Free Memorandum and Order - District Court of Delaware - Delaware

Case 1:O7—mc—O0O28-JJF Document 7 Filed O4/O3/2008 Page1 of4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE; :
: Chapter ll
ADVANCED MARKETING SERVICES, INC., : Case No. O6—II480—CSS
a Delaware corporation, et al., : Jointly Administered
Debtors. E Adv. Pro. No. 07-50004-CSS
SIMON & SCHUSTER, INC., a New York :
corporation, :
Plaintiff, ;
v. E Misc. Act. No. 07-28-JJF
ADVANCED MARKETING SERVICES, INC., ;
a Delaware corporation, :
Defendant. E
MEMORANDUM ORDER
Pending before the Court is a Motion For Leave To Appeal
(D.I. I) filed by Plaintiff, Simon & Schuster, Inc. (“Simon &
Schuster"). By its Motion, Simon & Schuster seeks leave to
appeal an Order of the United States Bankruptcy Court for the
District of Delaware denying its application for a temporary
restraining order (“TRO").
The decision of whether to grant leave to file an
interlocutory appeal is informed by the criteria set forth in 28
U.S.C. § I292(b), which governs interlocutory appeals from the
district courts to the courts of appeal. See In Re Magic
Restaurants, Inc., 202 B.R. 24, 25 (D. Del.I996). Leave to file
an interlocutory appeal may be granted when the order at issue
(I) involves a controlling question of law upon which there is

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(2) substantial grounds for difference of opinion as to its
correctness, and (3) if appealed immediately, may materially
advance the ultimate termination of the litigation. Katz v.
Carte Blanche Corporation, 496 F.2d 747, 754 (3d Cir. 1974).
However, these three criteria do not limit the Court’s discretion
to grant or deny an interlocutory appeal. Leave to file an
interlocutory appeal may be denied for reasons apart from this
specified criteria, including such matters as the appellate
docket or the desire to have a full record before considering the
disputed legal issue. Id; Because an interlocutory appeal
represents a deviation from the basic judicial policy of
deferring review until the entry of a final judgement, the party
seeking leave to appeal an interlocutory order must also
demonstrate that exceptional circumstances exist. Magig
Restaurants, 202 B.R. at 26 (citations omitted).
In the Third Circuit, the grant or denial of a motion for
TRO is generally not appealable. Simon v. Robinson, 196 Fed.
Appx. 54, 56 (3d Cir. 2006); Robinson v. Lehman, 771 F.2d 772,
782 (3d Cir. 1985); Richardson v. Kennedy, 418 F.2d 235 (3d Cir.
1969). Indeed, neither this Court, nor any of the parties to
this action have been able to locate any cases in the Third
Circuit allowing for an appeal from the denial of a TRO. Simon &
Schuster suggests that the Bankruptcy Court has already made up
its mind regarding the merits of Simon & Schuster’s reclamation
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claims; however, the Bankruptcy Court’s decision only addressed
the “likelihood” of success on the merits as required for a TRO,
and no final conclusions regarding Simon & Schuster’s ultimate
success were rendered. See University of Texas v. Camenisch, 451
U.S. 390, 394-395 (1981) (noting that it is improper to equate
likelihood of success on the merits with actual success on the
merits); United States v. Local 560, 974 F.2d 315, 330 (3d Cir.
1992) (recognizing that “a decision on a preliminary injunction
is, in effect, only a prediction about the merits of the case").
Moreover, the Court is not persuaded that Simon & Schuster
has established the criteria necessary for justifying an
interlocutory appeal. Simon & Schuster suggests that controlling
questions of law are at issue in this appeal, because the
underlying claim involves a relatively new statutory amendment.
However, the novelty of the legal question at issue is not
dispositive of the question of whether a controlling legal issue
is presented. Rather, the operative inquiry is whether the legal
conclusions, if erroneous, would constitute reversible error on
final appeal. Katz, 496 F.2d at 755. The Bankruptcy Court’s
holdings with respect to its decision denying a TRO are all
preliminary in nature, and therefore, cannot constitute matters
which would be reversible on final appeal. Clark v. K—Mart
Qgrpg, 979 F.2d 965, 969 (3d Cir. 1992) (recognizing that
findings of fact and conclusions of law rendered during
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preliminary injunction stage of the proceedings are not binding).
In addition, the Court is not persuaded that Simon &
Schuster has established either of the remaining prongs required
for interlocutory appeal. A question of first impression, a lack
of judicial authority on a legal question, or a party's
disagreement with a court's decision do not demonstrate a
substantial ground for difference of opinion. Magig, 202, B.R.
at 26; In re Sharps Run Assoc., 157 B.R.776, 779, n.6 (D.N.J.
1993). Further, it appears to the Court that, regardless of the
TRO ruling, the Bankruptcy Court will be required to preside over
additional proceedings related to Simon & Schuster’s claim
whether it be further injunctive proceedings, summary judgment
proceedings, or a trial. In these circumstances, the Court is
not persuaded that an interlocutory appeal would materially
advance the ultimate termination of this litigation.
NOW THEREFORE, IT IS HEREBY ORDERED that the Motion For
Leave To Appeal (D.I. 1) filed by Plaintiff, Simon & Schuster,
Inc. is DENIED.
April 3, 2008 gym
DATE UNI D S ATES ISTRICT JUDGE
4 4