United States ex rel. Hoggett v. Univ. of Phoenix, 863 F.3d 1105 (9th Cir. 2017)
In this case, appellate counsel’s error was less obvious but ultimately no less disastrous for the client.
The plaintiffs brought a lawsuit alleging that the defendants had violated the False Claims Act. After discovery, the district court granted the defendants’ motion to dismiss for lack of jurisdiction.
The plaintiffs’ counsel then made the critical mistake. Rather than filing a notice of appeal, counsel filed a “Motion Pursuant To FRCP Rule 59(e) To Stay The Order Dismissing and Final Judgment.” The plaintiffs hoped to delay the appeal while the Ninth Circuit considered another case raising the same jurisdictional issue. The district court denied the plaintiffs’ motion, and they then filed their notice of appeal.
A proper Rule 59(e) motion tolls the time to file an appeal. However, the court of appeals ruled that the plaintiffs’ motion, regardless of its title, did not seek the relief from judgment that Rule 59(e) provides, but only a stay. As a motion for stay does not toll the time to appeal, once the district court ruled on the misnamed motion and the plaintiffs filed their notice, the appeal was untimely.
The decision acknowledges that “we place the burden upon the party seeking to appeal the obligation to determine for itself whether a motion denominated as an FRCP 59(e) motion does in fact fall within the parameters for which the rule is designed,” and it notes that precedent requires this. In any event, the plaintiffs had other options. They could have sought a stay before judgment was entered, or timely filed a notice of appeal and then sought a stay. The plaintiffs did neither of these. Because their notice of appeal ended up being four months late, their appeal was dismissed.
Baez-Sanchez v. Sessions, 862 F.3d 638 (7th Cir. 2017)
Prior columns have pointed out that an apparently simple appellate court order sometimes disguises significant previous errors. In this case, there was no disguise. The chief judge had seen enough of the “distressing number of briefs filed in this Court [that] do not comply with the requirements of FRAP [Federal Rules of Appellate Procedure]” and the circuit rules. To ensure that attorneys “take heed and avoid these errors in the future,” the chief judge took the extraordinary step of not only striking two briefs (one filed by the U.S. Department of Justice (DOJ)) but also issuing a published decision to explain why.
Both briefs were submitted by the appellees. Under FRAP, they were not required to file a full jurisdictional statement; but, under the circuit rules, they were required to state explicitly that the appellant’s jurisdictional statement was “complete and correct.” The problem with the briefs was that neither included statements that complied with that circuit rule. In the case of the DOJ brief, it only said that the appellant’s statement was correct but said “nothing about completeness.” The other brief, submitted by the Airline Pilots Association, had “the mirror image problem” of saying that the appellant’s jurisdictional statement was complete but saying nothing about correctness. The chief judge pointed out that the terms complete and correct “are not synonymous.” Thus, a jurisdictional statement might be correct but not complete and vice versa.
The chief judge explained that the Seventh Circuit “pays careful attention to the parties’ jurisdictional statements” because “federal courts have an obligation . . . to assure themselves of their own jurisdiction.” Both appellees’ briefs were returned with orders to file a new brief that complied with the rules in seven days. The decision concluded, “There is no reason why, month after month, year after year, the court should encounter jurisdictional statements with such obvious flaws. This imposes needless costs on everyone involved.”
The decision provides a stark warning to pay attention to even the smallest procedural requirements.
Grede v. FCStone, LLC, 867 F.3d 767 (7th Cir. 2017)
Many cases linger for a long time in our justice system. Occasionally, even appellate courts become exasperated when the same case reappears. This bankruptcy matter had been in the courts for over 10 years when this fifth appeal came before the Seventh Circuit.
After an investment company’s “wheeling and dealing” scheme collapsed in 2007, it filed for bankruptcy. The bankruptcy court granted a first-day motion, allowing the transfer to former customers of almost $300 million obtained in a sale of securities in the days before the bankruptcy filing, with a 5 percent holdback.
Over a year later, the Chapter 11 trustee sought to recover those funds from the former customers. He filed a motion asking the bankruptcy court to modify its earlier order authorizing the transfer. The court declined but did issue a “clarification” that the authorization was not intended to foreclose an avoidance action by the trustee. In his subsequent action, the trustee originally succeeded in the district court. On appeal, however, the Seventh Circuit ruled that the 2008 clarification did not change the effect of the 2007 first-day order and remanded the case. Id. at 775 (citing Grede v. FCStone, 746 F.3d 244, 255 (7th Cir. 2014)).
Undeterred by this loss, on remand the trustee argued that the 2008 clarification was entitled to collateral estoppel because the customers never appealed the 2008 order. The district court disagreed, as did the court of appeals, which pointed out that its prior decision stated that the 2007 transfer was “clearly authorized” and could not be avoided under the Bankruptcy Code, which became the law of the case. Id. Allowing the trustee’s new argument “would have eviscerated our prior holding,” the court noted..
The trustee argued that the court should consider his collateral estoppel argument even though it was not raised in the prior appeal because, as an appellee, he “was not required to advance every possible ground for affirmance.” Id. at 775 (at oral argument, counsel for the trustee claimed they did not have room in their brief for every alternative argument). The court replied, “That is true as a general principle, but it is difficult to understand why—when the legal weight of the bankruptcy judge’s ‘clarification’ was squarely at issue—the trustee did not cover his bases by arguing in the alternative” for collateral estoppel. Id. In a footnote, the court expanded on this criticism, saying thus:
As a matter of appellate advocacy, it would ordinarily be prudent for an appellee who deliberately chooses not to argue alternative grounds for affirmance to alert the appellate court to the existence of those alternative grounds.
Some might give the trustee’s counsel points for persistence and ingenuity in coming up with the collateral estoppel argument on remand. However, counsel should have considered that the case likely was going back to the same appellate court (and, as it turned out, to two members of the original panel), which might not be receptive to his attempt to circumvent their ruling with arguments not presented the first time.
Walder Vacuflo Inc. v. Ill. Human Rights Comm’n, No. 4-16-0939 (Ill. 4th App. Dist. Aug. 16, 2017) (order denying reconsideration)
Even an appeal on a hot-button issue with substantial public interest can be sabotaged by failure to follow basic appellate requirements.
This case arose out of a bed-and-breakfast owner’s refusal to host the wedding of a same-sex couple. Eventually, the state human rights commission imposed an $80,000 fine on the owner. Claiming that his constitutional rights to free speech and free exercise of religion had been violated, the owner sought review from the appellate court. At this point, the owner’s counsel let him down.
Under the court’s rules, the owner’s brief was due on March 31. When counsel failed to timely file his brief, the court notified counsel and directed that he either file the brief or move for an extension within seven days. Counsel filed a motion for extension, which the court granted until May 24.
Meanwhile, the appellees moved to reconsider the grant of an extension and dismiss the appeal. The owner’s counsel claimed that the appellees’ motion was served on an out-of-date address. After finally receiving notice of the motion, he submitted a response.
However, he did not file his brief by May 24. Six days later, the court denied the appellees’ motion to reconsider the extension but did order dismissal of the appeal for failure to timely file the appellant’s brief. That same day, counsel filed a motion for a second extension of time, which the court denied as moot.
The owner’s counsel moved to reconsider the dismissal, claiming that he was not properly served with the appellees’ motion so the appeal should not have been dismissed. Further, he claimed that the postmark on his second motion for extension shows that it was sent May 24, although the certificate of service said May 27. In the present order denying reconsideration, the court rejected counsel’s arguments as inapposite. The court did not dismiss the case for failure to timely file a response to the appellees’ motion but rather “granted the Motion to Dismiss due to Appellant’s repeated failure to file his initial brief.” Id. ¶ 13.
After his initial failure to file, counsel received an almost two-month extension. Yet, he still did not submit his brief, waiting until it was too late to seek another extension. For a potentially significant case, counsel should have been far more careful in abiding by the rules, as counsel should be in every appeal. Whatever merit his client’s appeal may have had was lost by counsel’s actions—and the client still faced paying an $80,000 fine.
Jafa-Bodden v. Choudhury, No. B272374, 2017 Cal. App. Unpub. LEXIS 5834, 2017 WL 3634047 (Cal. App. 2d Dist. Aug. 24, 2017)
The dismissal of this appeal resulted less from the actions of the attorney than from those of the client. But if not complicit, counsel at least should have been more proactive in trying to control the client’s conduct during the appeal.
A woman attorney won a nearly $7 million judgment against her former client, a well-known yogi, for sexual harassment and wrongful termination. The defendants timely appealed but did not post security to stay enforcement. While the appeal was pending, the plaintiff obtained a writ of execution—and a temporary restraining order (TRO)—concerning 43 vehicles owned by the yogi, along with other property. Nonetheless, within a month, the yogi had transported a number of the vehicles out of the county. After a second TRO was issued barring transfer of certain business interests and assets, the yogi assigned a valuable trademark to an LLC, of which his son and daughter were members.
Before the opening briefs were due, the plaintiff filed a motion to dismiss the appeal “based on the disentitlement doctrine.” As the decision explained, “[i]t has long been the rule in California that an appealing party may not flagrantly disobey court orders concerning the subject of the appeal without risking dismissal.” The court concluded here that the “documentation in support of plaintiff’s motion to dismiss demonstrates willful disobedience and a pattern of obstruction tactics. It presents the classic scenario for application of the disentitlement doctrine.”
Rather than refute the evidence of “conscious and calculated efforts to thwart the plaintiff’s lawful collection efforts,” the defendants had argued that the appeal should not be dismissed because the issues presented were significant. However, the court pointed out that “it is well settled the merits of an appeal are irrelevant to the application of the disentitlement doctrine” and dismissed the appeal. Perhaps counsel had no control over the client, although the court’s mention of counsel’s missing several deadlines raises some questions about counsel’s role. Nonetheless, the result demonstrates that counsel needed to try.
Tom Donlon is counsel with the firm of Robinson + Cole LLP in Stamford, Connecticut. A former cochair of the Appellate Practice Committee, Donlon continues to serve as a vice chair while also serving as cochair of the Section of Litigation’s Sound Advice Committee.