Court Opinion

ID: 9491888
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:26:34.626187+00
Date Added: 2024-06-11T17:54:59.755009
License: Public Domain

COX, Circuit Judge,
specially concurring:
I agree with the majority that under Ryan v. Occidental Petroleum Corp., 577 F.2d 298, 301-02 (5th Cir.1978), and its progeny this court lacks appellate jurisdiction over this appeal because the parties voluntarily dismissed pending claims without prejudice. I write separately, however, to suggest that the jurisdictional issue presented in this case needs rethinking. Ryan’s rule — which permanently strips some good-faith litigants of their right to appeal — is legally unsound and disserves important policies.
I. Background
The plaintiff here, Michigan’s State Treasurer, sued Harold Barry and a limited partnership (collectively Barry) after a real estate investment deal soured.1 The complaint contained two claims in three counts: Count I alleged breach of contract and sought specific performance of an agreement to purchase an interest in a real-estate partnership; Count II realleged the same breach of contract, but sought damages; and Count III sought attorney fees under O.C.G.A. § 13-6-II as damages for “stubborn litigiousness.” 2 Barry answered and asserted two counterclaims. The first was tortious interference with business relations. The second, a breach-of-fiduciary-duty claim, rested on the possibility that the State Treasurer, by pre*17vailing on the claim asserted in Count I, would exercise partnership-agreement rights to Barry’s harm.
The case proceeded to motions for summary judgment. The district court granted summary judgment against the State Treasurer on Count I and against Barry on the tortious-interference claim. What was left, therefore, was the State Treasurer’s Count II breach-of-contract claim for damages, the State Treasurer’s “stubborn litigiousness” claim for attorney fees, and Barry’s breach-of-fiduciary-duty claim. The “stubborn litigiousness” claim was not mentioned in the pretrial order, and was thus abandoned. Count II may have been implicitly disposed of in the summary judgment order, since its claim concerned the same breach of contract as Count I; in any event, Count II was omitted from the pretrial order as well, and it too was thus abandoned.
The parties then stipulated to dismiss the breach-of-fiduciary-duty claim without prejudice under Fed.R.Civ.P. 41(a)(1)(h). Dismissing was quite understandable — the claim’s success was tied to the merits of the. claims that the court disposed of on summary judgment. Dismissing without prejudice was also a reasonable strategy, because a reversal or vacatur on appeal would revive hopes of success on the claim. The clerk, endorsed the voluntary dismissal, entered judgment, and closed the case.3 The State Treasurer filed a timely notice of appeal. This court has sua sponte concluded that it lacks jurisdiction over the appeal.
II. Issue
Broadly, the issue is whether there has been a “final decision” such that 28 U.S.C. § 1291 confers appellate jurisdiction. There is not a single judgment here that disposes of all claims. Nonetheless, under still-valid former Fifth Circuit law, a series of orders disposing of every claim can together equate to a final judgment. See Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228, 1231 (5th Cir.1973); see also Ryan v. Occidental Petroleum Corp., 577 F.2d 298, 301 (5th Cir.1978) (asking, based on Jeteo, whether a voluntary dismissal qualifies as an order disposing of part of an action). The only claim that the judgment here does not dispose of (or that was not abandoned) is the one that was voluntarily dismissed. Hence, the narrow issue is whether the voluntary dismissal without prejudice of that claim is, like the judgment based on a summary judgment order, a good pillar to support implied final judgment under Jeteo.
Under this circuit’s precedent, the answer is no. “[VJoluntary dismissal of [the plaintiffs] last substantive allegation ... cannot be regarded as terminating the litigation between these parties.” Ryan, 577 F.2d at 301-02. Ryan implies two reasons that the voluntary dismissal without prejudice is not final. The first is a little puzzling. Parties who voluntarily dismiss without prejudice, Ryan reasons, cannot ordinarily appeal because they have not suffered an adverse ruling; therefore, the voluntary dismissal is not final. Put differently, according to the Ryan court the ordinary basis of appellate jurisdiction is final judgment, and if the plaintiff cannot appeal — even for a reason unrelated to finality — then the judgment must not be final. Ryan’s second reason is that a voluntary dismissal without prejudice suggests that the fight goes on. There is always the possibility that the plaintiff will refile the same claim in the same court, thus generating a future appeal. Mesa v. United States, 61 F.3d 20 (11th Cir.1995), and its offspring Construction Aggregates, Ltd. v. Forest Commodities Corp., 147 F.3d 1334 (11th Cir.1998), march down Ryan’s path and add that a plaintiffs ability to refile the dismissed claim promotes piecemeal appeals and judicial inefficiency.
III. Discussion
The jurisdictional issue addressed in Ryan needs revisiting because it is wrongly decided. A current circuit split illustrates the *18debatability of Ryan’s rule.4 Ryan remains good Fifth Circuit law, and the Second and Tenth Circuits apparently follow Ryan’s rule as strictly as this circuit has in Mesa.5 On the other hand, the Sixth and Eighth Circuits have rejected the rule, and the First Circuit has done so implicitly.6 The Seventh and Ninth Circuits have compromised with a subjective approach: there is jurisdiction only if the parties did not intend to manipulate the system.7 The Third Circuit also appears to endorse a case-by-case approach; it concluded in one case that jurisdiction existed, but only because the claims that were voluntarily dismissed without prejudice would be time-barred in the future, anyway.8 For the following reasons, the Sixth, Eighth, and First Circuits stand on firmer ground.
A. Ryan rests on a mistake of law.
First, a Rule 41 voluntary dismissal without prejudice is a final decision. A “final decision” under 28 U.S.C. § 1291 is “one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). A voluntary dismissal, even without prejudice, fits the definition — the district court’s job is finished in that action. Pre and post-Ryan precedent so holds when the plaintiff dismisses the entire action. See Kirkland v. National Mortgage Network, Inc., 884 F.2d 1367, 1369-70 (11th Cir.1989) (“The district court’s order granting voluntary dismissal without prejudice under Rule 41(a)(2) is final and appealable by defendant. ...”); LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 602-03 (5th Cir.1976) (“Where the trial court allows the plaintiff to dismiss his action without prejudice, the judgment, of course, qualifies as a final judgment for purposes of appeal.”) (quoting 5 Moore’s Federal Practice ¶ 41.05[3], at 1068 (2d ed.1975); accord! 9 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2376 (2d ed. 1995 & 1998 Supp.)). : It is puzzling why a voluntary dismissal of an action without prejudice should be final, while such a dismissal that removes one claim, while others are disposed of otherwise, is not final.
*19B. Ryan is also bad policy.
But abstract legal analysis is not the end of the inquiry. Policy matters, too, in sculpting the final judgment rule. The definition of “final decision” is flexible: we should construe it “pragmatic[ally]” to secure the “ ‘just, speedy, and inexpensive determination of every action.’” Brown Shoe Co. v. United States, 370 U.S. 294, 306, 82 S.Ct. 1502, 1513, 8 L.Ed.2d 510 (1962) (quoting Fed.R.Civ.P. 1). “ ‘[The final decision rule] emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of trial.... In addition, the rule is in accordance with the sensible policy of “avoid[ing] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may' give rise, from its initiation to entry of judgment.” ’ ” Van Cauwenberghe v. Biard, 486 U.S. 517, 521 n. 3, 108 S.Ct. 1945, 1949 n. 3, 100 L.Ed.2d 517 (1988) (quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S.Ct. 669, 673, 66 L.Ed.2d 571 (1981) (in turn quoting Cobbledick v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940))). Ryan’s rule does not serve the interests of just resolution of claims, respect for the busy district courts, or judicial efficiency.
Why Ryan’s rule is a bad idea depends on' whether the district court has relinquished jurisdiction in these cases. That question is debatable. On one hand, the game is over in the district court. All the claims are gone, and the clerk has entered judgment; for these reasons, the Tenth Circuit has concluded that in these cases the district court has lost jurisdiction. See Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 148 (10th Cir.1992). On the other hand, if the judgment is not final, jurisdiction must remain in the district court if it exists anywhere. This is what the second appeal in Mesa implies. See Mesa v. United States, 123 F.3d 1435, 1437 n. 3 (11th Cir.1997). But for present purposes, it does not matter whether the district court has lost jurisdiction; bad results follow either way.
1. Ryan may permanently deny appeal.
First, if we conclude that the district court has lost jurisdiction, Ryan’s rule is draconian. For the crime of what we presume to be crafting premature appellate jurisdiction, the litigant is forever denied the appeal by right that § 1291 bestows. Once the district court has relinquished jurisdiction, the litigant has no sure way of obtaining finality that would permit review of the district court’s order in this action. If the litigant begins a new action with the voluntarily dismissed claims, and that second action proceeds to judgment, the litigant of course cannot raise issues from the first action on appeal in the second action. The Federal Rules of Civil Procedure, moreover, do not provide any explicit mechanism for “undismissing,” after judgment, any voluntarily dismissed claims so that the litigant could ultimately appeal.9
2. Or Ryan may inhibit finality for other purposes.
If, on the other hand, we assume that the district court retains jurisdiction, the litigant *20may have an avenue of appeal: he could seek entry of judgment under Fed.R.Civ.P. 54(b). But entry of judgment under Rule 54(b), unlike an appeal from a final judgment, is not a matter of right. It is, rather, committed to the district court’s discretion, -with the caution that cases appropriate for Rule 54(b) judgment are rare. See Ebrahimi v. City of Huntsville Bd. of Educ., 114 F.3d 162, 166 (11th Cir.1997).
Even if the litigant obtains an appeal, the Rule 54(b) route comes at a cost to finality. That is because, notwithstanding even an affirmance on appeal, the case is still pending below. Maybe there are ways to get rid of such an ever-pending case. When the voluntary dismissal without prejudice is by court order, the court could revisit the order and dismiss with prejudice. See Hardin v. Hayes, 52 F.3d 934, 938 (11th Cir.1995) (district court may reconsider and amend interlocutory orders at any time before final judgment). When the dismissal is by stipulation, however, the court lacks authority to dismiss the action with prejudice. See McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 935 (11th Cir.1987). Perhaps the parties could stipulate to “undismiss” — the Rules provide no such explicit right — but if the parties cannot agree, the action sits indefinitely on the district court’s docket. And in a case such as this one where real estate is involved, the title to that real estate could be forever clouded because litigation affecting the title remains pending in the district court. Furthermore, neither claim preclusion nor issue preclusion would bar a second action asserting the dismissed claims, since the action would have no final judgment. See Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1225 (11th Cir.1998) (claim preclusion); J.R. Clearwater, Inc. v. Ashland Chem. Co., 93 F.3d 176, 179 (5th Cir.1996) (issue preclusion). That means that the litigant could sue again and generate a future appeal.
3. Ryan encourages pointless district-court litigation.
Of course there is one way that litigants could preserve an appeal by right, and avoid landing in Ryan limbo: pursue all claims to disposition on the merits. But forcing parties to do so imposes more work on the district courts and promotes inefficiency. This is because Ryan ignores the legitimate reasons that a litigant may opt for a voluntary dismissal without prejudice over further proceedings or a dismissal with prejudice. Most obviously, the demise of some claims may have “orphaned” the rest.10 For example, the remaining claim may share an element with the resolved claims; a conclusion that no evidence exists to support the common element may sound the tocsin on the remaining claim. Or perhaps the remaining claim'was a setoff or a “defensive counterclaim,” one that the defendant would not have bothered to bring had the plaintiff not picked a fight. Or maybe the claim (like some RICO claims) was not a winner on the merits, but offered other tactical advantages (such as wide-ranging discovery or a chance to blacken the opponent).
In each case, it makes no sense to pursue the claim further now, but if the disposition of the resolved claims is reversed or vacated on appeal, the remaining claim’s usefulness or merit may rise again. The opponent of the orphaned claim could seek an impeccably final decision by moving the district court for summary judgment or dismissal. But it unnecessarily foists work on the busy district court and disserves judicial economy to force a party to pursue a now-pointless claim against his will.
4. But what about piecemeal appeals?
Against all these disadvantages in Ryan’s rule, there is an arguable countervailing concern. That is the specter of repeated appeals by litigants who dismiss claims in order to appeal and then resurrect them on remand or in another action. This concern does not justify Ryan’s rule; there are already built-in deterrents to this kind of conduct.
Voluntary dismissal without prejudice is not, after all, a freebie from the litigant’s *21point of view. When the litigant refiles the claims, he could face meritorious statute-of-limitations arguments. See, e.g., Fassett v. Delta Kappa Epsilon (N.Y.), 807 F.2d 1150, 1155 (3d Cir.1986). Delay is inevitable, moreover, and in that delay memories may fade, documents, may disappear, and witnesses may die or scatter. Refiling entails as well the expenses and hassles of an entirely new action, from (re)discovery to summary judgment motions. In short, it is hard to imagine that litigants would routinely dismiss meritorious claims without prejudice simply to obtain an appeal on other claims.
5. Ryan is an overbroad deterrent to jurisdictional manipulation.
Even if Ryan’s rule were needed to address the concern of manipulative refiling, it sweeps too broadly. Ryan’s logic does not bar jurisdiction only over appeals by cunning litigants. Because Ryan’s rule rests on the conclusion that a voluntary dismissal without prejudice is not final, it bars jurisdiction in the following scenario, as well: A plaintiff wishes to avoid the possibility of appeal, should she prevail in the lawsuit. To her one arguably meritorious claim, therefore, she attaches a second claim that she knows to be meritless. At some time before the defendant answers, she dismisses the second claim without prejudice, as she may do by right under Fed.R.Civ.P. 41(a)(l)(i). Now if she prevails on her first claim, the defendant cannot appeal because any judgment would not be final. Under Ryan, this strategy would work. Whatever the wisdom of punishing crafty litigants, it is hard 'to justify punishing their victims.
6. Ryan is sound in one respect: clarity.
While Ryan generally runs against final-judgment-rule policy, it does serve judicial efficiency in one respect: it provides a bright-line rule. The Seventh and Ninth Circuits’ practice of combing the record for evidence of manipulative intent and the Third Circuit’s analysis of future potential affirma-: five defenses (such as the statute of limitations) waste resources better spent on the merits of appeals. Jurisdiction is a threshold matter. See Brown Shoe Co. v. United States, 370 U.S. 294, 305-06, 82 S.Ct. 1502, 1513, 8 L.Ed.2d 510 (1962). A bright-line rule is therefore preferable to determine whether jurisdiction exists or not. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202, 108 S.Ct. 1717, 1722, 100 L.Ed.2d 178 (1988) (“This practical approach to the matter [of finality] suggests that what is of importance here is ... preservation of operational consistency and predictability in the overall application of § 1291.”). This circuit’s bright-line rule fosters predictability and streamlines review. But the bright line is drawn in the wrong place; dismissals without prejudice should be considered a proper component of a final decision under Jeteo.
TV. Conclusion
For the foregoing reasons, this court should rethink en banc the issue this case and Ryan present. We must especially keep in mind, in interpreting § 1291, that it confers appeal by right. See Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 874, 114 S.Ct. 1992, 1999, 128 L.Ed.2d 842 (1994). The State Treasurer is’ entitled to review of the district court’s construction of the partnership agreement, and in the current state of the law the Treasurer may never get such review. There is no substitute for appeal by right, and depriving the Treasurer of it for Ryan’s reasons is unjustifiable.

. While the merits are not at issue here, they are worth a brief description if only to point out that this permanently barred appeal is not meritless. The Treasurer and Barry were two of several partners in a real estate partnership whose sole asset was an office building. Michigan held the lion's share of the interest in the partnership and had the right to certain preferential treatment. In the early 1990s, the building’s value had declined such that the interests of the partners other than Michigan (given Michigan’s preferences under the partnership agreement) were worthless. To protect its investment, Michigan sought to exercise its right to purchase, on demand, the other partners’ interests. Barry alone balked at the sale because it would have brought him adverse tax consequences. Michigan sued Barry to force conveyance of the interest; the district court granted summary judgment for Barry because Michigan had failed to tender the $1 purchase price and because, according to the district court, Barry had not repudiated the agreement by refusing to convey his interest.

. "The expenses of litigation generally shall not be allowed as a part of the damages; but where the plaintiff has specially pleaded and has made prayer therefor and where the defendant ... has been stubbornly litigious ... the jury may allow them." O.C.G.A. § 13-6-11 (Michie 1982).

. The judgment oddly mentions only Barry's motion for summary judgment; it does not mention the summary judgment against Barry on its first counterclaim. This appears to be a mere clerical error, however, and the summary judgment order is clear — albeit in a footnote — that the district court granted summary judgment against Barry on its first counterclaim.

. Incidentally, this circuit suffers from an internal conflict. See Rebecca A. Cochran, Gaining Appellate Review by “Manufacturing" a Final Judgment Through Voluntary Dismissal of Peripheral Claims, 48 Mercer L.Rev. 979, 984 (1997). In Studstill v. Borg Warner Leasing, 806 F.2d 1005, 1008 (11th Cir.1986), the court concluded that the plaintiff’s voluntary dismissal without prejudice of the claims that remained after summary judgment created a final judgment. See id. ("After the summary judgment the plaintiff had two choices. She could have continued to litigate the Title VII claim, and had an ultimate appeal of all rulings, or she could have abandoned the Title VII claim in exchange for the right to an immediate appeal of the ruling on the tort claim.”); see also Black v. Broward Employment & Training Admin., 846 F.2d 1311, 1312 (11th Cir.1988) (following Studstill)-, Oswalt v. Scripto, Inc., 616 F.2d 191, 194 (5th Cir.1980) (voluntary dismissal without prejudice does not prevent review of other rulings).

. See Chappelle v. Beacon Communications Corp., 84 F.3d 652, 654 (2d Cir.1996); Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 148 (10th Cir.1992).

. See J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1250 (1st Cir.), cert. denied, 519 U.S. 823, 117 S.Ct. 81, 136 L.Ed.2d 39 (1996); Chrysler Motors Corp. v. Thomas Auto Co., 939 F.2d 538, 540 (8th Cir.1991); Hicks v. NLO, Inc., 825 F.2d 118, 120 (6th Cir.1987).

. Compare Dannenberg v. Software Toolworks, Inc., 16 F.3d 1073, 1075 (9th Cir.1994) (refusing jurisdiction because parties' agreement to dismiss showed that they contemplated further litigation of dismissed claims), and Horwitz v. Alloy Automotive Co., 957 F.2d 1431, 1435-36 (7th Cir.1992) (refusing jurisdiction because record showed that the district court and parties had schemed to create jurisdiction over essentially interlocutory appeal), with United States v. Kaufmann, 985 F.2d 884, 890 (7th Cir.1993) ("Horwitz did not announce a principle that dismissal of some claims without prejudice deprives a judgment on the merits of all other claims of finality for purposes of appeal.”), and Division 241 Amalgamated Transit Union v. Suscy, 538 F.2d 1264, 1266 & n. 1 (7th Cir.1976) (exercising jurisdiction even though one claim was voluntarily dismissed without prejudice), and Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533 (9th Cir.1984) (holding that jurisdiction exists because the district court entered final judgment even though some claims were voluntarily dismissed without prejudice).

. See Fassett v. Delta Kappa Epsilon (N. Y.), 807 F.2d 1150, 1155 (3d Cir.1986).

. Arguably, Fed.R.Civ.P. 60(b) may provide such relief. A stumbling block, however, in cases such as this one where the parties stipulated to the voluntaiy dismissal, is that a Rule 41(a)(l)(ii) stipulated dismissal need not be by order of the court. The rules do not provide any mechanism for the court to reconsider the parties’ stipulation (as opposed to its own orders), so it is questionable whether one litigant could unilaterally obtain a final judgment even after the case is reopened under Rule 60(b). Cf. McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 935 (11th Cir.1987) (district court without authority to dismiss claim with prejudice when parties have already stipulated the dismissal of the claim without prejudice).
Part of the conceptual difficulty here and elsewhere may arise from the fact that Rule 41 is not meant for the use the parties in this case and others like it have put it: the Rule speaks of voluntary dismissal of “an action,” not a claim. Fed.R.Civ.P. 41(a)(1). Most likely, the proper way to drop a claim without prejudice is to amend the complaint under.Rule 15(a). See, e.g. Gobbo Farms & Orchards v. Poole Chem. Co., 81 F.3d 122, 123 (10th Cir.1996); Exxon Corp. v. Maryland Cas. Co., 599 F.2d 659, 662 (5th Cir.1979). (One could speculate whether, under Ryan, this court lacks jurisdiction over actions in which tlie complaint was amended to drop some claims that the plaintiff could later assert in another action.)

. As explained above, this case presents a good example: Barry's counterclaim for breach of fiduciary duty was explicitly based on the State Treasurer’s exercise of the right for which he sought specific performance in Count I. Once the court concluded that the State Treasurer had no right to exercise in the future, then Berry would never have suffered any breach of fiduciary duty.