The Week in Federal Appellate Jurisdiction: June 20–26, 2021

Last week, the Seventh Circuit explained the circumstances under which litigants can appeal from Colorado River stays: issues need not be identical, nor must the state court proceedings resolve all of the federal action. The Eleventh Circuit held that it could review a denial of asylum even though an immigration petitioner had been granted withholding of removal. In another case, that court refused to extend pendent appellate jurisdiction over the refusal to compel arbitration under state law. Finally, cert-stage briefing is complete in a case that asks if Perlman appeals require a claim of privilege. But the petition is not scheduled for conference until next fall.

• The Seventh Circuit on Appeals from Colorado River Stays
• The Eleventh Circuit Held that an Order Granting Withholding of Removal is a Reviewable Final Order of Removal
• The Eleventh Circuit Refused to Extend Pendent Appellate Jurisdiction to Review a Refusal to Compel Arbitration Under State Law
• Cert-Stage Briefing Complete on Whether Perlman Appeals Require a Claim of Privilege

The Seventh Circuit on Appeals from Colorado River Stays

In Loughran v. Wells Fargo Bank, N.A., the Seventh Circuit reviewed a Colorado River stay—that is, a stay of district court proceedings in favor of state litigation that could resolve an essential part of the federal suit.

Simplifying a bit, Loughran involved a decade or so of foreclosure litigation concerning the plaintiffs’ home. The homeowners in Loughran were defendants in state court foreclosure proceedings, and they pleaded a variety of affirmative defenses. After the bank moved to strike those affirmative defenses, the homeowners sued in federal court. Their complaint alleged fraud and misrepresentations on the part of the bank and the bank’s counsel. Those allegations largely mirrored the homeowners’ affirmative defenses in the state court proceedings. The district court accordingly stayed proceedings pending the outcome of the state foreclosure proceedings, which could resolve many of the homeowners’ claims in their federal suit. The homeowners then appealed.

The Seventh Circuit determined that it had jurisdiction over the appeal. A stay of federal district court proceedings is normally not appealable. But not always:

In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., the [Supreme] Court held that a stay of federal litigation pending the resolution of a state suit was final for the purposes of section 1291 where the federal and state actions “involved [an] identical issue” and that issue was “the only substantive issue present in the federal suit.”

In these circumstances, the state court resolution of the issue would preclude relitigating the issue in federal court. So the stay effectively marks the end of litigation in the district court.

The Seventh Circuit noted, however, that issues need not be identical. They instead need only be “substantially the same,” such that “the state case is likely to dispose of the claims in federal court.” The court also said that the prospect of some further federal litigation did not bar an appeal. The state court proceedings must instead resolve “an essential part” of the federal suit. And the suits in Loughran met these criteria. The state court foreclosure litigation would determine whether the bank was the legal holder of the note in question. And that decision could “largely resolve the federal litigation.”

Loughran v. Wells Fargo Bank, N.A., 2021 WL 2547903 (7th Cir. June 22, 2021), available at the Seventh Circuit and Westlaw.

The Eleventh Circuit Held that an Order Granting Withholding of Removal is a Reviewable Final Order of Removal

In Thamotar v. U.S. Attorney General, the Eleventh Circuit reviewed the denial of asylum even though the immigration courts had withheld removal.

The petitioner in Thamotar fled Sri Lanka. Upon arriving in the United States, he admitted his removability (read: deportability) but sought both withholding of removal and asylum. The immigration courts eventually ordered the petitioner removed but withheld removal. They also rejected his application for asylum.

The petitioner appealed to the Eleventh Circuit, seeking review of the denial of asylum. The court concluded that it had jurisdiction over the appeal despite the order granting withholding of removal. The courts of appeals have jurisdiction to review a “final order of removal.” And an order withholding removal counts as a final order of removal. In order to withhold removal, the immigration courts must first order the petitioner removed. And petitioners granted withholding of removal can still be removed to a third country, just not the one they came from. So the Eleventh Circuit could review the immigration courts’ rejection of the petitioner’s asylum application. The court also noted that the case was not moot, as asylum gave more benefits to the petitioner than withholding.

Thamotar v. U.S. Attorney General, 2021 WL 2460641 (11th Cir. June 17, 2021), available at the Eleventh Circuit and Westlaw.

The Eleventh Circuit Refused to Extend Pendent Appellate Jurisdiction to Review a Refusal to Compel Arbitration Under State Law

In Hamrick v. Partsfleet, LLC, the Eleventh Circuit concluded that it lacked jurisdiction—including pendent appellate jurisdiction—to review the denial of a motion to compel arbitration under state law.

Hamrick involved a purported overtime class action against a trucking company. The company moved to compel arbitration under both the Federal Arbitration Act and state law. The district court denied those requests. The trucking company then appealed.

The refusal to compel arbitration under the Federal Arbitration Act was immediately appealable via 9 U.S.C. § 16(a). But that provision does not include refusals to compel arbitration under state law. And the Eleventh Circuit refused to extend pendent appellate jurisdiction to the state law issue. That court extends pendent appellate jurisdiction only when the appealable issue necessarily resolves the pendent one. And that wasn’t the case in Hamrick—the Eleventh Circuit decided the § 16 appeal without any reference to the state law issues. In the course of doing so, the Eleventh Circuit noted its disagreement with the Third Circuit’s decision in Palcko v. Airborne Express, Inc., which extended pendent appellate jurisdiction in similar circumstances.

Hamrick v. Partsfleet, LLC, 2021 WL 2546405 (11th Cir. June 22, 2021), available at the Eleventh Circuit and Westlaw.

Cert-Stage Briefing Complete on Whether Perlman Appeals Require a Claim of Privilege

The petitioner in In re Grand Jury Investigation filed its reply brief in support of cert. The case asks if Perlman appeals require a claim of privilege. You can read more about the issue and the initial petition here. The case is scheduled for conference on September 27, 2021.

Reply Brief of Petitioner, In re Grand Jury Investigation, No. 20-1141 (June 15, 2021), available at the Supreme Court and Westlaw.