LEONARD P. STARK, UNITED STATES DISTRICT JUDGE.
Presently before the Court is Chapter 7 Trustee Charles A. Stanziale, Jr.'s (the "Appellant") motion to certify (D.I.6) ("Certification Motion") this appeal (D.I.1) directly to the United States Court of Appeals for the Third Circuit pursuant to 28 U.S.C. § 158(d)(2)(A).
1. Background.
2. On December 5, 2012, Appellee filed an adversary proceeding (Adv.Pro. No. 12-51132-CSS), pursuant to 11 U.S.C. §§ 547 and 550, to recover Debtors' prepetition payments to Appellee that occurred within
3. The Bankruptcy Court issued an Order granting Appellee's motion on December 27, 2013, relying principally on In re Friedman's, Inc., 738 F.3d 547 (3d Cir. 2013). (D.I.1-1) Appellant appealed from that Order and filed the present Certification Motion. (D.I.6)
4. Parties' Contentions. Appellant argues that this case merits direct appeal to the Third Circuit because: (1) it presents a question of law of public importance, (2) there are conflicting decisions on the issue, and (3) direct appeal will materially advance this case. (D.I.6 at 11, 14, 15) Appellant's underlying argument is that Friedman's recognized an exception to its own rule that is logically analogous to this case. (Id. at 5) Appellee, without argument, joins Appellant's Certification Motion solely on the basis that a direct appeal will materially advance the progress of this case. (D.I.7 at 1) Appellee does not agree with the merits of Appellant's Certification Motion that Friedman's is either unclear or raises an undecided question of law. (Id. at 2) Because the parties failed to comply in a timely manner with the procedural requirements that would have obligated the Court to certify an appeal to the Court of Appeals, the Court must evaluate the motion for itself.
5. Legal Standards. Pursuant to § 158(a), district courts have mandatory jurisdiction to hear appeals "from final judgments, orders, and decrees" and discretionary jurisdiction over appeals "from other interlocutory orders and decrees." 28 U.S.C. § 158(a)(1), (3). Motions for direct appeal to the court of appeals are governed by 28 U.S.C. § 158(d)(2)(A), which provides:
28 U.S.C. § 158(d).
4. Discussion. After considering Appellant's arguments, the underlying Bankruptcy Court Order, and the applicable precedent, the Court concludes that this case does not present circumstances that warrant direct certification to the Third Circuit.
5. No Controlling Authority or Matter of Public Importance. Appellant first argues that there is "no controlling authority on whether the exception articulated by the Third Circuit in its Friedman's decision also applies to the facts present in the appeal." (D.I. 6 at 11) Under the Bankruptcy Code, a trustee may avoid certain transfers that the debtor made within the 90 days preceding the bankruptcy filing. See 11 U.S.C. § 547(b). One defense a creditor can raise to a trustee's preference action is the so-called "new value" defense:
11 U.S.C. § 547(c). Section 547(c)(4)(B), however, limits the creditor's "new value" if the debtor subsequently paid for that value. See id. In Friedman's, the Third Circuit addressed whether or not an "otherwise unavoidable transfer" under 547(c)(4)(B) could include post-petition payments. In re Friedman's, Inc., 738 F.3d at 549. The Court found that it did not, effectively establishing the bankruptcy filing date as the cut-off for calculating a creditor's available "new value" defense under § 547(c)(4). See id.
6. The Court recognized one exception to that rule, which is not at issue here. See id. at 562 (explaining that trustee's assumption of executory contract under § 365 precludes preference action); see also D.I. 6, at 1. In a footnote that this Court views as dictum,
7. Appellant argues that Friedman's does not necessarily control the
8. Appellant next argues that this issue raises a matter of public importance because it involves a potential defense that could affect at least sixteen other preference actions in this case. (D.I. 6 at 16) The fact that an appeal will affect other parties to Debtors' bankruptcy does not establish an issue of public importance. See In re Goody's Family Clothing, Inc., 2009 WL 2355705, at *2 (holding that appeal affecting only parties in the case is not matter of public importance). Appellant's theory is dependent on the specific facts of this case and the Court is not persuaded that it "transcend[s] the litigants and involves a legal question the resolution of which will advance the cause of jurisprudence to a degree that is usually not the case." In re Am. Home Mortgage Inv. Corp., 408 B.R. 42, 44 (D.Del.2009) (quoting 1 Collier on Bankruptcy 5.05[A] (15th ed. rev.)).
9. Question of Law Requiring Resolution of Conflicting Decisions. Appellant recognizes that "there are no conflicting decisions amongst the Circuit Courts regarding the scope of the exception set forth in Friedman's." (D.I. 6 at 14) Appellant, however, argues that "the Third Circuit noted in its opinion that `[d]istrict and bankruptcy courts are nearly equally divided on the issue' of when a payment must be made by a debtor to defeat a new [value] defense." (Id. at 14-15) (quoting In re Friedman's, 738 F.3d at 553) These cases, however, do not detract from Friedman's binding authority within this Circuit, and thus do not justify direct certification under § 158(d)(2)(A)(ii). See In re Goody's Family Clothing, Inc., 2009 WL 2355705, at *2.
10. Material Advancement of this Case. Appellant argues that certification will materially advance this case because, as argued before, this issue has arisen in sixteen other preference actions in Debtors' bankruptcy. (D.I. 6 at 16) Appellant contends that a direct certification will allow the Third Circuit to definitively rule on the requested expansion of the Friedman's exception. (Id.) However, there is nothing extraordinary or urgent about this situation that recommends departing from the standard appellate process. The matter is primed for briefing before this Court; whereas, the Third Circuit must first review and accept a certification request before the appeal can proceed in that Court. See 28 U.S.C. § 158(d)(2)(A); In re Johns-Manville Corp., 449 B.R. 31, 34 (S.D.N.Y.2011) (finding that without sufficient reason for direct appeal, process can actually lengthen rather than expedite appeal). The Court does not find that certification will materially advance this case.
At Wilmington, this 23rd day of March, 2015, this matter coming before the Court on Charles A. Stanziale, Jr.'s (the "Appellant") motion to certify (D.I.6) his appeal (D.I.1) directly to the United States Court of Appeals for the Third Circuit pursuant to 28 U.S.C. § 158(d)(2)(A), and having considered the parties' papers submitted in connection therewith;
IT IS ORDERED that Appellant's motion to certify (D.I.6) is DENIED for the reasons stated in the accompanying Memorandum entered this same day.
IT IS FURTHER ORDERED that the parties shall confer and submit a proposed briefing schedule no later than 14 days after the entry of this Order.