In the
United States Court of Appeals
For the Seventh Circuit

No. 98-2454

In the Matter of Herbert P. Carlson
and Margaret P. Carlson,

Debtors-Appellants.



Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 6566--John A. Nordberg, Judge.


Submitted April 17, 2000--Decided August 15, 2000



  Before Fairchild, Posner, and Diane P. Wood, Circuit
Judges.

  Diane P. Wood, Circuit Judge. Herbert Carlson is
a lawyer. For a period of time, he neglected to
pay any of the approximately $150,000 in income
tax that he owed for the money he earned in 1990,
1991, and 1992. Eventually, Carlson paid up, but
he contested his obligation to pay the
accompanying interest and penalties on the
overdue income taxes, as well as some
unemployment and Social Security taxes that were
assessed on the payroll of Carlson’s law
practice. In the meantime, in 1994 Carlson sought
Chapter 11 bankruptcy protection. Before the
bankruptcy court, the IRS filed a proof of claim,
which Carlson unsuccessfully opposed both there
and on appeal. See Matter of Carlson, 126 F.3d
915 (7th Cir. 1997).

  The bankruptcy court later (on August 20, 1996)
dismissed Carlson’s case for failure to submit a
confirmable plan. Carlson appealed to the
district court, where his case is currently
pending. In connection with that appeal, Carlson
asked the bankruptcy court for a stay of
collection proceedings pending the district
court’s resolution of the case. The bankruptcy
court denied his request, as did the district
court. The case stalled at that point for quite
some time, while Carlson moved for
reconsideration, settlement discussions took
place, and the IRS received unfulfilled promises
for payment. During much of that time, a
temporary stay was in effect. Eventually,
however, on June 3, 1998, the district court
denied Carlson’s motion to reconsider its earlier
(1996) order denying the stay. The judge offered
Carlson the option of a stay if he posted a
$700,000 bond (which the judge indicated was his
estimate of the amount likely to be due by the
time all was said and done), but Carlson either
cannot or will not post such a bond. He and his
wife have appealed to this court asking us to
reverse the district court’s decision.

  Before addressing his arguments, we must resolve
a matter of appellate jurisdiction. Since no
final decision has been rendered by the district
court, Carlson is invoking our jurisdiction under
the collateral order doctrine of Cohen v.
Beneficial Loan Corp., 337 U.S. 541 (1946). A
collateral order is sufficiently final in itself
to support jurisdiction under 28 U.S.C. sec. 1291
if three criteria are met: (1) the order must
conclusively determine the disputed question; (2)
it must resolve an important issue completely
separate from the merits of the action; and (3)
it must be effectively unreviewable on appeal
from a final judgment. Wingerter v. Chester
Quarry Co., 185 F.3d 657, 662-63 (7th Cir. 1999).
At least in the bankruptcy context, and perhaps
generally, the most important of these criteria
is the third. See In re Firstmark Corp., 46 F.3d
653, 659-60 (7th Cir. 1995); In re Klein, 940
F.2d 1075, 1078 (7th Cir. 1991); Matter of UNR
Industries, Inc., 725 F.2d 1111, 1117 (7th Cir.
1984). See also Matter of Forty-Eight
Insulations, Inc., 115 F.3d 1294, 1300 (7th Cir.
1997) (allowing appeal of a denied stay under 28
U.S.C. sec. 1292 because remaining creditors’
interests could not be properly protected if
ordered distribution occurred). This makes sense,
since the point of the Cohen exception to the
final judgment requirement is that where the harm
of the order cannot be remedied on appeal, the
order itself is effectively final and the
hypothetical chance to complain after final
judgment in the principal action does the losing
party little good. Palmer v. City of Chicago, 806
F.2d 1316, 1318-19 (7th Cir. 1986).

  Carlson maintains that because stay was denied,
the IRS is free to seize and liquidate his home
to satisfy its tax claim. The IRS agrees that
sale of the property may be required. In general,
if the IRS were to seize assets for payment of
taxes, penalties, or interest, and a court later
ruled that the taxpayer was not liable for some
or all of the payment, the damage could be undone
by a simple order requiring repayment with
appropriate interest. Carlson urges us here to
recognize an exception to that principle, because
of the heightened interest he has in his home. He
notes that homes are treated specially in a
variety of different contexts. See, e.g., 11
U.S.C. sec. 522(d) (bankruptcy exemptions);
United States v. James Daniel Good Real Property,
510 U.S. 43, 54 (1993) (forfeitures); California
v. Ciraolo, 476 U.S. 207, 213 (1986) (searches).
He concludes that, to the extent this case is
about the IRS’s power to seize his home for
satisfaction of his tax liabilities, it’s now or
never for him.

  The IRS counters by saying that while Cohen
applies to the denial of a security requirement
(thus allowing it to appeal now if the district
court had granted a stay without imposing a bond
requirement), the rule does not reach a decision
to require security, which was the effect of the
district court’s order in this case. A denial of
security is ordinarily immediately appealable
because the prevailing plaintiff who is denied
security may find that the defendant’s assets
that were once available to satisfy the judgment
have vanished during appellate litigation. Matter
of UNR Industries, Inc., 725 F.2d at 1117.
Requiring security usually does not raise that
problem because if the losing side fails to post
security, the prevailing party can collect
immediately, recognizing that it will have to
return the money should the judgment be reversed
on appeal. See Cohen, 339 U.S. at 688 ("The
situation is quite different where an attachment
is upheld pending determination of the principal
claim. . . . In such a situation the rights of
all the parties can be adequately protected while
the litigation on the main claim proceeds.").
Here, of course, the IRS could return the
proceeds of the sale of Carlson’s home (less the
outstanding mortgage balance). Still, money is
not the same as the house, and Carlson is
undoubtedly right to note that there is no
guarantee that the government would keep the home
itself for the duration of the appeal. Our
decision thus assumes that Carlson’s prediction
is correct: if the IRS turns to his home for
satisfaction of its claims, he and his wife will
not live in that home again.

  The real problem Carlson faces is that he
offers absolutely no authority for the
proposition that homes are somehow exempt from
tax liens. This is not surprising, because it is
not uncommon for the IRS to turn to precisely
that asset for payment. See, e.g., American Trust
v. Internal Revenue Service, 142 F.3d 920 (6th
Cir. 1998); Taffi v. United States, 96 F.3d 1190
(9th Cir. 1997); United States v. Denlinger, 982
F.2d 233 (7th Cir. 1992). The Carlsons are
typical in that their home represents one of
their largest assets. We are not unaware of the
disruption this imposes on individuals, but this
is a problem Carlson brought upon himself. We
therefore conclude that the substantial personal
grief that the family would experience if the IRS
follows through pending this appeal and seizes
the house is nonetheless not the kind of
irreparable injury that the Cohen doctrine
requires. That means that we have no appellate
jurisdiction and we must dismiss the appeal.

  If we are mistaken about the absence of a
conclusive presumption that the loss of one’s
home is irreparable, we would agree that Cohen
would support an appeal. But that would not get
Carlson very far, because this particular appeal
is utterly without merit. Ordinarily a party is
entitled to a stay pending appeal only by posting
an appropriate bond. See Fed. R. Civ. P. 62(d);
Fed. R. Bankr. P. 7062. The district court has
the discretion to waive this requirement, but
waiver is appropriate only if the appellant has
a clearly demonstrated ability to satisfy the
judgment in the event the appeal is unsuccessful
and there is no other concern that the appellee’s
rights will be compromised by a failure
adequately to secure the judgment. See, e.g.,
Dillon v. City of Chicago, 866 F.2d 902, 904-05
(7th Cir. 1988); NIPSCO v. Carbon Coal Co., 799
F.2d 265, 281 (7th Cir. 1986). This case presents
the polar opposite of a situation in which waiver
is appropriate. There is every reason to lack
confidence that Carlson will pay up eventually;
to the contrary, just two days after a prior IRS
collection effort, Carlson signaled his intent to
evade his obligations by transferring a piece of
real estate to his son at no charge. Carlson, 126
F.3d at 919. Nor has Carlson subsequently
demonstrated anything but obstinance in this
matter since our last opinion. Indeed, although
this appeal was docketed in June 1998, Carlson’s
various motions for extension delayed its
submission for nearly two years. Finally, the
$700,000 amount seems reasonable in light of the
estimated tax liability Carlson faces.
Consequently, the district court’s decision to
apply the usual bond requirement was well
justified.

  The appeal is Dismissed for lack of jurisdiction.
