Arbitration appeals, the Federal Rules of Appellate Procedure, appeal deadlines after bankruptcy stays, fact-based qualified-immunity appeals, and more.
July 6, 2023
June was arbitration-appeals month. In its third and last decision of the term relating to appellate jurisdiction, the Supreme Court held that district courts must stay proceedings on the merits pending an interlocutory arbitration appeal. In the courts of appeals, the Third Circuit reviewed the denial of a motion to dismiss that effectively sought arbitration. And the First Circuit dismissed an appeal from an order denying reconsideration of an arbitration denial.
In other decisions, two courts of appeals addressed some nuances of the Federal Rules of Appellate Procedure. The Fourth Circuit explained what notice is required under Rule 4(a)(6). And the Fifth Circuit recognized the amendments to Rule 3(c). There were also decisions on a bankruptcy stay’s effect on the appeal deadline, fact-based qualified-immunity appeals, and the reasonableness of mistakes for Rule 4(a)(2). Plus a new cert grant, denials of cert on appealing church-autonomy defenses, and more.
- Cert Grant on Reviewing Extreme-Hardship Determinations in Immigration Appeals
- Other Supreme Court Developments
- The Fourth Circuit on Receiving Notice Under Rule 4(a)(6)
- A Court Applied the Amended Rule 3(c) to a Notice of Appeal
- Motions to Dismiss that Effectively Seek Arbitration
- The First Circuit on Appeals from Interlocutory Reconsideration Decisions
- The Tenth Circuit on Bankruptcy Stays & the Appeal Deadline
- The Sixth Circuit Refused to Sanction a Fact-Based Qualified-Immunity Appeal
- The Third Circuit Applied Its Forbes Rule to a Qualified-Immunity Appeal
- The Federal Circuit on Cumulative Finality & Reasonable Mistakes
- The Fifth Circuit Split on the Healy Doctrine
- Quick Notes
Coinbase Holds that § 16 Appeals Require a Stay
In Coinbase, Inc., v. Bielski, the Supreme Court held that district courts must stay proceedings on the merits once a party appeals from the denial of arbitration. The Court determined that 9 U.S.C. § 16—which authorizes these appeals—was enacted against Griggs v. Provident Consumer Discount Co.’s background principal that a district court loses control over all aspects of a case that are on appeal. And because the issue in an arbitration appeal is whether the case should proceed at all, the entirety of the case is effectively “on appeal.” So district courts must stay proceedings on the merits pending the appeal. The implication (though not expressly stayed by the Court) is that district courts lose jurisdiction over the merits and have no choice but to stay proceedings once an appeal is taken.
Justice Jackson dissented. She contended that the background principal against which Congress added § 16 was the opposite: no automatic stays due to interlocutory appeals. And Griggs means that the district court loses control over only the issue on appeal: arbitrability. She would have left the stay decision to the discretion of the district court.
I think I side with the dissent on this one. The majority gives several good reasons for why district courts might stay proceedings in many cases. But I’m not convinced that courts must grant a stay in all cases.
Read more: Coinbase Holds that § 16 Appeals Require a Stay.
Coinbase, Inc., v. Bielski, 2023 WL 4138983 (June 23, 2023), available at the Supreme Court of the United States and Westlaw
Cert Grant on Reviewing Extreme-Hardship Determinations in Immigration Appeals
The Supreme Court granted cert in Wilkinson v. Garland.
The case asks if courts of appeals can review extreme-hardship determinations in immigration appeals. You can read more about the petition and this issue in my post from earlier this year: New Cert Petition on Reviewing Hardship Determinations in Immigration Appeals
Other Supreme Court Developments
A Dissent on Hypothetical Jurisdiction
Three justices dissented from the denial of certiorari in Waleski v. Montgomery, McCracken, Walker & Rhoads, LLP.
The case asked whether federal courts can exercise “hypothetical jurisdiction.” When a case presents a difficult statutory jurisdictional issue, but Article III jurisdiction is secure and the merits are straightforward, courts will sometimes exercise hypothetical jurisdiction over the case and affirm. I’ve written a few times on this site about the appellate version of hypothetical jurisdiction (commonly and unsurprisingly called “hypothetical appellate jurisdiction”). Waleski involved a question of bankruptcy court jurisdiction. But it still could have had implications for appellate jurisdiction.
Waleski v. Montgomery, McCracken, Walker & Rhoads, LLP, 2023 WL 4163195 (June 26, 2023), available at the Supreme Court of the United States and Westlaw
Cert Denied on Appealing Church-Autonomy Defenses
The Supreme Court denied cert in Faith Bible Chapel International v. Tucker and Synod of Bishops of the Russian Orthodox Church Outside of Russia v. Belya. Both petitions asked if denials of church-autonomy defenses were immediately appealable via the collateral-order doctrine.
New Petition on Staying v. Dismissing After Ordering Arbitration
Finally, a new petition asks if district courts must stay—not dismiss—an action after ordering arbitration. I wrote about this issue a few years ago—see Lamps Plus Never Should Have Gotten This Far—and hope the Court will resolve it.
The case is Smith v. Spizziri, and the response is due July 17, 2023.
Petition for a Writ of Certiorari, Smith v. Spizziri, No. 22-1218 ( June 14, 2023), available at the Supreme Court of the United States and Westlaw
The Fourth Circuit on Receiving Notice Under Rule 4(a)(6)
In Shuler v. Orangeburg County Sheriff’s Department, the Fourth Circuit held that Federal Rule of Appellate Procedure 4(a)(6)(A) requires that a party not receive actual notice of the judgment.
Simplifying a fair bit, the plaintiff in Shuler was pro se and did not keep the court apprised of an address change. When the district court entered judgment against her, the clerk properly mailed the judgment to her last known address. But the judgment came back undelivered. The plaintiff eventually learned of the judgment. She then sought to reopen the time to appeal under Federal Rule of Appellate Procedure 4(a)(6) The district court granted that motion, and the plaintiff appealed.
Rule 4(a)(6) allows district courts to reopen the time to appeal under certain conditions. One of them—Rule 4(a)(6)(A)—requires a finding that the “moving party did not receive notice under Federal Rule of Civil Procedure 77(d) of the entry of the judgment or order sought to be appealed within 21 days after entry.”
The question in Shuler was whether this provision requires actual notice of the judgment or merely proper service. The argument that service alone is sufficient goes as follows: Rule 77(d)(1) says that “[i]mmediately after entering an order or judgment, the clerk must serve notice of the entry, as provided in Rule 5(b), on each party.” And Federal Rule of Civil Procedure 5(b)(2)(C) says that service is proper if mailed “to the person’s last known address—in which event service is complete upon mailing.” Putting these rules together, the argument goes, means that a litigant “receives” notice of a judgment for purposes of Rule 4(a)(6)(A) once the clerk mails it.
The Fourth Circuit joined the Second and Seventh Circuits in rejecting this argument and holding that Rule 4(a)(6) requires that a party not receive actual notice. As the Seventh Circuit noted in its decision, the relevant rules do not “mesh perfectly”: “Rule 4(a)(6) talks of ‘receipt’ of a document under Rule 77(d); but Rules 77(d) and 5(b) concern ‘service’ rather than receipt.” But the Committee Notes make clear that Rule 4(a)(6) exists to permit district courts to reopen the appeal time when the would-be appellant never receives the judgment. Requiring only service would frustrate that purpose. There are be a variety of reasons why service was proper but the judgment was never received, some of which are of not the would-be appellant’s fault.
Rule 4(a)(6)’s reference to Rule 77 thus addresses only what kind of notice—notice from the district court clerk, rather than from a party—is necessary. But Rules 5 and 77 do not mean that service equals receipt for purposes of Rule 4(a)(6). Proper service is thus insufficient for Rule 4(a)(6) if the would-be appellant did not actually receive notice.
Shuler v. Orangeburg County Sheriff’s Department, 2023 WL 4140463 (4th Cir. June 23, 2023), available at the Fourth Circuit and Westlaw
A Court Applied the Amended Rule 3(c) to a Notice of Appeal
In Norsworthy v. Houston Independent School District, the Fifth Circuit applied the amended Federal Rule of Appellate Procedure 3(c) to hold that the order designated in a notice of appeal did not limit the scope of the appeal.
The plaintiff’s notice of appeal in Norsworthy referenced only the denial of her Federal Rule of Civil Procedure 59 motion to alter or amend the judgment. She did not mention the final judgment itself.
Under pre-2021 Fifth Circuit law, that might have limited the appeal to the Rule 59 decision, preventing the court of appeals from reviewing the underlying judgment on which the plaintiff sought reconsideration. But the 2021 amendments to Rule 3(c) abrogated this limiting of appeals through the order-designation requirement. Now, designating the denial of certain post-judgment motions is good enough to encompass the underlying judgment.
I’ve written extensively about the amendments to Rule 3(c) on this site, particularly courts’ failures to apply the amended rule. It’s nice to see a court get this right.
Norsworthy v. Houston Independent School District, 2023 WL 3965065 (5th Cir. June 13, 2023), available at the Fifth Circuit and Westlaw
Motions to Dismiss that Effectively Seek Arbitration
In Henry ex rel. BSC Ventures Holdings, Inc. Employee Stock Ownership Plan v. Wilmington Trust NA, the Third Circuit heard an appeal from a denied motion to dismiss that effectively sought arbitration.
The Henry plaintiff filed in Delaware district court, and the defendants believed that an arbitration provision required arbitration in Virginia. The Delaware district court could not order arbitration to take place outside of its jurisdiction. So the defendants moved to dismiss rather than compel arbitration.
The Third Circuit noted that 9 U.S.C. § 16(a)—which permits appeals from certain orders denying arbitration—does not refer to motions to dismiss. But that court has interpreted § 16(a) to permit appeals from all orders that effectively deny arbitration. “The substance of the motion and order, and not its form, determines its appealability.” And the Henry defendants’ motion effectively sought to compel arbitration.
Henry ex rel. BSC Ventures Holdings, Inc. Employee Stock Ownership Plan v. Wilmington Trust NA, 2023 WL 4281813 (3d Cir. June 30, 2023), available at the Third Circuit and Westlaw
The First Circuit on Appeals from Interlocutory Reconsideration Decisions
In Powers v. Receivables Performance Management, LLC, the First Circuit dismissed an appeal from an order rejecting reconsideration of the denial of arbitration.
The case started in state court, where the state court had denied the defendant’s motion to compel arbitration. After removing the case to federal court, the defendant again sought an order compelling arbitration. But because the defendant did not rely on newly available evidence or argue that the state court’s ruling involved a manifest error of law, the district court treated the motion as one seeking reconsideration. And the denial of reconsideration was not itself immediately appealable.
In a footnote, the court pointed out that the defendant had not argued that state and federal arbitration law differ sufficiently to avoid treatment as a reconsideration motion.
Powers v. Receivables Performance Management, LLC, 2023 WL 3876683 (1st Cir. June 8, 2023), available at the First Circuit and Westlaw
The Tenth Circuit on Bankruptcy Stays & the Appeal Deadline
In Vitamins Online, Inc. v. Heartwise, Inc., the Tenth Circuit held that a bankruptcy stay resets the time to file a cross appeal.
The defendant in Vitamins Online filed its notice of appeal and then filed a Chapter 11 petition for bankruptcy. Under 11 U.S.C. § 361(a)(1), that petition automatically stayed “the commencement or continuation . . . of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the” bankruptcy case. The plaintiff wanted to file a cross-appeal, which normally must come within 14 days of the appeal. But the plaintiff waited until it had received notice of the bankruptcy stay’s termination. It filed its cross-appeal a few days later.
The Tenth Circuit held that this cross-appeal—filed over a year after the original notice of appeal—was timely. The court determined that the taking of a cross-appeal constitutes the “the commencement . . . of a judicial . . . action.” So the defendant’s bankruptcy prevented the filing of a cross-appeal. And under 11 U.S.C. § 108(c)(2), any deadlines pending when a stay is entered expire 30 days after notice of the stay’s end. The plaintiff’s appeal—filed six days after the stay was lifted—was thus timely.
Vitamins Online, Inc. v. Heartwise, Inc., 2023 WL 4189604 (10th Cir. June 27, 2023), available at the Tenth Circuit and Westlaw
The Sixth Circuit Refused to Sanction a Fact-Based Qualified-Immunity Appeal
In England v. City of Columbus, the Sixth Circuit dismissed a fact-based qualified-immunity appeal that also sought review of a Heck defense. But the court declined to sanction the defendant for his appeal.
The case involved a police shooting. Police had handcuffed the plaintiff through a window in his patio. But given that an unsecured dog was also in the patio, police then tried to pull the plaintiff through an open window. While doing so, one officer began to fall into the patio and shot the plaintiff. And according to the district court, a reasonable jury could find facts that would not justify the officer’s use of deadly force:
When the dust settled, critical questions were left unanswered. First, what caused Officer Abel to tip forward? Did his weight shift because Mr. England lunged in a late-stage attempt to overtake Officer Abel—or merely because gravity affected his perch atop the plywood? Second, did Officer Abel know, or should he have known, that Mr. England was handcuffed? Did Officer Abel himself fasten the second cuff on Mr. England’s wrist—or did he reasonably believe that Mr. England’s hands were unrestrained? Whether Officer Abel had probable cause to believe that Mr. England posed an imminent threat of serious physical harm, and the use of deadly force was therefore justified under the circumstances, turns on these questions of fact. Accordingly, summary judgment is not appropriate.
The district court accordingly denied the officer’s request for qualified immunity.
The officer then appealed. And in that appeal, he “wholly fail[ed] to concede the facts in [the plaintiff]’s favor.” He argued that the plaintiff “‘had lunged forward, dragging [the officer] over a walled partition’ and ‘was resisting arrest and attempting to evade arrest when he was shot.’” The defendant never explained why he was entitled to immunity on the facts that the district court thought a reasonable jury could find. In fact, the defendant admitted that the plaintiff’s “‘suggested fact-pattern would very likely defeat summary judgment.’”
The Sixth Circuit also addressed and rejected the defendant’s Heck v. Humphrey defense. The court did not comment on its jurisdiction to do so. Most courts of appeals hold that they cannot address the Heck defense in a qualified-immunity appeal. The Sixth Circuit has a handful of unpublished opinions that go both ways on this issue. England (another unpublished decision) adds to this confusion.
Finally, the Sixth Circuit refused to sanction the defendant for filing a frivolous appeal. The court acknowledged that the appeal had delayed the underlying suit. But “[b]ased on the entire record,” the Sixth Circuit thought that the appeal was not sanctionable.
Thanks to Michael Solimine for sending this case my way.
England v. City of Columbus, 2023 WL 3756177 (6th Cir. June 1, 2023), available at the Sixth Circuit and Westlaw
The Third Circuit Applied Its Forbes Rule to a Qualified-Immunity Appeal
The Third Circuit also dealt with a fact-based qualified-immunity appeal in Minor v. Delaware River & Bay Authority.
The district court had determined that a reasonable jury could find facts establishing that a government job was not political—such that the plaintiff could not be fired for his political affiliation. The Third Circuit thus rejected the defendants’ arguments that the district court had erroneously determined that those fact issues were genuine.
But the district court had not separately analyzed the plaintiff’s claims concerning some of the defendants. Consistent with the Third Circuit’s Forbes rule—which requires district courts to specify the material facts that it thought were genuinely disputed when denying qualified immunity—the Third Circuit remanded for a more full explanation.
Minor v. Delaware River & Bay Authority, 2023 WL 3878398 (3d Cir. June 8, 2023), available at the Third Circuit and Westlaw
The Federal Circuit on Cumulative Finality & Reasonable Mistakes
In WSOU Investments LLC v. Dell Technologies Inc., the Federal Circuit held that a premature notice of appeal was effective as to some orders but not others.
WSOU involved claims concerning three different patents. The district court granted summary judgment to the defendant concerning two of the patents. At a trial concerning the third patent, the district court granted the defendant’s oral motion for judgment as a matter of law. It then ordered the parties to put their positions on that motion in writing. The district court also noted that it would take up an additional defense at some future point. But before the parties or district court could do any of that, the plaintiff appealed from all three decisions.
Although there was no final decision at the time of the appeal, the Federal Circuit noted that subsequent events can save a premature notice of appeal. Federal Rule of Appellate Procedure 4(a)(2) provides that “[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 court added, however, that the would-be appellant must reasonably believe that the district court had entered an immediately appealable final decision.
As to the district court’s first decision—granting summary judgment for claims concerning two of the patents—Rule 4(a)(2) saved the premature notice of appeal. There was “ambiguity as to whether the district court thought there was anything left for it to do other than enter final judgment in those cases.” So the appellant’s mistaken belief in finality was reasonable.
The second decision—granting judgment as a matter of law on claims concerning the third patent—was different. The district court had directed the parties to file written submissions on the Rule 50 motion, and the district court had not yet resolved one lingering defense. It was “unreasonable for [the appellant] to understand the court’s bench ruling to be an immediately appealable final decision” So the premature notice did not encompass that decision.
WSOU Investments LLC v. Dell Technologies Inc., 2023 WL 3881365 (Fed. Cir. June 8, 2023), available at the Federal Circuit and Westlaw
The Fifth Circuit Split on the Healy Doctrine
In United States v. Hoffman, the Fifth Circuit split on whether Congress has abrogated the Healy doctrine, which allows motions for reconsideration to reset the time to appeal in criminal cases.
Federal Rule of Appellate Procedure 4(b) sets a 14-day deadline for appeals in criminal cases. Rule 4(b)(3) provides that certain post-judgment motions reset the appeal clock, with the clock restarting once the district court resolves the motions. Motions for reconsideration are not listed in Rule 4(b)(3). They’re instead a judicial creation in criminal cases. But in United States v. Healy, the Supreme Court held that such motions reset the appeal clock when filed within the original time to appeal.
The Supreme Court decided Healy in 1964. And at least two courts of appeals (the First and Seventh Circuits) have held that the Sentencing Reform Act of 1984 abrogated the Healy doctrine in the sentencing context. Part of that Act—which is now codified at 18 U.S.C. § 3582(c)—provides limited circumstances in which a district court can modify a sentence. Outside of those circumstances, motions to change a sentence must come via Federal Rule of Criminal Procedure 35(a). And Appellate Rule 4(b)(5) says that a motion under Criminal Rule 35 does not affect the time to appeal.
The defendant in Hoffman filed a motion for reconsideration within 14 days of his sentencing. But that motion did not seek any relief that § 3582(c) authorized. The motion was thus necessarily one under Rule 35(a). The defendant appealed one day after the district court denied that motion. But the notice came 86 days after entry of the judgment.
Hoffman did not produce a majority opinion. The main opinion (per curiam, but seemingly authored by Judge Jolly) avoided deciding whether the timeliness issue. The opinion said it could do so because the outcome was unaffected—whether affirmed on the merits or dismissed for an untimely appeal, the defendant’s sentence remained intact.
Judge Dennis’s opinion did not address the timeliness of the appeal.
Finally, Chief Judge Richman would have held that the combination of § 3582(c), Criminal Rule 35, and Appellate Rule 4 abrogated the Healy doctrine.
United States v. Hoffman, 2023 WL 3910037 (5th Cir. June 9, 2023), available at the Fifth Circuit and Westlaw
Quick Notes
In In re Kramer, the Sixth Circuit held that a bankruptcy appeal (from the bankruptcy court to the district court) was limited to the order designated in the notice of appeal. Federal Rule of Bankruptcy Procedure 8003(a)(3)(B) requires that a notice of appeal “be accompanied by the judgment, order, or decree, or the part of it, being appealed.” Analogizing to Federal Rule of Appellate Procedure 3(c), the Sixth Circuit concluded that the appeal in Kramer was limited to the order designated in the notice of appeal.
In re Kramer, 2023 WL 4044112 (6th Cir. June 16, 2023), available at the Sixth Circuit and Westlaw
In Boone v. Illinois Department of Corrections, the Seventh Circuit explained its reasons for granting a certified appeal under 28 U.S.C. § 1292(b). Explanations like this are useful for future § 1292(b) petitions.
Boone v. Illinois Department of Corrections, 2023 WL 4101427 (7th Cir. June 21, 2023), available at the Seventh Circuit and Westlaw
In American Builders Insurance Co. v. Southern-Owners Insurance Co., the Eleventh Circuit held that an appellant waived any argument that an issue raised in a denied summary-judgment motion was purely legal. The defendant raised this issue (which had to do with the interpretation of an insurance policy) only at summary judgment, which the district court denied. The defendant did not raise the issue again in any motions under Federal Rule of Civil Procedure 50. And it was not until oral argument in the appeal that the defendant argued that the issue was purely legal and thus preserved via the denied summary-judgment motion. The Eleventh Circuit concluded that this was too late.
American Builders Insurance Co. v. Southern-Owners Insurance Co., 2023 WL 4067162 (11th Cir. June 20, 2023), available at the Eleventh Circuit and Westlaw
In Two Bridges, LLC v. City of Youngstown, the Sixth Circuit heard an immediate appeal from the denial of immunity under Ohio state law. The opinion is remarkable only for its focus on whether the law provides an immunity from suit—not the other elements of the collateral-order doctrine.
Two Bridges, LLC v. City of Youngstown, 2023 WL 4030071 (6th Cir. June 15, 2023), available at the Sixth Circuit and Westlaw
In In Re Smith, the Eleventh Circuit pointed out that 28 U.S.C. § 2107(a)’s 30-day window for civil appeals does not apply appeals from the district court in bankruptcy cases. The 30-day deadline for appealing in those cases comes only from Federal Rule of Appellate Procedure 4(a)(2). So the 30-day appeal deadline in bankruptcy cases is not jurisdictional.
In Re Smith, 2023 WL 3886049 (11th Cir. June 8, 2023), available at the Eleventh Circuit and Westlaw
And in Demartini v. Demartini, the Ninth Circuit split on whether an order partitioning land was final. The order granted the partition but did not decide what property each claimant was entitled to. A majority of the court analogized this to an order determining liability but not resolving damages—a non-final order. Judge Bennett dissented to contend that the order ended litigation on the merits and left the district court with nothing more to do.
Demartini v. Demartini, 2023 WL 4044434 (9th Cir. June 16, 2023), available at the Ninth Circuit and Westlaw