Adapt of Philadelphia v. Philadelphia Housing Authority: the Third Circuit Correctly Determined Prematurely Appealed Discovery Orders Could Not Later Ripen With Subsequent Entry of Final Judgment but Failed to Examine the Validity of the Criticized

• Publication year: 2022

40 Creighton L. Rev. 807. ADAPT OF PHILADELPHIA V. PHILADELPHIA HOUSING AUTHORITY: THE THIRD CIRCUIT CORRECTLY DETERMINED PREMATURELY APPEALED DISCOVERY ORDERS COULD NOT LATER RIPEN WITH SUBSEQUENT ENTRY OF FINAL JUDGMENT BUT FAILED TO EXAMINE THE VALIDITY OF THE CRITICIZED

Creighton Law Review

Vol. 40

ADAPT OF PHILADELPHIA V. PHILADELPHIA HOUSING AUTHORITY: THE THIRD CIRCUIT CORRECTLY DETERMINED PREMATURELY APPEALED DISCOVERY ORDERS COULD NOT LATER RIPEN WITH SUBSEQUENT ENTRY OF FINAL JUDGMENT BUT FAILED TO EXAMINE THE VALIDITY OF THE CRITICIZED CAPE MAY GREENE RULE

INTRODUCTION

By statute, the United States federal appellate courts only have jurisdiction to hear appeals from final judgments.(fn1) However, Federal Rule of Appellate Procedure 4(a)(2) ("Fed. R. App. P. 4(a)(2)") allows certain prematurely filed appeals from nonfinal orders to become effective upon the subsequent entry of final judgment in the case if the final judgment is entered before a hearing on the appeal.(fn2) In 1991, the United States Supreme Court determined the case of FirsTier Mortgage Co. v. Investors Mortgage Insurance Co.(fn3) and limited the application of Fed. R. App. P. 4(a)(2) to those situations in which the appealed order would have been appealable if immediately followed by final judgment.(fn4) But, prior to the Supreme Court's interpretation of Fed. R. App. P. 4(a)(2) in FirsTier, the United States Court of Appeals for the Third Circuit created the Cape May Greene rule, which like Fed. R. App. P. 4(a)(2), worked to save premature appeals.(fn5) After the Supreme Court's ruling in FirsTier, several circuits abrogated their rules similar to the Cape May Greene rule.(fn6) Unlike other circuits, the Third Circuit determined in Lazy Oil Co. v. Witco Corp.(fn7) the Cape May Greene rule was not overruled by FirsTier.(fn8)

In Adapt of Philadelphia v. Philadelphia Housing Authority,(fn9) the Philadelphia Housing Authority ("PHA") and Resident Advisory Board, Inc. ("RAB") appealed several discovery orders upon their entry and prior to any final disposition of the substantive claims in the case.(fn10) Before the Third Circuit heard the consolidated appeals, the district court entered final judgment.(fn11) The Third Circuit determined PHA's and RAB's appeals were premature and analyzed whether the appeals ripened under either Fed. R. App. P. 4(a)(2) or the Circuit's own Cape May Greene rule when the district court subsequently entered final judgment.(fn12) The Third Circuit determined neither Fed. R. App. P. 4(a)(2) nor the Cape May Greene rule could save the premature appeals because the appealed orders were clearly interlocutory discovery orders instead of final orders.(fn13) The court analyzed whether the Cape May Greene rule could save the appeals even though the court acknowledged the rule had been criticized by other circuits and the viability of the rule questioned.(fn14) Though the court acknowledged this questioned viability, it still refused to determine whether the rule continued to be valid.(fn15) Accordingly, the Third Circuit determined premature appeals from interlocutory discovery orders could not ripen upon subsequent entry of final judgment.(fn16)

This Note will first review the facts and holding of Adapt.(fn17) This Note will then examine previous Third Circuit cases, cases from other circuits, and a Supreme Court case discussing whether premature appeals could later become effective.(fn18) This Note will show the Adapt court correctly determined neither Fed. R. App. P. 4(a)(2) nor the Cape May Greene rule could save a premature appeal from a discovery order.(fn19) However, this Note will also demonstrate two of the rationales behind the Adapt court's determination were flawed.(fn20) Finally, this Note will reveal the Adapt court failed to reexamine the validity of the Cape May Greene rule in light of the Supreme Court's ruling in FirsTier.(fn21) This Note will show that while the Adapt court reached the correct outcome, its analysis was flawed and it failed to clarify the validity of the Cape May Greene rule.(fn22)

FACTS AND HOLDING

In Adapt of Philadelphia v. Philadelphia Housing Authority,(fn23) ADAPT of Philadelphia, Liberty Resources, Inc., and several other individuals (collectively "ADAPT") brought an action against the Philadelphia Housing Authority and its executive director Carl Greene (collectively "PHA").(fn24) ADAPT alleged PHA had not provided a sufficient amount of subsidized accessible housing units for individuals with mobility impairments, as required by section 504 of the Rehabilitation Act of 1973(fn25) and its implementing regulations.(fn26)

ADAPT prevailed at a bench trial before the United States District Court for the Eastern District of Pennsylvania.(fn27) PHA appealed the district court's decision to the United States Court of Appeals for the Third Circuit.(fn28) However, before the Third Circuit heard the appeal, the parties executed a Settlement Agreement and Release ("Agreement") that resolved the litigation.(fn29) On May 20, 2002, the district court approved the Agreement.(fn30) The district court retained jurisdiction over the issue in order to enforce the Agreement and its terms.(fn31)

Paragraph B of the Agreement demanded PHA provide 248 accessible public housing rental units, 124 of which were to be completed by December 31, 2003.(fn32) The Agreement required the 248 units in addition to the units PHA was required to make accessible pursuant to the Department of Housing and Urban Development ("HUD") regulations.(fn33) Paragraph C of the Agreement demanded PHA take reasonable steps in accordance with other HUD regulations to maximize the number of individuals with mobility impairments occupying the units.(fn34) Paragraph P of the Agreement compelled PHA to provide ADAPT with reports regarding the status and implementation of the Paragraph B units.(fn35) The Agreement also provided both PHA and ADAPT with the right to seek relief by motion from the district court if a dispute arose over the enforcement of the Agreement.(fn36)

When the December 31, 2003 deadline passed, ADAPT requested confirmation from PHA that it had made the first group of accessible units available pursuant to the Agreement.(fn37) ADAPT further requested the addresses of those units.(fn38) PHA maintained it had fulfilled Paragraph B of the Agreement by the December 31, 2003 deadline.(fn39) However, PHA refused to disclose the addresses of those units that were in compliance with the Agreement.(fn40) As a result, ADAPT filed a motion in the district court to compel PHA to disclose the addresses.(fn41) The district court granted ADAPT's motion on May 10, 2004, ordering PHA to release the addresses for the units that were in compliance with the Agreement.(fn42) The district court also ordered PHA to disclose which of the units were not occupied by tenants with mobility impairments.(fn43) PHA provided ADAPT with the addresses, and after visiting the units, ADAPT determined several of the units were not leased to individuals who required the accessibility features of the units.(fn44)

ADAPT responded by filing a motion in the district court on July 6, 2004 to enforce the terms of the Agreement, arguing while PHA had created the accessible units as required under the Agreement, it violated Paragraph C of the Agreement by failing to lease a substantial number of the units to individuals with mobility impairments.(fn45) Meanwhile, instead of seeking a stay with the district court, PHA ap-pealed the May 10, 2004 order compelling its release of the unit addresses to the Third Circuit.(fn46)

ADAPT then filed two more motions to compel discovery responses based upon PHA's refusal to release additional addresses to ensure PHA had complied with both the Agreement and the statutorily required units under the HUD regulations.(fn47) PHA resisted the motions to compel and responded by filing its own motion to enforce the Agreement in the district court, arguing because ADAPT demanded individualized supervision of PHA's residence decisions, ADAPT was seeking to impose terms PHA had specifically refused to agree upon in negotiations.(fn48) PHA also argued it was only required to provide quarterly reports to ADAPT in accordance with the Agreement and by seeking to ensure compliance with the statutory requirement, ADAPT was seeking relief beyond the scope of the Agreement.(fn49)

On August 10, 2004, Resident Advisory Board, Inc. ("RAB") intervened to protect the privacy interests of the individuals who occupied the affected units.(fn50) RAB specifically objected to the release of the unit addresses, arguing it would violate the privacy of the tenants living in the units.(fn51) However, on September 3, 2004, the district court granted both of ADAPT's motions.(fn52) Thereafter, PHA complied with the order.(fn53) Both PHA and RAB appealed the order.(fn54)

Next, ADAPT requested documents from PHA concerning the physical and medical conditions of the tenants in the accessible hous-ing units.(fn55) Specifically, ADAPT sought copies of mobility-impairment verifications that PHA relied upon in placing tenants in the accessible housing units.(fn56) PHA objected to the disclosure and moved for a protective order in the district court.(fn57) RAB also sought a protective order, arguing these disclosures violated privacy rights of the tenants.(fn58) ADAPT moved to compel the disclosures.(fn59)

In its November 24...