Saturday, August 23, 2014

Applying the “embattled doctrine” of pendent appellate jurisdiction

This decision was issued by a motions panel of the court of appeals. The plaintiffs, eleven former employees of an Indiana city, sued the mayor and the city under 42 U.S.C. § 1983, claiming that the mayor violated their First Amendment rights by firing them because of their political affiliations. The district judge granted summary judgment in favor of the mayor with respect to nine of the plaintiffs on the ground that the mayor was entitled to qualified immunity, and denied summary judgment with respect to the other two plaintiffs. The judge also refused to stay the proceedings pending the mayor’s appeal. The motions panel held that the district court should have stayed the case against the mayor pending resolution of the appeal on the merits because he could properly pursue an interlocutory appeal from a denial of qualified immunity and a stay of proceedings against him was required while the reviewing court determined whether he was entitled to qualified immunity.

The key aspect of the decision, however, was the motion panel’s treatment of the city’s separate motion to stay proceedings against it until the mayor’s appeal was decided. The district court denied the city’s motion for summary judgment, in which the city argued that the plaintiffs’ rights were not violated. The city could not invoke qualified immunity and the district court did not issue any order from which the city could immediately appeal. Nevertheless, the city asked the court of appeals to stay all proceedings in the district court and invoked the doctrine of "pendent appellate jurisdiction" as the jurisdictional basis for the court to do so.

Pendent appellate jurisdiction is, Judge Posner observed in writing for the motions panel, an "embattled doctrine" that allows "only a small class of interlocutory appeals." Cases that may fall within its scope are those in which an appeal from one ruling in a district court proceeding creates a "compelling practical reason" to allow an appeal from another ruling in that proceeding even though there is no independent jurisdictional basis for the second appeal.

The motions panel found that this case qualifies. Here, if the merits panel eventually concludes that the mayor did not violate the plaintiffs’ constitutional rights (his principal contention), then the suit against the city will collapse because there is no violation for which it may be accountable. If the panel concludes that, although the mayor may have violated those rights they were not sufficiently well established when he did so to defeat his immunity, then the plaintiffs’ claims against the city will survive the mayor’s (successful) appeal.

The practical problem with allowing the suit against the city to proceed while the mayor’s case is on appeal is that, depending upon the outcome of the appeal, two trials involving the same facts and witnesses may be necessary. On the other hand, if the district court proceedings against the city are stayed and the merits panel decides that the mayor did not violate the plaintiffs’ constitutional rights, then there will be no trial. If (with the stays granted) the merits panel decides that the mayor did violate the plaintiffs’ constitutional rights but is entitled to qualified immunity, there will be one trial, against the city. If the merits panel rejects the mayor’s appeal, the plaintiffs can try their claims against both the mayor and the city in a single proceeding. Each of those outcomes would be preferable to allowing the proceedings in the district court against the city to continue during the pendency of the mayor’s appeal.

Thus, the court found that the city’s status as a party to the mayor’s appeal was indeed pendent because of its interdependence with his appeal. The court emphasized the "exceedingly narrow" scope of its jurisdiction under the circumstances. The city could be treated as a party "only for the purpose of being able to ask us to reverse the district court’s denial of a stay of the proceedings against it in that court." The reviewing court would have no jurisdiction to review any other decisions with respect to the city at this stage.

The motions panel stayed district court proceedings against both the mayor and the city pending the outcome of the mayor’s appeal on the merits.

Allman v. Smith, 2014 WL 4073113 (7th Cir. Aug. 19, 2014).

Friday, August 22, 2014

Federal appellate review of an order granting leave to add parties that destroys diversity jurisdiction is unavailable

The plaintiff, whose parents were killed when a Union Pacific train derailed, filed a wrongful death action against Union Pacific in Illinois state court. Union Pacific removed the case to federal court, asserting diversity jurisdiction: The decedents were domiciled in Illinois and Union Pacific is a Delaware corporation with its principal place of business in Nebraska. After conducting some initial discovery, the plaintiff sought to amend his complaint to add claims against two Illinois residents employed by Union Pacific. The district court granted the request and, because the parties were no longer completely diverse, remanded the case to state court for lack of subject matter jurisdiction. Union Pacific appealed both the leave to amend and the remand.

An order remanding a case to state court for lack of subject matter jurisdiction "is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d). However, the bar against reviewing remand orders does not prevent the court of appeals from reviewing separate, appealable rulings that happen to be contained in the same document as the remand order. Yet the part of the district court’s order granting leave to amend the complaint was also unappealable because it was not a final order in that it did not grant or deny relief on the merits of any claim and it could be revisited and challenged at later stages of the litigation. Accordingly, the court of appeals found that it was without jurisdiction to consider the appeal.

Alternatively, Union Pacific asked the court to treat the appeal as a petition for mandamus. The "drastic and extraordinary" remedy of mandamus is appropriate only if three conditions are satisfied: (1) there must be no other adequate means to remedy the problem; (2) the party’s right to the writ must be clear and indisputable; and (3) the court must be satisfied that granting the writ would be an appropriate exercise of its discretion. Here, there was another adequate means to remedy the problem of which Union Pacific complained. It could seek reconsideration or later appellate review of the order granting leave to amend in the state courts. Therefore, mandamus relief was neither necessary nor appropriate.

The court of appeals also commented in a footnote that "Union Pacific has not explained how we could issue an order [of mandamus] compelling the district court to take action in a case over which it has already relinquished jurisdiction." But the court simply assumed that it could issue such an order and went on to address Union Pacific’s failure to meet the mandamus requirements.
The court dismissed Union Pacific's appeal and request for a writ of mandamus.

Linder v. Union Pacific Railroad Co., 2014 WL 3892539 (7th Cir. Aug. 11, 2014).

Thursday, August 21, 2014

Federal criminal defendant’s motion to reconsider his sentence did not toll the time to appeal

The defendant was sentenced on July 8, 2013, to 71 months in prison for possessing a firearm as a felon. Pursuant to Rule 4(b)(1)(A) of the Federal Rules of Appellate Procedure, the deadline for filing a notice of appeal was July 22. That deadline is not jurisdictional but it is mandatory and must be enforced if the argument is not waived.

On July 17, the defendant filed a motion titled "Defendant Louis Townsend’s Motion to Reconsider His Sentence." By statute, a motion for sentence modification must be brought under Rule 35 of the Federal Rules of Criminal Procedure. Motions under that rule don’t extend the time for filing an appeal. So the due date for the appeal remained unchanged notwithstanding the motion.

The court explained that there is no common law motion for reconsideration in connection with a criminal sentence in federal court. It noted that "a few unpublished orders from this circuit suggest that a common-law motion for reconsideration might be available in the sentencing context. * * * But unpublished decisions are not binding on subsequent panels." Further, the court stated: "We disavow anything in our unpublished decisions suggesting that district courts retain common-law authority to reconsider a sentence."

On July 19, the district court -- which properly treated the motion as having been brought under Rule 35 -- denied it as untimely. The defendant filed his notice of appeal on July 30. The government argued that the appeal was untimely. Because the appeal was eight days too late, the court of appeals dismissed it.

United States v. Townsend, 2014 WL 3906504 (7th Cir. Aug. 12, 2014).

Tuesday, August 5, 2014

Courts may review arbitration issues at the beginning or the end, but not in the middle

Employers that withdraw from underfunded multiemployer pension plans must pay their share of the shortfall. They can invoke a process that 29 U.S.C. §1401(a) calls arbitration to dispute the plan’s assessments, "though unlike normal arbitration it is neither contractual nor consensual."

The Central States Pension Fund concluded that US Foods withdrew and it assessed some liability for 2008 and some for 2009. US Foods made a timely request for arbitration of the 2009 assessment but it did not ask for arbitration of the 2008 assessment within the time limit.

In response to the Fund’s suit seeking to collect the 2008 assessment and prevent the arbitrator from considering how much US Foods owes for that year, US Foods asked the district court to order the arbitrator to calculate the amount due for 2008 and 2009 jointly. The court ruled that US Foods had missed the deadline for arbitral resolution of the 2008 assessment. US Foods appealed, relying on 9 U.S.C. §16(a)(1)(B), which authorizes an interlocutory appeal from an order "denying a petition under section 4 of this title to order arbitration to proceed."

The court of appeals held that it was without jurisdiction to hear the appeal. US Foods asked that the 2008 assessment be added to the agenda of the arbitrator who was already serving. A judge who adds or subtracts issues in a pending arbitration has neither compelled nor forbidden arbitration; the judge has instead resolved an issue in the arbitration. Thus, a judge’s order declining to interfere in the conduct of an arbitration is not an order "denying a petition under section 4 of this title to order arbitration to proceed" for the purpose of appellate jurisdiction under §16(a)(1)(B).

The court concluded that "[o]nce the arbitration is over, the losing side can seek judicial review. 29 U.S.C. §1401(b)(2), 1451. Until then matters are in the hands of the arbitrator." The court dismissed the appeal for want of jurisdiction.

Central States, Southeast and Southwest Areas Pension Fund v. US Foods, Inc., 2014 WL 3733773 (7th Cir. Jul. 30, 2014).

Monday, August 4, 2014

Appellate courts rarely look favorably on a party’s arguments on appeal that contradict its assertions in the trial court

Appellee Outland Renewable Energy, LLC ("Outland") asserted numerous counterclaims, taking the position that the federal district court had federal question and supplemental jurisdiction to entertain those claims. The district court dismissed the counterclaims on the merits and denied Outland's motion for leave to amend. On appeal, Outland asserted that the district court erred and was without jurisdiction to consider its counterclaims at all. Outland argued that its own federal claims were so "feeble" that they could not support federal question jurisdiction and that its state law claims fell outside the scope of the court’s supplemental jurisdiction, even though Outland had explicitly invoked supplemental jurisdiction in support of those claims.

It didn’t work. The court of appeals held: "Despite Outland’s perverse contention that its own federal claims were too feeble to invoke jurisdiction, the district court properly exercised federal question and supplemental jurisdiction over the original third-party counterclaims. It also properly applied Illinois substantive law and denied leave to amend Outland’s counterclaims based on futility and undue delay."

Beyond that, the court observed that "Outland’s strategy on appeal could expose it to sanctions under Federal Rule of Civil Procedure 11 or otherwise."

McCoy v. Iberdrola Renewables, Inc., 2014 WL 3703945 (7th Cir. Jul. 28, 2014).

Tuesday, July 8, 2014

Judge Posner rules that the United States Supreme Court is superior to district courts – lest there be any confusion

This appeal arises out of very complex litigation, the description of which Judge Posner decided to "simplify ruthlessly" in his opinion. The background will be simplified even more ruthlessly here to include only the aspects directly relevant to appellate procedure.

The overall case included a bankruptcy action in New York and a fraud claim in the Cook County Circuit Court. The Cook County case was removed to the Northern District federal court. The Judicial Panel on Multidistrict Litigation than transferred the Illinois federal case to the federal court in New York. The case proceeded there and the federal judge in New York eventually entered summary judgment, the reason for which is immaterial to the discussion here. On appeal of the summary judgment, the U. S. Court of Appeals for the Second Circuit vacated the decision and remanded the case to the federal court with directions to abstain and transfer the case back to the Northern District of Illinois so that it could be remanded to the Cook County Circuit Court.

The New York federal judge transferred the case back to the Illinois federal court. However, the federal district court judge in Illinois refused to remand the case back to the state court, apparently believing that the applicable Illinois law was clear so that it would be a waste of time to remand the case to the state court rather than merely decide that case while he had it.

Pursuant to 28 U.S.C. §1334(d), a federal court’s decision to abstain is not reviewable by the court of the appeals or the United States Supreme Court. But, in effect, the federal judge in Illinois reviewed the New York federal court’s abstention decision and overruled it. That is where the procedural problem arises. As Judge Posner explained: "The statute doesn’t say in so many words that an order to abstain is not reviewable by another district court, but the idea that a district judge has appellate authority denied to the U.S. Supreme Court can’t be taken seriously. It would imply that although the Supreme Court could not have reversed the Second Circuit’s decision ordering that the case be returned to the Illinois state court, a district judge could do so."

Judge Posner went on to explain that federal district judges "have appellate authority over decisions by magistrate judges, bankruptcy judges, and certain administrative law judges . . . but not over decisions by other district judges, let alone by courts of appeals." The judge erred in exercising "de facto appellate authority" that he did not possess. Upon transfer, the district judge was "authorized to do naught but remand the case" to the state court and the court of appeals so ordered.

Parmalat Capital Finance Ltd. v. Grant Thornton Int’l, 756 F.3d 549 (7th Cir. 2014).

Friday, June 20, 2014

Judge Posner on pre-briefing dismissal motions in criminal appeals

The government may move to dismiss a criminal appeal in advance of full briefing under Federal Rule of Appellate Procedure 27. The government did so in this appeal, contending that the defendant waived his right to appeal when he pleaded guilty.

In a brief opinion, Judge Posner expressed his view that such filings should be, "though not forbidden, discouraged." According to Judge Posner, the early filing of a motion to dismiss makes sense if the basis is absence of appellate jurisdiction. In that event, there is no point to full briefing. However, where the issue is something short of a jurisdictional challenge, the appellee ought to be allowed to respond to the argument for dismissal within the brief on the merits. Judge Posner observes: "I think it’s better for the government’s motion to be decided when the case is presented to a merits panel for decision, and by that panel." And so it shall be in this case, on Judge’s Posner’s order.

United States v. Manning, 2014 WL 2566843 (7th Cir. June 9, 2014).