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.
The Britt Litigation
Simplifying a bit, Britt involved a former Postal Service employee’s retaliation claim. The district court dismissed the claim, concluding that the plaintiff had “failed to sufficiently allege a causal link between her protected activity and an adverse employment action.” (Cleaned up.) The dismissal was without prejudice. But the district court also did not grant or deny leave to amend. It instead directed the clerk to close the case. The plaintiff then appealed.
Finality of Without-Prejudice Dismissals That Are Silent on Amendment
The Fourth Circuit initially heard the case en banc. It held that the dismissal was a final, appealable order.
The court began with a discussion of similar without-prejudice dismissals: those that expressly say that leave to amend is granted or denied. When a district court expressly grants leave to amend, there is no final, appealable decision. That’s because the district court is not finished with the case; the plaintiff can amend and try to continue the litigation. To be sure, a plaintiff can make the dismissal final by failing or refusing to amend. But the Fourth Circuit requires that these plaintiffs obtain an additional order from the district court for the dismissal to be final.
The Fourth Circuit also noted that a without-prejudice dismissal that denies leave to amend is final. The denial of leave to amend ends proceedings in the district court.
Britt concerned finality when a district court dismisses a complaint or an action without prejudice but is silent as to leave to amend. Before Britt, the Fourth Circuit had used a case-by-case analysis to determine finality. (I wrote about that approach a few years ago: The Fourth Circuit Says Goode Is Bad Law.) The court of appeals looked to the district court’s opinion to determine whether an amendment might cure the perceived defects in the complaint.
The en banc court recognized that this case-by-case approach had sown confusion. The court wanted a clear, predictable, and consistent rule. But “the flexibility inherent in a case-by-case method means that what suggests finality in one case can conflict with prior pronouncements on what serves as an indicium of finality.” That creates uncertainty for litigants. That uncertainty can result in the inadvertent loss of appellate rights. That uncertainty also requires that judges and lawyers untangle “jurisdictional knots.”
The Fourth Circuit thus abandoned its case-by-case approach, replacing it with the D.C. Circuit’s bright-line rule: “anything less than an express invitation [to amend] is not a clear enough signal to overcome the presumption of finality.” That is, “when a district court dismisses a complaint or all claims without providing leave to amend, [the court of appeals] need not evaluate the grounds for dismissal or do anything more—the order dismissing the complaint is final and appealable.” The dismissal’s language thus determines finality. The Fourth Circuit will no longer need to speculate about what what the district court intended.
Some Additional Concerns & Notes
The Fourth Circuit recognized that its rule was not perfect. The rule raised concerns about the appeal clock, which will begin running once the judgment dismissing the complaint or action is entered in a separate document (or deemed entered under Federal Rule of Appellate Procedure 4(a)(7)(A)). Plaintiffs who want to amend their complaints will need to first reopen or vacate the judgment under Federal Rule of Civil Procedure 59 or 60. Failure to do so could mean missing the appeal deadline.
The Fourth Circuit thought that this appeal-deadline issue was best addressed by the district court:
[W]hen the district court believes a deficiency in a complaint can be cured, it should say so and grant leave to amend. When a district court does not intend to grant leave to amend, it should issue a separate document to accompany an order of dismissal intended to be a final judgment, in compliance with Federal Rule of Civil Procedure 58.
The hope is that the Rule 58 judgment will clearly indicate that the appeal clock has begun.
The Fourth Circuit also discussed some related issues. One was what plaintiffs must do to stand on a complaint when the district court grants leave to amend. The court reiterated its requirement that “the plaintiff . . . waive her right to amend the complaint by requesting that the district court take further action to finalize its decision.” Another issue concerned what’s sometimes called “springing finality.” Springing finality involves a dismissal with leave to amend in which the district court sets a deadline for any amendments or does not give a deadline at all. Courts have struggled with when such dismissals become final. The Fourth Circuit said that there must be some additional decision from the district court “finalizing its judgment” before the plaintiff can appeal. The plaintiff can request that decision. Or the district court can enter it on its own initiative once the time to amend has ended.
A Step in the Right Direction
Britt is a solid decision. I might have preferred that the court not require litigants to obtain an additional order if they want to stand on their complaint. After all, the appeal itself usually indicates that the plaintiff intends to stand on its complaint. Then again, Britt did not actually involve what a plaintiff must do to stand on its complaint; the court merely restated its rule. Maybe the Fourth Circuit will revisit that issue.
There is, however, a risk that litigants unaware of the new rule might lose their chance to appeal. Once the district court enters a Rule 58 judgment, the appeal clock begins to tick. And plaintiffs who want to amend their complaint will need to reopen or vacate the judgment under Rule 59 or 60 before they can amend.
What if a litigant files a Rule 15 motion to amend its complaint before the appeal clock has run, but the district court doesn’t deny that motion until after it has run? Perhaps the Rule 15 motion could be treated as a Rule 59 or 60 motion and thus reset the appeal clock under Federal Rule of Appellate Procedure 4(a)(4). After all, contents—not captions—determine the type of motion.
The larger problem has to do with Rule 58. That rule does not specify what a final judgment should look like. (Rule 54(a) says only that “[a] judgment should not include recitals of pleadings, a master’s report, or a record of prior proceedings.”) And judges will sometimes disagree about whether a document counts as final judgment. The Rule 58 judgment is supposed to tell litigants that the appeal clock has begun. But it can do so only if the litigants recognize that something is a Rule 58 judgment.
This is one reason I’ve suggested requiring more specific language in a Rule 58 judgment for it to start the appeal clock. This requirement might look something like Arizona Rule of Civil Procedure 54(c), which says that “[a] judgment as to all claims and parties is not final unless the judgment recites that no further matters remain pending and that the judgment is entered under Rule 54(c).” The Wisconsin Supreme Court developed a similar requirement via judicial decision. In Wambolt v. West Bend Mutual Insurance Co., it “required that final orders and final judgments state that they are final for purposes of appeal.”
Rule 58 final judgments might benefit from similar specificity. Maybe the appeal clock shouldn’t start until the district court enters a separate document saying that it has finished with a case.
Thanks to Howard Bashman for sending this case my way.
Britt v. DeJoy (4th Cir. Aug. 17, 2022), available at the Fourth Circuit.