Appealing without-prejudice dismissals that are silent on amendment, the Fifth Circuit-Federal Circuit fight over patent appeals, the merger rule after failure-to-prosecute dismissals, receivership appeals, appealing denials of the church-autonomy doctrine, and more.
August 24, 2022
Where to begin?
- The En Banc Fourth Circuit on Appeals After Involuntary, Without-Prejudice Dismissals That Are Silent on Amendment
- The Continuing Fifth Circuit-Federal Circuit Fight Over Walker Process Appeals
- The Merger Rule in Appeals After Dismissals for Failure to Prosecute
- The Eleventh Circuit on Appeals from Orders Extending the Scope of a Receivership
- The Second Circuit on Appealing the Church-Autonomy Defense
- Preserving Issues Raised in a Denied Summary-Judgment Motion
- The Week’s Improper Qualified-Immunity Appeals
The En Banc Fourth Circuit on Appeals After Involuntary, Without-Prejudice Dismissals That Are Silent on Amendment
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 s et.
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.
For more on Britt and the uncertainty without-prejudice dismissals can cause, see my post The Finality of Without-Prejudice Dismissals That Are Silent on Leave to Amend.
Britt v. DeJoy (4th Cir. Aug. 17, 2022), available at the Fourth Circuit and Westlaw.
The Continuing Fifth Circuit-Federal Circuit Fight Over Walker Process Appeals
The Fifth and Federal Circuits cannot agree on where appeals of Walker Process claims belong. These claims allege that someone violated the Sherman Act by fraudulently obtaining a patent. The Federal Circuit—which has exclusive jurisdiction over claims arising under the patent laws—thinks that these cases do not arise under the patent laws. So it transfers these appeals to the appropriate regional circuit. The Fifth Circuit—to which the Federal Circuit has sent these cases—disagrees. It thinks that these cases do arise under the patent laws and thus belong in the Federal Circuit. A case recently ping-ponged between these two courts for years before settling in the Federal Circuit. And last summer, in Chandler v. Phoenix Services, LLC, the Federal Circuit transferred another Walker Process appeal to the Fifth Circuit, risking another game of jurisdictional hot potato.
Thankfully the Fifth Circuit ended this round of transfers, concluding that the Federal Circuit’s transfer order in Chandler was “not implausible.” But the Fifth Circuit continued to disagree with the Federal Circuit on where Walker Process appeals belong.
This leaves litigants pursuing Walker Process appeals in a bind: to which circuit should they appeal? There’s now a good chance that wherever they appeal—the Fifth or Federal Circuits—the court of appeals will transfer the case. These circuits have essentially told litigants that if they want the Fifth Circuit to review a Walker Process issue, they should probably appeal to the Federal Circuit. And if they want the Federal Circuit to review the issue, they should probably appeal to the Fifth Circuit.
This is untenable. No good comes from the confusion over where to bring these appeals. And these transfers delay appellate resolution of these cases for no good reason.
For more on Chandler and these transfers, see my post The Continuing Fifth Circuit-Federal Circuit Fight Over Walker Process Appeals.
Chandler v. Phoenix Services, L.L.C., 2022 WL 3355248 (5th Cir. Aug. 15, 2022), available at the Fifth Circuit and Westlaw
The Merger Rule in Appeals After Dismissals for Failure to Prosecute
Dismissals for failure to prosecute are appealable, and the court of appeals will review the propriety of the dismissal. The more interesting issue is what else the court of appeals will review. The merger rule normally means that all interlocutory decisions merge into the final judgment. But allowing litigants to appeal interlocutory decisions by inviting a failure-to-prosecute dismissal rewards dilatory tactics and risks piecemeal review.
The courts of appeals are nearly unanimous in refusing to review interlocutory orders that came before a dismissal for failure to prosecute. The Third Circuit did so in this week’s R & C Oilfield Services LLC v. American Wind Transport Group LLC. The district court ordered that the plaintiffs’ claims be arbitrated. Rather than arbitrate, the plaintiff did nothing, resulting in an eventual dismissal for failure to prosecute. On appeal, the Third Circuit refused to review the arbitration decision. The court of appeals determined that the failure-to-prosecute dismissal prevented the the arbitration decision from merging into the final judgment.
This is a good rule, though I might think about it as a rule of waiver rather than merger: the failure to prosecute waives any challenges to interlocutory orders. I’ll also note that I’ve run across two Second Circuit cases that reviewed interlocutory rulings after a failure-to-prosecute dismissal. And there might be some support for that approach in an old, cryptic Supreme Court decision.
For more on R & C Oilfield, see my post The Merger Rule in Appeals After Dismissals for Failure to Prosecute.
R & C Oilfield Services LLC v. American Wind Transport Group LLC, 2022 WL 3350590 (3d Cir. Aug. 15, 2022), available at the Third Circuit and Westlaw
The Eleventh Circuit on Appeals from Orders Extending the Scope of a Receivership
In SEC v. Complete Business Solutions Group, Inc., the Eleventh Circuit dismissed an appeal from an order expanding the scope of a receivership to include additional parties.
Complete Business Solutions was a securities-enforcement action against several defendants. The district court appointed a receiver over some of the defendants’ property and later expanded the scope of the receivership to include other entities. The defendants did not appeal either of these orders. The district court later expanded the receivership’s scope again to encompass even more entities and property. The defendants then appealed this last order.
The Eleventh Circuit dismissed the appeal. 28 U.S.C. § 1292(a)(2) gives the courts of appeals jurisdiction to immediately review orders “appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof.” The Eleventh Circuit explained that this jurisdictional grant covered the “front-end” and “back-end” of a receivership: “initial orders establishing receiverships and later orders refusing to wind them up.” But § 1292(a)(2) does not say anything about—and thus does not include within the grant of jurisdiction—interim orders on a receivership.
To bolster this conclusion, the Eleventh Circuit contrasted this language with that in § 1291(a)(1). That provision grants jurisdiction over orders “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” It accordingly encompasses not only the front- and back-end of orders regarding injunctions, but lots of orders in between. If § 1292(a)(2) was supposed to have a similarly broad scope, it would have included similarly broad terms.
The court of appeals also noted that a broader reading of § 1292(a)(2) would “contravene[] the general policy against piecemeal appeals”:
A receivership is fluid; its scope will often evolve as proceedings unfold. For just that reason, district courts have “broad powers and wide discretion to determine relief in an equity receivership.” Were we to immediately review all scope-related orders of the sort that this case entails, we would, in effect, become the micromanagers of district courts’ day-to-day administration of receiverships. That is the very sort of meddling the final-judgment rule was designed to prevent.
Finally, the Eleventh Circuit held that the order was also not an appealable injunction. The orders, even if injunctive in nature, were entered in the context of a receivership. The more-specific provision—§ 1292(a)(2)—thus governed.
SEC v. Complete Business Solutions Group, Inc., 2022 WL 3356406 (11th Cir. Aug. 15, 2022), available at the Eleventh Circuit and Westlaw
The Second Circuit on Appealing the Church-Autonomy Defense
In Belya v. Kapral, the Second Circuit held that the refusal to dismiss a suit under the church-autonomy doctrine was not immediately appealable via the collateral-order doctrine.
Belya involved a priest’s defamation claims against several individuals and entities affiliated with the Russian Orthodox Church Outside Russia. The defendants moved to dismiss. They invoked the church-autonomy doctrine, which “provides that religious associations have independence in matters of faith and doctrine and in closely linked matters of internal government.” (Quotation marks omitted.) The district court denied the motion. The court also refused to limit discovery to church-autonomy issues. The defendants then appealed.
The Second Circuit dismissed the appeal for a lack of jurisdiction. The defendants invoked the collateral-order doctrine, which deems certain district court orders final and appealable when they (1) conclusively resolve an issue, (2) involve an important issue that is separate from the merits, and (3) would be effectively unreviewable in an appeal from a final judgment. According to the Second Circuit, rejections of the church-autonomy defense failed all three requirements.
The district court’s order was not a conclusive denial of the church-autonomy defense, as the defendants could raise it again later. The district court held only that the claims in the plaintiff’s complaint did not require dismissal under the defense. Discovery might show otherwise. The order was also not conclusive despite the Church’s having to participate in discovery, as the church-autonomy defense did not provide a blanket protection from discovery.
The district court’s decision was also not separate from the merits, as the church-autonomy doctrine was a defense on the merits.
Nor was the decision effectively unreviewable in a final-judgment appeal. The church-autonomy doctrine is not an immunity from the normal costs and inconveniences of litigation. It’s instead a defense to liability. And defenses to liability can be reviewed after the end of district court proceedings.
Belya v. Kapral, 2022 WL 3378252 (2d Cir. Aug. 17, 2022), available at CourtListener and Westlaw.
Preserving Issues Raised in a Denied Summary-Judgment Motion
The Supreme Court has held that denials of summary judgment are normally not appealable after a trial on the merits. The rule might better be phrased as one of preservation, not appealability. That is, a denied summary-judgment motion normally does not preserve any issues for appeal. A party who wants to preserve any of those issues must raise them again via motions under Federal Rule of Civil Procedure 50.
There is, however, a potential exception to this general rule. The Supreme Court has said that a denied summary-judgment motion might preserve a purely legal issue. Last week, two courts dealt with this general rule and potential exception.
Hickman
Hickman v. Florida Department of Corrections involved employment-discrimination claims. The employer sought summary judgment on a religious-discrimination claim, arguing that the plaintiff had not exhausted that claim before state administrative agencies. The district court denied that motion. The case proceeded to trial, where the jury found that the employer had discriminated against the plaintiff because of his religion. The employer then appealed. And in that appeal, the employer renewed its argument that the plaintiff had failed to exhaust.
The Eleventh Circuit could not address that issue. The employer had raised exhaustion only in its summary-judgment motion. It did not re-raise the issue in Rule 50(a) and (b) motions. The employer in Hickman thus failed to preserve the exhaustion issues. The Eleventh Circuit added that it would not apply an exception for purely legal issues. Even if that exception exists, it did not apply in Hickman: the exhaustion issue was not purely legal.
Hickman v. Florida Department of Corrections, 2022 WL 3372003 (11th Cir. Aug. 16, 2022), available at the Eleventh Circuit and Westlaw.
Joseph v. Joseph
Simplifying a fair bit, Joseph v. Joseph involved a shareholder’s claims against a company’s chief executive officer. The plaintiff sought summary judgment as to whether several purportedly separate entities were in fact part of the company, which would have entitled the plaintiff to share in those entities’ profits. The district court denied the motion. The plaintiff’s claims then proceeded to trial, and the jury found for the defendants. The plaintiff then appealed. And in that appeal, she challenged the denial of summary judgment.
The Sixth Circuit could not address that issue. The plaintiff raised it only in her denied summary-judgment motion. And the issue was not purely legal. There was no dispute as to the law. There was instead a deeply factual dispute about the relationship between the purportedly separate entities and the company.
Joseph v. Joseph, 2022 WL 3536273 (6th Cir. Aug. 18, 2022), available at the Sixth Circuit and Westlaw.
The Week’s Improper Qualified-Immunity Appeals
Defendants have a right to immediately appeal from the denial of qualified immunity. But the scope of those appeals is limited when the district court denies immunity at summary judgment. With rare exceptions, defendants appealing from the denial of qualified immunity at summary judgment can dispute only the materiality of any fact disputes. They cannot argue that the district court erred in concluding that fact disputes were genuine. That is, they cannot dispute the district court’s determination of what a reasonable jury could find.
Defendants regularly flout this limit on the scope of interlocutory qualified-immunity appeals. They appeal from the denial of immunity to argue that the district court erred in determining what a reasonable jury could find. Appellate courts normally dismiss these improper appeals. But at that point, the damage is done. District courts often stay proceedings pending the appeal, which can take months or years to resolve. These improper appeals thus add wholly unnecessary difficulty, expense, and delay to civil-rights litigation. These improper appeals are also one of the main reasons why, should qualified immunity stick around in its current or an altered form, the rules governing qualified-immunity appeals need to change.
Last week saw two examples of these improper qualified-immunity appeals.
Flowers v. Renfro
Flowers v. Renfro involved an excessive-force claim against a police officer. The district court denied the officer’s request for qualified immunity, concluding that genuine fact issues existed as to (among other things) whether the plaintiff was ever told to leave the area, whether the plaintiff argued with the officer, whether the plaintiff was ever told he was under arrest, and whether the plaintiff took an aggressive stance.
The officer nevertheless appealed. And in that appeal, he presented his own version of events. That was improper. The Seventh Circuit accordingly dismissed the appeal for a lack of jurisdiction.
Flowers v. Renfro, 2022 WL 3569595 (7th Cir. Aug. 19, 2022), available at the Seventh Circuit and Westlaw.
Fugate v. Erdos
The plaintiff in Fugate v. Erdos alleged that he was unconstitutionally strip-searched while incarcerated. The district court denied the warden’s request for qualified immunity. There were fact dispute as to (among other things) the manner of a search and the warden’s involvement in ordering those searches.
The warden appealed. And in that appeal, some of his arguments challenged the genuineness of fact disputes, arguing that the district court wrongly credited the plaintiff’s version of events. This was improper. The Sixth Circuit accordingly dismissed the appeal insofar as the warden challenged the factual basis for the immunity denial.
Fugate v. Erdos, 2022 WL 3536295 (6th Cir. Aug. 18, 2022), available at the Sixth Circuit and Westlaw.