Finality traps, Perlman appeals, TRO appeals, and a new cert petition on the scope of § 1447(d) remand appeals.
May 12, 2020
There were a few decisions of note last week. The en banc Fifth Circuit addressed the finality trap in a case that I’ve been following for quite some time. The Second Circuit joined other circuits in cutting back the availability of Perlman appeals. And the Sixth Circuit heard two more appeals involving temporary restraining orders. Also, a new cert petition asks the supreme Court to address the scope of § 1447(d) remand appeals in the context of Baltimore’s climate-change litigation against oil and gas companies.
- The en banc Fifth Circuit addressed its finality trap
- The Second Circuit held that parties cannot take Perlman appeals
- A pair of COVID-19 related TRO appeals
- New cert petition on the scope of § 1447(d) remand appeals
The en banc Fifth Circuit addressed its finality trap
In Williams v. Taylor Seidenbach, Inc., the en banc Fifth Circuit took some teeth out of its finality trap. The finality trap can prevent plaintiffs from appealing when they lose on some claims and voluntarily dismiss the rest. If the remaining claims were voluntarily dismissed without prejudice, most courts of appeals will hold that the district court has not issued a final, appealable decision under 28 U.S.C. § 1291. That’s a fine general rule. But it becomes a trap when courts don’t let plaintiffs fix the finality problem.
The Fifth Circuit plotted a course around the trap in Williams: a Rule 54(b) certification of the claims that the district court dismissed on the merits. The case produced a fascinating set of opinions that touch on a variety of topics. The majority’s decision—though reaching the correct outcome—is an odd one. It appears to read Rule 54(b) to mean that there’s no actual end to a multi-claim action that the district court decides piecemeal. It used Rule 54(b) to solve this problem. But I think this problem is of the majority’s own making, and the majority thereby used Rule 54(b) in an unintuitive and ultimately unnecessary way. Concurring in the judgment, Judge Willett offered a better option: allow litigants to disclaim any right to refile the voluntarily dismissed claims.
For more, see my post on Williams from last week: Avoiding—but Not Disarming—the Finality Trap. I had quite a bit to say.
Williams v. Taylor Seidenbach, Inc., 2020 WL 2111307 (5th Cir. May 4, 2020) (en banc), available at the Fifth Circuit and Westlaw.
The Second Circuit held that parties cannot take Perlman appeals
In Rosner v. United States, the Second Circuit held that a privilege claimant could not immediately appeal discovery orders directed at the claimant’s therapists.
The plaintiff in Rosner sued the United States seeking a tax refund. But he filed his suit more than three years after he filed returns for the years in question. He argued that his tardiness was excused due to his mental disability, and in support he offered letters from his therapists that he suffered from post-traumatic stress disorder and other conditions. The IRS rejected the plaintiff’s claim as untimely. So he sued. The government then sought discovery from the plaintiff’s therapists. The district court refused to quash this discovery request—it held that the plaintiff waived the psychotherapist-privilege privilege by relying on his mental health—and the plaintiff appealed.
The Second Circuit held that it lacked jurisdiction over the appeal. It first held that the collateral-order doctrine did not apply. The collateral-order doctrine allows immediate appeals of district court orders that (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 after a final judgment. In 2009’s Mohawk Industries, Inc. v. Carpenter, the Supreme Court held that litigants cannot use the collateral-order doctrine to appeal discovery orders rejecting claims of attorney-client privilege. The Second Circuit has extended that holding to other privileges. And it saw no reason that Mohawk should not also extend to the psychotherapist-patient privilege.
The court went on to hold that the plaintiff also could not appeal under the Perlman doctrine. Named after the Supreme Court’s 1918 decision in Perlman v. United States, the Perlman doctrine generally allows privilege claimants to immediately appeal discovery orders directed to third parties. But since Mohawk, the courts of appeals have been cutting back on the scope of Perlman appeals, holding that only non-parties may take them. For parties, an appeal after a final judgment suffices. The Second Circuit adopted the reasoning of those cases.
A few years ago, I wrote an article—Perlman Appeals After Mohawk—on why this doctrinal development is wrong.
Rosner v. United States, 2020 WL 2296864 (2d Cir. May 8, 2020), available at the Second Circuit and Westlaw.
A pair of COVID-19 related TRO appeals
We’ve seen a slew of appeals involving temporary restraining orders recently. Last week, the Sixth Circuit issued two opinions addressing the denial of temporary restraining orders against Kentucky’s COVID-19 related restrictions.
Both involved the application of those restrictions to church services at Maryville Baptist Church. The Governor of Kentucky issued two orders that prohibited many mass gatherings and ordered non-life-sustaining organizations to close. Several lawsuits followed, with churches and church attendees arguing that these orders violated their rights under (among other things) the First Amendment. Those plaintiffs also sought TROs against the orders. In two cases—one brought by a church and another by church attendees—the district courts denied the TROs. In both cases, the parties appealed to the Sixth Circuit.
The first decision—Maryville Baptist Church v. Beshear—came down last Saturday. The Sixth Circuit noted the rule that it normally lacks appellate jurisdiction to review TROs. “But,” the court continued, “usually is not always”:
When an order has the practical effect of an injunction, and an appeal furthers the statutory purpose of permitting litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence, we will review it.
(Cleaned up.) The court thought “that time [was] of the essence”—it decided the motion for an injunction pending appeal on a Saturday, on the eve of Sunday services. The case would also quickly become moot, as the Governor had agreed to lift the restrictions as applied to churches on May 20, 2020. And the district court’s decision “ha[d] the practical effect of denying the Church’s motion for a preliminary injunction.” The Sixth Circuit accordingly held that it had jurisdiction to review the TRO.
The second decision—Roberts v. Neace—adopted the reasoning of the first decision. The Roberts court noted that the denial of the TRO was effectively a denial of an injunction. And an immediate appeal was necessary to avoid irreparable harm:
[N]o one can fairly doubt that this appeal will “further the statutory purpose of permit[ting] litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence.” At least four more worship services are scheduled on the Sundays and Wednesdays between today and May 20, when the Governor has agreed to permit places of worship to reopen. Lost time means lost rights.
On the merits, the Sixth Circuit enjoined the restrictions pending appeal.
Maryville Baptist Church v. Beshear, 2020 WL 2111316 (6th Cir. May 2, 2020), available at the Sixth Circuit and Westlaw.
Roberts v. Neace, 2020 WL 2316679 (6th Cir. May 9, 2020), available at the Sixth Circuit and Westlaw.
New cert petition on the scope of § 1447(d) remand appeals
I missed this when it was filed at the end of March, but a new cert petition asks the Supreme Court to resolve the split over the scope of remand appeals under 28 U.S.C. § 1447(d). The case is BP P.L.C. v. Mayor & City Council of Baltimore.
I wrote about the Fourth Circuit’s decision in March: A Deepened Split on the Scope of Remand Appeals. Briefly, the petition stems from Baltimore’s climate-change lawsuit against oil and gas companies. Baltimore filed that suit in state court, the defendants removed it to federal court, and the district court remanded it back to state court. The defendants then tried to appeal the remand.
Section 1447(d) generally bars appellate review of decisions remanding a case to state court. The statute includes two exceptions to that prohibition—when removal was based on the federal-officer removal statute or the civil-rights removal statute. The defendants had invoked eight grounds for removal, one of which was the federal-officer removal statute. But they sought appellate review of all eight grounds. They argued that once the court of appeals has jurisdiction under an exception to § 1447(d), the court can review all aspects of the district court’s remand order.
The Fourth Circuit disagreed. It held that the scope of remand appeals is limited to the express exemptions to § 1447(d). That is, the court of appeals can address only whether removal was proper under the federal-officer or civil-rights removal statutes; the court lacks jurisdiction to review any other ground for removal. Other courts disagree. Focusing on § 1447(d)’s reference to appeals from a remand “order,” these courts hold that the scope of appeal includes every aspect of the district court’s order.
Baltimore’s response is due June 29, 2020.
BP P.L.C. v. Mayor & City Council of Baltimore, No. 19-1189 (Mar 31, 2020), available at the Supreme Court and Westlaw.