Court Opinion

ID: 8908001
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:10:22.738437+00
Date Added: 2024-06-11T17:08:20.688125
License: Public Domain

ADAMS, Circuit Judge,
dissenting.
John J. Mortimer appeals from a district court order directing that he appear before the district court or, at his election, the bankruptcy court, for a Hoffman hearing, to determine the validity of his claim that his testimony and production of documents at an examination pursuant to Rule of Bankruptcy Procedure 205 would tend to incriminate him. The majority holds first, that there is an appealable order, and second, that Mortimer must submit to a Hoffman hearing. If I were to reach the merits I, too, would agree that it is for the court and not for the witness to determine whether the latter may invoke the fifth amendment privilege against self-incrimination. However, I believe that we are precluded from deciding the merits because we are without jurisdiction to entertain Mortimer’s appeal. Accordingly, I would dismiss the appeal as premature.1
The majority concludes that this Court has jurisdiction under § 24(a) of the Bankruptcy Act, 11 U.S.C. § 47(a). That provision invests courts of appeals with mandatory jurisdiction over appeals from “courts of bankruptcy in their respective jurisdictions in proceedings in bankruptcy, either interlocutory or final, and in controversies arising in proceedings in bankruptcy . .”2 After pointing out that making the often-difficult distinction between “proceedings” and “controversies” is important because an interlocutory order is appealable only if it had been entered in a “proceeding,” the majority relies on 2 Collier on Bankruptcy H 24.16 at 741 (14th ed. 1976), to categorize “[a]n order of the bankruptcy court directing an examination of a debtor’s books and records or of designated witnesses . . . as an order in a ‘proceeding in bankruptcy.’ ” The majority notes that such rule is derived from Judge Biggs’ opinion for this Court in In re Winton Shirt Corp., 104 F.2d 777, 779 (3d Cir. 1939), and that this precept has been widely accepted ever since by other circuits. Finally, the majority deems controlling in this case Judge Biggs’ holding, id., that “an order . . . entered in the course of or in connection with a [Rule 205] examination, is an administrative order and is made in the proceedings.”
I do not take issue with the majority’s conclusion that the matter on appeal is a “proceeding” rather than a “controversy.” But I do not believe that that is dispositive of the question of appealability. For, en-grafted upon the statutory grant of an appeal of right from interlocutory orders in proceedings is a long-standing judicial exception that orders concerning trivial, preliminary or procedural matters, not amounting to formal judicial rulings, adjudicating the rights of a party or determining an issue, are not reviewable.3 This judicial gloss upon the word “interlocutory” has been rationalized as follows:
[D]ue regard for the efficiency of administration and dispatch of legal proceedings necessitates a common-sense interpretation of § 24a that limits the right to appeal within reasonable bounds. Otherwise, “if every order were reviewable, proceedings could easily be so tied up and prolonged that the situation would become intolerable.”4
*988Thus, even where Congress has mandated that appeals may be taken from nonfinal orders, we must not lose sight of the “basic and persisting policy against piecemeal appeals” 5 that permeates the entire federal judicial scheme, lest we become inundated with applications to review every step along the course of a proceeding. Although the difference between the majority’s position and my own would not affect the ultimate result in this particular case, I am concerned that the decision by the majority risks opening the Court’s docket in the future to matters that have always been considered not worthy of an appellate court’s attention. The consequence may well be an increase in the Court’s caseload and an inevitable delay in the disposition of other appeals.
The exception under which interlocutory appeals are not permitted from procedural and preliminary matters originated under the statute as it existed prior to 1938, when interlocutory orders in proceedings were appealable only upon allowance by the court of appeals. At that time, the exception was used by some courts to justify their reluctance to allow appeals from interlocutory orders in the absence of exceptional circumstances.6 Although appellate court discretion in this regard was fettered by the 1938 amendment, which made such orders appealable of right, the exception has retained its vitality with respect to trivial, preliminary and procedural matters not amounting to a determination of issues.7 Indeed, it has been invoked by nearly every court of appeals in the country.8 Thus, for example, the Tenth Circuit gave the following explanation for its refusal to entertain a claimant’s appeal from an order by the Referee in Bankruptcy that the claimant respond to the merits of the trustee’s counterclaim while the bankruptcy court reserved decision on whether it had jurisdiction over the counterclaim:
It is true that virtually all interlocutory orders in proceedings in bankruptcy are appealable under 11 U.S.C. § 47. But this court has held that “an interlocutory order which determines nothing adversely to the asserted rights of a party is not reviewable on direct appeal therefrom.” De Laney v. City Investment Co., 224 F.2d 808, 810 (10th Cir. 1965). The bankruptcy court’s administration of the bankrupt estate should not be hindered “by appeals from orders which are indecisively procedural and which do not determine some controversy or decide some step in the course of the bankruptcy proceedings.” General Electric Company v. Beehive Telecasting Corporation, 284 F.2d 507, 509 (10th Cir. 1960). The Referee’s order did not determine the jurisdictional question adversely to either party. It was clearly “indecisively procedural” and not appealable.9
The exception under which interlocutory appeals are not permitted from procedural and preliminary matters has also been endorsed by this Court. Thus, in In re Pittsburgh Rys. Co., 164 F.2d 488 (3d Cir. 1947) (per curiam), Judges Maris, Goodrich and Kalodner expressed serious doubt whether two interlocutory orders that the Special Master proceed and report “present anything more than a procedural direction by the Court to its Special Master which is not a matter on which an appeal may be *989based.” 10 And some twelve years after his Winton Shirt opinion, Chief Judge Biggs himself recognized that “a mere ‘procedural direction’ ” that was not “substantive” or “final or definitive” would not be reviewable.11
Admittedly, the precise demarcation between a nonappealable “mere ‘procedural direction’ ” and a “substantive” interlocutory order is often a question of degree. In many respects we may have taken a more liberal approach toward appealability under § 24(a) than have some other tribunals.12 Still, unless this Court is now prepared to stand apart from the other courts of appeals and declare that virtually all orders in proceedings in bankruptcy, regardless of their degree of gravity, are appealable of right, it should dismiss the pending appeal. For at present Mortimer is not subject to a decree that he submit to a personal examination or produce any documents. If such a decree were outstanding, Mortimer’s rights obviously would be affected inasmuch as such decree would involve a determination of the validity of his claimed privilege and require that he disclose potentially prejudicial information, and consequently such decree would be appealable of right under § 24(a) practice.13
But here, Mortimer has merely been instructed to appear at a hearing specifically designed to determine whether and to what extent he must submit to a Rule 205 examination, in view of his claimed privilege. The order he appeals from is not itself determinative of any issue, nor does it prejudice any right of Mortimer. Indeed, the Supreme Court has instructed in Hoffman that this type of hearing be conducted in such a manner that the witness not be compelled to “surrender the very protection which the privilege is designed to guarantee.” 14 Thus, the directive from which Mortimer appeals simply triggers the procedural mechanism by which Mortimer’s rights in relation to the examination are to be adjudicated. Although any order issued subsequent to the Hoffman hearing will properly be appealable by Mortimer or the trustee as an interlocutory order entered “in the course of or in connection with a [Rule 205] examination,”15 the present order and the Hoffman hearing pursuant thereto are preliminary to such reviewable decree.16
As an alternative basis for appellate jurisdiction, Mortimer asserts that the order is a “final decision” within the meaning of 28 U.S.C. § 1291 because he is a nonparty witness to the bankruptcy proceeding. However, this Court specifically rejected a similar contention in Borden Co. v. Sylk, 410 F.2d 843 (3d Cir. 1969).17
*990In view of the foregoing, I would dismiss the appeal for want of jurisdiction.

. Were Mortimer to refuse to obey the district court’s order and be held in contempt, he would then be able to appeal the directive that he appear at a Hoffman hearing. See Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940); Alexander v. United States, 201 U.S. 117, 26 S.Ct. 356, 50 L.Ed. 686 (1906); Borden Company v. Sylk, 410 F.2d 843, 846 (3d Cir. 1969).

. For purposes of the Bankruptcy Act, the United States district courts are courts of bankruptcy. 11 U.S.C. § 1(10).

. See, e. g., Hoehn v. McIntosh, 110 F.2d 199, 201 (6th Cir. 1940) and cases cited therein. See generally, 2 Collier on Bankruptcy ¶ 24.39 (14th ed. 1976).

. 2 Collier on Bankruptcy ¶ 24.39 at 795 (14th ed. 1976), quoting Matter of Pechin, 227 F. 853, 854 (3d Cir. 1915).

. Panichella v. Pennsylvania Railroad Co., 252 F.2d 452, 454 (3d Cir. 1958).

. 2 Collier on Bankruptcy ¶ 24.11 [3] at 734.1-734.2 (14th ed. 1976). See, e. g., Triangle Electric Co. v. Foutch, 40 F.2d 353, 355-56 (8th Cir. 1930).

. 2 Collier on Bankruptcy ¶ 24.11 [3] at 734.2 (14th ed. 1976).

. See, e. g., First Circuit: Cope v. Aetna Finance Co. of Maine, 412 F.2d 635, 639 (1st Cir. 1969); Second Circuit: Dubnoff v. Goldstein, 385 F.2d 717, 722 (2d Cir. 1967); Fourth Circuit: Carolina Mills, Inc. v. Corry, 206 F.2d 76, 77 (4th Cir. 1953); Fifth Circuit: In re Durensky, 519 F.2d 1024, 1028-29 (5th Cir. 1975); Sixth Circuit; In re Charmar Investment Co., 475 F.2d 560, 563 (6th Cir.) cert, denied, 414 U.S. 823, 94 S.Ct. 123, 38 L.Ed.2d 56 (1973); Seventh Circuit: In re Chicago Rapid Transit Co., 200 F.2d 341, 342 (7th Cir. 1953); Tenth Circuit: Baldonado v. First State Bank of Rio Rancho, 549 F.2d 1380, 1381 (10th Cir. 1977).

. United States v. Allen, 395 F.2d 752 (10th Cir. 1968).

. The Court then held that the orders were within the district court’s discretion, on the assumption that they were appealable.

. In re American Bantam Car Co., 193 F.2d 616, 621 (3d Cir. 1952). Judge Biggs concluded, however, that under the circumstances, the order appealed from affected substantive rights of parties and was therefore reviewable. The effect of the order, which directed that a special master be appointed to hear testimony concerning a settlement offer, was to postpone indefinitely a reorganization and precipitate dismissal pursuant to the terms of the settlement.

. Compare In re American Bantam Car Co., 193 F.2d 616, 621 (3d Cir. 1952) (referral to special master), with De Laney v. City Investment Co., 224 F.2d 808, 809-810 (10th Cir. 1955) (referral to referee). But see note 11 supra.

. In re Winton Shirt Corp., 104 F.2d 777, 779 (3d Cir. 1939); 2 Collier on Bankruptcy ¶ 24.16 (14th ed. 1976).

. Hoffman v. United States, 341 U.S. 479, 486, 71 S.Ct. 814, 818, 95 L.Ed. 1118 (1951).

. In re Winton Shirt Corp., 104 F.2d 777, 779 (3d Cir. 1939).

. It goes without saying that the situation would have been different had the district court affirmed the bankruptcy judge’s order denying Mortimer’s motion to quash the subpoena duces tecum and the order that he appear for a Rule 205 examination, instead of modifying the order to direct a Hoffman hearing.

. Mortimer invites the Court to abandon Borden in favor of the approach taken in International Business Machines Corp. v. United States, 471 F.2d 507, 511-16 (2d Cir. 1972) cert, denied, 416 U.S. 979 & 980, 94 S.Ct. 2413, 40 L.Ed.2d 777 (1974). However, a panel of this *990Court is not empowered to overrule a prior decision; such a step may be taken only when the Court sits in banc. United States Court of Appeals for the Third Circuit, Internal Operating Procedures 25 (2nd revision, effective September 1, 1978). Moreover, in the years since Borden we have consistently resisted efforts to expand exceptions to the final judgment rule, and have maintained a restrictive attitude toward piecemeal appeals. See, e. g., Akerly v. Red Barn System, Inc., 551 F.2d 539, 543 (3d Cir. 1977); Bachowski v. Usery, 545 F.2d 363, 371 (3d Cir. 1976); Rodgers v. United States Steel Corp., 508 F.2d 152, 159 (3d Cir.), cert. denied, 420 U.S. 969, 95 S.Ct. 1386, 43 L.Ed.2d 649 (1975); Hackett v. General Host Corp., 455 F.2d 618, 621 (3d Cir.), cert, denied, 407 U.S. 925, 92 S.Ct. 2460, 32 L.Ed.2d 812 (1972). Finally, a more permissive rule toward appeals from discovery orders by a nonparty witness would be of no avail to Mortimer since he is not appealing an order that he disclose documents but an order that he appear at a carefully circumscribed Hoffman hearing, where the constitutionally permissible scope of discovery will be determined in accordance with guidelines laid down by the Supreme Court.