Manufacturing Finality via a Conditional Dismissal
In In re Municipal Stormwater Pond Coordinated Litigation, a split Eighth Circuit held that it lacked jurisdiction to review the resolution of some claims when the parties conditionally dismissed other claims.
The parties agreed that, should the Eighth Circuit reverse, the voluntarily dismissed claims could be reinstated. But if the Eighth Circuit affirmed, the voluntarily dismissed claims were forever lost.
A majority of the Eighth Circuit held that this conditional dismissal did not result in a final, appealable decision. Judge Kelly dissented, contending that the dismissal was not actually conditional because the district court did not approve of the dismissal’s terms.
The Voluntary Dismissal in Municipal Stormwater
Simplifying a bit, Municipal Stormwater stemmed from several cities’ claims against refiners and manufacturers of tar. The district court dismissed the cities’ claims against the refiners. That left only claims against four manufacturers.
The cities wanted to appeal this dismissal. But the district court refused refused to enter a partial judgment under Federal Rule of Civil Procedure 54(b).
So the cities and manufacturers agreed to voluntarily dismiss the remaining claims. This dismissal, however, was conditional. The parties agreed that if the Eighth Circuit reversed the dismissal of claims against the refiners, the cities could reinstate their claims against the manufacturers. In that scenario, the statute of limitations would be tolled, and the manufacturers could not raise a timeliness defense. But if the Eighth Circuit affirmed, the cities would “unconditionally release and forever discharge” the manufacturers.
Appeals After Conditional Dismissals
The Eighth Circuit held that the parties had impermissibly tried to manufacture an interlocutory appeal.
Conditional dismissals are one kind of manufactured finality. Like other kinds of manufactured finality, the district court either issues an interlocutory decision that affects or effectively decides claims, or the court expressly resolves some (but not all) of the claims. The parties then agree to dismiss all unresolved claims.
That dismissal is often with prejudice. But it also comes with conditions. Most commonly, the parties agree that if the court of appeals reverses, the voluntarily dismissed claims will spring back to life. This might require waiving defenses that would prevent reinstating the voluntarily dismissed claims, like a statute of limitations.
Nearly all courts hold that these conditional dismissals do not result in a final decision. Courts reason that district court proceedings are not truly over, as the voluntarily dismissed claims might pop back up in the future. Conditional dismissals also circumvent the established avenues for interlocutory appeals, particularly 28 U.S.C. § 1292(b) and Rule 54(b).
Reiterating these reasons, the Eighth Circuit dismissed the appeal in Municipal Stormwater.
Judge Kelly’s Dissent: Not Really a Conditional Dismissal
Judge Kelly dissented. She agreed with the majority that parties could not appeal after a conditional dismissal. But she thought that the dismissal in Municipal Stormwater was not actually conditional.
In other cases involving conditional dismissals, the district court was involved and approved the terms of the dismissal. But in Municipal Stormwater, the parties noticed the dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). So the district court wasn’t involved. The parties could not, by agreement, control the district court’s future action. And the district court was unlikely to reinstate the voluntarily dismissed claims.
The terms of the stipulated dismissal were thus irrelevant. That meant the dismissal involved a different kind of manufactured finality: the voluntary, with-prejudice dismissal of unresolved claims. And courts (including the Eighth Circuit) hold that these dismissals result in a final decision.
In re Municipal Stormwater Pond Coordinated Litigation, 2023 WL 4612995 (8th Cir. July 19, 2023), available at the Eighth Circuit and Westlaw
Final Decisions PLLC is an appellate boutique and consultancy that focuses on federal appellate jurisdiction. We partner with lawyers facing appellate-jurisdiction issues, working as consultants or co-counsel to achieve positive outcomes on appeal. Contact us to learn how we can work together.
Learn More ContactRelated Posts
In United States v. Wilson, the Ninth Circuit permitted the government to appeal a discovery order in a criminal case after the government asked the district court to dismiss the indictment to facilitate an appeal. Although the order was interlocutory, the Ninth Circuit could review it under 18 U.S.C. § 3731. That’s because § 3731 doesn’t require […]
Continue reading....
In Jones v. U.S. Merit Systems Protection Board, the Fourth Circuit reviewed a decision of the Merit Systems Protection Board even though the petitioners voluntarily dismissed some of their theories of relief. That voluntary dismissal was with prejudice, which made it highly unlikely that the voluntarily dismissed theories would ever resurface. So the petitioners were […]
Continue reading....
In New York State Telecommunications Association v. James, the Second Circuit split over an attempt at manufacturing finality. The district court had granted a preliminary injunction after concluding that federal law preempted a New York state law. The parties then stipulated to entry of a final judgment. A majority of the Second Circuit determined that […]
Continue reading....
Courts have long held that the merger doctrine does not apply when an action is dismissed for a failure to prosecute. In Marquez v. Silver, the Second Circuit extended this holding to actions dismissed as a discovery sanction. The court explained that sanction dismissals carry the same risk of strategic behavior as failure-to-prosecute dismissals. The […]
Continue reading....
Last October, the Eleventh Circuit held in Lowery v. Amguard Insurance Co. that litigants can create a final decision by abandoning unresolved claims. As I noted at the time, this holding stood in some tension with the Eleventh Circuit’s rule that litigants cannot voluntarily dismiss discrete claims. And although I liked the outcome, I did […]
Continue reading....Recent Posts
Injunction appeals have been in the spotlight of late. We’ve seen a few recent decisions on appeals from temporary restraining orders. And this month has already produced three cases involving effective denials of preliminary injunctions. One of these cases raised a question about the test for effective—and thus appealable—injunction denials. Under the Supreme Court’s decision […]
Continue reading....
In Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga, the en banc Fifth Circuit held that 28 U.S.C. § 1447(d) does not bar review of waiver-based remands. In so holding, the court overruled its decision in In re Weaver.
Continue reading....
In Amazon.com Services LLC v. NLRB, the Fifth Circuit split over whether a party could appeal from the district court’s delay in deciding a preliminary-injunction motion. The would-be appellant sought to enjoin an order that it file a brief in an NLRB proceeding. When the deadline for that brief arrived, the district court had not […]
Continue reading....
April saw more decisions on whether temporary restraining orders were appealable injunctions. The Eleventh Circuit addressed the immediate appealability of Florida’s litigation privileges. And another court of appeals held that defendants cannot immediately appeal from the denial of a church-autonomy defense. Let’s start, however, with a particularly interested decision on what counts as a claim […]
Continue reading....
In Diaz v. FCA US LLC, the Third Circuit split over whether a district court had resolved distinct claims for purposes of Federal Rule of Civil Procedure 54(b). The majority concluded that the district court had resolved only a distinct theory of recovery, not a distinct claim. Dissenting, Judge Phipps argued that claims are defined […]
Continue reading....