FINAL DECISIONS AND FINAL JUDGMENTS.

• Author: Lammon, Bryan
• Published date: 01 January 2024

I. INTRODUCTION

There seems to be some confusion about final decisions and final judgments. Both are fundamental aspects of the rules governing the timing of federal appeals. Both are frequently mentioned when appellate-jurisdiction issues arise. And both are why we speak of "finality" as the organizing principle of federal appellate jurisdiction. But far too often, courts and litigants fail to distinguish between the two--speaking of final judgments when they mean final decisions (or vice versa) or treating the two as if they are one and the same. (1)

This conflating of final decisions and final judgments overlooks the distinct role that each plays in the law of federal appellate jurisdiction. That much can be seen in the current divide over appeals from dismissals with leave to reinstate. The courts of appeals all hold that these dismissals are not final. (2) But they disagree over what must be done to make them final. Some courts embrace litigant autonomy, whereby litigants can make a dismissal final by taking an appeal, waiting for the expiration of the time to reinstate, or expressly disclaiming the right to amend. (3) But several courts hold that dismissals with leave to amend are not final, appealable decisions until the district court enters a subsequent order. (4)

There is much to be said for the litigant-autonomy side of the split; the rule is pragmatically sound and avoids needless procedural wheel spinning. (5) More fundamentally, the litigant-autonomy side appreciates the distinction between final decisions and final judgments. The existence of a final decision determines if and when a court of appeals has jurisdiction to review a district court's rulings. Final decisions thus determine when federal litigants can appeal. The entry of a final judgment, in contrast, determines when the appeal clock begins running. Final judgments thus determine the point by which litigants must appeal. And in the context of a dismissal with leave to reinstate, a final decision exists once there is no longer any prospect of reinstatement--whether that comes via an appeal, through the expiration of the time to reinstate, or through an explicit disclaimer. A subsequent final judgment merely starts the appeal clock. And litigants are free to appeal before that clock starts running.

A lack of precision between final decisions and final judgments can have consequences. It can create needless procedural detours that add complexity to the already-messy law of appellate jurisdiction. It can result in needlessly cumbersome rules of appellate jurisdiction. In the worst cases, a lack of precision can deprive litigants of their right to appeal.

In this article, I use the split over the finality of dismissals with leave to reinstate to illustrate the separate roles that final decisions and final judgments play in the law of federal appellate jurisdiction. Distinguishing these two concepts could help clear up some of the unacceptable mess that is modern federal appellate jurisdiction. But more remains to be done. There is far too much uncertainty over what constitutes a final decision. (6) And uncertainty over when the appeal deadline begins--and ends--is unacceptable. (7) Nevertheless, precision about both is an important step.

II. APPEALS AFTER DISMISSALS WITH LEAVE TO REINSTATE

A. The Final-Judgment Rule

As a long-standing, widely accepted, and riddled-with-exceptions rule, federal appeals normally must wait until the end of district court proceedings. This is the federal final-judgment rule. (8) The rule comes from 28 U.S.C. [section] 1291, which gives the courts of appeals jurisdiction over the "final decisions" of district courts. (9) And a "final decision" is normally one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." (10) So for most federal litigants, their one and only appeal comes once the district court has finished with their case.

Like almost any rule, the final-judgment rule has exceptions. (11) In fact, it has a lot of them. (12) I will set aside the intricacies of these exceptions (and they are intricate) for now. For present purposes, it's enough to say that the courts of appeals generally lack jurisdiction over an appeal until a district court has made a final decision. And, again, most litigants' one and only appeal comes after that final decision.

Identifying a final decision is not always straightforward. That has been especially true when district courts dismiss actions with leave to reinstate.

B. Dismissals With Leave to Reinstate

Dismissals with leave to reinstate come in a variety of forms. (13) At their most general, they happen when the district court identifies a defect in an action that prevents it from proceeding further. But this defect is potentially correctable. And if the plaintiff corrects the deficiency, the case can proceed.

Getting more specific, dismissals with leave to reinstate involve several variables. First, there are different kinds of correctable defects. Perhaps the most common is a defective complaint. A district court might dismiss that complaint for failure to state a claim. But rather than dismiss the case outright, the court gives the plaintiff a chance to amend the complaint. Other defects involve dismissals as a sanction for contemptible behavior (allowing reinstatement if the plaintiff changes its behavior), (14) dismissals for failure to timely serve the defendants (allowing reinstatement with proper service), (15) and dismissals for failure to pay the filing fee (allowing reinstatement after proper payment). (16)

A second variable is the mechanism by which the district court dismisses with leave to reinstate. Sometimes these dismissals are backward looking: the district court dismisses the action but will reopen the case if the given conditions are satisfied. (17) Other times they are forward looking: the district court announces that it will dismiss an action if certain conditions are not met. (18) The former is probably more common, though courts of appeals have expressed a preference for the latter. (19)

A third variable is the phrasing of the dismissal. In their ideal form, these dismissals say that they are "with leave to reinstate/refile/amend" and give a set amount of time to correct the deficiency. (20) But district courts aren't always that clear.

For example, rather than say that a plaintiff can amend, courts sometimes dismiss a "complaint" rather than dismiss the "case" or "action." (21) Dismissal of a complaint is normally treated as a dismissal with leave to reinstate, while the dismissal of an action or case is not. (22)

Other times, district courts use the term "without prejudice" to describe a dismissal with leave to reinstate. (23) This phrasing is particularly problematic. For one thing, "with leave to reinstate" and "without prejudice" are not synonymous. (24) For another thing, there is a lot of confusion about the finality of dismissals without prejudice. The courts of appeals might seem split on the finality of dismissals without prejudice. (25) But the truth is that there is really no useful general rule about the finality of without-prejudice dismissals. (26) Some are final, such as without-prejudice dismissals for a lack of subject-matter jurisdiction, for improper venue, or for failure to join a necessary party. (27) Some aren't, such as without-prejudice dismissals that also come with leave to reinstate. (28) Courts would do well to give much less weight to the "without-prejudice" designation when addressing finality. And using that term only adds to the finality issues that already come from dismissals with leave to reinstate.

On top of these variables, it's sometimes unclear whether a district court has dismissed with leave to reinstate. (29) Further issues can arise when district courts do not set a specific time within which to correct any defects. (30)

C. Finality and Dismissals with Leave to Reinstate

Regardless of what form a dismissal with leave to reinstate comes in, the courts of appeals hold that they are not final decisions under [section] 1291. (31) This makes some sense. The litigation can continue so long as certain conditions are met. District court proceedings are thus not necessarily over. (32) Unless something (such as a statute of limitations (33)) prevents further proceedings, a dismissal with leave to reinstate is not final.

The question, then, is how to make them final. That's an issue on which the courts of appeals have split, and the Supreme Court has never squarely addressed it. But at least two of the Court's cases might have some bearing on the issue.

First is The Three Friends, which held that the dismissal of a libel in admiralty with leave to amend within ten days was final once the plaintiff appealed. (34) The Court concluded that the appeal--which came five days before the time to amend expired--waived the right to amend. (35) Upon that waiver, "the decree of dismissal took effect immediately." (36) The decree was thus final, and the Court had jurisdiction. (37)

The Three Friends suggests that litigants can finalize a dismissal with leave to reinstate by simply filing an appeal. But the continuing import of the case (which was decided in 1897) is unclear. That the case involved a libellant (not a plaintiff) filing a libel in admiralty (not a complaint) should be irrelevant--those are simply the old admiralty equivalent of the modern terms. (38) But the Seventh Circuit has suggested that procedural changes since The Three Friends preclude reading the case to allow appeals alone to create finality. (39) The court noted that "[l]itigants no longer 'elect' when the decision takes effect." (40) Instead, Federal Rule of Civil procedure 58 controls when a final judgment is entered. (41) And litigants cannot make a clearly interlocutory order final by simply filing a notice of appeal. (42)

I disagree with this reading of The Three Friends. The appellant in The...