United States District Court, W.D. North Carolina, Charlotte Division
Kenneth D. Bell United States District Judge.
MATTER is before the Court on Ace Motor Acceptance
Corporation's (“Ace”) Motion of Appellee for
Order Dismissing Appeal of Interlocutory Order; Motion for
Order Awarding Damages for Frivolous Appeal (Doc. No. 2)
(“Motion”). Appellant Robert McCoy, Jr.,
(“McCoy”) has not filed a response to Ace's
Motion and the time for doing so has long passed. For the
reasons stated briefly herein, the Court will GRANT
IN PART and DENY IN PART Ace's
Motion (Doc. No. 2).
appeal stems from an adversarial bankruptcy proceeding
between Ace, a former floor plan lender for used car
dealerships, and McCoy Motors, LLC, Misty McCoy, and McCoy
(collectively, “McCoy Defendants”). Ace claims
that the McCoy Defendants owe it more than $1, 000, 000. This
adversary proceeding began in the Bankruptcy Court on June
18, 2018 and remains pending in the District Court today with
unfortunately little to no progress towards
resolution. A more complete and thorough history of
this case can be found on the Bankruptcy Court's docket,
No. 18-03036, and the District Court's docket, No.
appeals the order of the Bankruptcy Court (Bnk. Doc. No.
denying his motion to reconsider the court's prior order
(Bnk. Doc. No. 128) denying his motion to quash subpoenas.
The lead up to the Bankruptcy Court's ruling is as
follows: On November 20, 2018, Ace filed a motion for an
order granting it leave to file a second amended complaint
with additional parties and additional causes of action.
(Bnk. Doc. No. 99). The Bankruptcy Court scheduled a hearing
on the motion to be held in late December 2018. Because the
McCoy Defendants had failed to provide Ace with financial
information (some of which the Bankruptcy Court had already
ordered be turned over), counsel for Ace served subpoenas on
McCoy Motors and several non-parties seeking relevant
financial documents in advance of the hearing. No. subpoena
was issued to McCoy. After Ace's filing of Notices of
Intent to Serve Subpoenas (Bnk. Doc. Nos. 116, 119), McCoy
filed a motion to quash all subpoenas contained in Ace's
notices. (Bnk. Doc. No. 125). The Bankruptcy Court denied
McCoy's motion, stating:
Although McCoy suggests that it is necessary for the
subpoenas to be accompanied by a letter in order to be
enforceable in a foreign jurisdiction, this is not an
accurate statement of the applicable law. These are Federal
subpoenas under Federal Rule of Civil Procedure Rule 45, not
State subpoenas. The letter referenced in the Motion is not
required for a Federal subpoena. Rule 45 provides that
“[a] subpoena may command a person to attend a trial,
hearing, or deposition . . . within 100 miles of where the
person resides, is employed, or regularly transacts business
in person . .
. .” Thus, the subpoenas issued by the Plaintiff's
counsel were properly issued and are enforceable.
(Bnk. Doc. No. 127; Doc. No. 1-1). The day after the
Bankruptcy Court's order was filed, McCoy filed a motion
to reconsider. (Bnk. Doc. No. 128). The Bankruptcy Court
denied McCoy's motion to reconsider because the motion
did “not demonstrate any grounds to reconsider under
Federal Rule of Bankruptcy Procedure 9024 or Federal Rule of
Civil Procedure 60.” (Bnk. Doc. No. 130; Doc. No. 1-2).
McCoy filed this appeal on December 14, 2018, using a
standard check-box notice of appeal form. (Doc. No. 1)
Court may exercise jurisdiction only over final orders, 28
U.S.C. § 1291 (2012), and certain interlocutory and
collateral orders, 28 U.S.C. § 1292 (2012); Fed.R.Civ.P.
54(b); Cohen v. Beneficial Indus. Loan Corp., 337
U.S. 541, 545-46 (1949). The order McCoy seeks to appeal is
neither a final order nor an appealable interlocutory or
collateral order. Accordingly, the Court will dismiss the
appeal for lack of jurisdiction.
“final judgment, order, or decree of a bankruptcy
judge” may be appealed. 28 U.S.C. § 158(a),
Fed.R.Bankr.P. 8001(a) (district courts from bankruptcy
courts); 28 U.S.C. §§ 158(d), 1291 (circuit courts
from district courts). Generally, a case in federal district
court culminates in a final decision when “a ruling
‘by which a district court disassociates itself from a
case'” is entered. Bullard v. Blue Hills
Bank, 135 S.Ct. 1686, 1691 (2015)(alteration in
original) (quoting Swint v. Chambers Cty.
Comm'n, 514 U.S. 35, 42 (1995)). However,
“[t]he rules are different in bankruptcy. A bankruptcy
case involves ‘an aggregation of individual
controversies,' many of which would exist as stand-alone
lawsuits but for the bankrupt status of the debtor.”
Id. at 1692 (quoting 1 Collier on Bankruptcy ¶
5.08 (16th ed. 2014)). Thus, the “concept of finality
in bankruptcy cases ‘has traditionally been applied in
a more pragmatic and less technical way . . . than in other
situations.'” In re Computer Learning Ctrs.,
Inc., 407 F.3d 656, 660 (4th Cir. 2005) (quoting
A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009 (4th
Cir. 1986)). As a guiding principal, “Congress has long
provided that orders in bankruptcy cases may be immediately
appealed if they finally dispose of discrete disputes within
the larger case.” Bullard, 135 S.Ct. at 1692.
courts have held generally that a bankruptcy court's
discovery orders lack finality and are interlocutory for the
purposes of § 158(a). See, e.g., In re
Tullius, 500 Fed.Appx. 286, 289 (5th Cir. 2012)
(“Notwithstanding this more flexible approach to
finality in bankruptcy appeals, federal courts have concluded
overwhelmingly that a bankruptcy court's discovery orders
are interlocutory decisions from which an appeal to the
district court does not lie as a matter of right.”);
Coleman v. Simpson (In re Coleman Craten,
LLC), 15 Fed.Appx. 184 (table), 2001 WL 987034 (4th Cir.
2001) (denying the district court's order denying
party's motion for leave to appeal the bankruptcy
court's order granting in part and denying in part the
trustees' motion to compel); Vance v. Lester
(In re Vance), 165 F.3d 34 (table), 1998 WL 783728,
at *1 (7th Cir. 1998) (noting that a bankruptcy court's
discovery orders are interlocutory); In re Jeannette
Corp., 832 F.2d 43, 46 (3d Cir. 1987) (“In civil
litigation, discovery orders are, with rare exception,
non-appealable. A similar approach applies in bankruptcy
cases.”) (citations omitted); W.S. Badcock v. Corp.
v. Beaman, No. 4:14-CV-169-BO, 2015 WL 575422, at *2
(E.D. N.C. Feb. 11, 2015) (noting that bankruptcy discovery
orders are interlocutory).
the context of bankruptcy court, the Supreme Court has held
“that one to whom a subpoena is directed may not appeal
the denial of a motion to quash that subpoena but must either
obey its commands or refuse to do so and contest the validity
of the subpoena if he is subsequently cited for contempt on
account of his failure to obey.” United States v.
Ryan, 402 U.S. 530, 532 (1971) (citing Cobbledick v.
United States, 309 U.S. 323 (1940)). Similarly, the
Fourth Circuit has held that “[o]rders enforcing
subpoenas issued in connection with civil and criminal
actions, or with grand jury proceedings, are normally not
considered final. To obtain immediate review of such a
district court enforcement order, the party to whom it is
issued must defy it so that a contempt order, which is
considered final, is entered against him.” Reich v.
Nat'l Eng'g & Contracting Co., 13 ...