Opinion ID: 26485
Heading Depth: 1
Heading Rank: 1

Heading: jurisdiction

Text: 11 On February 8, 1999, the district court entered an order granting summary judgment to, and dismissing all claims against, Columbian. On February 17, 1999, plaintiffs filed both a notice of appeal from the district court's February 8 ruling and a motion to designate the February 8 order in favor of Columbian as final under Federal Rule of Civil Procedure 54(b). On February 22, 1999, the trial court entered partial summary judgment in favor of defendant Henkel, and dismissed all claims against Henkel except for plaintiffs' claim for defective design. The same day, the district court denied the Swopes' Rule 54(b) motion to designate the court's February 8 ruling as final. 12 On April 23, 1999, plaintiffs filed a Rule 41(a) stipulated motion to dismiss the remaining claim against Henkel and a motion to designate both the February 8 and the February 22 orders granting summary judgment as final pursuant to Fed.R.Civ.P. 54(b). The plaintiffs also filed a second notice of appeal on both grants of summary judgment. The plaintiffs' stipulated motion to dismiss was qualified. The dismissal was to be with prejudice if the trial court's summary judgment ruling in favor of Henkel was affirmed on appeal, and without prejudice if the district court was reversed. On May 3, 1999, the district court entered an order dismissing without prejudice the remaining claim against Henkel. 1 Also on that day, the district court granted plaintiffs' second Rule 54(b) motion and expressly designated the February 8 and February 22 summary judgment rulings as final judgments. 2 13 On appeal, Columbian filed a motion to dismiss for lack of appellate jurisdiction, arguing that appellate jurisdiction is defective because appellants' notice of appeal preceded the trial court's designation of its summary judgment decisions as final. Henkel has filed a motion making essentially the same arguments. The Swopes have filed memoranda in opposition, and Henkel has replied. 14 This Court's jurisdiction is limited by 28 U.S.C. § 1291, which authorizes appeals from final decisions of the district courts. Hence, as a general rule, all claims and issues in a case must be adjudicated before appeal, and a notice of appeal is effective only if it is from a final order or judgment. There are exceptions, of course, and one such exception is found in St. Paul Mercury Insurance Co. v. Fair Grounds Corp. 3 In that case, this Circuit held that a premature notice of appeal is effective if Rule 54(b) certification is subsequently granted. 4 Here, the Swopes filed a notice of appeal at the same time they filed for Rule 54(b) certification. Since the Swopes' Rule 54(b) motion was subsequently granted, 5 the rule in St. Paul Mercury Insurance Co. controls and appellate jurisdiction is proper. 15 Appellees argue, however, that St. Paul Mercury Insurance Co. is inconsistent with United States v. Cooper 6 and FirsTier Mortgage Co. v. Investors Mortgage Ins. Co. 7 FirsTier involved a plaintiff who had filed a notice of appeal close to a month before entry of judgment, but after a bench ruling on the same claims. FirsTier held that Federal Rule of Appellate Procedure 4(a)(2) permits a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment. 8 16 In Cooper, the Fifth Circuit relied on FirsTier to hold that no appellate jurisdiction existed where a plaintiff purported to appeal from a magistrate's report and recommendation, even though the district court subsequently entered final judgment. 9 In so holding, it disapproved the  Jetco-Alcorn-Alcom  line of cases, which had held that the circuit can consider a premature appeal where judgment becomes final prior to disposition of the appeal. 10 Though Cooper did not discuss St. Paul Mercury Insurance Co., it stated that to the extent that our prior cases allowed appeal of non-final decisions, they are no longer good law.... 11 17 Cooper does not abrogate St. Paul Mercury Insurance Co. — Cooper is not an en banc opinion, and FirsTier (decided in 1991) is not an intervening decision ( St. Paul Mercury Insurance Co. was decided in 1997). Hence, the Cooper panel cannot have overruled St. Paul Mercury Insurance Co. 12 Moreover, the logic of Cooper is not inconsistent with that of St. Paul Mercury Insurance Co. St. Paul Mercury Insurance Co. may be limited to the Rule 54(b) scenario, because Rule 54(b) was created specifically to avoid piecemeal appeals and to create finality for appeal. 13 Cooper, on the other hand, applies to non-final orders that become final through means other than a Rule 54(b) motion; and arguably it may apply only in the more limited situation where the order purportedly appealed from can never be a final decision. 14 In any event, it is unnecessary to decide today the exact scope of Cooper, since it does not conflict with St. Paul Mercury Insurance Co., by which we are bound. 18 We observe that finality in this case was not created by the filing or granting of the stipulated motion that purported to be a Rule 41(a) dismissal of the remaining claim against Henkel. 15 Hence, the trial court's granting of the Rule 54(b) motion was not superfluous and St. Paul Mercury Insurance Co. controls. 19 It is a settled rule in the Fifth Circuit that appellate jurisdiction over a non-final order cannot be created by dismissing the remaining claims without prejudice. This rule originated in Ryan v. Occidental Petroleum Corp., in which a district court granted a defendant's motion and dismissed the majority of plaintiff's complaint. 16 In order to appeal, the plaintiff obtained an order dismissing without prejudice his remaining substantive claims against the would-be appellees; but the plaintiff did not file a Rule 54(b) motion to designate the earlier ruling as final. 17 The Ryan court found it lacked appellate jurisdiction because a dismissal without prejudice cannot be regarded as terminating the litigation between the[] parties. 18 In the absence of Rule 54(b) certification, the trial court's rulings were held to lack finality under 28 U.S.C. § 1291. 19 20 The Ryan rule is employed by three of our sister circuits. 20 But two circuits have adopted a rule directly contrary to that of Ryan. 21 In addition, three circuits have adopted a sort of middle way that requires them to evaluate cases on an individual basis. 22 Perhaps because of these widely varying approaches, the merits of the Ryan rule were discussed extensively in the Eleventh Circuit opinion of State Treasurer v. Barry. 23 There, a majority of the court defended the Eleventh Circuit's maintenance of the Ryan rule while Judge Cox, in a special concurrence, urged en banc reconsideration of the rule. 21 As Ryan and other courts have stated, a party seeking to create finality through dismissal without prejudice of remaining claims must file for Rule 54(b) certification with the trial court. 24 This permits a trial court to control its docket and make an independent determination whether an appeal is warranted under the circumstances of the case. 25 Judge Cox's approach, which would grant parties automatic right of appeal where they dismiss all remaining claims without prejudice, is dubious for relying on the built-in deterrents to party manipulation. 26 Further, any factors which make an appeal meritorious, and which support the argument for appeal as of right, are properly within the cognizance of the trial court in deciding a Rule 54(b) motion. 22 Hence, the Ryan rule requiring Rule 54(b) certification to create finality will not prevent an appeal where one is warranted. This is especially so since the abrogation of Ryan 's other rule that Rule 54(b) certification is only to be granted in the infrequent harsh case. 27 The fact that the denial of a Rule 54(b) certification is reviewable for abuse of discretion is additional insurance. 23 The Seventh and the Ninth Circuits have adopted an in-between rule that allows jurisdiction as long as the parties have not intended to manipulate the system. 28 However, here we agree with Judge Cox and reject the practice of combing the record for manipulative intent since it waste[s] resources better spent on the merits of an appeal. 29 Ryan 's bright-line rule is therefore preferable as it fosters predictability and streamlines review. 30 24 In short, Ryan means that finality was created when the district court granted the Swopes' Rule 54(b) motion, and St. Paul Mercury Insurance Co. means that appellate jurisdiction is proper because, although the Swopes filed a premature notice of appeal, the orders appealed from were subsequently deemed final pursuant to Rule 54(b).