In Wilmington Savings Fund Society, FSB v. Myers, the appellant argued that its notice of appeal was timely, when filed within 30 days of a second judgment, and when the first judgment “was mislabeled because even though it purported to dispose of all claims and parties in the case, the title of the order did not signal that it was a final judgment.”

The Fifth Circuit agreed. Noting that “[o]rdinarily, such minor changes to an order do not ‘disturb or revise legal rights and obligations’ of the parties” (cleaned up), it concluded that “there was in this case a clear discrepancy between the label and the body of the district court’s order” that was sufficient to treat it as a substantive revision for purposes of calculating the appeal deadline. No. 24-20018 (March 18, 2024) (applying FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211 (1952)).

(The graphic was provided by DALL-E, and explained by it as follows: “The images above illustrate the concept of a substantive change versus a change solely of form, through the comparison of a caterpillar’s transformation into a butterfly (substantive change) and a chameleon’s color change (change of form).”

“A bench ruling can be effective without a written order and does trigger appeal deadlines if it is final—which this ruling was. While Guerra is right that the district court’s bench ruling did not comply with [Fed. R. Civ. P.] 58’s ‘separate document’ requirement, that neither prevented him from appealing nor gave him infinite time to appeal.” Ueckert v. Guerra, No. 22-40263 (June 27, 2022).

“Where, as here, a rule 12(b)(1) motion is filed in conjunction with a rule 12(b)(6) motion courts must consider the jurisdictional challenge first. The district court did so here, correctly finding jurisdiction lacking. But the district court then dismissed the action with prejudice, which our caselaw prohibits.” Williams v. Am. Commercial Lines, No. 21-30609 (May 24, 2022) (unpublished).

The Fifth Circuit affirmed a default judgment against the Elephant Group when it “agree[d] with the district court that neither claimed defense suffices. The presentation of meritorious defenses requires ‘definite factual allegations, as opposed to mere legal conclusions.’ Legal conclusions were all that were presented.” Tango Marine v. Elephant Group, No. 21-10068 (Dec. 5, 2021) (citations omitted) (On rehearing in 2022, the Court withdrew this opinion.)

“Most of the time, to be sure, Rule 60(b) orders denying relief are final and appealable because ‘Rule 60(b) motions ordinarily are made only after the district court has disposed completely of the subject litigation.’  But this is not so when unresolved matters remain pending in the district court. Where there is no ‘effective termination[] of district-court proceedings, a denial of a Rule 60(b) motion is not final for purposes of 28 U.S.C. § 1291.” Gross v. Keen Group, No. 20-20594 (Dec. 2, 2021) (citations omitted).

The Fifth Circuit affirmed a jurisdiction-based collateral attack on a judgment in Bessie Jeanne Worthy Revocable Trust, reasoning that in the prior litigation, “the Estate’s Texas citizenship defeated diversity among the parties,” creating a “‘total want of jurisdiction’ to enter judgment[.]” No. 20-10492 (Aug. 10, 2021). In so doing, the Court distinguished Picco v. Global Marine Drilling Co., 900 F.2d 846 (5th Cir. 1990), as turning on a distinct question about the effect of the automatic bankruptcy stay. The able Rory Ryan from Baylor’s law school cautions against an overly broad reading of this new opinion.

In Texas practice, “a judgment is final either if ‘it actually disposes of every pending claim and party’ or ‘it clearly and unequivocally states that it finally disposes of all claims and all parties.'” Bella Palma LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2021) (emphasis in original, quoting Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex. 2001).

In federal practice, however, “[w]ithout a [Fed. R. Civ. P.] 54(b) order, ‘any order or other decision, however designated, that adjudicates fewer than all the claims or rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties.'” Guideone Ins. Co. v. First United Methodist Church of Hereford, No. 20-10528 (Feb. 22, 2021, unpublished) (emphasis in original, quoting Fed. R. Civ. P. 54).

An unusual Fed. R. Civ. P. 60(b)(5) proceeding did not create appellate jurisdiction: “This case does not yet involve a final determination of the status of the interpleaded funds. Instead, it involves Rule 60(b)(5) relief from a prior order to disburse funds. The district court was not disbursing funds to the other party, but merely ordering that they be returned to the court’s registry pending the outcome of the state court action on remand. As the district court said, there has been no decision on who is entitled to the money. The final judgment has been set aside. Thus, this court lacks jurisdiction to hear this appeal.” Reed Migraine Centers of Texas v. Chapman, No. 20-10156 (Jan. 28, 2021).

The novelty of the international-discovery procedure in 28 USC § 1782 intersected with the collateral-order doctrine about interlocutory appeals in Banca Pueyo SA v. Lone Star Fund: “While we readily conclude that this appeal was premature, we recognize that the unusual nature of section 1782 proceedings results in some uncertainty about when to appeal. Indeed, respondents acknowledged that this might not be the right time, but they appealed now in an abundance of caution. They also worry that an appeal may never be ripe due to the possibility of a future dispute over privilege. But appellate jurisdiction is a ‘practical’ determination, not a speculative one. Once the district court fully resolves the second motion to quash, the scope of section 1782 discovery should be definitively resolved. When that conclusive determination comes, an appeal would be appropriate.”  No. 20-10049 (Oct. 27, 2020) (mem. op.).

The trap: “The Funds sought to render an interlocutory decision appealable by dismissing at least one defendant without prejudice. And under [Williams v. Seidenbach, 958 F.3d 341, 369 (5th Cir. 2020) (en banc)], that means—absent some further act like a Rule 54(b) certification—there is no final, appealable decision.”

The hint: “Because the dismissal without prejudice in this case occurred after the order the Funds seek to appeal, we do not decide how Williams . . . would apply where the dismissal occurred before the adverse, interlocutory order. See Schoenfeld v. Babbitt 168 F.3d 1257, 1265–66 (11th Cir. 1999) (concluding that there was a final decision in such a case).”

Firefighters’ Retirement System v. Citco Group Ltd., No. 19-30165 (July 7, 2020).

Despite the May 11 en banc opinion about the “finality trap,” the plaintiff in CBX Resources v. ACE Am. Ins. Co. remained stuck in the trap after dismissing certain of its claims – against the sole defendant – without prejudice: “To be sure, many cases applying the Ryan rule have multiple defendants, one or more of which was dismissed without prejudice while at least one defendant prevailed on the merits. But Ryan itself was an employment dispute with a single plaintiff suing a single defendant, his employer.” No. 18-50740 (May 12, 2020).

The “finality trap” can arise when a plaintiff sues two defendants and then (a) voluntarily dismisses one defendant without prejudice, and then (b) litigates to conclusion against the other and loses. The plaintiff’s ability to appeal the outcome of proceeding (b) is affected by the lack of a final judgment in proceeding (a), because under Fed. R. Civ. P. 54(b), there is not a final decision as to any one defendant until there is a final decision for all defendants

Williams v. Seidenbach found that entry of a partial final judgment under Rule 54(b) solved the plaintiffs’ problem in that case. (Judge Ho, joined by Chief Judge Owen and Judges Jones, Stewart, Dennis, Elrod, Haynes, Graves, Higginson, and Engelhardt).

A concurrence suggested that future litigants consider “bindingly disclaiming their right to reassert any dismissed-without-prejudice claims” as way to solve the problem. (Judge Willett, joined by Judge Southwick) (Note that all opinions appear in the same PDF document, linked above).

A dissent, focused on the text of Rules 41 and 54, observed that once a “Rule 41(a) dismissal ‘adjudicated’ the plaintiffs’ claims . . . there were no claims pending after that adjudication” which mean that “Rule 54(b) was (and still is) completely irrelevant.” (Judge Oldham, joined by Judges Smith, Duncan and – unexpectedly – Costa).

To be continued . . .

A not-unusual series of events involving a settlement agreement led to a practice tip in Defense Distributed v. U.S. Dep’t of State, No.18-05911 (Jan. 21, 2020):

• Plaintiffs sued several government entities about their right to publish online plans for the “Liberator” (right) a firearm that could be made with a 3-D printer;
• That lawsuit settled, favorably for the publisher;
• The settling parties filed a Rule 41(a)(1)(A)(ii) stipulation of dismissal;
• A few days later, the district court (purported to) enter a final judgment;
• Various states brought a new lawsuit in another federal court to enjoin the settlement; leading the original plaintiffs to try and reopen the case under Fed. R. Civ. P. 59(e).

The Fifth Circuit found that the stipulation divested the district court of jurisdiction, dooming the request to reopen. The Court suggested: “If the parties had wanted to, they could have asked the district court to retain jurisdiction–for example, to oversee enforcement of a settlement agreement.” (citations omitted).

“Here, however, we have an appeal from grant of a motion to dismiss without prejudice to refile. It is not a final judgment because ‘the district court did not adjudicate or dispose of any substantive issues on the merits.'” The King-Morocco v. Banner of N.O., L.L.C., No. 19-30323 (Nov. 27, 2019) (unpubl.) (citations omitted).

Diece-Lisa Indus., Inc. v. Disney Enterprises, Inc., a dispute about trademark rights related to “Lots-O’-Huggin’ Bear” (right), analyzed whether the disposition of several consolidated cases on personal-jurisdiction grounds could be reviewed. After reviewing the specific claims and the applicable standards, the Fifth Circuit “conclude[d] that we have jurisdiction to review the interlocutory orders . . . because they can be ‘regarded as merged into the final judgment terminating'” one of the case numbers. It then affirmed, finding that the plaintiffs’ “franchise theory” (a kind of single-business-enterprise argument) lacked merit, and that a nonexclusive license agreement also was not, by itself, a basis for jurisdiction. No. 17-41268 (Nov. 19, 2019).

The en banc Fifth Circuit will consider the panel opinion in Williams v. Taylor-Seidenbach, Inc., No. 18-31159 (Aug. 15, 2019), which continued to find a lack of appellate jurisdiction over a dispute because of the so-called “finality trap.” In a previous appeal, the Court found a lack of appellate jurisdiction over an order after three defendants had been dismissed without prejudice. The plaintiff returned to district court and obtained a new order directing dismissal with prejudice (with some caveats), but to no avail: “[T]he rule 54(b) judgment did not retroactively transform the prior without-prejudice dismissals into with-prejudice dismissals. . . . [T]he finality trap, which was found to bar appellate jurisdiction in Williams I, remains shut.”  Judge Haynes’s concurrence in the panel opinion asked for en banc review of the Fifth Circuit’s cases on this topic.

The Fifth Circuit reversed an OSHA determination that a company had failed to justify an untimely response, noting that under Fed. R. Civ. P. 60(b)(1) (which OSHA has adopted for this particular situation): “The excusable neglect inquiry is not limited to whether a party’s mistake caused the delay, such cause being expressed in the term ‘neglect,’ but equally concerns whether the party’s mistake or omission was ‘excusable.’ Focusing narrowly on whether a party is at fault for the delay and denying relief if it bears any blame clearly conflicts with Pioneer‘s more lenient and comprehensive standard.” Coleman Hammons Constr. Co. v. OSHA, No. 18-60559 (Nov. 6, 2019).

After an unsuccessful detour to the High Court of the Republic of the Marshall Islands, a plaintiff tried to appeal an award from the Western District of Texas of $26,726 in costs under Fed. R. Civ. P. 41(d) (“Costs of a Previously Dismissed Action”), along with a related order that administratively closed the Texas matter until the costs were paid. The Fifth Circuit found it had no jurisdiction because: (1) administrative closure is not a final judgment; (2) the collateral-order doctrine did not apply, “[s]ince there is no indication that the ordered costs could not be paid and later recovered upon a successful appeal of a final judgment,” and (3) mandamus was not available, especially when: “[A]ppellants here do not allege that they are unable to pay. Unwillingness to pay based on disagreement with the district court’s decision is insufficient. Appellants can obtain relief through direct appeal after a final judgment.” Sammons v. Economou, No. 18-50932 (Oct. 10, 2019).

A party sought to appeal a ruling in a forfeiture action about the M/V Galactica Star (distinct from the Battlestar Galactica, right); the Fifth Circuit dismissed for lack of jurisdiction: “Although a “Final Judgment” was signed and entered in district court, it did not reference Rule 54(b), did not include any language taken from the rule,and did not express the sentiments contained within the rule. The only document referenced in the judgment was the Government’s motion to strike, which did not mention Rule 54(b), the language of the rule, partial finality, or immediate appealability.” United States v. The MV Galactica Star, No. 18-20781 (Oct. 1, 2019). Cf. Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (“[W]hen there has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” (emphasis added)).

DeJoria v. Maghreb Petroleum Exploration, S.A. presents, at first blush, an epic dispute in which “[t]he facts of this case are littered across the pages of the Federal Reporter.” A failed oil-development project in Morocco led to a $130 million judgment from the Moroccan courts. But after years of legal wrangling about the enforceability of that judgment in Texas, “despite the seeming complexity of this case—royal intrigue, a foreign proceeding, almost a billion dirhams at stake—it ends up being resolved on one of the most basic principles of appellate law: deference to the factfinder.” After confirming the correct legal framework, the Fifth Circuit found no clear error in the district court’s fact-findings. No. 18-50348 (Aug. 16, 2019).

The Fifth Circuit’s unfortunate Erie guess in Priester v. JPMorgan Chase Bank, 708 F.3d 667 (5th Cir. 2013), about limitations for an action to quiet title on a home-equity lien, was later rejected by the Texas Supreme Court in Wood v. HSBC Bank USA, 505 S.W.3d 542 (Tex. 2016). Meanwhile, the Priesters’ problems with their lender continued. The Fifth Circuit declined to consider their motion for reconsideration under Fed. R. Civ. P. 60(b), noting a lengthy delay by the Priesters in bringing the motion, and observing: “If a ‘change in law’ automatically allowed the reopening of federal cases, then anytime the Supreme Court resolved a circuit split, the courts that had taken the view that did not prevail would have to reopen cases no matter how long ago the judgments issued. . . . [The Priesters] are worried that the earlier federal judgment against them may pose a res judicata problem. But res judicata is the ordinary result of a final judgment, not an extraordinary circumstance warranting relief from one.” Priester v. JP Morgan Chase, No. 18-40127 (re-released as published on July 1, 2019).

District courts frequently “administratively close” an inactive matter, but that housekeeping measure does not create an appealable order: ‘”A ‘final decision’ generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” In contrast, “a district court order staying and administratively closing a case lacks the finality of an outright dismissal or closure.” By administratively closing the case, the district court retains jurisdiction, meaning it can “reopen the case—either on its own or at the request of a party—at any time.” “[R]eservation of jurisdiction for the purpose of hearing substantive claims . . . precludes appellate jurisdiction because an order framed this way is not a final judgment.”’ Sentry Select Ins. Co. v. Ruiz, No. 18-50605 (May 23, 2019) (unpubl.)

A non-party appealed a discovery issue, complaining about confidentiality protection for documents it produced under subpoena in a complicated antitrust case. The Fifth Circuit reviewed the issue as a collateral order in Vantage Health Plan, Inc. v. Willis-Knighton Medical Center, No. 17-30867 (Jan. 9, 2019). Unfortunately for the movant, that review identified three problems with its position: “First, the bald assertion of competitive harm is insufficient, and Humana was repeatedly unable to articulate a specific harm that would be caused by the disclosure of the documents. Second, Humana ignores the fact that any documents not placed into the record will remain subject to the district court’s protective order and are restricted to ‘attorney’s eyes only.’ . . . Third, those documents that are ultimately filed on the record are still subject to the court’s redaction requirements, which cover all [specific numeric information rates and percentages].”

In a borrower’s lawsuit against the servicer of a home equity loan, the district court entered a partial final judgment pursuant to Fed. R. Civ. P. 54(b) on January 4, 2018. Then, after further review of a remaining claim by a magistrate judge, it entered a second judgment resolving the rest of the case on January 31. The Fifth Circuit held that the notice of appeal was timely as to the second judgment, but not the first. The Court had considerable doubt about whether the appeal of the second judgment could be used to question whether Rule 54(b) had properly been invoked in the first, and also found that the district court had properly used that Rule to handle the borrower’s various claims. Johnson v. Ocwen Loan Servicing LLC, No. 18-10257 (Feb. 21, 2019).

The surprisingly-complex issue of voluntary dismissal, addressed  by Fed. R. Civ. P. 41(a), led to the novel question in Welsh v. Correct Care LLC of whether the lack of an answer to an amended complaint, when the original pleading had been answered, allowed an automatic dismissal without prejudice. The Fifth Circuit held that it did not, and further noted that before the district court could condition such a dismissal on it being with prejudice, it would have to give the plaintiff a choice, as “[a] plaintiff typically ‘has the option to refuse a Rule 41(a)(2) voluntary dismissal and to proceed with its case if the conditions imposed by the court are too onerous.'” No. 17-11522 (Feb. 7, 2019).

Moss and Keating sued Princip, Martin, and the partnership to which the four of them belonged. The defendants removed the case, but after an adverse verdict, raised a problem with subject matter jurisdiction: Moss and Keating were diverse from Princip and Martin – but the partnership, as a citizen of every place the partners lived, was not. The district court dismissed the partnership from the case, finding it necessary but dispensable, and the Fifth Circuit affirmed:

“Although the plaintiffs raised claims for damages derivative of the partnership’s rights, the partnership’s presence in the suit was not necessary to protect the partnership or any of the parties from prejudice. The partnership was a party throughout the litigation, but its role was purely passive, reflecting the reality that its interests did not diverge from the interests represented by the four individual partners and that its  presence played no distinct role in the outcome of the suit against the individuals.”

Moss v. Princip, No. 16-10605 (Jan. 16, 2019).

84 Lumber lost, at the pretrial stage, a construction dispute with Paschen, a general contractor. Paschen then dismissed without prejudice its third-party action against J.A., a general contractor, after which 84 Lumber appealed. The jurisdictional question was whether that dismissal without prejudice made the case unappealable under Ryan v. Occidental Petroleum  577 F.2d 298 (5th Cir. 1978). The Fifth Circuit concluded that it did not: “The purpose of the Ryan rule is to prevent the appealing party from manufacturing jurisdiction by using an ‘end-run around the final judgment rule to convert an otherwise non-final—and thus nonappealable—ruling into a final decision appealable under § 1291.’ But the plaintiff, 84 Lumber, did not participate in Paschen’s dismissal of its remaining third-party claim against J & A, so it did not manufacture appellate jurisdiction.” 84 Lumber Co. v. Continental Casualty Co., No. 18-30170 (Jan. 24, 2019).

A reminder on a basic point of judgment finality for appeal purposes: “FRAP 4(a)(1)(1)(A) requires litigants to file a notice of appeal ‘within 30 days after entry of the judgment or order appealed from.’ The district court entered judgment on March 6, 2018. Kleinman moved for attorney’s fees on March 20, which the court awarded on June 26. Kleinman appealed both the judgment and the fees award on July 23—over four months late for the judgment on the merits. And contrary to Kleinman’s arguments, ‘[m]otions addressing costs and attorney’s fees . . . are considered collateral to the judgment, and do not toll the time period for filing an appeal.’” Kleinman v. City of Austin, No. 18-50612 (Jan. 25, 2019, unpubl.)

The Fifth Circuit noted that “[t]he parties agree that we have jurisdiction over this appeal” in Aggreko LLC v. Chartis Specialty Ins. Co., which arose from rulings on cross-motions for summary judgment in a dispute about insurance coverage. Unfortunately for the parties seeking appellate review, the Court also reminded that “we must sua sponte examine the basis of our own jurisdiction when necessary.” Here, the disposition on summary judgment below did not end the litigation, as it resolved only some claims between some parties, and did not expressly result in the dismissal or entry of relief with respect to any parties’ claims.” No. 18-40325 (Nov. 21, 2018).

Inadvertent calendaring errors can justify relief from some deadlines, but not Rule 60(b)(1), which says that a court “may relieve a party or its legal representative from a final judgment, order, or proceeding,” on the grounds of “mistake, inadvertence, surprise, or excusable neglect.” “A district court does not abuse its discretion when it denies a Rule 60(b)(1) motion due to the ‘careless mistake of counsel.’  In fact, our case law establishes the opposite: ‘a court would abuse its discretion if it were to reopen a case under Rule 60(b)(1) when the reason asserted as justifying relief is one attributable solely to counsel’s carelessness with or misapprehension of the law or the applicable rules of court.'” Rayford v. Karl Storz Endoscopy Am., Inc., No. 18-30602 (Oct. 23, 2018, unpublished) (citations omitted).

Griggs was ordered to arbitrate his dispute with Stream Energy. Griggs refused to do so. When asked by the district court for a status report, in an echo of Bartleby the Scrivener’s famous “I would prefer not to,” Griggs responded in relevant part:

“Griggs anticipated that this Court would have already dismiss[ed] this case for want of prosecution because this Court left him only an arbitration which he has not pursued. So, Griggs states the following for the Court’s consideration: 1. Griggs understands and appreciates this Court’s order compelling arbitration. Griggs believes that the Court cons[idered] all arguments before it ruled. 2. However, Griggs disagrees with this Court’s conclusion that this matter must go to arbitration. 3. Griggs will not pursue arbitration. 4. Griggs stands ready to litigate this case before this Court to a conclusion.”

The district court then dismissed the case without prejudice. After review of the various kinds of dismissals addressed by Fed. R. Civ. P. 41, the Fifth Circuit treated the dismissal order as one for “delay or contumacious conduct” under Rule 41(b) – and thus, declined to reach the merits of the arbitration ruling: “Griggs should not be permitted, through recalcitrance, to obtain the review of the arbitration clause that he was expressly denied in the district court, a review that Congress has foreclosed under the Federal Arbitration Act.” Griggs v. SGE Management LLC, No. 17-50655 (Sept. 27, 2018).

The parties settled and filed an unconditional stipulation of dismissal under Fed. R Civ. P. 41(a)(1)(A)(ii). Months later, one of them sought to reopen that action and rescind the settlement, alleging forgery of a key signature. The Fifth Circuit found that “ancillary jurisdiction” was not available, as that doctrine is limited to (1) “factually interdependent claims” (which “disappear[] . . . after the original federal dispute is dismissed,” or (2) “‘collateral issues’ . . . things like fees, costs, contempt, and sanctions,” which could apply to an appropriate order but not to this type of unconditional dismissal. The Court found jurisdiction under Fed. R. Civ. P. 60(b)(1), which addresses “mistake, inadvertence, surprise, or excusable neglect,”  but was of little help here where the settlement documents expressly allocated risk about later-discovered evidence. Other parts of that rule did not apply. “By unconditionally dismissing this action under Rule 41(a)(1)(A)(ii), the parties divested the district court of subject-matter jurisdiction over their dispute. To reopen this case, Scott must lean on Rule 60(b). But that rule’s six doors remain closed.” National City Golf Finance v. Scott, No. 17-60283 (Aug. 9, 2018).

The district court dismissed fraud claims against an accounting firm for not complying with a Louisiana pre-suit review requirement. The Fifth Circuit affirmed but remanded for clarification as to whether the dismissal was with, or without, prejudice. Fed. R. Civ. P. 41 generally assumes that silence means “with prejudice,” but the Supreme Court has recognized that that rule’s exception for “jurisdiction” goes so far as “encompassing those dismissals which are based on a plaintiff’s failure to comply with a precondition requisite to the Court’s going forward to determine the merits of his substantive claim.”
Firefighters’ Retirement System v. EisenerAmper LLP, No. 17-30273 (Aug. 2, 2018).

In addition to inspiring 600Camp’s most painful pun of 2018, Ditech Financial LLC v. Naumann provides a thorough summary of the requirement – unique to default judgments, among all judgments available under the Federal Rules –  that  the relief awarded “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” As applied here, “Ditech’s demand for judicial foreclosure gave meaningful notice that, in the event of default, a writ of possession would issue in favor of the foreclosure-sale purchaser. Texas’s process of enforcing a judicial foreclosure—and specifically its mechanism for enforcing the foreclosure sale— entails issuance of the writ. Accordingly, in this case the judgment’s provision for future issuance of the writ did not expand or alter the kind or amount of relief prayed for by Ditech.” No. 17-50616 (July 19, 2018, unpublished).

A lawyer sought to appeal a sanctions order; the Fifth Circuit found that it lacked appellate jurisdiction:

• The Court did not accept the district court’s certification under Fed. R. Civ. P. 54(b), as “the claim for relief is the wrongful death and survival cause of action brought by [Plaintiff] . . . [t]he Rule 11 sanctions and referral to the disciplinary committee with findings of . . . misconduct are not claims for relief in this suit”;
• The district court’s Rule 54 order did not contain a certification about “a legal issue that satisfies the substantive requirements of § 1292(b),” and thus could not be treated as an appealable interlocutory order;
• The sanctions ruling was not a “collateral order,” as it is “reviewable after the district court makes its determinations of liability on the merits . . . .”; and
•  A potentially-viable doctrine about the appeal of sanctions orders, combined with an attorney’s withdrawal, did not apply because the relevant counsel remained in the case

Nogess v. Poydras Center LLC, No. 17-30449 (April 3, 2018).

A threshold issue in Hacienda Records LP v. Hacienda Records & Recording Studio, Inc. was whether a ruling about appellants’ standing, in another related action, was entitled to collateral estoppel effect. At the time of the district court’s decision, the other court’s ruling was not final for appeallate purposes. Finding that all elements but one were clearly established, and that the policies behind preclusion doctrines would be well-served by applying collateral estoppel here, the Fifth Circuit noted that with one notable exception, “our court has consistently followed the strict approach to finality, linking the availability of appeal for the prior decision with finality for collateral-estoppel purposes.” The Court then declined to address that issue, accepting and agreeing wiht the district court’s conclusion that “although . . . ‘the doctrine of collateral estoppel does not apply here,’ ‘the court nonetheless agree[s] with the reasoning and conclusions reached” by the other court. No. 16-41180 (Jan. 4, 2018).

The Fifth Circuit affirmed an award of $232,809.92 in costs on an unsuccessful FCA claim, noting: “The district court acknowledged that [Defendant]’s invoices were not detailed but explained that, given nearly three million pages of copies [Defendant] produced for its defense in this case,it would have been impossible for [Defendant] to explain each page’s usefulness.” It also allowed recovery for “costs relating to (1) TIFF image conversion, (2) scanning, (3) formatting electronic documents, and (4) PDF conversion – per [28 U.S.C.] § 1920(4), which allows recovery for ‘exemplification’ and ‘making copies’ of case materials.” In a similar vein, the Court credited the district court’s explanation that the statute “allow[s] a prevailing party to recover the costs of complying with an opposing party’s request to reformat electronic documents or scan hard copies of documents.” United States ex rel King v. Solvay Pharmaceuticals, Inc., No. 160259 (Sept. 12, 2017).

An insurance dispute went to final judgment in 2012, was appealed to the Fifth Circuit and ultimately remanded “for further consideration in the light of hte answer given by the Texas Supreme Court in [In re: Deepwater Horizon, 470 S.W.3d 452 (Tex. 2015)]. On remand, after considering the effect of Deepwater Horizon, the district court reinstated its 2012 judgment. In the second appeal, the parties disputed whether “the post-judgment interest rate, which is significantly lower than the applicable pre-judgment interest rate, should apply from the date of the 2012 judgment because that judgment was not materially changed on remand.” The Fifth Circuit agreed that it should run from the 2012 judgment, noting that the district court did not reopen the record, and the judgment did not materially change. ExxonMobil v. Electrical Reliability Servcs., No. 15-20751 (Aug. 22, 2017).

In LLOG Exploration Co. v. Signet Maritime Corp., after affirming a declaratory judgment about delay damages under a maritime towage contract, the Fifth Circuit found that it lacked jurisdiction over the related award of attorneys’ fees: “[I]n its award of fees and costs to LLOG, the district court did not set a set a specific amount. This court held in S. Travel Club, Inc. v. Carnival Air Lines, Inc., 986 F.2d 125, 131 (5th Cir. 1993), ‘that an order awarding attorney’s fees or costs is not reviewable on appeal until the award is reduced to a sum certain.'” No. 15-31123 (Dec. 23, 2016, unpublished).

In a dispute about a home loan, the district court wrote an opinion found for the defendant mortgage servicer in all respects, including its counterclaim for judicial foreclosure. The final judgment, unfortunately, did not address that claim or otherwise contain “catch-all” language. Because “[t]he district court’s ‘final judgment’ neither adjudicates ‘all claims . . . of all parties,’ nor expressly styles itself as a partial final judgment pursuant to Rule 54(b). . . . this Court has no appellate jurisdiction and cannot review the merits of the case.” Wease v. Ocwen Loan Servicing LLC, No. 16-10521 (Dec. 29, 2016, unpublished).

The ECF records for the Western District of Texas showed that the appellant in Sudduth v. Texas Health & Human Services Commission filed her notice of appeal on August 31 — one day late. Following Franklin v. McHugh, 804 F.3d 627 (2d Cir. 2015), the Fifth Circuit found the ECF notices dispositive and dismissed for lack of jurisdiction. The Court observed that the Western District local rules and Fed. R. App. P. 4(a)(5) allow a party to seek relief from the district court in the event of technical problems with the ECF filing, which the appellant did not do here. Finally, “Sudduth argues that she was not made aware of any jurisdictional defect until this court requested briefing on this issue and that, at the very least, Franklin should not be retroactively applied to her case because it is new law. But, as previously discussed, the local rules and procedures here were sufficiently clear as to the requirements for timely filing, and the onus is on Sudduth, not the court, to be aware of and cure any deficiencies in the notice of appeal.” No. 15-50764 (July 18, 2016).

Bechuck sued Home Depot and Advantage Sales for injuries allegedly suffered in a Home Depot store.  After a pretrial conference at which the district court expressed skepticism about the claims against Home Depot, and a flurry of resulting orders and motions, a final order of dismissal resulted that Bechuck challenged in several ways.  The Fifth Circuit largely agreed with him, concluding, (1) placing a a restriction on where a case can be refiled is not appropriate for a Rule 41(a)(1) or (a)(2) voluntary dismissal, absent any prior history of forum-shopping or other forum-related gamesmanship; and (2) while labelling a Rule 12 dismissal as one under Rule 41(a)(2) is an abuse of discretion, so long as it without prejudice or undue condition, there is no harm because the matter can be freely refiled.  Bechuck v. Home Depot USA, No. 15-20219 (Feb. 17, 2016).

Cal Dive settled a hard-fought lawsuit against Schmidt, one of its divers, who alleged that he suffered a debilitating brain injury on the job.  A year after the settlement, having continued with surveillance that it conducted during the litigation, Cal Dive brought an “independent action” under Fed. R. Civ. P. 60(b)(1) to set aside the settlement, alleging “that, after reaching the Agreement but before signing the Release, Schmidt had acquired a driver’s license and purchased a new car. In the months following the settlement, Schmidt was observed “cutting his grass, shopping, driving, and jogging for at least two miles.”  The Fifth Circuit affirmed dismissal of Cal Dive’s action for failure to plead reliance, noting that during the litigation, “Cal Dive did not believe Schmidt’s allegations or testimony and hired its own experts to examine him over several years.”  Cal Dive Int’l v. Schmidt, No. 15-30300 (Jan. 21, 2016, unpublished).

Ybarra sued the Dish Network, alleging that he received seven calls from it in violation if the Telephone Consumer Protection Act.  The trial court granted partial summary judgment for Ybarra on three of the calls, after which the parties agreed to the dismissal of the remaining claims.  Dish appealed, and Ybarra objected because the final judgment did not reserve Dish’s right to appeal.  Distinguishing the much-criticized case of Amstar Corp. v. Southern Pacific, 607 F.2d 1100 (5th Cir. 1979), the Fifth Circuit concluded: “Amstar only precludes the appeal of a claim directly covered by the consent judgment. Here, claims subject the partial summary judgment are independent of the settled claims. The reservation of a right to appeal [in the settlement agreement] was effective.”  Ybarra v. Dish Network, No. 14-11316 (Oct. 20, 2015).

The Fifth Circuit reversed a ruling that declined to enforce a Moroccan judgment in the case of Dejoria v. Maghreb Petroleum Exploration, S.A., No. 14-51022 (Sept. 30, 2015).  Acknowledging that the Moroccan court system has been criticized for a lack of independence from that country’s king, the Court concluded that “we cannot agree that the Moroccan judicial system lacks sufficient independence such that fair litigation in Morocco is impossible,” and that the defendant had not shown that “Morocco would not recognize an otherwise enforceable foreign judgment only because the judgment was rendered in Texas.”  The Court distinguished other cases involving Iranian “revolutionary courts” and the Liberian court system during that country’s civil war, saying they “exemplify how a foreign judicial system can be so fundamentally flawed as to offend basic notions of fairness.”

Revisiting the forum non conveniens question whether Mexico is an “available alternative” forum for a tort claim, the Fifth Circuit reaffirmed that the damages caps imposed by Mexican law do not disqualify it as a forum, and that this defense may be raised even in the context of moving to set aside a default judgment.  Moreno v. LG Electronics, USA, Inc., No. 14-40563 (Sept. 8, 2015).

The plaintiff in Wooten v. McDonald Transit Assocs. sued for age discrimination and the defendant defaulted.    The trial court received damages evidence and entered judgment for the plaintiff.   The defendant then appeared – unsuccessfully – but obtained reversal from the Fifth Circuit.  No. 13-11035 (Jan 2, 2015).

“On appeal, the [defaulted] defendant, although he may not challenge the sufficiency of the evidence, is entitled to contest the sufficiency of the complaint and its allegations to support the judgment.”   Here, the majority saw the pleading as a “threadbare recital of a cause of action,” especially weak as to causation.  At the hearing, however, “[P]laintiff’s live testimony provides sufficient evidence of each of the elements of his ADEA cause of action to support the entry of default.”

After a careful review of the language of the rules, precedent, and policy, the majority emphasized the pleadings over the evidence: “As there can be no judgment absent competent pleadings, it strains the text of [Rule 55] to suppose that this investigatory power encompasses the adduction of facts necessary to render the pleadings competent in the first place.”  The trial court should have either dismissed or, in one of various ways, ordered amendment of the pleadings and afforded the defendant the chance to answer them.  A dissent found that “[t]his result is inordinately lopsided and, even worse, favors the wearer of the black hat over the wearer of the white hat.”

Sundown Energy could access its oil and gas production facility via the Mississippi River, but had to cross Haller’s land to access it from the highway.  They litigated about Sundown’s rights and reached a settlement, which their counsel read into the record on the day set for trial.  The Fifth Circuit found that the parties had reached a settlement, which the district court had the authority to enforce pursuant to their agreement.  The Court reversed, though, as to the district court’s resolution of several logistical issues: “Here, the district court erred by imposing several terms which either conflicted with or added to the agreement read into the record by the parties. Although the parties gave the district court the authority to enforce and interpret the settlement agreement, the district court did not have the power to change the terms of the settlement agreed to by the parties.”  Sundown Energy L.P. v. Haller, No. 13-30294 et al. (Dec. 8, 2014).

A mortgage servicer sued two individuals, alleging a conspiracy to defraud; the defendants argued that the servicer lacked standing because the notes in question were not properly conveyed.  The case settled during trial, and as part of the settlement “the parties stipulated to several facts, including the fact that the Trusts were the owners and holders of the Loans at issue.”  An agreed judgment followed.  BAC Home Loans Servicing, L.P. v. Groves, No. 13-20764 (Nov. 3, 2014, unpublished).

The defendants then moved to vacate under FRCP 60(b), arguing that the plaintiff lacked standing.  The district court denied the motion and the Fifth Circuit affirmed.  It first noted that “the court will generally enforce valid appeal waivers, [but] a party cannot waive Article III standing by agreement . . .”  Further noting that “parties may stipulate to facts but not legal conclusions,” the Court held: “That is exactly what happened here.  [Defendants] conceded facts that establish [plainitiff’s] status; thus, the district court appropriately reached the resulting legal conclusion that [plaintiff] has standing.”

In somewhat quirky language, the Texas Rules of Civil Procedure set this deadline to answer a lawsuit: “[O]n or before 10:00 a.m. on the Monday next after the expiration of twenty days after the date of service.”  Despite the specific time stated, attorneys often calendar only the answer day, reasoning that a default judgment is unlikely in the space of a few hours.  That practice failed in G&C Land v. Farmland Management Services, in which the plaintiff obtained a default judgment for over $3,000,000 at 10:15 on the critical Monday.  No. 14-10046 (5th Cir. Sept. 23, 2014).

Plaintiff alleged fraud claims about the costs of an agricultural lease on a West Texas farm; the judgment granted recovery on those claims and trebled the damages under the DTPA.  Two hours later, the defendant removed and then sought to set aside the default judgment.  The district court ultimately granted that motion, along with a summary judgment for the defendant on the merits, and the Fifth Circuit affirmed.

Whilte the Fifth Circuit’s opinion is short and unpublished, the district court opinion (page 31 of the attached) goes into substantial detail about the default judgment.  It found a lack of willfulness by the defendant, a lack of prejudice to the plaintiff, and meritorious defenses.  As to willfulness, the district court noted that “fault is attributed only to Farmland’s counsel,” and held: “There is no dispute that Farmland failed to file an answer or remove before the deadline to answer in state court, which failure is attributed to the negligence of Farmland’s counsel.  Yet, such negligence does not amount to willfulness . . . “   It also noted that while Farmland had timely answered after removal in accordance with the Federal rules, “this alone does not excuse Farmland’s failure to timely answer in state court.”

The federal courts’ decisions to set aside the default judgment are clearly correct – the (affirmed) summary judgment shows that the claim lacked merit, and plaintiff was not prejudiced by having to address the merits instead of resting on a 15-minute “gotcha.”  And as to the deadline, the opinions do not address Rule 5 of the Texas Rule of Civil Procedure, which provides:  “If any document is sent to the proper clerk by first-class United States mail in an envelope or wrapper properly addressed and stamped and is deposited in the mail on or before the last day for filing same, the same, if received by the clerk not more than ten days tardily, shall be filed by the clerk and be deemed filed in time (emphasis added).”  A serious argument says that the state court’s speedy grant of a default judgment did not allow Rule 5 a chance to function as intended.

Nevertheless, the district court faulted defense counsel for not answering before 10:00, and used the word “negligence” to describe what happened.  Had the facts been different – a stronger claim, a change of position in reliance on the judgment – the decision could have been closer and counsel’s situation would have become more awkward.  In light of the facts of this case, defense counsel should be mindful of the 10:00 AM deadline in the rules, and factor it into their calendaring system.

A similar article about this case appeared in a recent Texas LawBook.