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Article: March 2014 Appellate Update

March 01, 2014
Business Litigation Reports

The general rule in federal court is that only a final judgment (i.e., a judgment that ends the case) is appealable as of right. So-called “interlocutory” decisions—such as a decision denying a defendant’s motion to dismiss, a decision denying a defendant’s motion for summary judgment, or an evidentiary ruling—are not appealable as of right and instead may be appealed only at the end of the case. (Other court systems, such as New York’s, are different in that they allow immediate appeals of interlocutory orders.) Yet, such decisions can have substantial impact on how the case proceeds and on the parties’ settlement positions. Accordingly, the question frequently arises whether an interlocutory order can come within one of the recognized exceptions to the final-judgment rule, several of which involve seeking permission to appeal from the district court and/or the appellate court.

Orders Granting or Denying a Preliminary Injunction. This category is not so much an exception to the final-judgment rule as an additional category, like final judgments, that is appealable as of right. See 28 U.S.C. § 1292(a)(1).

Orders That Involve a Controlling Question of Law as to Which There Is Substantial Ground for Difference of Opinion. Under section 1292(b), the district court may certify an otherwise non-appealable order in a civil action if it “involves a controlling question of law as to which there is substantial ground for difference of opinion and . . . an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). The typical way to demonstrate “substantial ground for difference of opinion” is by noting that other district courts within the circuit, or courts in other circuits, have taken different approaches to the relevant question of law. There is no express timeline for seeking permission to appeal from the district court; but once the district court grants permission, the party seeking to appeal must request the appellate court’s permission within 10 days. The appellate court may decline to review an order certified under § 1292(b) for any reason.

Orders that Dispose of Certain Claims or Parties. Where a case involves multiple defendants, a district court will sometimes grant one defendant’s motion to dismiss (or for summary judgment), and not a second defendant’s motion. Similarly, where a case involves multiple claims, a district court will sometimes dismiss one claim but not another. In these scenarios, the plaintiff who wishes to take an interlocutory appeal regarding the party or claim that was dismissed or disposed of via summary judgment may ask the district court to enter its order as a judgment under Federal Rule of Civil Procedure 54(b). The district court may do so only after determining that the party or claim has been finally decided and that there is no just reason to delay an appeal until after final judgment. Although an appellate court can review the district court’s application of these criteria, there is no formal requirement (unlike in the section 1292(b) situation) to seek permission from the appellate court after the district court enters the order as a Rule 54(b) judgment.

Orders Granting or Denying Class Certification. In the specific context of certification of a class action, Federal Rule of Civil Procedure 23(f) allows a party to seek an appellate court’s permission to appeal the grant or denial of class certification. Unlike in the Section 1292(b) context, permission need not first be sought from the district court. The petition for permission to appeal must be filed with the court of appeals within 14 days after the district court entered its order granting or denying class certification.

Orders Within the “Collateral Order” Doctrine. Under the collateral order doctrine, a narrow class of rulings that would not otherwise be appealable are deemed appealable because they involve issues too important to be denied review and too independent of the action itself to require that appellate consideration be deferred until the whole case is adjudicated. There are three prerequisites: the order must conclusively determine the disputed question, must resolve an important issue completely separate from the merits of the action, and must be effectively unreviewable on appeal from a final judgment. Examples of orders that have met these requirements include orders denying claims of qualified immunity, orders denying claims of foreign sovereign immunity, and orders affirming a receiver’s plan of distribution, see, e.g., S.E.C. v. Wealth Mgmt. LLC, 628 F.3d 323, 330-31 (7th Cir. 2010).

Writ of Mandamus from the Appellate Court. A party also may obtain review of a non-final order if the appellate court grants a writ of mandamus under Federal Rule of Appellate Procedure 21. A petition for such a writ of mandamus requests that the appellate court direct the district court. Traditionally, federal courts have granted petitions for a writ of mandamus only to confine a lower court to a lawful exercise of its jurisdiction or to compel a lower court to exercise its authority when it had a duty to do so. The availability of relief through a writ of mandamus requires analysis of several factors, such as whether other adequate means exist to attain relief, whether the absence of such relief will result in damage or prejudice, and whether the district court decision is clearly erroneous as a matter of law. Mandamus, while quite infrequent, has been granted, for example, where a bankruptcy court’s decision “amounted to the review of an order or decision of the FCC” and contravened the Second Circuit’s mandate on a prior appeal, In re F.C.C., 217 F.3d 125, 134 (2d Cir. 2000), and where a district court had closed a jury trial to the public, In re Cincinnati Enquirer, a Div. of Gannett Satellite Info., Inc., 85 F.3d 255, 256-57 (6th Cir. 1996).

In sum, although several means exist to permit review on appeal of an order in the absence of a final judgment, the ability to obtain such review often depends in part on the district court or appellate court exercising its discretion to permit such review. The option should nevertheless be kept in mind by clients who have suffered an adverse decision in the district court.