
USCA1 Opinion

	




                                       UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-2220                             IN RE ULPIANO UNANUE CASAL,                                       Debtor,                                                                                      ________                           GERARDO A. QUIROS LOPEZ, ET AL.,                                Plaintiffs, Appellees,                                          v.                            ULPIANO UNANUE CASAL, ET AL.,                                Defendants, Appellees,                                                                                      ________                       LILIANE UNANUE, EMPEROR EQUITIES, INC.,                               Defendants, Appellants.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Jos  Antonio Fust , U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                                    Selya and Cyr,                                   Circuit Judges.                                   ______________                                 ____________________             Andr s  Guillemard-Noble, with whom Harvey B. Nachman and The Law             ________________________            _________________     _______        Offices of Harvey B. Nachman were on brief for defendants, appellants.        ____________________________             Arturo J. Garc a-Sol , with whom Dora M. Penagar cano, McConnell,             _____________________            ____________________  __________        Vald s,  Kelley, Sifre, Griggs &  Ruiz-Suria were on  brief for plain-        ____________________________________________        tiffs, appellees.             Carlos Lugo  Fiol,  Assistant Solicitor  General,  Department  of             _________________        Justice, with whom Reina Colon De Rodr guez, Acting Solicitor General,                           ________________________        was on brief for intervenor.                                 ____________________                                     July 7, 1993                                 ____________________                    CYR,  Circuit Judge.   Liliane  Unanue ("Liliane")  and                    CYR,  Circuit Judge.                          _____________          Emperor Equities, Inc.  ("Emperor") challenge the constitutional-          ity of various provisional remedies imposed by a bankruptcy court          pursuant to P.R.  Laws Ann. tit. 32  App. III, R.56  et seq.   We                                                               __ ____          lack jurisdiction over most of their claims, and find no merit in          the others.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    Ulpiano Unanue Casal ("Unanue"), a former  chief execu-          tive  officer of Goya Foods ("Goya"), filed a voluntary chapter 7          petition in  August 1990,  scheduling  liabilities totaling  $1.1          million and assets of  nominal value.  Goya, a  creditor, charged          that  Unanue was continuing to  lead a life  of luxury, traveling          between  seven "fabulously  furnished"  apartments  which he  had          fraudulently transferred to Liliane, his wife, prior to bankrupt-          cy.   After extensive discovery, Goya moved for leave to commence          an adversary proceeding, in the name  and behalf of the chapter 7          estate,  see  11 U.S.C.   503(b)(3)(B),  against  Liliane and  E-                   ___          mperor,  a shell  corporation apparently  controlled  by Liliane.          Although  Liliane and Emperor were served with the Goya motion in          July 1991, neither responded.                    On August  24, 1991, Goya learned that Emperor had sold          one of Unanue's former  condominium apartments some months earli-          er, in May  1991, netting approximately $400,000.   Goya promptly                                          3          renewed its motion for leave to commence adversary proceedings on          behalf of the chapter  7 estate, and sought an immediate ex parte                                                                   __ _____          order of attachment on the apartment-sale proceeds, alleging that          the  proceeds were assets of the chapter  7 estate and at risk of          removal from the jurisdiction.   On September 4, 1991, the  bank-          ruptcy court authorized Goya to commence an adversary proceeding,          and  issued an  ex parte order  of attachment under  P.R. Rule 56                          __ _____          ("September 4  order").1   On September 9,  Goya provided  appel-          lants  with copies  of  the summons,  complaint,  and motion  for          provisional remedies.                    In the course  of executing the writ  of attachment, it          was discovered  that Liliane had  transferred most of  the apart-          ment-sale proceeds  to a  Swiss bank  account.  On  September 12,          1991, alarmed by the  apparent removal of the sale  proceeds from          the  jurisdiction, Goya  sought  additional provisional  remedies          under Rule 56, including  "cautionary notices" and a "prohibition          against alienation" of  Liliane's remaining properties in  Puerto          Rico,  Paris, New  York and Spain.   After notice  to Liliane and          Emperor, and a hearing  on appellants' constitutional claims, the          bankruptcy  court authorized the  additional provisional remedies          on September 26 ("September 26 orders").                                        ____________________               1Federal Rule  of Civil Procedure 64 is applicable in adver-          sary proceedings.  See Fed. R. Bankr. P. 7064.  Thus, provisional                             ___          remedies are available in an adversary proceeding, see id. 7001 &                                                             ___ ___          7064,  "under the circumstances and in the manner provided by the          law of  the state in which  the district court is  held," Fed. R.          Civ. P. 64.                                          4                    The September 4 and  September 26 orders were  appealed          to the district court on the ground that the provisional remedies          imposed  by  the  bankruptcy  court were  unconstitutional  under          Connecticut v. Doehr, 111  S. Ct. 2105 (1991).   The Commonwealth          ___________    _____          of Puerto  Rico intervened.  See  28 U.S.C.   2403(b).   The dis-                                       ___          trict court upheld the challenged provisional remedies, see In re                                                                  ___ _____          Unanue  Casal, 144 B.R. 604 (D.P.R. 1992), and the present appeal          _____________          followed.                                          II                                          II                                THE SEPTEMBER 4 ORDER                                THE SEPTEMBER 4 ORDER                                _____________________                    Although the parties have not done  so, we inquire into          our  jurisdiction to entertain the interlocutory appeal of the ex                                                                         __          parte order entered on September 4.  See In re Spillane, 884 F.2d          _____                                ___ ______________          642, 644 (1st  Cir. 1989); In  re Recticel Foam  Corp., 859  F.2d                                     ___________________________          1000, 1002 (1st Cir. 1988) ("a court has an obligation to inquire          sua sponte into its subject matter jurisdiction").  The courts of          ___ ______          appeals  may  derive  jurisdiction  to review  a  district  court          appellate order in a bankruptcy case from either of two statutory          sources:  (1)  the bankruptcy  appeal provisions of  28 U.S.C.             158(d); or (2) the  interlocutory appeal provisions in  28 U.S.C.            1292 applicable  to civil  actions generally.   See Connecticut                                                            ___ ___________          Nat'l Bank v.  Germain, 112 S. Ct. 1146 (1992).2   We trace these          __________     _______          avenues of appeal in turn.                                        ____________________               2Germain  rejected  the widely  held view  that 28  U.S.C.                  _______          158(d)  affords the only avenue  of appeal from  a district court          appellate order in a  bankruptcy case.  Compare, e.g.,  In re GSF                                                  _______  ____   _________          Corp., 938 F.2d 1467, 1473 n.4 (1st Cir. 1991).          _____                                          5                                          6          A.   Section 158(d)          A.   Section 158(d)               ______________                    Section 158(d) affords a right  of appeal to the courts          of  appeals from  all  "final decisions,  judgments, orders  [or]                                  _____          decrees"  entered by district courts in bankruptcy cases.  See 28                                                                     ___          U.S.C.   158(d)  (emphasis  added).   It  is often  difficult  to          determine  what constitutes  a  "final" judgment  or order  under          section 158(d).  There is somewhat less difficulty in doing so in          an adversary  proceeding, however, as the  finality determination          in  such proceedings  "closely resembles  [that] in  'an ordinary          case [between  the parties]  in a district  court.'"  In  re Har-                                                                ___________          rington, No.  92-2212 (1st Cir. Apr. 26, 1993), slip op. at 4 n.3          _______          (quoting In re Public Serv. Co.,  898 F.2d 1, 2 (1st Cir. 1990)).                   ______________________          Accordingly, a district court order in an adversary proceeding is          not  appealable as of  right under section 158(d)  unless it ends          the entire adversary proceeding "on the merits and leaves nothing          for the court to do but enter the judgment."  See Stringfellow v.                                                        ___ ____________          Concerned  Neighbors in Action, 480 U.S. 370, 375 (1987) (quoting          ______________________________          Catlin v. United States, 324 U.S. 229, 233 (1945)).          ______    _____________                    Even though  a somewhat loosened  standard of  finality          obtains in bankruptcy appeals, on  a showing of "special justifi-          cation," see Harrington, supra,  at 3, 4 n.3, the  exceptions are                   ___ __________  _____          narrowly  limited in order to  avoid piecemeal review.  Neverthe-          less, as  in  an ordinary  civil action,  the "collateral  order"          doctrine established in Cohen v. Beneficial Industrial Loan Corp,                                  _____    _______________________________          337  U.S. 541 (1949),  is applicable to an  appeal from an inter-          locutory  order entered  in an  adversary  proceeding, see  In re                                                                 ___  _____                                          7          Martin,  817 F.2d 175, 178  (1st Cir. 1987),  where the non-final          ______          order is, inter alia, "effectively  unreviewable on appeal from a                    _____ ____          final  judgment," see In  re Newport Sav. &  Loan Assn., 928 F.2d                            ___ _________________________________          472,  474 (1st Cir. 1991) (quoting Van Cauwenberghe v. Biard, 486                                             ________________    _____          U.S. 517 (1988)).                    On  this  reasoning,  we  must decline  review  of  the          September  4  order, as  "non-final"  under section  158(d).   We          adhere  to our earlier holding that an interlocutory order allow-          ing an  attachment to remain in place  is not an appealable "col-          lateral order," since  "'the rights  of all parties  can be  ade-          quately protected  while the  litigation on  the main  claim pro-          ceeds.'"   Lowell Fruit Co. v. Alexander's Market, Inc., 842 F.2d                     ________________    ________________________          567,  569 (1st  Cir.  1988) (per  curiam)  (quoting Swift  &  Co.                                                              _____________          Packers  v. Compania Colombiana  del Caribe, S.A.,  339 U.S. 684,          _______     _____________________________________          689 (1950));  the district court provided  adequate protection of          appellants'  rights  in  the  present case  by  conditioning  its          September 4  attachment  order on  Goya's  posting  of a  $50,000          surety bond, and there is no indication that appellants' property          is  at further significant risk or peril.  Moreover, the validity          of the  September 4 attachments  remains subject to  challenge on          eventual  appeal from  a  final judgment,  even  if the  claimant          prevails.  See Lowell  Fruit, 842 F.2d at 570 (citing  Drys Ship-                     ___ _____________                           __________          ping  Corp. v.  Freights,  Sub-Freights, Charter  Hire, 558  F.2d          ___________     ______________________________________          1050,  1052 (2d  Cir. 1977)).   In  the meantime,  appellants can          secure  release of the attached property by posting a surety bond          of their own, see P.R. Rule 56.3, its cost presumably recoverable                        ___                                          8          from  the claimant  in the  event the  defendant prevails  on the          underlying claim.  Cf.  Lowell Fruit, 842 F.2d at  570 (Massachu-                             ___  ____________          setts law).  Given these procedural and remedial  safeguards, the          present  case  clearly falls  within  the rule  in  Lowell Fruit:                                                              ____________          "'[a]lthough the imposition of  provisional remedies may impose a          hardship    an unjust  hardship if the imposition is  improper             the hardship is not so substantial as to justify wasting judicial          resources  through  piecemeal  appeal.'"   Id.  at  569  (quoting                                                     ___          Trustees  of HMG  v.  Compania  Aseguradora Inter-Americana  S.A.          ________________      ___________________________________________          Panama, 672 F.2d 250, 251 (1st  Cir. 1982) (per curiam)).          ______          B.   Section 1292          B.   Section 1292               ____________                    We also  lack jurisdiction  over the  September 4 order          under 28 U.S.C.   1292(a)(1), which permits interlocutory appeals          of   district  court  orders  "granting,  continuing,  modifying,          refusing  or  dissolving  injunctions."    Traditionally, section          1292(a)(1) has been construed narrowly, in light of  its language          and  its potential  for eroding  the "finality"  doctrine.   See,                                                                       ___          e.g.,  Carson v. American Brands,  Inc., 450 U.S.  79, 84 (1981);          ____   ______    ______________________          Kartell  v. Blue Shield of Massachusetts, Inc., 687 F.2d 543, 551          _______     __________________________________          (1st Cir. 1982); see also Sierra Club v. Marsh, 907 F.2d 210, 214                           ___ ____ ___________    _____          (1st  Cir. 1990)  ("we are  unwilling to  adopt a  more expansive          reading of  section 1292(a)(1) than is  logically required"); see                                                                        ___          generally  16  Charles A.  Wright  et al.,  Federal  Practice and          _________                          __ ___   _____________________          Procedure  (1977 & 1992 supp.) [hereinafter:  Wright & Miller] at          _________                                     _______________            3921  n.10.   Thus,  "[f]or  historical reasons,  court-ordered          'attachments,'  even  where  coercive  and  designed  to  protect                                          9          ultimate  relief, are  typically  considered to  be 'legal,'  not          'equitable' in  nature, and  therefore are not  'injunctions' for            1292(a)(1) purposes."   Bogosian v.  Woloohojian Realty  Corp.,                                    ________     _________________________          923 F.2d  898, 901  (1st Cir.  1991);  see also  Wright &  Miller                                                 ___ ____  ________________            3922 n.46.   Moreover, where  the challenged order  is not  ex-          pressly  captioned  as  an  injunction, see  Feinstein  v.  Space                                                  ___  _________      _____          Ventures, Inc., 989 F.2d  49 (1st Cir. 1993), "a  litigant [must]          ______________          show that an interlocutory order of the district court might have          a 'serious, perhaps irreparable  consequence,' and that the order          can  be  'effectually  challenged'  only  by  immediate  appeal."          Carson, 450  U.S. at 84  (quoting Baltimore Contractors,  Inc. v.          ______                            ____________________________          Bodinger, 384 U.S. 176,  181 (1955)); see also Kartell,  687 F.2d          ________                              ___ ____ _______          at 551; Bogosian,  923 F.2d at 901 (noting "serious consequences"                  ________          necessary for appealability).                    In the  present case, the September 4  order, captioned          as an "attachment," possesses all essential characteristics of an          "attachment"  under Puerto Rico law:   it is directed to the U.S.          Marshal, rather  than appellants, and its  execution subjects the          attached  property to the jurisdiction of the court.  We conclude          that the September 4 order  comes within the "attachments" excep-          tion to  appealability under  section 1292(a)(1).   See Bogosian,                                                              ___ ________          923 F.2d at 901.  Moreover, even were we to treat the September 4          order  as an  "injunction" under  section 1291(a)(1),  appellants          have  not shown  that  the order  is  insusceptible of  effective          vindication following final judgment,  see Lowell Fruit, 842 F.2d                                                 ___ ____________          at 569-70, and therefore  have not made the showing  of "serious,                                          10          perhaps  irreparable  consequences"  required  for  interlocutory          review.  See Carson, supra;  see also Navarro-Ayala v. Hernandez-                   ___ ______  _____   ___ ____ _____________    __________          Colon, 956 F.2d 348, 350 (1st  Cir. 1992) ("Even if we assume the          _____          dubious proposition  that [the  challenged] order . . .  could be          considered  an injunction,  for an  injunction to  be immediately          appealable it  must have  a 'serious, perhaps  irreparable conse-          quence'") (citation omitted); Chronicle  Pub. Co. v. Hantzis, 902                                        ___________________    _______          F.2d  1028, 1031 (1st  Cir. 1990) ("[e]ven  were the [challenged]          order to be deemed an injunction under   1292(a)(1), interlocuto-          ry review would be permissible only upon a showing that the order          will have a 'serious,  perhaps irreparable consequence,' and that          the  order  can be  'effectually  challenged'  only by  immediate          appeal") (citation omitted).          C.   Section 1292(b)          C.   Section 1292(b)               _______________                    Finally, appellants' challenge to the September 4 order          presents  no occasion  for interlocutory  review under  28 U.S.C.            1292(b), which permits  the courts of  appeals to entertain  an          interlocutory appeal  on a  district court's  certification "that          [the challenged]  order involves a controlling question of law as          to which there  is substantial ground  for difference of  opinion          and  that  an immediate  appeal  from  the  order may  materially          advance the  ultimate termination of  the litigation."   The dis-          trict  court did not purport to certify the September 4 order for                                          11          immediate appeal,3 and,  in any case, a court  of appeals may not          exercise  its discretion  to  entertain  an interlocutory  appeal          under section 1292(b) unless  the appellant requests it to  do so          within  ten days  after entry  of the  district court  order from                  ___ ____          which  appeal is  sought.   No such  timely request  was made  by          appellants.   "[T]he  statute's ten-day limit  is jurisdictional,          which is  to say  that the law  does not  permit us to  forgive a          party's failure to comply."  Rodriguez v. Banco Central, 917 F.2d                                       _________    _____________          664, 668 (1st Cir. 1990).                                         III                                         III                               THE SEPTEMBER 26 ORDERS                               THE SEPTEMBER 26 ORDERS                               _______________________                    The  September 26 orders,  authorizing  the  filing  of          "cautionary notices"  against  appellants' real  properties,  and          prohibiting their  alienation by  appellants, present  a somewhat          closer question.   On the  one hand, the  "cautionary notice,"  a          creature of Puerto Rico  law, is roughly analogous to  the Anglo-                                        ____________________               3The district court opinion  stated:  "should the bankruptcy          court's  orders be  deemed interlocutory,  we would  have granted                                                        _____  ____          leave to appeal  these orders because of  the important constitu-          tional  issues they  raise."   144  B.R.  at 608,  n.4  (emphasis          added).  The quoted statement appears in a footnote discussion of          the  district court's interlocutory  appellate jurisdiction under               ________ _______          28 U.S.C.   158(a).  See also 28 U.S.C.   157.  In relevant part,                               ___ ____            158(a) states:  "The district courts . . . shall have jurisdic-          tion . . ., with leave of the [district] court, from interlocuto-          ry orders and decrees[] of bankruptcy judges entered in cases and          proceedings referred  to the bankruptcy judges  under section 157          of  this title."  Thus, in context, the district court's footnote          did  not  purport to  be a    1292(b)  certification, nor  did it          certify that "an immediate  appeal [to the court of  appeals] may          materially  advance the  ultimate  termination of  the litigation          . . . ."  28 U.S.C.   1292(b).                                          12          American  notice  of lis  pendens, see  Cruz  La Corte  v. Mojica                               ___  _______  ___  ______________     ______          Sandoz,  109 D.P.R. 354 (1980); see also Correa Sanchez v. Regis-          ______                          ___ ____ ______________    ______          trar, 113  D.P.R.  581,  13  O.T. 750,  760  (1982)  ("cautionary          ____          notice"  is recorded in Registry  of Property for primary purpose          of  subjecting property to the remedy obtained in a pending legal          proceeding).   Orders  imposing lis  pendens have been  viewed as                                          ___  _______          "attachments" for  section 1292(a)  purposes.  See  Rosenfeldt v.                                                         ___  __________          Comprehensive Acctg. Serv. Corp., 514 F.2d 607, 609 n.2 (7th Cir.          ________________________________          1975)  (Stevens, J.); but cf.  Beefy King Int'l,  Inc. v. Veigle,                                ___ ___  _______________________    ______          464 F.2d 1102,  1104 (5th  Cir. 1972) (per  curiam) (holding  lis                                                                        ___          pendens analogous to injunction under Florida law).  On the other          _______          hand, a "prohibition against alienation" seems closely akin to an          injunction;  it is directed to appellants personally, enforceable          by contempt, and "'designed to accord or protect,  some or all of          the  substantive relief  sought' in  the action."   Bogosian, 923                                                              ________          F.2d  at 901 (quoting 16 Wright & Miller    3922 at 10, 26).  The                                   _______________          fact  that the September 26  orders are not  captioned as injunc-          tions, and that  the district court and  the parties consistently          treated them  as attachments, is relevant but  not dispositive of          their appealability  under section  1292(a)(1).   See  Manchester                                                            ___  __________          Knitted  Fashions, Inc.  v. Amalgamated  Cotton Garment  & Allied          _______________________     _____________________________________          Industries  Fund, 967 F.2d 688, 690 (1st Cir. 1992) ("we consider          ________________          the  substantial effect of the order . . . in deciding whether an               ___________ ______          appeal is available"  under   1292(a)(1))  (emphasis added);  cf.                                                                        ___          Teradyne, Inc. v. Mostek Corp.,  797 F.2d 43, 47 (1st Cir.  1986)          ______________    ____________          (where  an  order has  attributes of  both  an attachment  and an                                          13          injunction, treatment by district court and parties is "factor to          be  considered" for  purposes of  appealability).   And it  is at          least  conceivable,  notwithstanding the  $1 million  surety bond          posted by Goya, that appellants might be able to assert "serious,          perhaps irreparable" consequences from the prohibition on aliena-          tion of  properties having a  stated value approximating  $7 mil-          lion.                    We need not  delve into the matter, however,  as appel-          lants' constitutional challenge to  the September 26 orders would          fail on  the merits even if appealable  under section 1292(a)(1).          See  Norton v.  Mathews, 427  U.S. 524,  532 (1976)  (where party          ___  ______     _______          requesting dismissal based on  lack of jurisdiction clearly would          prevail  on the  merits,  court may  bypass close  jurisdictional          question).    Appellants'  constitutional challenge  is  based on          Connecticut  v. Doehr, 111 S.  Ct. 2105, which  held that, absent          ___________     _____          exigent  circumstances,  "[a] plaintiff's  interest  in attaching          . . .  property does not justify the burdening of [a defendant's]          ownership rights without a hearing to determine the likelihood of          recovery."   Id. at 2115.   Here, however,  appellants were given                       ___          notice  and a hearing prior  to the issuance  of the September 26          orders.  At the hearing, Goya demonstrated a  reasonable "likeli-          hood of recovery," based on (1) the dates of appellants' purchase          of  the various properties;  (2) sudden  changes in  the debtor's          cash  position around  the times  of these purchases;  (3) appel-          lants' repeated refusals to identify other sources of funding for          their acquisition  of these properties;  (4) appellants' apparent                                          14          attempt  to remove assets from the jurisdiction at about the time          Goya  commenced its  investigation into  the debtor's  connection          with those assets; and (5) the debtor's apparent past involvement          in appellants'  financial affairs.   Appellants, for  their part,          presented little  or no rebuttal evidence,  preferring to reserve          their  right to  present  their case  at trial.   Doehr  does not                                                            _____          require  a trial on the merits prior  to the issuance of a provi-          sional remedy.   Appellants were afforded due process  before the          September 26  orders issued.  See  id.  We  therefore reserve for                                        ___  ___          another day  the question  whether a "cautionary  notice," linked          with  a "prohibition  against  alienation" of  real property,  is          appealable as an injunction under 28 U.S.C.   1292(a)(1).                                          IV                                          IV                                      CONCLUSION                                      CONCLUSION                                      __________                    The appeal  of the  September 4 order of  attachment is          dismissed for  lack of jurisdiction, without  prejudice to appel-          lants'  right to  renew their  constitutional challenge  upon the          conclusion of the pending adversary proceeding.  The due  process          challenge  to the September 26 orders imposing "cautionary notic-          es" and a "prohibition against alienation" of appellants' proper-          ties is denied on the merits.                    Dismissed, in part, for lack of jurisdiction; affirmed,                    _______________________________________________________          in part, on the merits.  Costs to appellees and intervenor.          __________________________________________________________                                          15
