Labor & Employment Law I JULY 2, 2019

Appeal Rules Trap Appellants

Federal appeals rules can be tricky, as shown by a couple of recent cases.

The first felled Slobodanka Nestorovic. Nestorovic lost her job for allegedly poor performance. She brought sex and disability discrimination claims under Title VII of the Civil Rights Act and the Americans with Disabilities Act against her former employer, the Water Reclamation District in Chicago.

The district court dismissed her case on May 16, 2018. Under 28 U.S.C. § 2107(a) and Fed. R. App. P. 4(a)(1)(A), Nestorovic then had 30 days (until June 15) to file a notice of appeal. That didn’t happen.

On July 13, Nestorovic asked the district court to extend her time to appeal. Under Section 2107(c) the district court may extend the time for appeal upon a timely motion and showing of excusable neglect or good cause. Rule 4(a)(5)(A) of the Federal Rules of Appellate Procedure implements § 2107(c) and likewise allows the district court to extend the time to file an appeal if a party shows excusable neglect or good cause and moves for the extension no later than 30 days after the appeal deadline has expired.

Nestorovic’s motion fell short. She offered little to explain what excusable neglect or good cause warranted an extension. Nestorovic explained only that she was “actively searching for attorneys willing to take the case on contingency” and had been “advised very recently that [prospective] counsel could not file an appeal before reviewing filings to date, which would take several weeks.” The district court granted the requested extension of time, laconically saying only that the extension was warranted “in these circumstances.”

The Seventh Circuit disagreed. The controlling legal standard is clear: “If a time prescription governing the transfer of adjudicatory authority from one Article III court to another appears in a statute, the limitation is jurisdictional; otherwise, the time specification fits within the claim-processing category.”

Under § 2107(a), a party must file a notice of appeal within 30 days of the entry of the judgment being appealed. As mentioned above, Section 2107(c) allows an extension of time to file a notice of appeal upon “motion filed not later than 30 days after the expiration of the time otherwise set for bringing appeal” and “a showing of excusable neglect or good cause.” This limitation is jurisdictional and cannot be waived.

The appeals court then had to determine is whether the district court abused its discretion by concluding that an extension was warranted in these circumstances.

A court abuses its discretion when the record contains no evidence on which it could have rationally based its decision or when the decision rests on an erroneous view of the law.

Here, all the record contained was the district court’s brief statement that the extension was justified “in these circumstances.”

Nestorovic’s unsworn, unsupported statement that she was searching for an attorney—even if credited—did not demonstrate excusable neglect or good cause.

Nestorovic was not entitled to an extension of time, and her appeal was untimely, depriving the appeals court of jurisdiction to review it. Nestorovic’s appeal was dismissed.

Nestorovic v. Metropolitan Water Reclamation District of Greater Chicago, ___ F. 3d.___, 2019 WL 2428706 (7th Cir. 2019).

In the next case, Harold and Lorraine Wade filed a Chapter 13 bankruptcy petition in January 2015, which automatically stayed any collection actions against their property because of 11 U.S.C. § 362(a). But the Wade’s petition was successive—they had voluntarily dismissed a different petition two months earlier. Section 362(c)(3) states that if a prior petition “was pending within the preceding 1-year period but was dismissed,” the automatic stay “shall terminate with respect to the debtor on the 30th day after the filing of the latter case.”

The Wades moved for sanctions against Kreisler Law, P.C., alleging that the law firm violated the automatic stay arising from their bankruptcy petition by filing a lien against Lorraine’s home. The bankruptcy judge denied the Wades’ motion. The Wades appealed to the district court, but also asked the bankruptcy judge to certify her order for direct appeal under § 158(d)(2)(A). The judge granted that request and issued a certification order.

The Wades then filed a notice of appeal, but they never filed a petition for permission to appeal as required by Rule 8006(g) of the Federal Rules of Bankruptcy Procedure. Kreisler moved to dismiss based on this procedural oversight.

Because Rule 8006(g) is a time limitation found in a procedural rule, not a statute, it is properly classified as a nonjurisdictional claim-processing rule. The question on appeal was whether Rule 8006(g) is a “mandatory” claim-processing rule, which if properly invoked must be enforced. It was.

Rule 8006(g) requires a petition for permission to appeal, so Rule 26(b)(1) “singles [it] out...for inflexible treatment.” Rule 8006(g) is thus a mandatory claim-processing rule. Because Kreisler properly invoked the rule, it had to be enforced.

Because Kreisler properly objected to the violation of Rule 8006(g), the court of appeals considered that its duty to dismiss the appeal was mandatory. The court overruled In re Turner, 574 F.3d 349 (7th Cir. 2009) and Marshall v. Blake, 885 F.3d 1065 (7th Cir. 2018) to the extent that they had approved exceptions to compliance with Bankruptcy Rule 8006(g) and Rule 5(a)(1) of the Federal Rules of Appellate Procedure.

In re Wade, ___ F.3d ___, 2019 WL 2482413 (7th Cir. 2019).