The Week in Federal Appellate Jurisdiction: May 30–June 5, 2021

Last week, the Eighth Circuit said that an appeal from a refusal to compel arbitration encompasses all issues resolved alongside that refusal, even those unrelated to arbitration. So the court could address the propriety of class-action allegations as part of an arbitration appeal. The First Circuit held that the Bankruptcy Rules—not the Civil Rules—apply to cases consolidated under § 1334(b). So bankruptcy’s shorter deadline for reconsideration motions—and thus shorter deadline for delaying the start of the appeal window—applies. And the Sixth Circuit said that appeal waivers do not affect the court’s statutory appellate jurisdiction. Plus an improper qualified-immunity appeal and using a notice of appeal to narrow the scope of an appeal.

• The Eighth Circuit Reviewed the Propriety of Class Allegations as Part of an Arbitration Appeal
• The First Circuit Held That the Bankruptcy Rules—Including the Rules on Delaying the Time to Appeal—Apply in § 1334(b) Actions
• The Sixth Circuit Clarified that Appeal Waivers Do Not Affect Appellate Jurisdiction
• Quick Notes

The Eighth Circuit Reviewed the Propriety of Class Allegations as Part of an Arbitration Appeal

In Donelson v. Ameriprise Financial Services, Inc., the Eighth Circuit held that it could review a district court’s refusal to strike class-action allegations as part of an appeal from a refusal to compel arbitration.

Simplifying a bit, Donelson involved a purported securities class action. The plaintiff brought claims against a variety of defendants, including a brokerage. And the plaintiff sought to represent a class of plaintiffs with similar claims. The defendants moved to both strike the class-action allegations and compel arbitration. The district court denied both requests, and the defendants appealed.

Appellate jurisdiction over the refusal to compel arbitration was secure under 9 U.S.C. § 16(a). But the defendants also wanted the Eighth Circuit to review the denial of their motion to strike the class-action allegations.

The Eighth Circuit held that it had jurisdiction to do so. Section 16(a) provides appellate jurisdiction to immediately review “an order” refusing to compel arbitration. Appellate jurisdiction thus extended to the entire order, not just the part that refused to compel arbitration. Because the district court refused to compel arbitration and strike the class allegations in a single order, the Eighth Circuit could review both issues via § 16(a).

Note, this is similar reasoning to that the Supreme Court has used in interpreting the scope of appeals under 28 U.S.C. § 1292(b) and 28 U.S.C. § 1447(d). Both of those statutes provide for appellate jurisdiction over certain orders. And the Court has held that jurisdiction extends to the entire order, not just the parts of it that give an appellate court jurisdiction.

Donelson v. Ameriprise Financial Services, Inc., 2021 WL 2231396 (8th Cir. June 3, 2021), available at the Eighth Circuit and Westlaw.

The First Circuit Held That the Bankruptcy Rules—Including the Rules on Delaying the Time to Appeal—Apply in § 1334(b) Actions

In In re Lac-Mégantic Train Derailment Litigation, the First Circuit held that the Federal Rules of Bankruptcy Procedure—not the Federal Rules of Civil Procedure—apply to cases in a district court under 28 U.S.C. § 1334(b). So a motion to reconsider filed 28 days after the district court’s final judgment did not delay the start of the appeal clock.

Simplifying a fair bit, Lac-Mégantic involved a number of claims related to a train derailment. One defendant, which was operating the train at the time of the derailment, filed for bankruptcy in the District of Maine. That district court then consolidated all claims related to the derailment under 28 U.S.C. § 157(b)(5). That provision “allows a district court having jurisdiction over a bankruptcy proceeding to order the transfer to it of any ‘personal injury tort and wrongful death claims’ related to the bankruptcy proceeding.” Eventually, all that remained were claims against one rail carrier, and the district court dismissed those claims for a lack of jurisdiction. The plaintiffs sought reconsideration of that dismissal 28 days later. The district court denied that motion a few months later, and the plaintiffs appealed.

The First Circuit dismissed the appeal as untimely. Timeliness turned entirely on which set of procedural rules governed the proceedings. Civil litigants normally have 30 days after a final judgment to file their notice of appeal. Both the Civil Rules and Bankruptcy Rules provide that a timely motion to reconsider delays the start of the time to appeal—it begins to run only after the court resolves the reconsideration motion. But the rules differ on what amounts to a timely motion. Civil Rule 59(e) gives litigants 28 days to seek reconsideration. Bankruptcy Rule 9023 gives them only 14 days. And an untimely motion for reconsideration does not delay the running of the appeal clock. So the plaintiffs’ motion for reconsideration in Lac-Mégantic—and thus their appeal—was timely under the Civil Rules but late under the Bankruptcy Rules.

The First Circuit held that the Bankruptcy Rules “govern the procedures in a case over which a federal court exercises section 1334(b) jurisdiction as one ‘related to’ a pending bankruptcy proceeding.” So the plaintiffs’ motion for reconsideration—and their appeal—was untimely.

Thanks to Howard Bashman for sending me this case.

In re Lac-Mégantic Train Derailment Litigation, 2021 WL 2217454 (1st Cir. June 2, 2021), available at the First Circuit and Westlaw.

The Sixth Circuit Clarified that Appeal Waivers Do Not Affect Appellate Jurisdiction

In United States v. Hack, the Sixth Circuit enforced an appeal waiver to bar a challenge to a restitution order. In the course of doing so, the Sixth Circuit noted that appeal waivers do not affect the court’s appellate jurisdiction. The court recognized that its caselaw on the matter “is not a model of clarity.” But most of the Sixth Circuit’s cases—along with most other circuits’ cases—treat appeal waivers as claim-processing rules. So a valid appeal waiver does not affect the jurisdiction of a court of appeals.

United States v. Hack, 2021 WL 2253236 (6th Cir. June 3, 2021), available at the Sixth Circuit and Westlaw.

Quick Notes

In Taylor v. Ways, the Seventh Circuit rejected several attempts to challenge the factual basis for an immunity denial. The case involved a former police officer’s race-discrimination claims against a sheriff’s office. The district court denied one defendant’s request for qualified immunity, as a reasonable jury could find that the defendant acted out of racial animus and caused the plaintiff’s firing. That defendant nevertheless appealed. And in that appeal, he challenged both the legal and factual basis for the immunity denial. The Seventh Circuit refused to consider the factual challenges, including whether the defendant caused the plaintiff’s termination and whether the defendant acted out of racial animus. Considering the facts that the district court thought a reasonable jury could find, the court also affirmed the denial of immunity. And interestingly, the Seventh Circuit questioned whether proximate-cause issues are ever appropriate topics in appeals from the denial of qualified immunity.

Taylor v. Ways, 2021 WL 2217484 (7th Cir. June 2, 2021), available at the Seventh Circuit and Westlaw.

And in Sanders v. Christwood, the Fifth Circuit said that a party could not appeal the denial of a recusal motion when the notice of appeal designated only a subsequent summary-judgment decision. Federal Rule of Appellate Procedure 3(c) requires that a notice of appeal designate (among other things) the appealed order or judgment. And several courts have held that a notice designating one particular decision implicitly forfeits an appeal over other decisions. Pending amendments to Rule 3(c) will abrogate this practice of using the decision-designation requirement to limit the scope of appeal. These amendments can’t come soon enough.

Sanders v. Christwood, 2021 WL 2232483 (5th Cir. June 2, 2021), available at the Fifth Circuit and Westlaw.