When a party raises an issue for the first time after filing its notice of appeal, does the notice limit jurisdiction over that issue? Or does the case instead implicate prudential limits on appellate courts’ addressing issues in the first instance?
April 20, 2024
In McGruder v. Metropolitan Government of Nashville & Davidson County, the Sixth Circuit said that it would address a judicial-estoppel defense raised for the first time after the defendant had filed its notice of appeal.
The Sixth Circuit framed this issue as one implicating the content and timing requirements for a notice of appeal. The defendant’s notice had not designated a decision on the judicial-estoppel defense. And the only decision relevant to that defense came after the notice of appeal. The Sixth Circuit nevertheless concluded that it could address judicial estoppel in the first instance. The matter had been fully briefed in the district court. And courts can address judicial-estoppel issues on their own initiative.
While I agree with the outcome in McGruder, I’m not sure that the case implicates the issues it addresses. I think the case instead implicates the prudential limits on appellate courts’ addressing issues in the first instance.
The Notice of Appeal in McGruder
Simplifying only a little bit, McGruder involved Title VII retaliation claims. While the Title VII action was pending, the plaintiff filed for bankruptcy in a different district. But the plaintiff did not list her Title VII action as a potential asset of the bankruptcy estate, and her debts were discharged without regard to that action.
A jury later found for the plaintiff on her retaliation claims. The jury awarded $260,000 in compensatory damages. But it did not award any back pay. The district court then ordered a new trial on back pay. The district court also ordered that the defendant reinstate the plaintiff to her prior job.
The defendant appealed from the reinstatement order. Shortly thereafter, the defendant learned of the plaintiff’s bankruptcy and her omission of the Title VII action from her assets. The defendant then asked the district court to dismiss the plaintiff’s action on judicial-estoppel grounds. The defendant contended that the plaintiff’s “omission amounted to a manifest injustice against the bankruptcy proceedings as well as an abuse of the judicial process.”
The district court determined that it could not rule on the defendant’s request, as the defendant had filed a notice of appeal that deprived the district court of jurisdiction over the action.
The Scope of the Appeal
On appeal, the defendant again argued for judicial estoppel. The Sixth Circuit determined that it could consider this argument.
The Sufficiency of the Notice of Appeal
The Sixth Circuit noted that the defendant had not “include[d] the [judicial-estoppel] claim in its notice of appeal.” That’s of course because the defendant had filed the notice before even moving to dismiss the action on estoppel grounds.
But the Sixth Circuit concluded that it could excuse this “omission from this notice of appeal” for two reasons. First, “the general concern regarding notice to appellees [was] not applicable in this case.” That’s because the defendant had raised its judicial-estoppel argument in the district court, and the parties had fully briefed it. So the plaintiff had sufficient notice of the issue, and there was no prejudice from considering it despite its “omission from the notice of appeal.” Second, federal courts can raise judicial-estoppel issues on their own initiative.
The Extent of the Judicial-Estoppel Argument
The Sixth Circuit went on to explain that it would address estoppel only as it related to the reinstatement order. That order was an interlocutory order granting injunctive relief and thus appealable under 28 U.S.C. § 1292(a)(1). The other relief the defendant sought—estoppel for the damages award and retrial on back pay—was not properly before the court of appeals.
Notice or Preservation?
I think the Sixth Circuit got this one right. But I’m a little concerned about the notice-of-appeal analysis.
A Dated Discussion of Rule 3(c)
For one thing, the Sixth Circuit appeared to rely on abrogated caselaw concerning the order-designation requirement for notices of appeal. Under Federal Rule of Appellate Procedure 3(c), a notice of appeal must “designate the judgment—or the appealable order—from which the appeal is taken.” Before recent amendments to Rule 3(c), several courts of appeals had held that this order-designation requirement limited the scope of appeal. That is, specifying some decisions in a notice of appeal implicitly forfeited appellate review of other decisions.
The 2021 amendments to Rule 3(c) abrogated this caselaw. But the Sixth Circuit seemed to have relied on it in McGruder. The court quoted its 2008 decision in JGR, Inc. v. Thomasville Furniture Industries, Inc. for the proposition that “a court of appeals has jurisdiction only over the areas of a judgment specified in the notice of appeal as being appealed.” (Cleaned up.) So this entire discussion seems to be premised on an outdated interpretation of Rule 3(c).
The Relevance of Rule 3(c)
More fundamentally, however, I don’t think McGruder implicates the order-designation requirement. Not does it implicate the general rule is that a notice of appeal does not encompass post-notice decisions. That’s because there were no post-judgment decisions to designate; the district court declined to rule on the defendant’s motion to dismiss the action after concluding that the notice of appeal deprived the district court of jurisdiction.
McGruder instead involved a post-notice argument—an new reason for denying injunctive relief. And there is no need to identify your arguments in a notice of appeal. Designating the judgment or appealable order should be enough. So the defendant’s identifying the preliminary injunction in McGruder was sufficient so far as the notice of appeal is concerned.
Post-Notice Issues & Arguments
The real issue in McGruder was thus whether a post-notice issue or argument was properly before the court of appeals. That question does not implicate Rule 3(c). It instead implicates the prudential limits on appellate courts’ addressing issues for the first time. The familiar general rule for appellees is that they may defend a judgment on any ground supported by the record and properly raised in the district court. When it comes to appellants, there are of course limits on raising issues for the first time on appeal that largely come from the law of preservation.
As for McGruder, I think the Sixth Circuit was within its discretion in addressing judicial estoppel in the first instance, even though the issue entered the case after a notice of appeal was filed. Normally we don’t want to address arguments for the first time on appeal. But as the Sixth Circuit explained, the parties had fully briefed judicial estoppel in the district court (and, presumably, in their appellate briefing, too). And courts can raise judicial-estoppel issues on their own initiative. So long as nothing was required of the district court (such as resolving any factual disputes), these seem like fine reasons for an appellate court to address an issue in the first instance.
McGruder v. Metropolitan Government of Nashville & Davidson County, 2024 WL 1653480 (6th Cir. Apr. 17, 2024), available at the Sixth Circuit and Westlaw