La Tierra Interiors, Inc. v. Washington Federal Savings (In re Tullius)

Citation:
No. 11-51167, Pursuant to 5TH CIR. R. 47.5, not for publication.
Tag(s):
Ruling:
DISMISSED the appeal for lack of jurisdiction, concluding that bankruptcy court's discovery order was interlocutory, and the district court's order (dismissing the appeal from the bankruptcy court) did not "cure" the non-finality such that the Fifth Circuit would have jurisdiction over the appeal. The Court explained that federal courts have concluded "overwhelmingly" there is no right to appeal bankruptcy courts' interlocutory discovery orders. The Court also explained that the "collateral order" doctrine did not apply to the facts of this case because the appellants could have obtained the effective review by appealling the now-final plan confirmation order, had they objected to confirmation (which they apparently did not).
Procedural context:
The bankrutpcy court denied appellants' motion to compel discovery, and the movants/appellants appealed to the district court, which dismissed the appeal for lack of jurisdiction because the bankruptcy court's order was interlocutory. Appellants sought appeal of the district court's dismissal order to the Fifth Circuit.
Facts:
Appellants were creditors in the chapter 13 bankruptcy case who were suspicious of transfers from the debtor to a non-debtor third party. Through Rule 2004, the appellants attempted to subpoena bank records from Washington Federal Savings (WFS), the institution where the alleged recipient of fraudulent transfers maintained his deposits. WFS moved to quash the appellants' subpoena, and the bankruptcy court granted the motion, in part, limiting the scope of discovery and requiring appellants to pre-pay the costs to respond to the appellants subpoena. A month later, the appellants filed a motion to compel WFS to produce the requested documents and broaden the scope from the bankrutpcy court's prior order. The bankrutpcy court denied the motion, concluding that appellants failed to take steps necessary to avoid imposing an undue burden on WFS, and that appellants were merely trying to re-litigate the issue addressed at the prior hearing. Appellants appealed the order to the district court, which dismissed the appeal for lack of jurisdiction.
Judge(s):
WIENER, CLEMENT, and PRADO

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