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.
The litigation in Bing
Bing involved Title VII race- and sex-discrimination claims. The plaintiff, Robel Bing, was fired on his first day of work at defendant Brivo Systems. After meeting Bing at orientation, another Brivo employee Googled Bing’s name and learned of his “tangential involvement in a shooting for which he faced no charges.” (Bing had lent his legally owned gun to a friend, and that friend fired it into the air in celebration of Halloween, hitting a third party.) The Brivo employee then “berated Bing about the incident, declared that he was not fit for employment with Brivo, terminated him on the spot, and escorted Bing out of the building.”
Bing sued for race discrimination, claiming that the Brivo employee Googled Bing only because Bing was a black male. But the district court dismissed the complaint for failure to state a claim. It concluded that the complaint failed to include allegations raising a plausible inference of race or sex discrimination. The district court entered an order stating that the complaint was dismissed and directing the clerk to close the case. Bing then appealed.
Appellate jurisdiction in Bing
As a preliminary matter, the Fourth Circuit’s decision produced two opinions. Judge Traxler wrote an opinion holding that the court had jurisdiction over the appeal, and the entire panel joined that opinion. Judge Quattlebaum, joined by Judge Agee, then wrote the opinion on the merits of the dismissal. Judge Traxler dissented from that merits opinion.
Appellate jurisdiction was an issue due to the district court’s dismissing the complaint without prejudice. The courts of appeals are wary of these kinds of dismissals for fear that the complaints could be refiled after an appeal. That is, the plaintiff might try to appeal the dismissal of the complaint and, if unsuccessful in that appeal, file an amended complaint that could lead to a second appeal. Concern over piecemeal appeals leads courts to often say that dismissals without prejudice are not final, appealable orders. That’s of course an overstatement; lots of dismissals without prejudice (such as dismissals for lack of subject-matter jurisdiction) are final and appealable. And the concern over refiling might be overblown. The courts of appeals nevertheless hold, as a general matter, that plaintiffs may not appeal from dismissals without prejudice.
The Fourth Circuit’s framework for appealing dismissals without prejudice
But sometimes they can. In a series of decisions—Domino Sugar Corp. v. SugarWorkers Local Union 392, Chao v. Rivendell Woods, Inc., and In re GNC Corp.—the Fourth Circuit established a framework for assessing appeals from dismissals without prejudice. In Domino Sugar, the court held that “dismissals without prejudice generally are not appealable ‘unless the grounds for dismissal clearly indicate that no amendment in the complaint could cure the defects in the plaintiff’s case.’” The court considers “the bottom-line effect of the district court’s ruling and whether the court dismissed the complaint only, as opposed to dismissing the action entirely.” The Fourth Circuit also allows plaintiffs to “stand on the complaint,” as doing so waives any right to amend and eliminates the risk of repetitive appeals.
Applying these considerations, the Fourth Circuit held that the dismissal in Bing was final and appealable. The record included no indication that other facts existed that the plaintiff could allege and thereby cure the perceived deficiencies in his complaint. The court refused to imagine such facts without any indication that they existed. The district court also ordered the clerk to close the case, indicating that the district court was finished with it. And at oral argument, the plaintiff’s counsel stated that the plaintiff was standing on the dismissed complaint.
The Fourth Circuit’s decision in Goode
But another decision—Goode v. Central Virginia Legal Aid Society, Inc.—suggested that the dismissal in Bing was not final or appealable. Goode laid out a seemingly bright-line rule that dismissals due to insufficient allegations are not appealable, as the plaintiff can fix the deficiency via amendment. The decision also suggested that the dismissal of a “case” (as opposed to just a “complaint”) was irrelevant. And Goode said that plaintiffs’ standing on their complaints was relevant but not dispositive.
The Fourth Circuit determined that “much of the language and analysis in Goode was in direct conflict with Domino Sugar, Chao, and In re GNC”:
Specifically, Goode’s assertion of a bright-line rule that without-prejudice dismissals premised on the failure to plead sufficient facts in the complaint are not appealable is inconsistent with Domino Sugar, which emphasized the case-by-case nature of the inquiry, and also with Chao, which found that very type of dismissal to be appealable. Goode’s rejection of the significance of the dismissal of the case as opposed to the complaint because that language was paired with the phrase “without prejudice” is also inconsistent with Chao, which relied on the significance of dismissing the case in the context of a without-prejudice dismissal. Additionally, Goode’s refusal to give weight to the plaintiff’s decision to stand on his complaint because there were no institutional interests of an executive-branch agency at stake is inconsistent with In re GNC, which gave dispositive effect to that decision in a case involving only private parties.
Domino Sugar, Chao, and In re GNC all preceded Goode. The earlier decisions therefore controlled:
Under Domino Sugar, the order in this case is appealable because the district court held that the circumstances surrounding Bing’s termination did not expose Brivo to legal liability, and Bing has no additional facts that could be added to his complaint. Under Chao, the order is appealable because the district court dismissed the complaint and directed that the case be closed. The order is likewise appealable under Chao and In re GNC because Bing has elected to stand on his complaint as filed.
So Goode, it seems, is no longer good law.
A better way?
In a footnote, the court observed the occasional difficulty in determining whether a dismissal without prejudice is final. This difficulty can be especially hard for plaintiffs, “who have a relatively short period of time to determine their next step before the door to appellate review permanently closes.” But, the court observed, this doesn’t have to be the way. The Eleventh Ciruit, for example, deems the choice to appeal a waiver of any right to amend, thereby removing any uncertainty, protecting plaintiffs’ right to appeal, and limiting any appellate manipulation that can occur when courts dismiss without prejudice.
This is a better approach. The appeal itself indicates an intent to stand on the complaint. And any uncertainty can be resolved via briefing or at oral argument. Asking for more has no obvious benefits. As Federal Practice & Procedure § 3914.1 explains, rarely is anyone surprised (much less harmed) by treating the appeal itself as a sure sign of the plaintiff’s intention to stand on the complaint:
If in some rare case the appellee can show prejudice from failure to enter a formal and final judgment pursuant to Civil Rule 58, the appeal can be dismissed. In ordinary cases it is better to tolerate the informal path of taking an immediate appeal, which will not confuse anyone, than to incur the waste motion of dismissing the appeal, securing entry of judgment, and entertaining a second appeal.
Bing v. Brivo Systems, LLC, 2020 WL 2530832 (4th Cir. May 19, 2020), available at the Fourth Circuit and Westlaw.