The opinion of the court was delivered by: Thomas I. Vanaskie United States District Judge
At issue in this bankruptcy case is whether two Orders entered by the United States Bankruptcy Court for the Middle District of Pennsylvania are appealable to this Court under 28 U.S.C. § 158. Eileen Patrick, Kurt Underkofler, and Susan A. Helsel (collectively, "Debtors"), individually and on behalf of others similarly situated, commenced the underlying adversary proceeding by filing a Complaint against, inter alios, Dell Financial Sevices, L.P. ("DFS"), alleging improprieties in the submission of proof of claims in Chapter 13 bankruptcy proceedings.*fn1 DFS filed a motion to dismiss the Complaint, which the Bankruptcy Court granted in part and denied in part. As relevant here, the Bankruptcy Court entered an Order on December 8, 2005, dismissing Counts III and IV of the Complaint, and also deciding that it has national subject matter jurisdiction over Debtors' class action claims (the "December 8 Order").
After the Bankruptcy Court disposed of the motion to dismiss, Debtors filed a motion to amend the Complaint to name the Trustee as an involuntary plaintiff in the adversary proceeding. The Bankruptcy Court denied this motion in an Order entered on April 17, 2006 (the "April 17 Order").
Debtors appeal the December 8 Order dismissing part of their Complaint, as well as the April 17 Order denying their motion to amend the Complaint. This appeal is docketed at No. 3:06-CV-0978. DFS appeals that part of the December 8 Order in which the Bankruptcy Court concluded that it has national subject matter jurisdiction over Debtors' class action. This appeal is docketed at No. 3:06-CV-1061.
Before the Court is DFS's Motion for Leave to Appeal (Dkt. Entry 2 in No. 3:06-CV-1061) and its Conditional Motion to Dismiss Debtors' Appeal (Dkt. Entry 13 in No. 3:06-CV-0978). For the reasons that follow, the Court concludes: (1) the December 8 and April 17 Orders are non-final, interlocutory orders that are not appealable as of right; but (2) DFS and Debtors will be granted leave to appeal the December 8 and April 17 Orders.
On or about March 23, 2005, Debtors filed a five-count class action Complaint in the Bankruptcy Court against DFS asserting claims under the Bankruptcy Code. (DFS's Br. in Supp. of Conditional Mot. to Dismiss ("DFS's Supp. Br."), Dkt. Entry 14, No. 3:06-CV-0978, at 1; Debtors' Br. in Opp'n to DFS's Conditional Mot. ("Debtors' Opp'n Br."), Dkt. Entry 22, No. 3:06-CV-0978, at 2.)*fn2 Debtors initiated the action on behalf of a putative nationwide class of Chapter 13 debtors. Among other things, Debtors sought damages and declaratory and injunctive relief. Debtors allege that DFS "systematically filed" proof of claims in various bankruptcy proceedings and represented that the claims were secured, when DFS knew the claims were unsecured, in order to receive a greater distribution from the bankruptcy estates. (Debtors' Opp'n Br., at 2; Opinion of the Bankruptcy Court of Dec. 8, 2005 ("Dec. Op."), Ex. B to DFS's App. to Mot. for Leave to Appeal, at 1-2.) In Count III of the Complaint, Debtors asserted a claim for "abuse of process" under 11 U.S.C. § 105. (Id. at 5.) In Count IV, Debtors sought to recover the excess payments received by DFS under 11 U.S.C. § 542. (Id.)
On April 25, 2005, DFS filed a motion to dismiss the Complaint. DFS argued that the Complaint failed to state a claim for which relief can be granted. (DFS's Supp. Br., at 1.) DFS also argued that the Bankruptcy Court lacked subject matter jurisdiction over the class action claims to the extent that putative class members reside outside of the Middle District of Pennsylvania. (Id.)
The Bankruptcy Court issued the December 8 Order granting in part and denying in part DFS's motion, along with an opinion explaining its reasons. The court dismissed Count III of the Complaint because it concluded that 11 U.S.C. § 105 cannot be used as the means to pursue a private cause of action not provided for in the Bankruptcy Code. (Dec. Op., at 5.) The Court dismissed Count IV because, under its reading of the pertinent statutes, only a bankruptcy trustee has standing to bring an action to recover excess payments made to a creditor. (Id.)
The Bankruptcy Court, however, denied DFS's motion to the extent it argued that the court lacked subject matter jurisdiction over a nationwide class action. The court acknowledged the case law that supported DFS's argument. (Id. at 6.) Nevertheless, the court interpreted 28 U.S.C. § 1334(b), the jurisdictional statute, in light of the Third Circuit's decision in Maritime Electric Co., Inc. v. United Jersey Bank, 959 F.2d 1194 (3d Cir. 1991), as extending jurisdiction to the extent claimed by Debtors. (Id.) Additionally, the court cited decisions outside the Third Circuit holding that bankruptcy courts have jurisdiction over nationwide class actions. (Id. at 6-7.)
DFS and Debtors filed timely motions for reconsideration of the December 8 Order. The Bankruptcy Court issued an Order on April 17, 2006, denying both motions.*fn3
On February 21, 2006, Debtors filed a motion to amend their Complaint to join the Trustee as an involuntary plaintiff. (Debtors' Opp'n Br., at 2.) Debtors sought to join the Trustee in an effort to obtain standing to pursue an action to recover excess payments made to creditors. (DFS's Supp. Br., at 2.) The Bankruptcy Court's April 17 Order denied the request to amend the Complaint.
On April 26, 2006, Debtors filed a notice of appeal in the Bankruptcy Court pursuant to Federal Rule of Bankruptcy Procedure 8001(a). Debtors sought appellate review of (1) the December 8 Order dismissing Counts III and IV of their Complaint, and (2) the April 17 Order denying their motion to join the Trustee as a party.*fn4
Debtors did not file a motion for leave to appeal, but instead maintained in their opening appellate brief that the December 8 and April 17 Orders are final and, therefore, appealable as of right. (See Appellants' Br., Dkt. Entry 4, No. 3:06-CV-0978, at 9.) Prior to filing their notice of appeal, Debtors did not request that the Bankruptcy Court enter a final judgment pursuant to Federal Rule of Civil Procedure 54(b), incorporated into bankruptcy proceedings via Federal Rule of Bankruptcy Procedure 7054(a), as to the December 8 and April 17 Orders.
On May 4, 2006, DFS filed a notice of appeal, seeking review of the December 8 Order in which the Bankruptcy Court determined it could exercise jurisdiction over a nationwide class action.*fn5
DFS also moved for leave to appeal the December 8 Order pursuant to Federal Rules of Bankruptcy Procedure 8001(b) and 8003. (Dkt. Entry 2, No. 3:06-CV-1061.) Though DFS argues that the December 8 Order is a final order, it filed the motion to protect itself in the event this Court concludes that the December 8 Order is interlocutory. In that regard, DFS requests that the Court exercise its discretion to allow DFS to appeal the December 8 Order.
On June 8, 2006, DFS filed a Conditional Motion to Dismiss Debtors' Appeal. (Dkt. Entry 13, No. 3:06-CV-0978.) DFS contends that the December 8 Order is a final order, and that this Court should hear both DFS's and Debtors' appeals of that order. If, however, the Court concludes that the December 8 Order is interlocutory, DFS argues that the Court should grant DFS leave to appeal and grant Debtors leave to appeal only if the Court determines it is appropriate in light of Debtors' failure to file a motion for leave to appeal. If the Court denies DFS's motion for leave to appeal, DFS argues that the Court should dismiss Debtors' appeal. If the Court grants DFS's motion for leave to appeal, DFS indicated that ...