Appellate Decisions

The Federal Circuit & Cumulative Finality

The Federal Circuit might have switched camps in the cumulative-finality split. But its lack of explanation leaves any change uncertain.

January 31, 2020

By Bryan Lammon

The cumulative-finality doctrine provides that certain subsequent events can save a premature notice of appeal filed after certain district court decisions. As I detailed in a 2018 article, the doctrine cannot be stated with any greater precision because the courts of appeals are all over the map on when exactly notices can be saved. Three general approaches to cumulative finality have emerged. And until recently, the Federal Circuit appeared to be in the most restrictive camp, holding that only decisions resolving all outstanding issues can be saved by the entry of a final judgment.

But the Federal Circuit’s recent decision in Amgen Inc. v. Amneal Pharmaceuticals LLC appears to break with that court’s precedent. The court held that a premature notice of appeal was cured when counsel abandoned the unresolved claims at oral argument. (I covered the decision in a previous weekly roundup, and Dennis Crouch wrote about it on Patently-O.) This outcome required a different approach to cumulative finality than the Federal Circuit has previously endorsed. But the court said little about why the disclaimer was sufficient, nor did it acknowledge its earlier decisions on cumulative finality. Still, the Federal Circuit might have switched camps in the cumulative-finality split.

Cumulative finality generally

I discussed cumulative finality—its origins, its relation to (or replacement by) Federal Rule of Appellate Procedure 4(a)(2), the Supreme Court’s one decision on the matter, and the existing mess in the courts of appeals—in the above-mentioned article. For present purposes, its enough to note that litigants occasionally file their notice of appeal too early. They normally must wait until the end of district court proceedings before filing a notice of appeal. But sometimes they file too early, before the district court has entered a judgment or other appealable decision. Problems can then arise if these litigants do not file a second notice (or amend their first). No proper notice has been filed. And parties that do not file a proper notice forfeit their right to appellate review.

To address this problem, courts and rulemakers developed the cumulative-finality doctrine, which allows subsequent events to save a premature notice of appeal.

The common law of cumulative finality

Cumulative finality first emerged as a coherent doctrine in the 1960s and 70s. The courts of appeals developed the doctrine to save a variety of prematurely filed notices of appeal. Courts held, for example, that notices filed after a district court announced its decision were saved by the district court’s subsequent entry of a judgment. Courts held that notices filed after dismissal of a complaint (but not dismissal of the entire action) were saved by the later dismissal of the action. Courts also held that notices filed after the district court resolved some (but not all) of the claims in a multi-claim action were saved by a subsequent judgment that resolved the remaining claims. And a few decisions from this time allowed subsequent events to save a notice of appeal filed after a clearly interlocutory order.

Federal Rule of Appellate Procedure 4(a)(2)

Rule 4(a)(2) was added to the Federal Rules of Appellate Procedure in 1979. As amended, the rule now reads:

A notice of appeal filed after the court announces a decision or order—but before the entry of the judgment or order—is treated as filed on the date of and after the entry.

The Committee Notes stated that the rule was meant “to avoid the loss of the right to appeal by filing the notice of appeal prematurely.” The Notes also indicate that the Committee intended to codify an existing practice in the courts of appeals, and it cited to some the caselaw in this area.

But neither the Notes nor the rule itself specified what precisely was being codified or how the rule affected the then-existing common law cumulative-finality doctrine. And the post-Rule 4(a)(2) caselaw does not offer many hints. Despite the new rule, the courts of appeals continued to develop cumulative finality as a largely judge-made doctrine.

FirsTier

Then came the Supreme Court’s decision in FirsTier Mortgage Co. v. Investors Mortgage Insurance Co.. FirsTier held that Rule 4(a)(2) saved a notice of appeal filed after a district court had announced from the bench its decision to dismiss the case but before it formally entered the final judgment of dismissal on the docket. The Court echoed the Committee notes on the rule’s purpose and origins: Rule 4(a)(2) exists to prevent the loss of appellate rights when a late notice does not prejudice the appellee, and the rule codified an existing practice in the courts of appeals. But the Court added that Rule 4(a)(2) would not save every premature notice of appeal. The rule instead “permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment.”

The circuits after FirsTier

After FirsTier, the courts of appeals developed three general approaches to issues of cumulative finality. Some cases held that appeals only from decisions that resolve all outstanding issues in the district court can be saved by the entry of a final judgment. Other cases held that Rule 4(a)(2) will save only those notices filed after decisions that could have been certified for an intermediate appeal under Rule 54(b). And still other cases held that nearly any district court decision, no matter how interlocutory, can be saved by a subsequent judgment. As I detail in the article, the split is not merely between the circuits. Several circuits have internally inconsistent caselaw on cumulative finality.

Until recently the Federal Circuit appeared to be in the first camp—holding in two unpublished cases that only decisions resolving all outstanding issues can be saved by the entry of a final judgment. In Meade Instruments Corp. v. Reddwarf Starware, LLC, the Federal Circuit held that the parties’ voluntary dismissal of outstanding claims did not save a premature notice of appeal. The court concluded that FirsTier abrogated the common law cumulative-finality doctrine. So after FirsTier, an appellant must reasonably believe that an earlier order was final and disposed of the entire case for Rule 4(a)(2) to apply. Similarly, in Stoney Point Products, Inc. v. Underwood the Federal Circuit held that Rule 4(a)(2) did not save a notice of appeal filed after the district court had decided some claims but before it had decided all claims. The court determined that “there [was] no reasonable basis for [the appellant] to assert that he was under the mistaken impression that the district court’s [earlier] order was final and appealable.” The appellant should have filed a new notice after the final judgment.

The Federal Circuit appeared to invoke a broader approach to cumulative finality once. But it did so in an appeal from the Board of Contract Appeals, not from a district court. In Fireman’s Fund Insurance Co. v. England, the court held that it had jurisdiction to review a Board order dismissing some (but not all) of a government contractor’s claims. The court noted that it did not approach Board decisions with normal notions of finality. And it concluded that it would review the Board’s order because the dismissed claims were sufficiently narrow and distinct, such that their immediate resolution would not disrupt further agency action. But the Federal Circuit buttressed this conclusion by pointing to the Board’s later order dismissing the remaining claims without prejudice. Although a dismissal without prejudice normally does not render a case final, there was no indication that the claimant would refile those claims. And the court found support for this reasoning in other cumulative finality decisions.

Amgen and cumulative finality

The Federal Circuit’s decision in Amgen, however, seems to apply the intermediate approach to cumulative finality: Rule 4(a)(2) will save notices filed after decisions that could have been certified for an immediate appeal under Rule 54(b).

The Federal Circuit’s jurisdictional decision in Amgen

Amgen was a patent-infringement suit against four defendants. The district court determined that two defendants infringed the patent while the other two did not. Both the patent holder and the infringing defendants appealed. But at the time of the appeal, the district court had not yet resolved the infringing defendants’ defense and counterclaim that the patent at issue was invalid. Indeed, up through oral argument in the appeal, that matter had still not been resolved.

The appeal was accordingly premature. (The opinion seems to suggest that only the infringing defendants’ appeal was premature, but the patent holder’s appeal was premature, too.) The district court had not yet resolved all claims, so there was no final decision when the parties appealed. But the infringing defendants cured this defect at oral argument by “giv[ing] up” their invalidity defense and counterclaim. That is, the infringing defendants disclaimed any intention to assert that defense and counterclaim, effectively dismissing it with prejudice. The district court’s judgment, combined with the defendants’ disclaimer, rendered the decision final and appealable.

A broader approach to cumulative finality in the Federal Circuit?

Accepting this disclaimer required a broader approach to cumulative finality than the Federal Circuit has applied in the past. The district court had not resolved all issues in Amgen; the invalidity defense and counterclaim remained pending. And there was no entry of a final judgment by the district court. Instead, a lawyer consulted with his client in the middle of the appeal and announced that the client was willing to abandon the defense and counterclaim.

But the Amgen opinion never explained why this disclaimer was enough to secure appellate jurisdiction. The Federal Circuit did not reference any of its decisions in this context (or any other court’s decisions), nor did it mention Rule 4(a)(2). It merely said that the defendants’ statement at oral argument cured the jurisdictional defect, such that the district court’s judgment resolved all claims for all parties.

So where does the Federal Circuit now stand on cumulative finality? Amgen did not announce a new rule for cumulative finality. Nor did it abrogate the Federal Circuit’s earlier (albeit unpublished) decisions in this area. Still, the Amgen court could not have done what it did without applying a broader approach to cumulative finality than the Federal Circuit has used in the past. So it appears we’ll have to wait for another cumulative-finality issue to arise in the Federal Circuit before we know exactly where that circuit stands.