Rosenberg v. Rosenberg

Background

Kevin J. Rosenberg initiated Chapter 7 bankruptcy proceedings seeking to discharge his student-loan debt owed to Educational Credit Management Corporation. The bankruptcy court initially granted summary judgment for Rosenberg and denied summary judgment for Educational Credit Management Corporation. The district court later reversed the grant of summary judgment for Rosenberg, upheld the denial of summary judgment for Educational Credit Management Corporation, and sent the case back to the bankruptcy court for further proceedings.

Rosenberg then asked the bankruptcy court to exclude the testimony and vocational evaluation report of Educational Credit Management Corporation’s expert, Jesse R. Ogren. The bankruptcy court granted that motion on September 21, 2022. Applying Rule 702 of the Federal Rules of Evidence and the standard from Daubert v. Merrell Dow Pharmaceuticals, Inc., the bankruptcy court concluded that Ogren had not shown that his testimony involved specialized knowledge, was based on sufficient facts or data, or resulted from reliable principles and methods. Ogren’s report concluded that Rosenberg could earn $80,000 as a paralegal if he applied for work.

Interlocutory Appeal

Educational Credit Management Corporation sought permission for an interlocutory appeal, meaning an appeal before the bankruptcy case reached a final judgment. Under 28 U.S.C. § 158(a)(3), the district court may hear an appeal from a bankruptcy court’s interlocutory order with permission. The court applied the three-part standard associated with 28 U.S.C. § 1292(b): the order must involve a controlling question of law, there must be substantial grounds for disagreement about that question, and immediate review must potentially advance the end of the litigation.

Educational Credit Management Corporation argued that the controlling legal question was whether Ogren’s testimony was admissible under Rule 702. It also argued that other courts had allowed Ogren to testify using the same or similar methods and that immediate review could prevent the parties from having to conduct two trials. Rosenberg argued that the bankruptcy court had made a fact-based evidentiary decision that was not suitable for immediate review and that an appeal would not materially advance the case.

Court’s Analysis

Judge Kenneth M. Karas concluded that the first requirement was not satisfied. Whether expert testimony is admissible is a fact-dependent decision generally left to the trial court’s discretion. Reviewing the bankruptcy court’s decision would require the district court to study the record and evaluate how the law applied to the facts, rather than decide a pure legal question quickly and independently of the record.

The court also stated that Educational Credit Management Corporation had not shown a substantial ground for disagreement about the governing legal standard. The bankruptcy court had applied Rule 702, and the company challenged that court’s application of settled law to the facts rather than claiming that the bankruptcy court used the wrong legal standard. Because the company could not satisfy the first requirement, the court did not need to decide the second or third requirements. It nevertheless stated that the appeal would likely delay, rather than expedite, the litigation.

Disposition

The court dismissed Educational Credit Management Corporation’s appeal, without prejudice, for lack of jurisdiction and directed the Clerk of Court to close the case.