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Randy Joseph NETZER, Plaintiff-Appellant, v. OFFICE OF LAWYER REGULATION and Matthew F. Anich, Defendants-Appellees

United States Court of Appeals for the Seventh Circuit2017-03-13No. Nos. 16-3236 & 16-3713
851 F.3d 647

Summary

Holding. The circuit court affirmed the dismissal of the appeal as untimely. The 14-day deadline for appealing a bankruptcy court decision cannot be extended by the district court or circuit court on equitable grounds; any request for additional time must be directed to the bankruptcy judge and must be made within 35 days of the order's entry.

Randy Netzer, a debtor in bankruptcy, sought to discharge a debt owed to Wisconsin's Office of Lawyer Regulation. A bankruptcy court had determined that approximately $9,200 in costs imposed during a disciplinary proceeding against Netzer constituted a non-dischargeable fine, penalty, or forfeiture under federal bankruptcy law. Netzer appealed to the district court more than a month after the bankruptcy court's decision, exceeding the 14-day appeal deadline set by the Federal Rules of Bankruptcy Procedure. He argued that he should receive extra time because he had not learned of the decision promptly.

The district court dismissed the appeal as untimely and declined to grant relief based on equitable grounds, reasoning that the appeal deadline is jurisdictional and therefore not subject to exceptions. On appeal to the circuit court, Netzer again sought to excuse his late filing. The circuit court rejected this request, holding that while bankruptcy rules establish time limits for appealing, those limits must be enforced as written. The court emphasized that the bankruptcy rules themselves provide the exclusive mechanism for extending appeal deadlines: a bankruptcy judge may grant additional time only if the request is made within 35 days of the original decision. Netzer's failure to meet either deadline—the initial 14-day period or the 35-day window for requesting an extension—meant that no court possessed authority to grant relief.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether the 14-day appeal deadline in Federal Rule of Bankruptcy Procedure 8002(a)(1) is jurisdictional
  • Whether courts possess equitable authority to extend bankruptcy appeal deadlines
  • Interpretation of Federal Rule of Bankruptcy Procedure 9022(a) regarding notice and appeal timing
  • The scope of Rule 8002(d)(1) as the exclusive mechanism for extending the time to appeal

Procedural posture

Netzer appealed a district court order dismissing his appeal of a bankruptcy court decision as untimely.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

EASTERBROOK, Circuit Judge.

Randy Netzer, a debtor in bankruptcy, asked the court to discharge a debt to Wisconsin’s Office of Lawyer Regulation. Bankruptcy Judge Furay concluded in-this adversary proceeding that the approximately $9,200 the Supreme Court of Wisconsin imposed as costs in a disciplinary proceeding against a member of the state’s bar is a “fine, penalty, or forfeiture” under 11 U.S.C. § 523(a)(7) and therefore is not dischargeable. 545 B.R. 254 (Bankr. W.D. Wis. 2016).

The bankruptcy court entered its decision on February 3, 2016, and Netzer had 14 days to appeal. Fed. R. Bankr. P. 8002(a)(1). He took 41, filing a notice on March 15. He asked the district judge to excuse his tardiness, contending that until a few days earlier he had not known of the bankruptcy court’s decision. But the district court dismissed the appeal as untimely. 2016 U.S. Dist. Lexis 84260 (W.D. Wis. June 29, 2016), reconsideration denied, 2016 U.S. Dist. Lexis 129476 (Sept. 22, 2016). The judge stated that he lacks authority to extend the time on equitable grounds, because the 14-day period is jurisdictional.

In re Sobczak-Slomczewski, 826 F.3d 429 (7th Cir. 2016), holds that the 14-day period in Rule 8002(a)(1) is jurisdictional, and Bowles v. Russell, 551 U.S. 205, 213-14, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007), holds that there cannot be equitable exceptions to jurisdictional rules. The grant of review in Hamer v. Neighborhood Housing Services of Chicago, 835 F.3d 761 (7th Cir. 2016), cert. granted, No. 16-658 (U.S. Feb. 27, 2017), which poses the question whether Fed. R. App. P. 4(a)(5)(C) sets a jurisdictional time limit, suggests that the Supreme Court may soon decide how far rules about the times for appeal, as opposed to statutory limits, can affect a court’s jurisdiction. See also Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (time limit in Fed. R. Bankr. P. 4004 is not jurisdictional); Eberhart v. United States, 546 U.S. 12, 126 S.Ct. 403, 163 L.Ed.2d 14 (2005) (time limit in Fed. R. Crim. P. 33(a) is not jurisdictional); United States v. Neff, 598 F.3d 320 (7th Cir. 2010) (time limit in Fed. R. App. P. 4(b) is not jurisdictional).

We need not hold these appeals for Hamer, however, or revisit the issue resolved in Sobczak-Slomczewski. For whether or not a given rule is “jurisdictional” it is still a rule, and when invoked it must be enforced. Appellees have claimed the benefit of the 14-day limit for bankruptcy appeals. Bankruptcy Rule 9022(a), which requires bankruptcy courts to notify litigants of judicial orders, also provides: “Lack of notice of the entry does not affect the time to appeal or relieve or authorize the court to relieve a party for failure to appeal within the time allowed, except as permitted in Rule 8002.” This takes us to Rule 8002(d), which specifies the conditions under which a bankruptcy judge may extend the time for appeal. Rule 8002(d)(1) permits a bankruptcy judge to allow a belated appeal if application is made within 35 days after the order’s entry. Netzer missed that deadline — and, even if he had asked in time, still the power to decide would have belonged to the bankruptcy judge, not to the district judge or the court of appeals.

Courts lack an “equitable” power to contradict the bankruptcy statutes and rules. Law v. Siegel, — U.S. -, 134 S.Ct. 1188, 188 L.Ed.2d 146 (2014); In re Kmart Corp., 359 F.3d 866, 871 (7th Cir. 2004). Rule 9022(a) says that lack of notice authorizes additional time only to the extent allowed by Rule 8002, and Rule 8002(d)(1) sets a limit of 35 days from the decision for such a request to be made. Those rules promote expeditious resolution of bankruptcy appeals. Litigants have only to check the court’s electronic docket once a month in order to protect their interests; this step will ensure that, even if notice miscarries, a request for additional time can be made within the 35 days allowed by Rule 8002(d)(1).

Affirmed