The opinion of the court was delivered by: Gary L. Sharpe U.S. District Judge
Pending is a motion filed by the Social Security Administration (SSA) seeking appeal from an interlocutory order issued by the United States Bankruptcy Court for the Northern District of New York. The Bankruptcy Court held in favor of Paul and Jeanne Griffin, ruling that (1) emotional distress damages are compensable under § 362(k) of the Bankruptcy Code; (2) § 106 of the Bankruptcy Code waives sovereign immunity as to those damages; and (3) a damages inquest should be held. (See Pet'r Ex. C at 7,14, Dkt. No. 1:2.) For the reasons that follow, the motion is denied.
SSA first claims that appeal of the order is appropriate under the collateral order doctrine. (See Pet'r Mot. at 8, Dkt. No. 1.) "The collateral order doctrine is a practical construction of the final judgment rule, which permits an appellate court to hear an appeal of a decision that would conclusively resolv[e] claims of right separable from, and collateral to, rights asserted in the action." In re World Trade Ctr. Disaster Site Litig., 521 F.3d 169, 178-79 (2d Cir. 2008) (citations and internal quotation marks omitted) (alteration in original). The doctrine recognizes that "interlocutory appeals . . . are the exception, not the rule." Id. at 178 (quoting Johnson v. Jones, 515 U.S. 304, 309 (1995)). It renders only a "small class of decisions . . . immediately appealable." Id. (citation and quotation marks omitted). To fall within that limited class, the order appealed must, among other things, "be effectively unreviewable on appeal from a final judgment." See id. at 179 (citation and internal quotation marks omitted). An order is "effectively unreviewable" if it affects rights that "will be irretrievably lost in the absence of an immediate appeal." See In re Johns-Manville Corp., 824 F.2d 176, 180-81 (2d Cir. 1987) (citation and internal quotation marks omitted).
SSA has failed to demonstrate that the challenged order is "effectively unreviewable." SSA claims that the Bankruptcy Court incorrectly ruled that SSA's sovereign immunity is waived as to the Griffins' claims against it. (See Pet'r Mot. at 2, Dkt. No.1.) SSA also contends that federal sovereign immunity encompasses immunity from the "burdens of litigation," and not merely immunity from liability. (Id. at 5.) SSA therefore argues that the challenged order would be effectively unreviewable on appeal from final judgment because SSA's asserted "right not to endure the burdens of litigation" would be irretrievably lost. (See Pet'r Mot. at 6-7, Dkt. No. 1).
SSA's motion based on the collateral order doctrine is denied. As SSA concedes, it is unclear in this Circuit that federal sovereign immunity would encompass "a right not to stand trial," or an "immunity from the burdens of litigation" in this case. (See id. at 5-6 ("[T]he issue is not entirely free from doubt.") (discussing In re World Trade Ctr., 521 F.3d at 190-91).) Moreover, SSA has failed to sufficiently brief the issue for the court's consideration. Accordingly, SSA has failed to demonstrate that the challenged order is "effectively unreviewable" and eligible for immediate appeal under the collateral order doctrine. Its motion based on that doctrine is therefore denied.
SSA next argues that the Bankruptcy Court's order qualifies for immediate appeal under 28 U.S.C. §158(a)(3).*fn1 Section 158(a)(3) grants district courts discretionary appellate jurisdiction over an interlocutory order of the bankruptcy court. See 28 U.S.C. § 158(a)(3) (2008). "In determining whether to grant leave to appeal an interlocutory order of a bankruptcy court, district courts generally apply the statutory standard, set forth in 28 U.S.C. § 1292(b), governing interlocutory appeals of the district court to the Court of Appeals." In re Cross Media Mktg Corp., 2007 WL 2743577, at *2 (S.D.N.Y. Sept. 19, 2007); see also In re Adelphia Commc'ns Corp., 333 B.R. 649, 658 (S.D.N.Y. 2005). Under that standard, a petitioner must show that the challenged order "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation. . . ." 28 U.S.C. § 1292(b) (2008).
SSA's motion based on 28 U.S.C. § 158(a)(3) is denied. In support of its § 158 argument, SSA points out that reversal of the Bankruptcy Court's ruling would result in the termination of the action. Given the late stage of the underlying bankruptcy proceedings, however, the court finds that granting an immediate appeal would not serve to materially advance the termination of the litigation. Accordingly, leave to appeal the Bankruptcy Court's order under § 158 is denied.
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that SSA's motion is DENIED; it is further
ORDERED that the Clerk serve a copy of this Decision and Order upon the parties; and it is further
ORDERED that the Clerk provide a copy of this Decision and Order upon the Bankruptcy Court of the ...