The courts of appeals have created an asinine finality trap that they need to get rid of. The trap also makes me wonder whether we need to rethink finality.
November 29, 2022
I’ve written a lot on this site about the finality trap in the last few years. Now I’ve published an essay on the trap in the New York University Law Review Online. I argue that the trap is asinine. And there’s an easy fix to it: let litigants disclaim the right to refile voluntarily dismissed claims. But the trap also makes me wonder if we should rethink finality. Current finality doctrine largely looks to what the district court has done—has the district court actually resolved all of the claims? It might be better to instead ask whether the district court is done. That is, once the district court has finished with an action, it has issued a final decision and the court of appeals has jurisdiction.
The essay is Disarming the Finality Trap, 97 New York University Law Review Online 173 (2022). You can download a copy at SSRN. The abstract is below.
The en banc Fourth Circuit held that if the district court says nothing about leave to amend, a without-prejudice dismissal is a final, appealable decision.
August 18, 2022
The courts of appeals continue to wrestle with their jurisdiction after dismissals without prejudice. The most recent example is Britt v. DeJoy, in which the Fourth Circuit sat en banc to address finality when a district court dismisses a complaint or action without prejudice but also does not grant or deny leave to amend. The en banc court held that these dismissals are “final” under 28 U.S.C. § 1291 and thus appealable.
It’s a good decision. And the motivation behind it—reducing the uncertainty that comes from case-by-case determinations of finality—is commendable. The Fourth Circuit also gave some guidance on the related issues of (1) what plaintiffs must do to stand on a complaint dismissed with leave to amend and (2) finality when the time to amend has passed or was never set.
I just hope that counsel in the Fourth Circuit keep this new rule in mind. Litigants unaware of this new rule might inadvertently lose their right to appeal.
A new cert petition challenges the Ninth Circuit’s variation on the finality trap.
April 14, 2021
The last year or so has seen some significant judicial activity when it comes to the finality trap. The trap can arise after a party voluntarily dismisses some of its claims without prejudice and then tries to appeal. This scenario makes some courts of appeals suspicious, as parties sometimes use these voluntary dismissals to manufacture an interlocutory appeal. The courts have developed a variety of ways to stop parties from doing so. And some of those methods create a trap. The court of appeals deems the dismissal non-final and thus non-appealable. But the court also leaves no avenue for the appealing party to make the underlying decision final. The party is then left in limbo. The case is over and unchangeable in the district court. But it’s not final for purposes of appeal.
A new cert petition challenges the Ninth Circuit’s variation on the finality trap. More generally, the petition gives the Supreme Court a chance to disarm the trap once and for all. The case is Starline Tours of Hollywood, Inc. v. EHM Productions, Inc. The response is due May 7, 2021.
The D.C. Circuit split on finality after a dismissal without prejudice, with one judge questioning the distinction between dismissals of complaints and dismissals of actions.
February 11, 2021
Many discussions of federal appellate jurisdiction focus on when litigants can appeal before the end of district court proceedings. But traditional end-of-proceedings appeals have their own issues, including uncertainty over when the time to file them begins to run. That uncertainty can lead to parties’ losing their right to appeal. So efforts to reform appellate jurisdiction cannot look only at interlocutory appeals. The traditional end-of-proceedings appeal needs work, too.
As much can be seen in the D.C. Circuit’s decision from earlier this week in Wilcox v. Georgetown University. The district court in Wilcox dismissed the plaintiffs’ complaint without prejudice and, several months later, denied leave to amend. The D.C. Circuit looked for signs that the district court intended for the initial dismissal to be final. Concluding that the district court intended to dismiss only the complaint—not the entire action—the majority held that the decision did not become final until the district court denied leave to amend. Dissenting, Judge Randolph contended that the case was over at the initial dismissal. And of particular interest, he rejected the longstanding distinction between dismissing a complaint and dismissing an entire action.
The Eleventh Circuit held that a decision was final and appealable despite the voluntary dismissal of all remaining claims without prejudice.
July 17, 2020
In Corley v. Long-Lewis, Inc., the Eleventh Circuit held that a district court’s resolution of all claims was final and appealable despite the plaintiffs’ voluntarily dismissing some of those claims without prejudice. In doing so, the court had to wade through its conflicting lines of authority in this area—one holding that the resolution of all claims is final despite the voluntary dismissal, the other holding that it’s not. The conflicting cases could not be reconciled. The court accordingly had to go with the older precedent. And that precedent held that “an order granting a motion to voluntarily dismiss the remainder of a complaint under Rule 41(a)(2) ‘qualifies as a final judgment for purposes of appeal.’” The court also addressed its territorial jurisdiction to review the decision of an MDL transferee court and appellate standing after some claims are voluntarily dismissed. And Chief Judge William Pryor—who authored the majority opinion—wrote a separate concurrence discussing the messy state of the law governing governing appeals after voluntary dismissals and offering alternatives to avoid that mess.
The Fifth Circuit again demanded that parties obtain a Rule 54(b) certification when a claim has been dismissed without prejudice.
July 9, 2020
The Fifth Circuit’s finality trap has another victim. In Firefighters’ Retirement System v. Citco Group Ltd., the court held that the district court had not issued a final, appealable decision when claims against one defendant had been dismissed without prejudice. To appeal, the plaintiffs needed to obtain a certification under Federal Rule of Civil Procedure 54(b) (and will presumably be allowed to do so).
Firefighters’ Retirement is thus another illustration of the Fifth Circuit’s foolish finality trap. Unlike other recent finality trap cases, the dismissal without prejudice in Firefighters’ Retirement came between with-prejudice dismissals. But the plaintiffs were trying to appeal a district court decision that came before the dismissal without prejudice. And that was enough to preclude finality. The Fifth Circuit declined to address what would happen if claims were dismissed without prejudice before the decision that a party sought to appeal.
The Fourth Circuit clarified its law on appealing dismissals without prejudice and rejected 2015’s Goode v. Central Virginia Legal Aid Society, Inc.
May 26, 2020
In Bing v. Brivo Systems, LLC, the Fourth Circuit clarified its law governing appeals from dismissals without prejudice due to insufficient pleadings. In a series of decisions, that court had laid out a framework for when those dismissals are final and appealable. Relevant considerations included whether the defects in a complaint could be cured, whether the district court dismissed the complaint or the entire action, and whether the plaintiff decided to stand on the dismissed complaint. But a more recent decision—Goode v. Central Virginia Legal Aid Society, Inc.—had applied a more restrictive approach to appeals involving pleading deficiencies.
Bing required the Fourth Circuit to clarify the law governing these appeals. The court ultimately held that Goode was inconsistent with earlier Fourth Circuit decisions and must be disregarded. In a footnote, the court also pointed to an easier path: deeming an appeal from these dismissals an implicit waiver of the right to amend. Doing so would avoid the finality problems that dismissals without prejudice can create, would protect plaintiffs’ right to appeal, and would create certainty over appellate jurisdiction.
Another plaintiff has fallen into the Fifth Circuit’s finality trap, and it makes me wonder whether the en banc court actually made things worse.
May 15, 2020
Last week, in Williams v. Taylor Seidenbach, Inc., the Fifth Circuit failed to disarm its finality trap. This week, in CBX Resources, L.L.C. v. ACE American Insurance Co., a panel of the Fifth Circuit watched as another party fell into that trap. And unlike the plaintiffs in Williams, the plaintiff in CBX Resources had not obtained the post-proceedings Rule 54(b) certification that Williams held would cure any jurisdictional defects. Presumably the CBX Resources plaintiff will go through the rigmarole of doing so and eventually be back before the Fifth Circuit.
CBX Resources has me wondering if the Fifth Circuit’s Rule 54(b) approach is not only unnecessary, but also makes things worse. The approach seems to encourage the very thing that the court wanted to avoid: litigants’ manufacturing interlocutory appeals by voluntarily dismissing all remaining claims and then refiling them.
Rather than disarm the finality trap, the Fifth Circuit found a way to avoid it: an odd, unintuitive, and unnecessary use of Rule 54(b).
May 9, 2020
When plaintiffs lose on some of their claims and then voluntarily dismiss the rest, they risk falling into the finality trap. If the remaining claims were voluntarily dismissed without prejudice, most courts of appeals will hold that the district court has not issued a final, appealable decision under 28 U.S.C. § 1291. This general rule becomes a trap when courts don’t let plaintiffs fix the finality problem. In Williams v. Taylor Seidenbach, Inc., the en banc Fifth Circuit found one way around the trap: a Rule 54(b) certification of the claims that the district court dismissed on the merits. But the court didn’t actually disarm the trap. And its use of Rule 54(b) is an odd, unintuitive one that has the potential for future mischief.
The en banc Williams decision is fascinating and has a lot going on. It comprises four opinions, including a separate concurrence from the author of the majority opinion. Those opinions debate statutory interpretation and the role of appellate courts in creating rules of appellate jurisdiction. In this post, I hit the highlights: the legal, factual, and procedural background of Williams; the main points of the four separate opinions; and my take on the court’s decision. I ultimately find the majority opinion to be both odd and unnecessary. It’s odd in its reading and use of Rule 54(b). And it’s unnecessary given the much better option offered by one of the concurring opinions: letting litigants disclaim any right to refile their voluntarily dismissed claims. This practice is common in the courts of appeals, obviates any finality concerns, and preserves Rule 54(b)’s role.
The en banc Fifth Circuit can disarm its finality trap, which occasionally precludes appeals when plaintiffs voluntarily dismiss some of their claims.
January 28, 2020
Last week, the en banc Fifth Circuit heard argument in Williams v. Taylor Seidenbach, Inc. The case gives that court the opportunity to clean up the “finality trap” it has created for litigants. The Fifth Circuit has held that parties may not appeal when they’ve voluntarily dismissed some of their claims without prejudice; the voluntary dismissal precludes the district court’s decision from being final. But those same parties also cannot return to the district court to change the dismissal to one with prejudice, as district court proceedings are finished. Cases that fall into this finality trap exist in a sort of litigation limbo. I’ve accordingly called them “zombie actions”: they are final and unalterable in the district court, but they are not final—and will never become final—for appeal.
The Fifth Circuit has several options for fixing its finality trap. In this post, I discuss those options, as well as the finality trap’s origins, its application in Williams, the en banc argument, and the larger problems in this area of appellate jurisdiction.