The strictures of Rule 54(b) judgments, admiralty appeals from the dismissal of crossclaims, the scope of qualified-immunity appeals, and an odd Rule 3(c) decision.
September 7, 2022
Last week, two courts discussed the circumstances in which it’s appropriate for district courts to enter partial judgments under Federal Rule of Civil Procedure 54(b). Both took a pretty narrow view of the rule. The Third Circuit addressed the application of 28 U.S.C. § 1292(a)(3) (which grants appellate jurisdiction over “decrees . . . determining the rights and liabilities of the parties to admiralty cases”) in the context of counterclaims that were dismissed after a choice-of-law decision. The Sixth Circuit refused to address a few issues in a qualified-immunity appeal. And the Eleventh Circuit read a notice of appeal to encompass the dismissal of a complaint and the denial of a second Rule 60 motion, but not the denial of a prior Rule 60 motion.
- Two Examples of Strictly Approaching Rule 54(b)
- The Third Circuit on Admiralty Appeals & the Dismissal of Crossclaims
- The Sixth Circuit on the Scope of Qualified-Immunity Appeals
- The Eleventh Circuit Decided an Odd Rule 3(c) Case
Two Examples of Strictly Approaching Rule 54(b)
Federal Rule of Civil Procedure 54(b) permits district courts to enter a partial judgment on the resolution of some (but not all) claims in a multi-claim suit. The district court has discretion to do so when there is “no just reason for delay”—that is, no reason to delay appellate review of the resolved claims. Last week, two courts addressed when it was proper for a district court to enter such a judgment. And both took a fairly narrow view of Rule 54(b).
Peden v. Stephens
The Eleventh Circuit reversed the entry of a Rule 54(b) judgment in Peden v. Stephens.
Simplifying a bit, the district court had dismissed the plaintiffs’ claims against all but one defendant. Rather than make the dismissed defendants wait for the resolution of the claims against the sole remaining defendant, the district court entered a Rule 54(b) judgment. The district court thought that the resolved claims were distinct from the remaining claim. And it noted that the case might take years to resolve, as Covid-19 had slowed progress.
The Eleventh Circuit reversed. The court of appeals emphasized that there was a presumption against Rule 54(b) judgments. And there must be a risk of “some [particular] danger or hardship or injustice associated with delay.” In other words, there must be reasons not to delay. The district court’s analysis—that it would simply be inconvenient to delay appellate review—was thus inadequate, as that inconvenience exists any time claims are resolved piecemeal.
One other note about Peden: the opinion included an erroneous (but ultimately harmless) statement about Rule 54(b). The Eleventh Circuit said that the rule was “promulgated under the Supreme Court’s authority to ‘define when a ruling of a district court is final,’ 28 U.S.C. § 2072(c).” That’s not right. To be sure, § 2072(c) authorizes the Supreme Court to create rules “defin[ing] when a ruling of a district court is final for the purposes of appeal under” 28 U.S.C. § 1291. But Congress added subsection (c) to § 2072 in 1990. Rule 54(b)’s modern form—requiring a determination of no just reason for delay—dates back to 1946. (You can more about the rule’s early history in Sears, Robuck & Co. v. Mackey.) Further amendments in 1961 clarified that the rule also applied in multi-party actions.
Peden v. Stephens, 2022 WL 3714962 (11th Cir. Aug. 29, 2022), available at the Eleventh Circuit and Westlaw
Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S
In Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S, the First Circuit took a similarly circumscribed view of Rule 54(b), though it ultimately approved of the district court’s decision to enter a judgment.
Simplifying a bit once again, Amyndas Pharmacueitcals involved a pharmaceutical company’s claims against several defendants for misappropriating trade secrets. The district court dismissed the claims against two of those defendants—one for improper venue, the other for failure to state a claim. Over the dismissed defendants’ objection, the district court then entered a Rule 54(b) judgment, and the plaintiff appealed.
The First Circuit rejected the defendants’ challenge to the Rule 54(b) judgment. Like the Eleventh Circuit in Peden, the First Circuit emphasized the presumption against using Rule 54(b). The rule “must be reserved for the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early and separate judgment as to some claims or parties.” And even when the resolved and pending claims do not overlap, “a party seeking entry of partial final judgment must establish a compelling reason for accelerated appellate review.”
The First Circuit determined that the Rule 54(b) judgment in Amyndas Pharmacueitcals was appropriate. Given the dismissal of one defendant on venue grounds—and the claims left pending in the district court—an immediate appeal would determine whether the action must be pursued in two different fora. “And the nature of the rights at issue [in Amyndas Pharmacueitcals]—intellectual property rights that may erode in significance over time—also factor[ed] in favor of speedier review.”
Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S, 2022 WL 4007463 (1st Cir. Sep. 2, 2022), available at the First Circuit and Westlaw
The Third Circuit on Admiralty Appeals & the Dismissal of Crossclaims
In Great Lakes Insurance SE v. Raiders Retreat Realty Co., the Third Circuit heard an admiralty appeal from an order that dismissed a defendant’s counterclaims on choice-of-law grounds.
The case involved a maritime-insurance contract. The district court dismissed the defendant’s Pennsylvania-law counterclaims, concluding that they were barred by the law chosen in the contract (New York’s). The defendant then appealed.
Under 28 U.S.C. § 1292(a)(3), the courts of appeals have jurisdiction over “[i]nterlocutory decrees . . . determining the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are allowed.” The Third Circuit has interpreted this provision to encompass orders that “conclusively determine the merits of a claim or defense.” Striking the counterclaims effectively determined the parties’ rights on those claims. And although other counterclaims remained, the relief sought in the dismissed counterclaims was distinct. The choice-of-law decision thus determined the merits of the counterclaims and was appealable under § 1292(a)(3).
Congratulations to Howard Bashman on the victory in Great Lakes Insurance!
Great Lakes Insurance SE v. Raiders Retreat Realty Co., 2022 WL 3724098 (3d Cir. Aug. 30, 2022), available at the Third Circuit and Westlaw
The Sixth Circuit on the Scope of Qualified-Immunity Appeals
In Campbell v. Cheatham County Sheriff’s Department, the Sixth Circuit refused to review a statute-of-limitations defense as part of a qualified-immunity appeal. The defendant had not invoked pendent appellate jurisdiction, and the statute-of-limitations defense could be effectively reviewed after a final judgment. The court also noted that the defendant taking the appeal disputed some of the facts that formed the basis for the immunity denial. That was improper.
Campbell v. Cheatham County Sheriff’s Department, 2022 WL 3714606 (6th Cir. Aug. 29, 2022), available at the Sixth Circuit and Westlaw
The Eleventh Circuit Decided an Odd Rule 3(c) Case
In Farrukh v. University of South Florida Board of Trustees, the Eleventh Circuit held that a notice of appeal encompassed a dismissal and the denial of a second Rule 60 motion. But it did not permit review of the denial of the first Rule 60 motion.
The district court dismissed the plainitff’s complaint, after which the plaintiff filed a Rule 60(b) motion. The district court denied that motion. The plaintiff then filed a second Rule 60(b) motion. The district court denied that one, too. The plaintiff then appealed. And in that notice of appeal, the plaintiff designated only the second Rule 60 denial
The Eleventh Circuit limited its review to the dismissal and second Rule 60 denial. As a preliminary matter, the appeal was timely. The district court never set out the judgment in a separate document, so the time for appealing did not begin to run until 150 days after the dismissal. The notice of appeal was filed well within that period.
Further, the dismissal and second Rule 60 denial were within the court’s jurisdiction. The plaintiff designated the second Rule 60 denial in his notice of appeal. And Federal Rule of Appellate Procedure 3(c) provides that “a notice of appeal encompasses the final judgment . . . if the notice designates . . . an order described in Rule 4(a)(4)(A).” Rule 4(a)(4)(A) includes the denial of a Rule 60 motion.
But the Eleventh Circuit refused to consider the first Rule 60 denial. It wasn’t designated in the notice of appeal. And Rule 3(c) didn’t expressly include it within the scope of review.
This decision contravenes the spirit of the recent Rule 3(c) amendments, which I thought were going to end the practice of using the order-designation requirement to limit the scope of appeal. I have to imagine, however, that this scenario—two Rule 60 motions denied before the time to appeal has run—is rare.
Farrukh v. University of South Florida Board of Trustees, 2022 WL 3973703 (11th Cir. Sep. 1, 2022), available at the Eleventh Circuit and Westlaw