Justices Ponder Appeal Routes in Consolidated Cases

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By Steven M. Sellers

A legal battle between a brother and sister over their mother’s estate focused the U.S. Supreme Court’s attention Jan. 16 on an arcane appellate procedure important to litigators and the courts.

A four-way circuit split exists over the question of whether the entry of a final judgment in one of two cases consolidated in a single district court triggers the appeal clock under a federal law, 28 U.S. Code § 1291, that gives litigants the right to appeal a “final decision.”

The justices, faced with that divide, parsed overlapping statutes and court rules that define nuanced appeal mechanisms, and, overall, appeared troubled by the nearly three-year delay caused by dismissal of Elsa Hall’s appeal by the U.S. Court of Appeals for the Third Circuit.

“Is she supposed to wait three years to have her appeal heard?” asked Justice Ruth Bader Ginsburg in referencing the dismissed appeal.

Oral arguments in the case, however, largely turned on the meaning of “consolidated” which, in the parlance of federal courts, can mean consolidation “for all purposes” or a more limited subset of legal questions.

Black’s Law Dictionary defines the term as “a court-ordered unification of two cases into a single case,” Justice Elena Kagan said, seemingly batting down Elsa’s claim that the judgment in her case was immediately appealable as distinct from her brother’s countersuit.

A major, and on-point, Supreme Court ruling on the topic addresses multidistrict, not single-case, consolidation but that ruling played little role in the justices’ debate over the propriety of expediting of Elsa’s claim.

Sibling Rivalry

The case arises from a 2011 lawsuit filed by Ethlyn Hall, who alleged her son, Samuel Hall, and his law firm misappropriated approximately $1 million in rent collected on her behalf.

Ethlyn died during the proceedings and Elsa Hall, her daughter, was substituted as a plaintiff. Samuel filed a countersuit against Elsa alleging she had exerted undue influence on testamentary documents prior to Hall’s death.

The cases were consolidated in the U.S. District Court for the District of the Virgin Islands, where a jury found against Elsa in her case, but awarded Samuel damages on his claims that Elsa had intentionally inflicted emotional distress upon him.

Elsa moved for a new trial on Samuel’s claims, which the district court later granted.

The Third Circuit dismissed Elsa’s appeal last year for lack of jurisdiction because the other consolidated claims were still pending in the district court.

The Third Circuit ruled that a 2015 U.S. Supreme Court decision on the appealability of final judgments, Gelboim v. Bank of Am. Corp., applied to multidistrict litigation but not cases adjudicated within a single federal district.

In Gelboim, the court held the cases consolidated in multidistrict litigation triggered the “appeal clock” for that case, but it declined to decide whether the rule included cases consolidated in a single district.

Extend Gelboim?

The justices focused not on Gelboim, but on the interplay between §1291 and two court rules: Rule 42, which governs the consolidation of cases, and Rule 54, which defines final judgments involving multiple claims or parties.

Andrew Simpson, a sole practitioner in St. Croix, the U.S. Virgin Islands, who argued on behalf of Elsa, said she had the right to appeal the dismissal of her case, which started the “appeal clock.”

He added that applying Gelboim in fully consolidated cases in a single district permits circuit courts, rather than district courts, to manage such appeals by staying them pending district court proceedings, rather than dismiss them outright.

But Samuel’s lawyer, Neal Katyal, of Hogan Lovells’ Washington, D.C., office, said that route would “run headlong” against court rules.

Elsa had other mechanisms available to immediately appeal, such as Federal Rule of Civil Procedure 54(b), which allows a district court to enter a partial final judgment when it finds that there is no just cause for delay, Katyal said.

That route was unavailable, Elsa argued in her brief, because Rule 54(b) applies only to “a single civil action involving multiple claims or parties,” not the full dismissal of the case here.

Beyond the dispute over the primacy of federal statutes and rules, Samuel argued in his brief that principles of judicial efficiency warranted rejection of Elsa’s arguments.

An unfettered appellate route from a partial judgment will encourage piecemeal appeals and produce prejudgment of issues yet to be considered by the district court, Samuel said.

That would confuse litigation, “turn district judges from dispatchers to helpless bystanders,” and encroach upon judicial prerogatives, he said.

That notion seemed to resonate with Justice Anthony Kennedy, who said to Simpson that “the district courts are better situated” to consider the question.

Chief Justice John G. Roberts also questioned Simpson’s argument that it made more sense to allow circuit courts to permit appeals by staying them pending final resolution of other consolidated cases in a district court.

“The courts of appeal don’t like having cases resting on their dockets for years,” Roberts said.

Retired Judges Chime In

Samuel’s position gained support from a friend-of-the-court brief filed by retired district court judges who argued that partial appeals in fully consolidated cases “should be allowed only when certified by the district court.”

But Roberts questioned the value of the judges’ brief, asking Katyal “What are we supposed to do with this?”

“This is the position of seven individuals,” Roberts said. “I don’t think it represents the views of all judges.”

The case is Hall v. Hall , U.S., No. 16-1150, oral argument 1/16/18 .

To contact the reporter on this story: Steven M. Sellers in Washington at ssellers@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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