Appeals involving manufactured finality in class actions, winding down a trust, Colorado River stays, the scope of qualified-immunity appeals, and more.
January 12, 2022
Last week produced several decisions of note. The most interesting to me was a divided motions panel decision from the Sixth Circuit. The majority refused to dismiss an appeal when the plaintiff asked the district court to grant summary judgment for the defendant. The case strikes me as odd, however, as the plaintiff apparently wants to appeal only an interlocutory class-certification decision—the plaintiff doesn’t seem to challenge its merits loss.
In other decisions, the Eleventh Circuit rejected several proffered grounds for appellate jurisdiction in a case that challenged an order involving the winding down of a trust. The Eighth Circuit split over whether a decision staying an action pending the resolution of related state court proceedings was a Colorado River stay that would warrant an immediate appeal. And several courts addressed their jurisdiction in appeals from the denial of qualified immunity. Plus effective notices of appeal, injunction appeals, and appeals from sealing orders.
- The Sixth Circuit Split on the Application of Microsoft Corp. v. Baker
- The Eleventh Circuit Dismissed an Order Concerning the Winding Down of a Trust
- The Eighth Circuit on Colorado River Appeals
- The Week in Qualified-Immunity Appeals
- Quick Notes
The Sixth Circuit Split on the Application of Microsoft Corp. v. Baker
In Ohio Public Employees Retirement System v. Federal Home Loan Mortgage Corp. (no slip opinion publicly available), the Sixth Circuit refused to dismiss an appeal after the plaintiff requested that the district court grant summary judgment for the defendants.
The opinion is a bit light on details. But it looks like Ohio Public Employees was a purported class action again Freddie Mac. The district court denied class certification, and the Sixth Circuit refused to review that decision under Federal Rule of Civil Procedure 23(f). The plaintiff then asked the district court to grant summary judgment for Freddie Mac. The plaintiff noted that the defendant intended to eventually move for summary judgment, but did not plan do do so for over a year. The plaintiff wanted to accelerate the inevitable resolution of the action so that it could appeal. The district court eventually agreed with the plaintiff’s request and entered summary judgment in favor of Freddie Mac. The plaintiff then appealed. But in that appeal, the plaintiff challenged only the district court’s denial of class certification.
A divided motions panel of the Sixth Circuit refused to dismiss the appeal. Freddie Mac argued that the plaintiff had improperly manufactured an appeal, much like the plaintiffs in Microsoft Corp. v. Baker. But the Sixth Circuit saw a meaningful distinction between Baker and Ohio Public Employees. The plaintiffs in Baker had voluntarily dismissed their claims with prejudice. The plaintiff in Ohio Public Employees had lost at summary judgment (albeit at the plaintiff’s request). That meant the plaintiff in Ohio Public Employees had lost on the merits. It accordingly could appeal.
Judge Griffin dissented. As he read the record, the district court had not determined that the plaintiff’s claims lacked merit. The district court had instead agreed with the plaintiff that the denial of class certification marked the “death knell” of the case. So just like the plaintiffs in Baker, the plaintiff in Ohio Public Employees had tried to manufacture an appeal.
I’m a bit confused by this case. It sounds like the plaintiff actually lost at summary judgment. That the plaintiff requested summary judgment should not matter. Once a plaintiff concedes that—given the district court’s interlocutory decisions—it loses on the merits, the case is effectively over. It shouldn’t matter for appeal purposes that the losing party accelerates the actual end of the case. But the plaintiff in Ohio Public Employees doesn’t seem to dispute its loss on the merits. It has appealed to challenge only the adverse class-certification decision. Unless that class-certification decision affects the merits of the plaintiff’s claims, it seems that any error in class certification would be harmless. So while there’s probably appellate jurisdiction, the appeal looks like a non-starter.
Ohio Public Employees Retirement System v. Federal Home Loan Mortgage Corp., 2022 WL 97152 (6th Cir. Jan. 6, 2022), available at Westlaw.
The Eleventh Circuit Dismissed an Order Concerning the Winding Down of a Trust
In Acheron Capital, Ltd. v. Mukamal, the Eleventh Circuit dismissed an appeal from an order allowing allowing a trustee to auction all of its assets at once, rather than piece by piece.
Simplifying quite a bit, Acheron Capital arose from a securities fraud suit that the SEC brought against a company that sold a particular kind of investment. After the SEC sued, a receiver took over administration of those investments. The plaintiff later acquired some of those investments, and the rest were transferred to a trustee. The trustee eventually decided to liquidate the trust by auctioning off the entire portfolio of investments. The plaintiff sued to stop this sale, arguing that it had a right to bid on each of the investments individually. The district court disagreed and instructed the trustee that it could auction the entire portfolio of investments. The plaintiff then appealed.
The Eleventh Circuit held that it lacked jurisdiction. The court first held that the order was not a final decision under 28 U.S.C. § 1291. In doing so, the Eleventh Circuit rejected four proffered grounds for jurisdiction:
- First, the district court’s decision was not a traditional final decision, as it did not mark the end of the proceedings involving the winding down of the trust. A final decision would not come until the district court approved of the sale.
- Second, the decision was not appealable via the collateral-order doctrine. The decision was not completely separate from the merits of the wind-down proceedings. Nor was it sufficiently important to warrant immediate review. And the plaintiff could effectively appeal the decision after a final judgment—a stay of any sale would address the risk of the sale occurring before appellate review.
- Third, the decision was not appealable under the Supreme Court’s decision in Forgay v. Conrad. To be appealable under Forgay, an order must direct the immediate sale of property. The order in Acheron Capital did not do so.
- Finally, the decision was not appealable under Gillespie v. U.S. Steel Corp., which courts occasionally use to hear an appeal by pragmatically balancing the costs and benefits of delaying review. The Supreme Court has more or less cabined Gillespie to the facts of that case, which were not present in Acheron Capital.
The Eleventh Circuit also held that the decision was not appealable via 28 U.S.C. § 1292(a)(2). That subsection permits appeals from “[i]nterlocutory orders appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof, such as directing sales or other disposals of property.” The former Fifth Circuit (whose precedent the Eleventh Circuit adopted on its creation) has interpreted § 1292(a)(2) to permit appeals from orders requiring or confirming the sale of assets in a receivership. The Eleventh Circuit noted that this rule is in tension with some older Fifth Circuit cases. But it saw no need to reconcile the cases, as the district court had not directed a receiver to sell receivership property.
Acheron Capital, Ltd. v. Mukamal, 2022 WL 58249 (11th Cir. Jan. 6, 2022), available at the Eleventh Circuit and Westlaw.
The Eighth Circuit on Colorado River Appeals
In Window World International, LLC v. O’Toole, a divided Eighth Circuit dismissed an appeal from district court order staying proceedings.
Simplifying a bit, Window World involved two lawsuits between a trademark holder and its licensees. The licensees first sued the trademark holder in North Carolina state court, alleging that their licensing agreements were actually franchise agreements that needed to be reformed. The trademark holder then brought the second suit in a Missouri federal court. This suit alleged that the licensees had infringed the holder’s trademark and competed unfairly. The district court in this second suit granted the licensees’ request to stay the federal proceedings. The case would resume once the North Carolina court had determined the extent to which the licensees could use the trademark holder’s mark. The trademark holder then appealed.
In a divided decision, the Eighth Circuit held that it lacked jurisdiction. The parties and district court had treated the stay as one under Colorado River Water Conservation District v. United States. But it wasn’t. Such a stay would require that the state court litigation effectively resolve the claims in the federal suit. That’s why Colorado River stays can be immediately appealed—the stay effectively puts the plaintiff out of federal court, as the state court litigation will resolve the issues in the federal suit and preclude their re-litigation in federal court. In Window World, however, the North Carolina litigation would not necessarily resolve the trademark holder’s infringement and unfair-competition claims. The district court was not “surrendering jurisdiction” to the state court. It was instead pausing the federal suit pending resolution of a relevant issue—the scope of the trademark license—in state court. This was simply an administrative ruling. It was not an appealable Colorado River stay.
Judge Colloton dissented. As he saw things, the North Carolina litigation could effectively resolve the trademark holder’s federal claims. If the North Carolina court determined that the licensees had unlimited rights to use the mark at issue, that decision would foreclose the trademark holder’s claims. The North Carolina litigation would thus resolve an essential part of the federal suit and could be dispositive. The stay was accordingly one under Colorado River, and the Eighth Circuit had jurisdiction over the appeal.
Window World International, LLC v. O’Toole, 2022 WL 67751 (8th Cir. Jan. 7, 2022), available at the Eighth Circuit and Westlaw.
The Week in Qualified-Immunity Appeals
Several courts addressed their jurisdiction in qualified-immunity appeals.
Sturdivant v. Fine & the Scope of § 1983
In Sturdivant v. Fine, the Tenth Circuit dismissed a qualified-immunity appeal insofar as the defendant argued that she was not acting under color of law. Sturdivant involved race-discrimination claims against a high school dance coach. The district court denied the coach’s request for qualified immunity, and the coach appealed.
On appeal, the coach argued (among other things) that she was no longer the coach—and thus not acting under color of state law—when the discrimination occurred. The Tenth Circuit held that it lacked jurisdiction to address this argument. Defendants may appeal the denial of qualified immunity. But “a challenge to the elements of § 1983 does not involve qualified immunity.” The court accordingly dismissed the appeal insofar as the defendant argued that she did not act under color of state law.
Sturdivant v. Fine, 2022 WL 67734 (10th Cir. Jan. 7, 2022), available at the Tenth Circuit and Westlaw.
Pendent Appellate Jurisdiction Over Municipal Appeals
Two courts addressed their jurisdiction when a municipal defendant invoked pendent appellate jurisdiction to tag along with its employees’ qualified-immunity appeal.
In Hyde v. City of Willcox, the Ninth Circuit heard a city’s appeal from the denial of summary judgment on a municipal-liability claim alongside a qualified-immunity appeal. The allegations against the city were the same as those against two individual defendants that the plaintiffs had sued under a theory of supervisory liability. The Ninth Circuit held that the allegations against the individual defendants did not allege a plausible claim for supervisory liability. That conclusion applied equally to the municipal claim against the city. Because the individual defendants’ qualified-immunity appeal necessarily resolved the merits of the claim against the city, the Ninth Circuit could exercise pendent appellate jurisdiction over the city’s appeal.
In Greene v. Crawford County, the Sixth Circuit dismissed a municipality’s appeal from the denial of summary judgment on a municipal-liability claim. Unlike the Ninth Circuit in Hyde, the Sixth Circuit had affirmed the denial of immunity. The qualified-immunity appeal thus did not necessarily resolve the claims against the municipal defendant. So there were no grounds for exercising pendent appellate jurisdiction over the municipal appeal.
Hyde v. City of Willcox, 2022 WL 55542 (9th Cir. Jan. 6, 2022), ;available at the Ninth Circuit and Westlaw.
Greene v. Crawford County, 2022 WL 34785 (6th Cir. Jan. 4, 2022), available at the Sixth Circuit and Westlaw.
The Week’s Fact-Based Qualified-Immunity Appeal
In Carter v. Butler, the Fifth Circuit dismissed a fact-based qualified-immunity appeal. The plaintiff in Carter sued several jail officials for deliberate indifference to the plaintiff’s serious medical needs. The district court denied the defendants’ request for qualified immunity. According to the district court, genuine fact issues existed as to (among other things) whether the defendants acted with deliberate indifference to the plaintiff’s medical needs.
The defendants appealed. But in that appeal, they argued that there was insufficient evidence of deliberate indifference. Indeed, the defendants highlighted their challenge to the factual basis for the immunity denial:
They requested oral argument to “aid this [h]onorable [c]ourt in clarifying the genuineness of any alleged factual disputes based on the record,” and ask us to review “[w]hether the [d]istrict [c]ourt erroneously determined there was a genuine issue of fact as to whether any individual defendant acted with deliberate indifference and failed to grant qualified immunity.”
The Fifth Circuit explained that it lacked jurisdiction over these arguments. When hearing a qualified-immunity appeal from a summary-judgment decision, the courts of appeals normally cannot address the genuineness of any fact disputes. They instead must take as given the district court’s assessment of what facts a reasonable jury could find. The court of appeals can address only whether those facts amount to a violation of clearly established law.
The defendants’ arguments in Carter all depended on their own version of events—which differed from that which the district court determined a reasonable jury could find. The Fifth Circuit thus lacked jurisdiction over the appeal.
Carter v. Butler, 2022 WL 72730 (5th Cir. Jan. 7, 2022), available at the Fifth Circuit and Westlaw.
Quick Notes
In United States v. Jackson, the Ninth Circuit determined that two filings within the time to file a notice of appeal were effectively a notice of appeal. The district court in Jackson denied the petitioner’s request for relief under 28 U.S.C. § 2255. The petitioner then filed a motion asking the district court to issue a certificate of appealability. Upon realizing that the district court had already granted a certificate of appealability, the petitioner filed a second motion asking that that the first motion be treated as a request to appeal. Only after the time to file a notice of appeal had expired did the petitioner file an actual notice. But the first two filings made it clear that the petitioner in Jackson wanted to appeal the district court’s decision. Because they were both received within the appeal window, they added up to an effective notice of appeal.
United States v. Jackson, 2022 WL 16874 (9th Cir. Jan. 3, 2022), available at the Ninth Circuit and Westlaw.
In Fireman’s Fund Insurance Co. v. Steele Street Limited II, the Tenth Circuit determined that an interlocutory order requiring an insurance company to adhere to a particular insurance provision was an appealable injunction. The parties in Fireman’s Fund disputed (among other things) whether hail damage to the brick facade of a building was covered by an insurance policy. The district court granted partial summary judgment to the insured and ordered the insurance company to perform actions set out in the policy’s appraisal provisions. The insurance company then appealed.
Although the district court’s order was not called an injunction, the Tenth Circuit determined that the decision was an appealable injunction under 28 U.S.C. § 1292(a)(1). An order amounts to an injunction when it is “[1] directed to a party, [2] enforceable by contempt, and [3] designed to accord or protect some or all of the substantive relief sought by a complaint in more than a temporary fashion.” And the district court’s order satisfied each of these requirements: it ordered specific performance of an insurance contract, which was sought by the insured and enforceable by contempt.
Fireman’s Fund Insurance Co. v. Steele Street Limited II, 2022 WL 39392 (10th Cir. Jan. 5, 2022), available at the Tenth Circuit and Westlaw.
In June Medical Services L.L.C. v. Phillips, the Fifth Circuit reviewed an order refusing to unseal certain filings. The court first said that it had jurisdiction to do so via the collateral-order doctrine. It then went on to note that it also had jurisdiction via the law-of-the-case doctrine. The Fifth Circuit had held in a prior appeal involving the unsealing order that it could immediately review the order. That conclusion applied in this subsequent stage of the case.
June Medical Services L.L.C. v. Phillips, 2022 WL 72074 (5th Cir. Jan. 7, 2022), available at the Fifth Circuit and Westlaw.