An Unnecessary Discourse on Reviewing Personal Jurisdiction in Arbitration Appeals
In Hines v. Stamos (no PDF currently available), the Fifth Circuit spoke at length about its jurisdiction to review a personal-jurisdiction defense as part of an arbitration appeal. But the discussion was entirely unnecessary. The district court had never ruled on the personal-jurisdiction defense, meaning that there was no order to review. And the panel ultimately remanded the case for the district court to address personal-jurisdiction (as well as subject-matter jurisdiction), which might render the arbitration issue moot.
All of this could have been done without mentioning appellate jurisdiction over the personal-jurisdiction defense. The Fifth Circuit could have simply remanded the case for the district court to address personal jurisdiction in the first instance. And I think doing so would have been the better move—whether personal- and subject-matter-jurisdiction issues are within the scope of interlocutory appeals is a difficult, unsettled issues.
The Unresolved Personal-Jurisdiction Defense in Hines
The relevant facts are straightforward. The plaintiffs in Hines sued several defendants, alleging that the defendants “collaborated with government officials to coerce social-media companies to monitor and censor disfavored speech on their platforms.” The defendants moved to dismiss on several grounds, including a lack of personal jurisdiction and a lack of subject-matter jurisdiction. At the same time, the defendants moved to compel arbitration of the plaintiffs’ claims.
The district court denied the motion to compel arbitration. But it did not rule on the personal- or subject-matter-jurisdiction defenses. The defendants then appealed.
The Scope of the Arbitration Appeal
Decisions refusing to order arbitration under the Federal Arbitration Act are immediately appealable under 9 U.S.C. § 16(a). So the district court’s arbitration order permitted an immediate appeal. The real issue was what other issues were within the scope of this appeal.
The defendants in Hines argued that their personal-jurisdiction defense was also within the scope of appeal. After all, statutes authorizing immediate appeals from a particular type of “order” include all matters “fairly included” in that order. (For some posts on the scope of appealable orders, see Appealable Orders, Not Appealable Documents; Arbitration, Pendent Appellate Jurisdiction, and Appealable “Orders”; and BP & the Broad Scope of § 1447(d) Remand Appeals.)
The Fifth Circuit determined that the personal-jurisdiction defense was within the scope of the arbitration appeal. The court said that it has “consistently concluded that there is appellate jurisdiction on interlocutory appeal to address (or remand for the district court to address) preliminary issues that the district court was required to resolve before issuing the appealable order but failed to do so.” Among those decisions were cases addressing subject-matter jurisdiction in interlocutory appeals, which the court found particularly instructive:
It is undisputed that for purposes of appellate jurisdiction there is no distinction between issues of subject-matter jurisdiction and nonwaived objections to personal jurisdiction. This is because both subject-matter and personal jurisdiction are essential elements of the jurisdiction of a district court, without which the court is powerless to proceed to an adjudication.
(Cleaned up.)
Consistent with those decisions, the Hines panel held that it had “jurisdiction to review the issue of personal jurisdiction because it is ‘fairly included’ in the appealable arbitration orders.” Personal jurisdiction was a “threshold issue.” The parties had fully briefed that issue. And the court thought that it could not affirm the arbitration decision without first addressing personal jurisdiction. “Accordingly, given that personal jurisdiction is a necessary predicate to the district court’s issuing the appealable arbitration orders, and thus ‘fairly included’ in such orders, [the court had] appellate jurisdiction to address it on this interlocutory appeal.”
The Fifth Circuit further explained that it could address personal jurisdiction even though the district court had not yet ruled on it. The Fifth Circuit said that it was not “reaching beyond” the appealable arbitration order but “instead addressing a necessary prerequisite to the district court’s entering such orders.”
Declining to Rule on Personal Jurisdiction
The Fifth Circuit went on to hold that the district court should have addressed personal jurisdiction before addressing arbitrability. In the course of doing so, the court rejected one of the plaintiffs’ arguments that personal jurisdiction existed, concluding that the defendants had not consented to personal jurisdiction by seeking to compel arbitration.
But the Fifth Circuit stopped short of deciding the personal-jurisdiction defense. The district court had not yet addressed the issue, meaning there was nothing for the Fifth Circuit to review. So the court ordered a limited remand for the district court to address personal jurisdiction (and subject-matter jurisdiction) in the first instance.
An Unnecessary Discourse on the Scope of Arbitration Appeals
Hines’s discussion of appellate jurisdiction over personal-jurisdiction issues was entirely unnecessary. For one thing, the court never actually decided the issue that it spent so long saying it had jurisdiction to decide. Granted, the Fifth Circuit rejected one of the plaintiffs’ arguments (that moving to compel arbitration waived the personal-jurisdiction defense). But that doesn’t amount to a full decision on the matter.
This isn’t to say that Hines didn’t reach the correct outcome in remanding the case. It makes complete sense for a district court to address its jurisdiction before deciding arbitration. So the court of appeals was well within reason in remanding the action for the district court to address the issue in the first instance.
But the same outcome could have been reached without even mentioning appellate jurisdiction over personal jurisdiction. All the Fifth Circuit had to say was that the district court abused its decisional-sequencing discretion by deciding arbitrability before personal jurisdiction. That would have been enough to vacate the denial of arbitration and remand for a decision on jurisdiction.
This discourse on the scope of arbitration appeals is also troubling. Courts are all over the map when it comes to whether jurisdictional issues are within the scope of interlocutory appeals. And a decision like Hines adds fuel to the argument that jurisdiction is always within the scope of those appeals. The Fifth Circuit called jurisdiction a threshold issue that must be addressed before turning the appealable issues. Taken to its extreme, that reasoning would permit review of personal and subject-matter jurisdiction anytime a party appeals before the end of district court proceedings. That would be a massive expansion of the scope of interlocutory appeals.
Hines v. Stamos, 2024 WL 3580618 (5th Cir. July 30, 2024), available at 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 Ashley v. Clay County, the Fifth Circuit held that a municipal defendant could appeal a district court’s refusal to resolve an immunity defense despite the district court’s ordering arbitration.
Continue reading....
In In re Lion Air Flight JT 610 Crash, the Seventh Circuit reviewed a preemption issue as part of a certified appeal that concerned the right to a jury trial. The district court had thought that only the jury-trial issue warranted an immediate appeal under 28 U.S.C. § 1292(b). But the Seventh Circuit concluded that the […]
Continue reading....
In Smith v. Spizzirri, the Supreme Court held that district courts must stay—not dismiss—an action if the district court orders arbitration and a party requests a stay. The decision resolves a long-standing split over the ability to dismiss actions after ordering arbitration. The decision also has implications for appellate jurisdiction. As I’ve explained on this […]
Continue reading....
Courts have held that when an “order” is appealable—say, via a certified appeal under 28 U.S.C. § 1292(b) or an exception to 28 U.S.C. § 1447(d)’s bar on remand appeals—the entirety of the district court’s order is within the scope of appeal. So when a district court certifies an order for an immediate appeal under § 1292(b), the […]
Continue reading....
In Coinbase, Inc., v. Bielski, the Supreme Court held that district courts must stay proceedings on the merits once a party appeals from the denial of arbitration. The Court determined that 9 U.S.C. § 16—which authorizes these appeals—was enacted against Griggs v. Provident Consumer Discount Co.’s background principal that a district court loses control over all […]
Continue reading....Recent Posts
Perlman Appeals in the Grand Jury Context In In re Grand Jury Subpoeans Dated Sep. 13, 2023, the Second Circuit held that the target of a grand jury investigation could appeal an order directing the target’s attorneys to disclose documents over a claim of attorney-client privilege. The order was appealable via the Perlman doctrine, which generally […]
Continue reading....
In Fleming v. United States, the Eleventh Circuit became the fifth court of appeals to reject pure Bivens appeals. The court held that federal officials cannot immediately appeal the Bivens question without also appealing the denial of qualified immunity. Unlike some of the prior decisions, this one was unanimous. And it puts the government’s record […]
Continue reading....
Last month produced decisions involving a variety of appellate-jurisdiction issues. The Fifth Circuit decertified a § 1292(b) appeal. Judge Pillard of the D.C. Circuit explained that appellate “standing” does not require re-establishing standing in the court of appeals. The Sixth Circuit said that qualified immunity and an action’s merits are intertwined, which suggests (perhaps unintentionally) […]
Continue reading....
A new cert petition asks whether the denial of derivative sovereign immunity is immediately appealable via the collateral-order doctrine.
Continue reading....
Disclosure: I filed an amicus brief in the Fourth Circuit in support of rehearing its decision in this case and discussed the cert petition with the petitioner’s counsel. Last week, the Supreme Court granted certiorari in Parrish v. United States. The case asks if a would-be appellant must file a second notice of appeal after […]
Continue reading....