In two recent appeals, courts held that a purported final judgment was defective—and no final decision existed—due to unresolved crossclaims.
March 18, 2024
The classic definition of a “final decision” is one that ends litigation on the merits and leaves nothing for the district court to do but enforce the judgment. So when a district court enters what it calls a “final judgment” and closes a case, it would seem that a final decision exists. But what if the district court (and the parties) have overlooked one or more claims?
In two recent cases—Shipman v. Aquatherm L.P. and Amerisure Insurance Co. v. Auchter Co.—courts of appeals held that the existence of unresolved crossclaims precluded a final decision, despite the district court’s entry of a judgment.
Finality & Unresolved Claims
In both cases, the district courts had resolved some of the claims (presumably the ones the parties cared about most). But those courts had not expressly disposed of some crossclaims. The district courts nevertheless each entered a judgment and considered the actions finished. And the aggrieved parties appealed.
The courts of appeals dismissed these appeals for a lack of appellate jurisdiction. The explanation was simple. A final decision generally does not exist until the district court resolves all claims. In both Shipman and Amerisure Insurance, the district court had not resolved all claims. Nor had the district courts entered a partial final judgment under Federal Rule of Civil Procedure 54(b). And the entry of a judgment was insufficient to create a final decision; the district courts had to actually dispose of all claims.
Final If Finished
These decisions are consistent with the predominant approach to finality: there is no final decision until all claims are resolved. But I’m not sure I agree with this approach when the district court has resolved some claims and thinks that it is done with the action.
To be sure, the district court’s judgment is defective—it did not resolve one or more of the parties’ claims. But that’s a problem with the district court’s resolution of the action, not the finality of the district court’s decision. And it’s a problem that parties with overlooked claims can raise. That is, a party with an unresolved claim could move to alter or reopen the judgment. Or that party can raise the oversight on appeal. And failure to object to the district court’s overlooking a claim could be treated as an abandonment of that claim.
This isn’t to say that a district court can simply make a decision final by declaring it so. It means only that once the district court is finished, a final decision exists. At that point, aggrieved litigants can appeal and raise any objection to the district court’s resolution of the action. Switching to this “final if finished” approach to finality might seriously simplify this overly complicated area of law.
A Note on Abandoning Claims at Oral Argument
One last note: in Amerisure Insurance, the Eleventh Circuit said that it would not allow a party to fix the finality problem by abandoning the unresolved claims at oral argument. Other courts have allowed litigants to do so. But the Eleventh Circuit doubted that this abandonment at oral argument was permissible. And even if it was, the court declined to accept the abandonment.
Shipman v. Aquatherm L.P., 2024 WL 957981 (3d Cir. Mar. 6, 2024), available at the Third Circuit and Westlaw
Amerisure Insurance Co. v. Auchter Co., 2024 WL 980089 (11th Cir. Mar. 7, 2024), available at the Eleventh Circuit and Westlaw