The Week in Federal Appellate Jurisdiction: February 16–22, 2020

Last week saw a new decisions on finality in bankruptcy under Ritzen Group, the consequences of an interlocutory appeal becoming moot, the content and timing of notices of appeal, and cumulative finality. Plus a new report on discretionary appeals under § 1292(b) and a new cert petition on appealing non-party sovereign immunity.

• New data on § 1292(b) appeals
• Comments closed on the proposed amendments to Appellate Rule 3
• New cert petition on appealing refusals to dismiss for failure to join a sovereign entity
• The Third Circuit held that orders setting bar dates for claims in bankruptcy were not final
• Mootness on appeal doesn’t require vacating interlocutory orders
• The Second Circuit excused a mistake in captioning a notice of appeal
• The Sixth Circuit held that a late notice of appeal was effectively a motion for extension of time
• Cumulative finality saves a premature appeal from the denial of a motion to unseal

New data on § 1292(b) appeals

The Federal Judicial Center released a new report on petitions to appeal under 28 U.S.C. § 1292(b). The report—Emery G. Lee III, Jason A. Cantone & Kristin A. Garri, Permissive Interlocutory Appeals, 2013–2019—presents data on the incidence and resolution of § 1292(b) petitions terminated between October 1, 2013, and June 30, 2019. See my post on the report for a summary of some findings and the report’s executive summary, or use the link below for the full report. It’s only a few pages long and well worth a read.

Emery G. Lee III, Jason A. Cantone, & Kristin A. Garri, Permissive Interlocutory Appeals, 2013–2019 (2020), available at the Federal Judicial Center.

Comments closed on the proposed amendments to Appellate Rule 3

The comment period for the proposed amendments to Federal Rule of Appellate Procedure 3(c) has closed. The regulations.gov docket for the proposed amendments has copies of the comments. The Advisory Committee on Appellate Rules will likely consider the amendment again at its spring meeting.

New cert petition on appealing refusals to dismiss for failure to join a sovereign entity

A new cert petition—City of Ferguson v. Fant—asks if defendants can immediately appeal the denial of motions to dismiss for failure to join a party when that absent party would be protected by sovereign immunity.

The case involves a § 1983 class action against Ferguson, Missouri. The plaintiffs allege that the city wrongfully detained them for minor offenses in overcrowded and unsanitary conditions. They were released only after friends or family paid sufficient fines, which was all part of the city’s policy of using these fines to generate revenue. The city moved to dismiss the plaintiffs’ claims for failure to join a required party under Federal Rule of Civil Procedure 19, arguing that the State of Missouri must be joined—the plaintiffs’ injuries were attributable to the Ferguson Municipal Court, which is an arm of the state and not part of the city. But Missouri could not be joined due to sovereign immunity. So, the city argued, the case should be dismissed.

The district court disagreed and denied the motion to dismiss. The city then tried to appeal—tried to appeal twice, actually. In the first appeal, the Eighth Circuit held that the district court’s decision was not immediately appealable. Granted, the denial of sovereign immunity is normally immediately appealable under the collateral-order doctrine. But the city in Fant was trying to immediately appeal to invoke a non-party’s sovereign immunity. This, the Eighth Circuit held, was improper. The Eighth Circuit later rejected a second attempted appeal, from which the city now seeks cert.

The cert petition argues that the courts of appeals have split on whether a party can immediately appeal due to a non-party’s sovereign immunity. The city seeks review of this appealability question as well as whether the state is a party that must be joined under Rule 19.

The response is due March 19, 2020.

Petition for a Writ of Certiorari, City of Ferguson v. Fant, No. 19-1025 (Feb. 13, 2020), available at the Supreme Court and Westlaw.

The Third Circuit held that orders setting bar dates for claims in bankruptcy were not final

In In re Energy Future Holdings Corp, the Third Circuit held that bankruptcy court orders setting “bar dates” for latent asbestos claim were not final.

Simplifying a fair bit, Energy Future Holdings involved the bankruptcy of an entity with latent asbestosis liability. That is, not all who had been exposed to the debtor’s asbestos had yet contracted an asbestos-related disease. Bankruptcy courts set a “bar date” by which all claims must be filed. Any claims not filed by that date are discharged. But this discharge raises due-process concerns for those (like latent asbestos claimants) with potential future claims. These claimants do not yet know of their injury or the need to file a claim, so the discharge risks depriving them of their claims without notice or an opportunity to be heard. Bankruptcy law allows for courts to protect these latent claimants by establishing a trust. But that’s not the only way to protect them, and the Third Circuit has approved other procedures for doing so.

In the Energy Future Holdings litigation, the bankruptcy court adopted one of those other procedures. It set a bar date for all asbestos—manifest or latent—and directed that any latent claims be pursued under the post-confirmation process for bankruptcy. That process, specified in Federal Rule of Bankruptcy Procedure 3003(c)(3), “allow[s] claimants to file proofs of claim after the bar date if they show excusable neglect.” A group of latent asbestos claimants objected, arguing that setting a bar date for latent claims would violate due process. The bankruptcy court overruled this objection and, after subsequent proceedings, confirmed the debtor’s plan. A group of latent claimants who developed mesothelioma after the bar date appealed the bankruptcy court’s confirmation order and discharge of their claims.

The Third Circuit addressed several issues on its way to affirming the bankruptcy court’s plan of reorganization. Among those were the timeliness of the appeal. The debtor argued that the bankruptcy court order rejecting objections to the bar date was final under Ritzen Group, Inc. v. Jackson Masonry, LLC. Because that order was final, the debtor argued, the latent claimants needed to immediately appeal, and their appeal after confirmation of the reorganization plan was thus too late.

The Third Circuit rejected this argument and held that the appeal was timely. Under Ritzen Group, a final order in bankruptcy resolves a “procedural unit” that is separate from the claim-resolution proceedings. And a separate procedural unit has several characteristics:

• It “initiates a discrete procedural sequence, including notice and a hearing.”
• It “requires application of a statutory standard.”
• And it “does not occur as part of the adversary claims-adjudication process.”

The motion to set a bar date, the Third Circuit noted, initiated a “discrete procedural sequent” that included notice and an opportunity to be heard. But no statutory standard existed to govern whether the bar date applied to latent claimants. And the dispute over the bar date was part of the claims-adjudication process. Orders setting bar dates were thus not final. And the claimants could wait until plan confirmation to appeal.

In re Energy Future Holdings Corp, 2020 WL 770021 (3d Cir. Feb. 18, 2020), available at the Third Circuit and Westlaw.

Mootness on appeal doesn’t require vacating interlocutory orders

In Democratic Executive Committee of Florida v. National Republican Senatorial Committee, the Eleventh Circuit dismissed as moot an appeal from a preliminary injunction. In doing so, the court declined to vacate prior decisions in the case.

The case involved a constitutional challenge to Florida’s signature-match requirements for mail-in and provisional votes. Those requirements generally allowed rejecting votes when a voter’s signature did not match a signature on file. Mail-in voters who learned that their votes were rejected had until the day before the election to verify their identity. Voters who cast provisional ballots could not cure any signature defects. The district court entered a preliminary injunction requiring “ballots of those voters who were belatedly notified of signature mismatch to be counted, provided that those voters timely verified their identities by following the normal cure procedures.”

Because that preliminary injunction might have affected the then-recent 2018 election for one of Florida’s seats in the U.S. Senate, the defendants sought an emergency stay and filed an appeal. A panel of the Eleventh Circuit denied the emergency stay. The preliminary injunction then expired two days later. Several months later, Florida amended its voting laws to change the signature-match requirements. The plaintiff voluntarily dismissed its lawsuit, and most of the defendants voluntarily dismissed their appeal of the preliminary injunction.

But one defendant—the National Republican Senate Committee—asked the Eleventh Circuit to vacate the district court’s preliminary-injunction order and the Eleventh Circuit opinion denying the emergency stay. The Eleventh Circuit declined to do so. The changes to Florida law mooted the case, as the Committee conceded. The Eleventh Circuit’s decision denying an emergency stay had no binding legal consequences, nor did it have any res judicata effect. It thus did not need to be vacated. As for the district court’s preliminary-injunction decision, the court of appeals noted that in an appeal from a final judgment, an action’s becoming moot on appeal normally requires vacating the judgment. But interlocutory appeals are different. The Eleventh Circuit thus adhered to the usual practice of simply dismissing the interlocutory appeal as moot without vacating the order appealed from.

Democratic Executive Committee of Florida v. National Republican Senatorial Committee, 2020 WL 813254 (11th Cir. Feb. 19, 2020), available at the Eleventh Circuit and Westlaw.

The Second Circuit excused a mistake in captioning a notice of appeal

In In re Johns-Manville Corp., the Second Circuit held that a party’s notice of appeal was effective even though it named only the party’s attorney.

A bankruptcy court had enjoined an asbestos claimant from suing a debtor directly, instead requiring that the claims be brought against a trust established as part of a 1986 bankruptcy settlement. The claimant appealed that decision to the district court. But the notice of appeal named only the claimant’s attorney, not the claimant himself.

Under Federal Rule of Appellate Procedure 3(c), a notice of appeal normally must name at least one of the the appealing parties. And courts will dismiss appeals that do not name any of the appealing parties; we saw an example of this last week. But citing the Supreme Court’s recent decision in Manrique v. United States, the Second Circuit excused what it “characterized as a captioning error.”

In re Johns-Manville Corp., 2020 WL 815776 (2d Cir. Feb. 19, 2020), available at the Second Circuit and Westlaw.

The Sixth Circuit held that a late notice of appeal was effectively a motion for extension of time

In Young v. Kenney, the Sixth Circuit remanded a late-filed appeal to the district court to determine whether an extension of the appeal deadline was warranted.

Young was a prisoner’s civil-rights suit. The plaintiff had filed his notice of appeal three weeks late. But in the notice, the plaintiff explained that he had been transferred to a psychiatric unit shortly before the district court entered its judgment. Prisoners in that unit could not have any property, so the plaintiff did not see the judgment until a few weeks after it was issued.

A district court can extend the time to file an appeal for excusable neglect or good cause. Notices of appeal alone, however, generally don’t count as a motion for an extension of time. But the late-filed notice in Young was more than a normal notice of appeal. It explained why an extension was warranted and “effectively read[] as a motion for an extension of time to file an appeal.” The Sixth Circuit accordingly treated it as such and remanded the case for the district court to determine whether an extension was warranted.

Young v. Kenney, 2020 WL 813814 (6th Cir. Feb. 19, 2020), available at the Sixth Circuit and Westlaw.

Cumulative finality saves a premature appeal from the denial of a motion to unseal

In United States v. Le Chabrier, the Ninth Circuit held that the subsequent resolution of a supervised-release-revocation proceeding saved a notice of appeal filed after the district court refused to unseal certain materials.

The defendant in Le Cahbrier had been convicted of fraud, and the probation service sought to revoke her supervised release after she failed to pay restitution. In those revocation proceedings, the defendant sought to unseal portions of the record. The district court denied the motion to unseal. The defendant then filed a notice of appeal.

The Ninth Circuit instructed the defendant to show cause as to why the appeal should not be dismissed for lack of jurisdiction. But the court of appeals later concluded that the response was unnecessary. The district court had resolved the revocation proceedings before the Ninth Circuit decided the appeal. And the close of those proceedings “[gave] rise to an appealable final decision.”

Although the court of appeals did not say as much, this was an application of cumulative finality. Indeed, it is an example of the most generous approach to cumulative finality. The denial of the motion to unseal was an interlocutory order that could not have been certified for an immediate appeal (in part because this was a criminal case, to which Federal Rule of Civil Procedure 54(b) does not apply). The notice of appeal was thus unquestionably premature. But the subsequent resolution of the revocation proceedings was enough to save the notice.

No one was harmed by the Ninth Circuit’s giving effect to the premature notice—the parties and the court all had sufficient notice that the defendant wanted to appeal. Le Chabrier provides a nice illustration in support of my suggestion to amend the Federal Rules of Appellate Procedure to embrace the broadest approach to cumulative fianlity.

United States v. Le Chabrier, 2020 WL 826195 (9th Cir. Feb. 19, 2020), available at the Ninth Circuit and Westlaw.