The Week in Federal Appellate Jurisdiction: March 15–21, 2020

Last week saw two decisions of note. The Seventh Circuit dismissed a bankruptcy appeal because the district court had remanded the case to the bankruptcy court for a determination of sanctions. And the Tenth Circuit dismissed a qualified-immunity appeal because the defendant refused to accept the facts that the district court took as true in denying immunity.

• The Seventh Circuit dismissed an appeal involving bankruptcy sanctions
• The Tenth Circuit dismissed an improper qualified-immunity appeal

The Seventh Circuit dismissed an appeal involving bankruptcy sanctions

In Hazelton v. Board of Regents, the Seventh Circuit held a district court decision was not final or appealable when it remanded a dispute to a bankruptcy court for the determination of sanctions.

The debtors in Hazelton had filed for bankruptcy and obtained a discharge of their debts. Among those debts were deferred tuition payments that one of the debtors owed to the University of Wisconsin-Stout. The University had allowed her to defer paying tuition, with the unpaid balance accruing interest. The University received notice of the discharge. It nevertheless collected the unpaid tuition by intercepting the debtors’ income-tax refund.

The debtors sought sanctions against the University for violating the bankruptcy discharge. But the bankruptcy court refused. It determined that the unpaid tuition was student-loan debt and thus not subject to discharge. The debtors appealed to the district court, which reversed. It concluded that the deferred tuition was not student-loan debt because money did not exchange hands and the school had not extended credit. The district court accordingly remanded the case to the bankruptcy court to determine whether sanctions were appropriate. The University then appealed to the Seventh Circuit.

The Seventh Circuit held that it lacked jurisdiction over the appeal. Under 28 U.S.C. § 158(d)(1), the courts of appeals have jurisdiction to review “all final decisions, judgments, order, and decrees entered” that district courts enter in appeals from bankruptcy court. And under Bullard v Blue Hills Bank, a district court’s decision in this context is final if it resolves a discrete dispute in a bankruptcy case. The district judge in Hazelton did not resolve the sanctions dispute. It instead remanded that dispute for further proceedings in the bankruptcy court. Although the district court resolved the issue of whether the debt was a student loan debt, that court did not resolve the entire dispute over sanctions:

The judge decided only that the tuition debt was not excluded from the Chapter 7 discharge. That ruling leaves several nonministerial tasks for the bankruptcy court on remand. The bankruptcy judge must decide whether [the University] had an objectively reasonable basis to conclude that its conduct was lawful under the discharge order. If it did not—if indeed there was “no fair ground of doubt” that the discharge order prohibited [the University] from intercepting the [debtors’] 2016 income-tax refund—then the bankruptcy judge must decide the appropriate sanction.

The Seventh Circuit accordingly dismissed the appeal.

Hazelton v. Board of Regents, 2020 WL 1239068 (7th Cir. Mar. 16, 2020), available at the Seventh Circuit and Westlaw.

The Tenth Circuit dismissed an improper qualified-immunity appeal

In Valdez v. Motyka, the Tenth Circuit dismissed an improper qualified-immunity appeal because the defendant disputed the facts.

Valdez arose out of a police shooting. The plaintiff had asked for a ride from someone who, it turns out, police were looking for. Once police spotted the suspect’s truck, a chase ensued. In the course of the chase, someone in the truck shot at police, hitting the defendant police officer in the shoulder. That officer nevertheless continued the pursuit. The suspect eventually crashed into a tree. When the defendant officer arrived at the scene, he began shooting.

According to the district court, a reasonable jury could find that the plaintiff and other in the truck presented no threat to the officers or anyone else when the officers began shooting. The plaintiff was laying on the ground, face down. The area where he was laying “was sprayed with bullets[,] permitting the inference that the officers were firing without aiming at a clear target.” Statements from one of the officers and the “scattered bullets” suggested that the officer “started shooting without making any effort to determine whether there was any immediate threat to him or others as the occupants of the cab came out.” The plaintiff was shot in the back and finger; he was temporarily paralyzed, and his hand was permanently damaged.

The plaintiff sued both the officers and their employer (the city of Denver) for excessive force. The officer who shot the plaintiff in the back sought qualified immunity. The district court denied immunity, concluding “that the question of whether [the plaintiff] presented an imminent threat—sufficient to justify [the officer]’s decision to fire at him—was disputed in the record and best left to a jury.” The officer nevertheless appealed.

The Tenth Circuit dismissed that appeal because the officer challenged the district court’s interpretation of the facts. In an interlocutory appeal from the denial of qualified immunity at summary judgment, the right to appeal is limited. The courts of appeals generally lack jurisdiction to address whether the summary-judgment record supports the version of facts that the district court took as true in denying immunity. The courts of appeals can instead address only whether that version of the facts amounts to a clearly established violation of federal law.

The officer in Valdez purported to make legal arguments. But he was actually “challenging the district court’s view of the facts.” The Tenth Circuit accordingly dismissed the appeal for lack of jurisdiction.

One additional note: the City of Denver also tried to appeal alongside the individual officer, invoking pendent appellate jurisdiction. Courts sometimes allow municipalities to appeal alongside their employees’ qualified-immunity appeals. But jurisdiction over these municipal appeals exists only when the court of appeals concludes that no constitutional violation occurred. (This is a bad rule, and I am currently working on an article about it. But it is the rule in most circuits.) Because the court dismissed the individual defendant’s appeal for lack of jurisdiction, it held that there was no basis for pendent jurisdiction over Denver’s appeal.

Valdez v. Motyka, 2020 WL 1320881 (10th Cir. Mar. 20, 2020), available at the Tenth Circuit and Westlaw.