appellant.

                         OPINION

McKEOWN, Circuit Judge:

    As Chief Justice Roberts recently observed in the context
of determining whether a bankruptcy court order is final,
parties considering the filing of an appeal would do well to
remember the maxim: “It ain’t over till it’s over.” Bullard v.
Blue Hills Bank (In re Bullard), 135 S. Ct. 1686, 1693 (2015).
While we have well-established and quite rigid standards of
finality in civil and criminal actions governed by 28 U.S.C.
§ 1291—our most frequently invoked jurisdictional statute—
we have taken a more nuanced and “flexible” approach to
assessing the finality of appeals in bankruptcy cases.
However, even this flexible approach is stretched beyond its
breaking point by this appeal from a district court order that
4                 IN RE LANDMARK FENCE

includes a remand to the bankruptcy court with explicit
instructions to engage in “further fact-finding.” We dismiss
the appeal because this order is not final for purposes of
appeal.

                       BACKGROUND

    In 2003, James Sahagun and Gerardo Garcia (collectively
“Sahagun”) filed a class action in state court against their
former employer, Landmark Fence Company (“Landmark”).
The suit was a typical wage-and-hour class action, alleging
that Landmark had failed to pay a variety of wages required
by California law. Four years later, in 2007, the state court
certified a class of current and former Landmark employees.
Before the class claims could proceed to trial, however,
Landmark filed for bankruptcy in the Central District of
California.

    Sahagun entered the bankruptcy fray, filing a claim
against the Landmark estate. The bankruptcy court held a
six-day trial on the merits of Sahagun’s wage claims. The
bankruptcy court found that Landmark had committed several
violations of California wage laws and awarded the plaintiff
class approximately $15 million in unpaid wages, interest,
and penalties. A significant portion of the damages were
based on the bankruptcy court’s conclusion that California
law required Landmark to pay class members a prevailing
wage for the time they spent 1) traveling to and from public
worksites; and 2) fabricating parts for use on public
worksites.

    Landmark appealed the decision to the district court
pursuant to 28 U.S.C. § 158(a)(1). The district court affirmed
the bankruptcy court’s ruling that Sahagun was entitled to the
                  IN RE LANDMARK FENCE                        5

prevailing wage for time spent fabricating components for
public works contracts. The district court held, however, that
the bankruptcy court applied an incorrect legal standard for
assessing whether Landmark was required to pay prevailing
wages for the time class members spent traveling to and from
public worksites. The district court thus remanded for
“additional fact finding” on “[t]he terms of Landmark’s
public works contracts and the practical conditions of the
jobsite” to determine what damages might be justified.

    Sahagun appealed, alleging that the district court’s ruling
on travel time was erroneous and asking us to reinstate the
bankruptcy court’s damages award. Landmark cross-
appealed the district court’s determination regarding
entitlement to prevailing wages for parts fabrication.

                          ANALYSIS

   Although both parties urge us to decide this appeal on its
merits, “[i]t needs no citation of authorities to show that the
mere consent of parties cannot confer upon a court of the
United States the jurisdiction to hear and decide a case.”
People’s Bank v. Calhoun, 102 U.S. 256, 260–61 (1880). We
undertake this jurisdictional analysis sua sponte. Gupta v.
Thai Airways Int’l, Ltd., 487 F.3d 759, 763 (9th Cir. 2007).

    The district court exercised appellate jurisdiction over the
bankruptcy court pursuant to 28 U.S.C. § 158(a). We have
jurisdiction over this appeal and cross-appeal only if the
district court’s order vacating the bankruptcy court’s
judgment and remanding for further factfinding was a “final
decision[], judgment[], order[], [or] decree[].” 28 U.S.C.
§ 158(d)(1). We hold that it was not, and dismiss the appeal
for lack of jurisdiction.
6                    IN RE LANDMARK FENCE

     Typically, a district court order is considered final when
it “ends the litigation on the merits and leaves nothing for the
court to do but execute the judgment.” Firestone Tire &
Rubber Co. v. Risjord, 449 U.S. 368, 373–74 (1981) (quoting
Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978)).
The district court’s order does not meet this standard. Rather,
the order directed the bankruptcy court to reassess the
evidence and determine anew the size of Sahagun’s claim
against the Landmark estate.

    We have held, however, that the fluid and sometimes
chaotic nature of bankruptcy proceedings necessitates a
degree of jurisdictional flexibility. See, e.g., Cannon v.
Hawaii Corp. (In re Hawaii Corp.), 796 F.2d 1139, 1141 (9th
Cir. 1986). In assessing jurisdiction over an appeal from a
non-final order in the bankruptcy context, we weigh four
factors: “(1) the need to avoid piecemeal litigation;
(2) judicial efficiency; (3) the systemic interest in preserving
the bankruptcy court’s role as the finder of fact; and
(4) whether delaying review would cause either party
irreparable harm.”        Stanley v. Crossland, Crossland,
Chambers, MacArthur & Lastreto (In re Lakeshore Vill.
Resort, Ltd.), 81 F.3d 103, 106 (9th Cir. 1996) (citing Vylene
Enters., Inc. v. Naugles, Inc. (In Re Vylene Enters., Inc.),
968 F.2d 887, 895–96 (9th Cir. 1992)).1 These factors cut

   1
     This flexible test is arguably in conflict with the Supreme Court’s
decision in Connecticut National Bank v. Germain, 503 U.S. 249, 253
(1992). See In re Bender, 586 F.3d 1159, 1163–64 (9th Cir. 2009) (noting
that Germain “cast doubt on our application of a flexible standard” but
that no subsequent Ninth Circuit case has determined “that our earlier
precedent must be overturned”). Indeed, the Supreme Court’s recent
opinion in In re Bullard acknowledged that the rules of finality “are
different in bankruptcy,” but nonetheless cautioned against exercising
jurisdiction over appeals in which the “parties’ rights and obligations
                      IN RE LANDMARK FENCE                                 7

sharply against finding that we have jurisdiction over this
appeal.

    To begin, the risk of piecemeal litigation is significant.
“[W]hen an intermediate appellate court remands a case to
the bankruptcy court, the appellate process likely will be
much shorter if we decline jurisdiction and await ultimate
review of all the combined issues.” In re Lakeshore Vill.
Resort, 81 F.3d at 106 (quoting In re Stanton, 766 F.2d 1283,
1287–88 (9th Cir. 1985)). We have departed from this rule
where the district court’s remand order is limited to “purely
mechanical or computational task[s] such that the
proceedings on remand are highly unlikely to generate a new
appeal.” Saxman v. Educ. Credit Mgmt. Corp. (In re
Saxman), 325 F.3d 1168, 1172 (9th Cir. 2003) (quoting In re
Fox, 762 F.2d 54, 55 (7th Cir. 1985)). Far from remanding
for a “mechanical or computational task,” the district court
directed the bankruptcy court to engage in “further fact-
finding” before reassessing its damages award.

    In a quixotic effort to convince us to assume jurisdiction,
Sahagun argues that the litigation is effectively over because
the plaintiff class cannot present any evidence that will
support an award of damages under the legal standard
articulated by the district court. We do not necessarily share
Sahagun’s pessimism. Upon remand from the district court,
the plaintiffs should have the opportunity to prove that wages
were owed for travel “required” or “necessary” to “carry out

remain unsettled.” 135 S. Ct. at 1692–93. Nonetheless, we need not
resolve whether Germain can be reconciled with a flexible approach to
jurisdiction “because we conclude that the [lower court’s] decision was
not final even under our circuit’s flexible finality standard.” In re Bender,
586 F.3d at 1164.
8                  IN RE LANDMARK FENCE

. . . accomplish or fulfill” a public works contract—a standard
that, after all, isn’t that different from the one originally
employed by the bankruptcy court.

    Nor would judicial efficiency be enhanced by exercising
jurisdiction. Although Sahagun points out that the litigation
would end if we held that the bankruptcy court got it right on
all counts, we eschew a “jurisdictional inquiry that requires
us to decide the merits of the appeal.” In re Vylene Enters.,
968 F.2d at 891.

    The third factor, preserving the bankruptcy court’s role as
the finder of fact, also tips in favor of declining jurisdiction.
Although the parties characterize the issues in the appeal as
purely matters of law, viewing the appeal through this lens
ignores the language of the order on appeal. The district
court remanded the case with explicit directions for the
bankruptcy court to engage in “further fact-finding.”
Assuming jurisdiction now would deprive the bankruptcy
court of the opportunity to assess whether and to what extent
the district court’s order alters its assessment of wages owed
to the class members.

    Finally, neither party will suffer irreparable harm if we
decline jurisdiction. That the plaintiff class has endured a
significant delay in recovering unpaid wages is regrettable,
but not irreparable. The desire for a resolution—even a
partial one—is understandable, but this consideration does
not override the finality consideration.

   A final wrinkle in our jurisdictional analysis bears
mention. In a motion for judicial notice filed just six days
before oral argument, counsel for Landmark indicated that the
underlying bankruptcy petition had been dismissed over
                   IN RE LANDMARK FENCE                          9

seven months prior, in August 2014. Landmark thus urges us
to dismiss the appeal as moot and vacate the orders of the
district court and the bankruptcy court. We deny the motion
for judicial notice and Landmark’s other entreaties to
terminate the litigation.

    We recognize that developments during the pendency of
an appeal may render a case moot at any time. Counsel has
an obligation to inform the court promptly of any such events.
But wholly apart from the inexplicable and irresponsible
delay in notifying us that the bankruptcy petition had been
dismissed, we decline to address mootness now. Doing so
would require us to violate the Supreme Court’s direction
that, “[o]n every writ of error or appeal, the first and
fundamental question is that of jurisdiction, first, of this
court, and then of the court from which the record comes.”
Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 547
(1986) (quoting Mansfield C. & L.M.R. Co. v. Swan, 111 U.S.
379, 382 (1884)); see also Sierra Club v. U.S. Dep’t of Agric.,
716 F.3d 653, 660 (D.C. Cir. 2013) (holding that because
appellate jurisdiction was lacking, the court “can express no
position on . . . [whether] the Sierra Club’s case was moot
when filed”); Amalgamated Clothing & Textile Workers
Union v. S.E.C., 15 F.3d 254, 258 (2d Cir. 1994) (“Since we
conclude that this Court does not have jurisdiction to review
the Commission’s May 6, 1993 letter of affirmance in this
case because it is not a final order . . . we do not [decide] . . .
whether this issue is moot.”); cf. Sierra Club v. U.S. Nuclear
Regulatory Comm’n, 825 F.2d 1356, 1363 (9th Cir. 1987),
(dismissing appeal of a non-final order and declining to
address the argument that the “petition may very well be
moot” due to events occurring during the pendency of the
appeal).
10                    IN RE LANDMARK FENCE

     Although the mootness issue may seem a superficially
quick fix, Sahagun’s response to the motion points to why the
argument over mootness is more appropriately raised in the
trial court.2 More importantly, because we do not have
appellate jurisdiction, we lack the authority to grant
Landmark’s request to vacate the district court’s orders. See
Defenders of Wildlife v. Perciasepe, 714 F.3d 1317, 1328
(D.C. Cir. 2013) (“If we lack jurisdiction, we cannot vacate
the district court’s order for lack of jurisdiction because we
lack the power to do so.”). We thus deny the motion for
judicial notice of the bankruptcy dismissal.

     DISMISSED.3

  2
    Sahagun contends that the dismissal did not render the appeal moot and
that vacatur would be unjust, pointing out that at least $5 million of the
$15 million in damages awarded by the bankruptcy court constituted a
final judgment that should be afforded preclusive effect because it was not
contested on appeal.
 3
  In light of our conclusion that we lack jurisdiction, we deny Sahagun’s
motion to certify to the California Supreme Court the two issues of
California wage and hour law relating to the merits of the appeal. We also
deny as moot the pending motions to file amicus briefs.