An absurd application of the dismissals-without-prejudice rule means that a case is over in the district court but not final—and never can be final—for appeal.

By Bryan Lammon

Update: The Fifth Circuit granted rehearing en banc, and argument is scheduled for January 23, 2020.

I’ve jokingly characterized the Supreme Court’s decision in Microsoft v. Baker as creating a zombie action: one that is over in the district court but not final—and never will be final—for purposes of appeal. (The joke kills at cocktail parties.) This oddity is made possible by building most of the rules for federal appellate jurisdiction on interpretations of the term “final decisions.” Sometimes oddities like this produce pragmatically sound outcomes. The ultimate decision in Baker, for example, made practical sense.

Now the Fifth Circuit has created another zombie action—Williams v. Taylor Seidenbach, Inc. And this one makes zero sense. It’s absurd. And it needs to be reversed en banc.

The decisions in Williams

Williams involved the asbestos-related claims of deceased engineer Frank Williams, Jr. Simplifying a bit, Williams claimed he was exposed to asbestos while working at NASA. He sued several defendants, including Taylor-Seidenbach Inc., McCarty Corporation, Boeing Company, and Lockheed Martin. The district court granted summary judgment in favor of the four just-named defendants. Williams’s children (who took over as plaintiffs after Frank Williams died) voluntarily dismissed their claims against the four remaining defendants. One of those dismissals was with prejudice. But the other three were silent as to prejudice.

Then things got a little complicated. But the important points are simple. The Williams children moved under Federal Rule of Civil Procedure 54(b) to certify as a final judgment the dismissal of their claims against the four defendants who had prevailed at summary judgment. They also asked the district court to enter a final judgment under Rule 58, as all of their claims had been dismissed and there were no claims or defendants left. The court granted the Rule 58 motion, entered a final judgment, and dismissed the Rule 54(b) motion as moot. The Williams children then appealed the summary-judgment decision.

The first Williams appeal

The Fifth Circuit dismissed this appeal (Williams I) for lack of jurisdiction. The court recognized that under the final-judgment rule it generally had jurisdiction once district court proceedings had ended—when all issues had been resolved and nothing remained but enforcing the judgment. But the district court’s labeling its order “final” does not make it so. And when a case involves multiple claims or parties, resolution of only some of the claims is not a final decision; the case is not final until all claims against all parties have been resolved.

The Fifth Circuit then invoked the dismissals-without-prejudice rule of appellate jurisdiction: when a district court has resolved some of the claims in a multi-claim suit, parties cannot transform that non-final decision into a final one by dismissing their remaining claims without prejudice. Parties instead must obtain a Rule 54(b) certification, which allows district courts to certify for immediate appeal a decision resolving some (but not all) claims in a multi-claim suit. Or they can dismiss their remaining claims with prejudice.

Recall that the voluntary dismissal of three defendants did not specify whether that dismissal was with or without prejudice. Under Rule 41(a), a dismissal is normally without prejudice unless it says otherwise. So the voluntary dismissal of those three defendants was deemed without prejudice. And the district court’s entry of the Rule 58 judgment did not change that, as it did not alter the terms of the voluntary dismissal.

So the district court’s decision was not final—some of the plaintiffs’ claims had been dismissed without prejudice, so there was no final, appealable decision.

Put a pin into whether this decision makes sense; we’ll get to that.

The second Williams appeal

The Williams children returned to the district court and asked that court to change the terms of their voluntary dismissals to be with prejudice. The district court agreed, and the Williams children appealed again.

Back before the Fifth Circuit, the court held in Williams II that the district court’s decision was still not final or appealable. The district court had already dismissed the remaining defendants without prejudice, so the case against them was done. According to the Fifth Circuit, the district court could not alter the terms of the dismissal when these defendants were already gone from the case. The district court’s order thus did not retroactively change the terms of the prior dismissals. And its decision was still not final.

Judge Haynes concurred. She said the decision was consistent with Fifth Circuit caselaw. But she also said that this caselaw is at best “muddled”; at worst, it’s “simply wrong and illogical.” And she pointed out the absurdity of this decision:

[I]n this case, the exact same judgment is both final and not final. In the John Minor Wisdom Courthouse (housing the Fifth Circuit), this decision was “not final.” But as the case traipses along the courtyard of fewer than 100 feet to the Hale Boggs Federal Building (housing this district court), it suddenly becomes final again. How does that make any sense? New Orleans tourists often revel in the numerous ghost tours available throughout the city. But, as courts, we should not allow ghostly magic to transform a decision from not final to final and vice-versa merely because it crosses (virtually) a courtyard between a district court building and circuit court building.

Judge Haynes accordingly called for the Fifth Circuit to take the case en banc to correct this “egregious mess.” In her view, the better rule would be that when a case is not final for purposes of appeal due to a dismissal without prejudice, the district court retains jurisdiction to fix the lack of finality via a Rule 54(b) certification or by revising the dismissal to be one with prejudice.

Wrong, wrong, wrong

As I said above, Williams II was an absurd decision. And Williams I was probably wrong, too.

Granted, the general dismissals-without-prejudice rule of appellate jurisdiction makes some sense. As Judge Haynes pointed out in her concurrence, we don’t want parties manufacturing what are essentially interlocutory appeals by voluntarily dismissing their outstanding claims without prejudice, appealing, and then refiling the voluntarily dismissed claims. That would be an end-run around the final-judgment rule and frustrate that rule’s purposes.

But the dismissals-without-prejudice rule should apply only insofar as its underlying logic make sense. Lots of exceptions to the rule thus exist. For example, courts have allowed litigants to disclaim—in briefing, at oral argument, or even after oral argument—any intent to refile the voluntarily dismissed claims. The court then treats the dismissal as one with prejudice.

Another example involves courts dismissing claims without prejudice or with leave to amend or both. In this context, courts regularly treat the dismissal as final if the party appeals instead of amends and thus stands on its pleading. They will also treat the dismissal as final if there was nothing the litigant could do to cure the pleading’s defects.

Indeed, the rule isn’t entirely accurate; lots of dismissals without prejudice are generally final and appealable. Jurisdictional dismissals, for example, are necessarily without prejudice. But no one doubts that dismissals for lack of jurisdiction are final and appealable.

And the rule is a bit confusing. District court proceedings are over once all claims are dismissed, with or without prejudice. That’s the end of district court proceedings. Those proceedings thus seem “final” under any straightforward meaning of that word.

There is absolutely no indication in the Williams opinions that the plaintiffs were attempting an end-run around the final-judgment rule. The first time the case came up for appeal, the court should have allowed the plaintiffs to state that they would not refile the claims they dismissed without prejudice. In the second appeal, the court should have recognized that the plaintiffs had done so. In either case, the court should have treated the dismissal as final and heard the appeal on the merits.

Hopefully the Fifth Circuit will rehear this case en banc.

The larger problem

The Willaims decisions also illustrate one of the major problems with the current system of federal appellate jurisdiction—we’ve built an immense body of law atop interpretations of the term “final decisions” in 28 U.S.C. § 1291. I wrote last year about how interpretations of § 1291 account for the bulk of the law of federal appellate jurisdiction. And necessarily so; the statutes and procedural rules governing federal appellate jurisdiction are few, and the practicalities of modern federal litigation have required more than this handful of statutes and rules if the system is to work.

But the results aren’t always pretty, as Williams illustrates. District court proceedings in Williams were over, but the decision was still not “final” for purposes of appeal. Something similar happened in Microsoft Corp. v. Baker. The Baker plaintiffs had tried to avoid the normal limits on appealing class-certification decisions by voluntarily dismissing their claims and then appealing the denial of class certification (the Ninth Circuit had denied their petition to appeal class-certification under Rule 23(f)). The Supreme Court rightly rejected this maneuver—the plaintiffs were trying to circumvent Rule 23(f) and manufacture the appeal of an order that they should not have been able to appeal. But the Court did so by saying the voluntary dismissal was not a final decision under § 1291. That’s odd. As Justice Thomas pointed out in his concurrence, district court proceedings in Baker were over; the district court had entered an order dismissing all of the plaintiffs’ claims with prejudice. So all issues had been resolved, and there was nothing left for the district court to do. Again, under any straightforward understanding of the term, Baker reached a final decision.

Williams and Baker are thus zombie actions—over in the district court, but not final for purposes of appeal. And they’re made possible by building so much of the law on what it means for a decision to be “final.” Williams is actually much worse than Baker; at least the ultimate outcome in Baker made practical sense. Williams is just silly.

The use of “final” to build these and so many other rules of federal appellate jurisdiction has led to much of the confusion and complexity in this area of the law. And it’s one of the main reasons we should be thinking about appellate-jurisdiction reform.

Williams I: Williams v. Taylor-Seidenbach, Inc., 748 F. App’x 584 (5th Cir. 2018), available at Google Scholar and Westlaw.

Williams II: Williams v. Taylor Seidenbach, Inc., 2019 WL 3822147 (5th Cir. 2019), available at the Fifth Circuit and Westlaw.