Ditching its initial holding that abandoning unresolved claims creates a final decision, the Eleventh Circuit treated a purported abandonment as a successful attempt to amend a complaint.
January 11, 2024
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 not see a meaningful difference difference between abandoning an unresolved claim and voluntarily dismissing it.
Yesterday—and on its own initiative—the Eleventh Circuit issued a substitute opinion in Lowery. This time, the court held that the plaintiffs had effectively amended their complaint to remove the unresolved claim. And amending a complaint to remove unresolved claims is a perfectly acceptable way to achieve a final decision.
The new opinion says nothing about abandoning claims. I take this as an indication that future Eleventh Circuit panels might not welcome the abandoning tactic that Lowery initially approved. But the decision also suggests some valuable pragmatism in treating attempts to eliminate unresolved claims as attempts to amend a complaint.
The Unresolved Claim in Lowery
Simplifying only a little, Lowery involved several claims (including a counterclaim) concerning insurance coverage. At summary judgment, the district court resolved nearly all of the claims against the defendant. All that remained was the plaintiffs’ claim for bad-faith refusal to defend.
Satisfied with what they had achieved, the plaintiffs filed a “notice of intent to abandon” the one remaining claim:
The notice stated that the Lowerys had “elect[ed] to forego” the penalties and fees they were seeking in count three and were “abandon[ing]” that count. The Lowerys also filed a “request for final judgment” under Federal Rule of Civil Procedure 58(d). The request alleged that “[n]o further matters [we]re before the District Court for resolution” because the Lowerys had abandoned the only count not resolved by the partial summary judgment. The Lowerys asked that the partial summary judgment “be made the final judgment of the court.”
The defendant didn’t oppose this notice. The district court accordingly entered a “final order and judgment,” finding that “no additional claims for adjudication remain[ed] pending” and designating the partial summary-judgment order the “final judgment of the Court.”
The Appellate-Jurisdiction Issue in Lowery
This abandoning of an unresolved claim created an appellate-jurisdiction issue. That’s because the Eleventh Circuit has recently been adamant in holding that litigants cannot voluntarily dismiss discrete claims under Federal Rule of Civil Procedure 41.
Rule 41 allows for the voluntary dismissal of “actions” by notice, stipulation, or court order. And the Eleventh Circuit has repeatedly said that the rule’s use of the term “action”—not “claim”—means that litigants can dismiss only entire actions under Rule 41. So when litigants try to create a final decision by voluntarily dismissing unresolved claims, the Eleventh Circuit has dismissed those appeals for a lack of a final decision. (See my posts “Finality After Rule 41 Dismissals of Claims & Actions and More on Rule 41 Dismissals of Actions and Claims for more on some of these decisions.)
The Eleventh Circuit accordingly issued jurisdictional questions to the parties in Lowery. They jointly responded with a request that the Eleventh Circuit treat the notice of intent to abandon as a motion to amend the complaint to drop the unresolved count.
The First Lowery Decision: Finality via Abandonment
The Eleventh Circuit initially held that a final, appealable decision existed because the plaintiffs had abandoned the unresolved claim. The court didn’t mention any of its decisions on voluntary dismissals. It instead relied on Fifth Circuit’s decision in Mid City Management Corp. v. Loewi Realty Corp., which held that abandoning unresolved claims in response to an inquiry from the district court judge produces a final decision. The Lowery panel thought that “a written notice abandoning a claim without objection by the opposing party accomplishes the same thing.” So whether initiated by the district court or the parties, abandoning unresolved claims results in a final, appealable decision.
The Second Lowery Decision: Finality via Amendment
I was critical of the first Lowery decision—in both a blog post and as quoted in an article by Alison Frankel. To be sure, I liked the result. The plaintiffs were willing to abandon the only unresolved claim. So district court proceedings were over. It makes complete sense to hold that there was a final decision.
But I didn’t see a meaningful difference between voluntarily dismissing a claim and abandoning it. In the cases in which litigants purported to use Rule 41 to voluntarily dismiss unresolved claims, their conduct could easily be seen as abandoning those claims. And if we characterized those actions as abandoning unresolved claims, the first Lowery opinion suggests that there would have been a final decision.
The Eleventh Circuit apparently had second thoughts about the first Lowery decision. Yesterday, it “sua sponte vacate[d]” its original opinion and substituted a new one.
This time, the Eleventh Circuit held that the plaintiffs had effectively amended their complaint. The Eleventh Circuit has previously said that amendments are the “most obvious” way to eliminate unresolved claims without dismissing an entire action. The lack of an explicit motion did not matter; the plaintiffs effectively sought an amendment, and the court of appeals could construe their request as such. And the district court’s entry of a final judgment revealed an intent to allow the plaintiffs to drop the one remaining claim.
A Tension Removed & a Pragmatic Path Revealed
The new Lowery opinion eliminates the tension between abandoning and voluntarily dismissing claims. But I hope the new opinion has not eliminated the pragmatism of the original. When the parties no longer want to litigate unresolved claims, courts should not stand in the way of eliminating those claims. Perhaps the new Lowery opinion suggests a greater willingness to treat other attempts at eliminating unresolved claims—such as attempts to voluntarily dismiss them—as essentially efforts to amend the complaint.
Lowery v. AmGuard Insurance Company, 2024 WL 108751 (11th Cir. Jan. 10, 2024), available at the Eleventh Circuit and Westlaw