Perceived urgency for a ruling on a preliminary-injunction led the Fifth Circuit to conclude that the district court’s delay in deciding amounted to an appealable denial.
April 15, 2024
In In re Fort Worth Chamber of Commerce, a divided Fifth Circuit held that the delay in resolving a preliminary-injunction motion effectively denied that motion. The court thought that the context of the case—impending changes to regulations—required quick action. So when the district court did not decide the preliminary-injunction request by the plaintiffs’ desired date, the Fifth Circuit treated that delay as an appealable denial of a preliminary injunction under 28 U.S.C. § 1292(a)(1).
The Preliminary-Injunction Request in Fort Worth Chamber of Commerce
The Fifth Circuit reached this conclusion in an odd context: a mandamus petition that challenged a transfer order.
Simplifying a bit, a group of plaintiffs challenged rules issued by the Consumer Financial Protection Bureau. Along with their complaint, the plaintiffs sought a preliminary injunction against the new rules. The plaintiffs also requested an expedited ruling on the injunction, as the new rules would soon take effect.
The district court did not rule by the plaintiffs’ requested deadline. It instead invited the Bureau to seek a transfer of the case to the District of Columbia Circuit. In response, the plaintiffs reiterated their request for an expedited ruling. They also told the district court that if it did not rule within a few days, the plaintiffs would consider the injunction denied.
The Bureau took up the district court’s invitation and moved for a transfer. But before the district court ruled on that transfer request, the plaintiffs filed a notice of appeal. Shortly thereafter, the district court granted the transfer.
The plaintiffs then filed a mandamus petition asking the Fifth Circuit to hold that the district court lacked jurisdiction to transfer the case.
An Effective Denial of a Preliminary Injunction
A majority of the Fifth Circuit held that mandamus was appropriate. Key to that decision was the conclusion that the district court lacked jurisdiction to enter the transfer order.
After an effective notice of appeal has been filed, a district court loses jurisdiction over any aspect of the action that is on appeal. The question, then, was whether the plaintiffs’ notice of appeal was effective.
The Fifth Circuit held that it was. Under 28 U.S.C. § 1292(a)(1), litigants can immediately appeal the denial of a preliminary injunction. Granted, the district court had not expressly ruled on that matter. But the district court’s delay, the majority explained, was an effective denial. Although only a few weeks had passed between the plaintiffs’ injunction motion and the notice of appeal, the context of the case—the pending implementation of new rules—meant that even this short delay was an effective denial.
Because the district court had effectively denied the preliminary injunction, the notice of appeal was effective. The notice also deprived the district court of jurisdiction to transfer the case. The transfer frustrated the Fifth Circuit’s ability to review the denial of the preliminary injunction. And delaying review of the injunction denial would deprive the plaintiffs of any meaningful review.
The majority went on to conclude that the district court had clearly and indisputably erred in transferring the action after an appeal had been filed. It also determined that mandamus was appropriate to clarify that once an appeal had been filed, the district court cannot transfer the action.
Judge Higginson’s Dissent
Judge Higginson dissented. He noted that the plaintiffs never sought a temporary-restraining order, which is how one normally gets an expedited ruling on injunctive relief. He also contended that there was no need for an expedited injunction decision because the Bureau’s new rules did not require any immediate action from the plaintiffs. With no urgency, there was no effective denial of a preliminary injunction in waiting a few weeks.
Effective Denials Through Delay
Fort Worth Chamber of Commerce has gotten some attention as another Fifth Circuit decision attempting to undo a transfer. But the underlying decision about an effective motion-denial due to delay troubles me.
I think I’m with Judge Higginson on this one. I might even go farther and say that a district court’s taking its time with a motion rarely amounts to an effective denial.
It’s one thing for a district court to effectively deny a motion by saying that the court wants to see how the action develops. We see this sometimes with motions to dismiss complaints on qualified-immunity grounds. Rather than decide the qualified-immunity defense at the pleading stage, a district court says it will wait to rule on immunity until after discovery.
This purported delay is actually a denial. The qualified-immunity defense is supposed to shield defendants from litigation. So a decision to “defer” ruling on immunity until after discovery effectively denies immunity’s protections. And the Supreme Court has held that the denial of qualified immunity at the pleading stage is an immediately appealable order.
It’s an entirely different thing for a district court to simply take its time in deciding a motion. District courts have discretion in how they manage actions before them. Litigants’ insistence that a court move faster don’t change that discretion into an effective denial.
Unless a rule or statute sets a deadline for a decision on a motion, it’s better to treat delay for what it actually is: delay. If a district court is taking too long, the proper course of action is to seek mandamus. Otherwise we get into difficult questions about how much delay is too long. And those difficult questions create uncertainty as to appellate jurisdiction, which litigants (particularly defendants) might use as a tool for creating cost and delay.
In re Fort Worth Chamber of Commerce, 2024 WL 1483817 (5th Cir. Apr. 5, 2024), available at the Fifth Circuit and Westlaw