Can a party sandbag an appeal by waiting until rehearing to invoke a statutory protection it earlier promised not to use? That was the sharp question lurking in MOAC Mall Holdings LLC v. Transform Holdco LLC, decided April 19, 2023.
The setup: Sears filed for Chapter 11 and sold assets to Transform, including rights to assign leases. When Transform tried to assign a Mall of America lease over MOAC's objection, MOAC appealed. Transform expressly represented it wouldn't invoke § 363(m)'s protection for good-faith purchasers.
MOAC won on the merits in district court. Then Transform reversed course, invoked § 363(m) on rehearing, and the district court dismissed, treating the provision as jurisdictional under Second Circuit precedent.
The Supreme Court unanimously rejected that characterization. Justice Jackson, writing for the Court, applied the clear-statement rule: a provision is jurisdictional only if Congress clearly says so. Section 363(m) never mentions jurisdiction, presupposes courts will hear appeals, and contains exceptions inconsistent with jurisdictional status.
The practical upshot matters. Because § 363(m) isn't jurisdictional, courts can now apply waiver, forfeiture, and estoppel. Parties who promise not to invoke it, then change their minds, may find the door closed.