The Sixth Circuit dismissed an appeal when the plaintiff voluntarily dismissed her unresolved claims without prejudice. But the court avoided a finality trap.
July 22, 2021
The past several years have seen the courts of appeals struggling with their jurisdiction when plaintiffs voluntarily dismiss some of their claims without prejudice. Concerned that these plaintiffs are trying to manufacture an interlocutory appeal, the courts have developed a variety of rules on appealability. The Fifth Circuit, for example, requires that the would-be appellant obtain a partial judgment under Federal Rule of Civil Procedure 54(b). The Ninth Circuit requires meaningful district court involvement in the voluntary dismissal. And the Eleventh Circuit simply holds that the without-prejudice voluntary dismissal creates a final, appealable decision.
The Sixth Circuit has now weighed in. In Rowland v. Southern Health Partners, Inc., a divided panel held that the without-prejudice voluntary dismissal of all outstanding claims did not create a final decision. The case involved a fairly blatant attempt at manufacturing an interlocutory appeal, with the plaintiff hoping to reinstate her voluntarily dismissed claims should she succeed on appeal. A majority of the court rejected this effort. Dissenting, Judge Moore would have held that the plaintiff had sufficiently imperiled her voluntarily dismissed claims to create a final decision.
The Rowland Litigation
Rowland involved several claims against a company that provided medical services at a jail and some of the company’s employees. The plaintiff was injured while incarcerated, and she pleaded both federal civil-rights claims and state-law negligence claims. At summary judgment, the district court dismissed all but two of the plaintiff’s claims. The district court also struck the plaintiff’s request for punitive damages.
The case was set to proceed to trial on the two remaining claims. But at a status conference, the parties told the district court that they had agreed to voluntarily dismiss those claims without prejudice. The parties did so to facilitate an appeal from the district court’s decision dismissing most of the plaintiff’s claims. The district court accordingly entered an order dismissing the two remaining claims without prejudice. The plaintiff then appealed both the summary-judgment decision and the order dismissing the remaining claims.
No Risk, No Final Decision
A majority of the Sixth Circuit held that the voluntary dismissal had not created a final, appealable decision.
The Problems With Without-Prejudice Voluntary Dismissals
Courts often say that dismissals without prejudice are not final. That’s not quite right; lots of dismissals without prejudice—such as dismissals for a lack of jurisdiction—are final. But in some cases, a dismissal without prejudice does not mark the end of district court proceedings. A dismissal with leave to amend, for example, is normally without prejudice, as an action might continue in the district court if the plaintiff amends its complaint.
Voluntary dismissals without prejudice present their own problems. Appellate courts are often suspicious of these dismissals, as litigants sometimes use them to manufacture an interlocutory appeal. When an action involves multiple claims, the resolution of some (but not all) claims is normally not final or appealable. The litigants must wait until all claims are resolved before appealing. If the resolution of some claims warrants an immediate appeal—say, because the resolved claims involve issues or parties unrelated to the remaining claims—the district court can enter a partial judgment under Federal Rule of Civil Procedure 54(b).
When a district court resolves some claims in a multi-claim action, litigants don’t always take the Rule 54(b) route. Perhaps they’re unwilling to seek a partial judgment, unable to obtain one, or unaware that the rule exists. Whatever the reason, they instead try to create a final judgment by voluntarily dismissing all remaining claims without prejudice. The plan is to create a final decision via the voluntary dismissal, appeal the district court’s decision, and then reinstate the voluntarily dismissed claims. Granted, there might be issues in pursuing the reinstated claims, such as preclusion or statute-of-limitations defenses. But the without-prejudice dismissal permits the plaintiff to try and reinstate the voluntarily dismissed claims.
Courts normally see this tactic for what it is: an attempted end-run around the final-judgment rule. And many courts will rebuff litigants’ attempts to use this tactic, holding that the without-prejudice voluntary dismissal precludes the district court’s decision from being final.
The Manufactured Appeal in Rowland
That’s precisely what happened in Rowland.
The Sixth Circuit has already held that without-prejudice voluntary dismissals normally do not create final, appealable decisions. In 2013’s Page Plus of Atlanta, Inc. v. Owl Wireless, LLC, the Sixth Circuit held that “a party’s conditional dismissal of unresolved claims, in which the party reserves the right to reinstate those claims if the case returns to the district court after an appeal of the resolved claims,” is not a final decision under 28 U.S.C. § 1291. After the district court in Page Plus resolved all but one of the parties’ claims, the parties stipulated to dismiss the last one without prejudice. The parties intended to appeal the district court’s decision and, if the case was remanded after the appeal, reinstate the voluntarily dismissed claim.
In holding that there was no final decision, Page Plus noted that the final-judgment rule exists to prevent piecemeal review of district court decisions. Allowing appeals after these conditional dismissals would thus contravene the final-judgment rule, as parties could pause district court proceedings anytime they wanted immediate appellate review of a decision resolving a claim. Allowing these appeals would also undermine Rule 54(b), which exists to permit appeals from decisions resolving some (but not all) claims in a multi-claim action.
Rowland, the Sixth Circuit thought, was just like Page Plus. The parties had agreed to voluntarily dismiss the remaining claims without prejudice, and the plaintiff intended to reinstate those claims after the appeal. Rowland thus presented a clear attempt at manufacturing an appeal. So just like in Page Plus, the voluntary dismissal did not result in a final, appealable decision.
The court noted that it had recognized two situations in which a without-prejudice voluntary dismissal might create a final decision. The first is when the dismissal creates a risk of new defenses to the dismissed claims, such as preclusion or a statute of limitations. Second is when the voluntarily dismissed claims must be filed in a new action, obviating any concern over multiple appeals in a single action. Rowland fit neither of these. The voluntary dismissal created no new risks for the claims, and the plaintiff intended to reinstate the claims in the same action.
Judge Moore’s Dissent
Judge Moore dissented. As she read the record, the plaintiff had assumed sufficient risks in voluntarily dismissing her claims. Granted, the plaintiff believed that no new defenses would apply. But the district court’s order did not provide as much, and the defendants had not agreed to waive any timeliness issues. The defendants instead argued on appeal that any reinstated claims would be untimely. And the district court did not authorize the plaintiff to reinstate her claims in the same action. Although the plaintiff believed that she could reinstate the claims in the same action, that belief did not control finality.
Further, although the plaintiff asked the Sixth Circuit to reinstate her voluntarily dismissed claims, the court could not do so. The plaintiff had asked for and received that dismissal. She accordingly could not challenge it on appeal. The plaintiff had thus accepted the risk that a future court might bar her from refiling the voluntarily dismissed claims.
That all being said, Judge Moore cautioned litigants against using without-prejudice voluntary dismissals to secure an appeal. For one thing, the law in this area is messy. And the Supreme Court might step in and squarely prohibit the practice. After all, the Court held in Microsoft Corp. v. Baker that plaintiffs cannot voluntarily dismiss their claims and then appeal an adverse class-certification decision. One of the reasons for this holding was that the practice undermined Rule 23(f). Similar reasoning could apply to the without-prejudice voluntary dismissal of some claims, which undermines Rule 54(b).
No Finality Trap
Happily, the majority and dissent agreed that the Rowland plaintiff had not fallen into a finality trap. The trap exists when a court prevents litigants from correcting the finality problem that a voluntary dismissal created. We’ve seen this recently in the Fifth and Ninth Circuits, which have decisions that effectively barred litigants from ever appealing a district court’s decision.
That wasn’t the case in Rowland. The plaintiff had several options. She could change the voluntary dismissal to be with prejudice, obviating any concern over refiling. She could ask the district court to vacate the voluntary dismissal and and then seek a partial judgment under Rule 54(b). Or she could ask the district court to vacate the voluntary dismissal and litigate the action to a final judgment. Whatever the avenue, the plaintiff was not forever barred from appellate review.
Thanks to Howard Bashman and Michael Solimine for sending this case my way.
Rowland v. Southern Health Partners, Inc., 2021 WL 3076744 (6th Cir. July 21, 2021), available at the Sixth Circuit and Westlaw.