The Third Circuit held that a post-judgment decision to void contracts between class members and third-party litigation funders was an immediately appealable collateral order. The case illustrates the difficulties courts face in deciding when litigants can appeal decisions made as part of a district court’s ongoing, post-judgment supervision of a settlement.
May 4, 2019
The Third Circuit tackled a slew of appellate-jurisdiction issues in the latest appeal arising out of the NFL concussion litigation. In In re National Football League Players’ Concussion Injury Litigation, the court partially reversed a district court order that voided all agreements between players and third-party litigation funders. But to get there, the court had to untangle something of a jurisdictional mess. Of particular note is the Third Circuit’s decision about appeals in ongoing, post-judgment proceedings: the court held that the district court’s order voiding the contracts—which was made as part of the district court’s ongoing supervision of a settlement—was final and appealable under the collateral-order doctrine. But another, more administrative order by the district court was not appealable. Other courts have allowed appeals in post-judgment proceedings under a more general and pragmatic approach to appellate jurisdiction. The takeaway is that this area is one that is ripe for future research.
First, some background. The NFL concussion litigation comprises claims by former NFL players based on concussion-related injuries. The district court eventually certified a class of former players and approved a class-wide settlement. The settlement required that players submit claims for damages. But the procedure for submitting claims often resulted in players waiting more than two years before receiving their awards. So hundreds of players contracted with third-party litigation funders to receive cash advances on their awards. These players assigned their rights to their settlement proceeds in exchange for cash. But the settlement agreement prohibited the players from assigning their claims to any third parties. When the district court was made aware of these contracts, it issued an order that declared them void.
Three third-party litigation funders sought to appeal this order and some others. The Third Circuit first dismissed some of the appeals as untimely. The court concluded that for most of the appeals, the relevant date for calculating the time for filing a notice of appeal was the date the district court declared the contracts void. Notices of appeal filed more than 30 days after that date were accordingly untimely, resulting in the dismissal of two appeals.
Another appeal was timely filed from a district court order that came two months after the order declaring the contracts void. This later order directed the settlement claims administrator to disburse proceeds directly to the players who had entered into voided contracts. This order, the Third Circuit concluded, was an administrative and ministerial one that merely gave effect to the earlier order voiding the contracts. It accordingly could not be appealed, even as part of post-judgment proceedings.
The key jurisdictional issue was the appeal from the order voiding the contracts. This order was entered into as part of the district court’s ongoing, post-judgment supervision of the settlement. And as I have written previously, appeals in post-judgment proceedings can pose some unique problems. Like normal, pre-judgment litigation, appellate jurisdiction in post-judgment proceedings comes primarily from 28 U.S.C. § 1291. So § 1291‘s normal finality principles apply—an appeal generally cannot be taken until the end of post-judgment proceedings, when the district court has resolved all issues raised in those proceedings. But determining when those proceedings have actually ended can prove troublesome.
The NFL concussion litigation illustrates this issue. Once the class was certified and the case settled (and the settlement affirmed on appeal), the post-judgment phase of the litigation began. But there’s no clear end point to this phase of litigation. Granted, full payment (or other resolution) of all class members’ claims will mark the end of these proceedings. When that eventuality will occur, however, is unknown. In the meantime, the district court might make a variety of decisions, such as the decision voiding the assignment contracts. The question then arises of when those decisions can be appealed.
One option would be to wait until the actual end of post-judgment proceedings. That’s often unsatisfactory, as long, seemingly interminable delays between the district court’s decision and the appeal might occur. That delay can impose immense and sometimes irreparable costs on the litigants. But not every district court decision made as part of post-judgment proceedings can be immediately appealable; that could result in substantial delays during post-judgment proceedings, with better-resourced parties taking numerous appeals to try and wear down their opponents. It could also create a lot of appellate work—each appeal would likely come before a different panel, which would have to familiarize itself with the case and the issues. It’s often better to consolidate related decisions into a single appeal, so that a single panel can learn the case and resolve all issues in a single decision.
When a post-judgment appeal raises questions of appealability, most courts of appeals have answered those questions by weighing the costs and benefits of an immediate appeal. This sometimes ad-hoc balancing bears the hallmarks of the pragmatic or balancing approach to appellate jurisdiction epitomized by the Supreme Court’s decision in Gillespie v. U.S. Steel Corp. The Supreme Court has seemingly rejected Gillespie’s ad-hoc approach to appellate jurisdiction, courts of appeals frequently disclaim it, and the appellate-jurisdiction scholarship often regards it as a dead case. But I’ve shown that its influence persists in a variety of doctrines that exist in the courts of appeals, one of which involves appeals in post-judgment proceedings.
The influence of two aspects of Gillespie’s balancing approach on appeals in post-judgment proceedings merit mention. First, the courts of appeals often are less concerned with the risks of piecemeal review in these appeals; the main event of litigation is complete and so any appeals will not interfere with it. Second, the courts often look to whether the appellant would have any chance at review were immediate review denied; because of the uncertainty as to when post-judgment proceedings will end, courts are often concerned with providing some opportunity for appellate review.
In the NFL concussion litigation, the Third Circuit echoed these interests. The court began by noting that it should sometimes approach appellate jurisdiction practically rather than technically—a classic Gillespie sentiment. And the court noted that post-judgment proceedings don’t raise as many concern about piecemeal appeal, as the merits litigation is over.
For most courts, that reasoning would be enough to call the order appealable. But the Third Circuit went on to hold that the district court’s order voiding the contracts was final and appealable under the collateral-order doctrine. The collateral-order doctrine is probably the most-common and most-maligned exception to the general final-judgment rule. Simplifying a bit, that doctrine allows for appeals from orders that are (1) conclusive, (2) involve important issues that are separate from the merits, and (3) effectively unreviewable on appeal. According to the Third Circuit, the district court’s order satisfied these requirements. The district court conclusively decided to void the contracts, and the order raised important issues of freedom of contract and district court authority that were separate from the merits of the class action. As to whether the order was effectively unreviewable, the Third Circuit noted that the order could not be appealed alongside any future “final order,” as the merits were resolved and no additional final orders seemed forthcoming.
The Third Circuit ultimately reached the right decision in exercising jurisdiction over the appeal. But I don’t think it need to go the collateral-order-doctrine route. The problem with using the collateral-order doctrine is that collateral-order-doctrine decisions are supposed to be categorical—they identify types of orders that are appealable as of right. Saying a type of order is an appealable collateral order thus opens the door to future appeals of that order. Further, courts often address the appealability of orders as if they were addressing only that particular orders, not a category. That is, they address whether an order should be appealed in the case before them but not as a general matter. The Third Circuit engaged in this type of reasoning.
When courts of appeals use the collateral-order doctrine in this manner, they invite future appeals of similar orders. And sometimes those orders don’t merit immediate review. Granted, courts of appeals can beat back these attempts at appeals by distinguishing the order in question—holding, for example, that a particular order is not sufficiently important to merit an appeal. But when the collateral-order doctrine is used in this manner, it looks a lot like a discretionary appeal. And as Adam Steinman has argued, “the process for invoking the collateral order doctrine (and determining whether it applies to a particular case) is ill-suited to . . . discretionary judgments.” Because collateral-order appeals are appeals as of right, they often involve full briefing on both jurisdiction and the merits—and sometimes even oral argument—before being dismissed for lack of jurisdiction. This is a lot of wasted work. And it can be just as burdensome and costly as actual appeals.
Appeals in post-judgment proceedings are thus another area of federal appellate jurisdiction that is ripe for reform. And it’s one where explicitly discretionary appeals might be wise.
Links
- In re NFL Players’ Concussion Injury Litigation, ___ F.3d ____, 2019 WL 1868828 (3d Cir. 2019): Slip opinion, Google Scholar, Westlaw