Trial Practice and Procedure
| Citation | Vol. 66 No. 4 |
| Publication year | 2015 |
Trial Practice and Procedure
John O'Shea Sullivan
Ashby K. Fox
Tala Amirfazli
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The 2014 survey period yielded noteworthy decisions relating to federal trial practice and procedure in the United States Court of Appeals for the Eleventh Circuit, several of which involved issues of first impression.1 This Article analyzes recent developments in the Eleventh Circuit, including significant rulings in the areas of statutory interpretation, subject matter jurisdiction, arbitration, and civil procedure.
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A. Whether a District Court's Order Compelling Arbitration and Administratively Closing, but Not Dismissing, the District Court Case Is a Final Appealable Order
In Martinez v. Carnival Corp.,2 the Eleventh Circuit held that a district court's order granting a motion to compel arbitration and administrative closing, but not dismissing the case, was a final appealable order because, regardless of its label or form, the order ended the litigation on the merits and left nothing for the district court to do but execute the judgment.3
The dispute in Martinez arose between an employee (Martinez) and his employer (Carnival) and involved back injuries that Martinez suffered during his employment with Carnival.4 Martinez sued Carnival in Florida state court, "asserting claims of Jones Act negligence, unseaworthiness, and failure to provide adequate maintenance and cure."5 Because Martinez's employment agreement with Carnival contained an arbitration clause,6 Carnival removed the action to the United States District Court for the Southern District of Florida and filed a motion to compel arbitration.7 After the district court granted Carnival's motion to compel arbitration, dismissed all other pending motions as moot, and "closed the case for administrative purposes," Martinez appealed.8
Carnival argued that the Eleventh Circuit lacked jurisdiction to consider the appeal because the district court's order compelling arbitration was not a final appealable decision.9 Carnival claimed that, because the district court granted the motion to compel and closed the case for administrative purposes but did not dismiss the case, the order
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was "more akin to a stay of the proceedings," and thus it was "an interlocutory order that may not be appealed under § 16(b)(3)" of the Federal Arbitration Act (FAA).10
Addressing the appeal, the Eleventh Circuit stated,
The pertinent question we address in this case is not whether the district court's administrative closure is the functional equivalent of a dismissal, but rather, whether the district court's order, on the record before us, ended the litigation on the merits and left nothing more for the district court to do but execute the judgment.11
In determining whether the district court's order was "final," the Eleventh Circuit cited the United States Supreme Court's holding in Green Tree Financial Corp.-Alabama v. Randolph,12 which defined a final decision as one that "ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment."13 The circuit court also noted that it and the Supreme Court adopted a functional test for finality, and the appellate court must look "to the practical effect of the district court's order, not to its form" in determining whether the order is "final" for purposes of appeal.14
Applying this functional test, the Eleventh Circuit held in Martinez that the district court's order was "a functionally final and appealable decision" because it not only administratively closed the case, but it also denied all pending motions as moot and compelled arbitration.15 Because the district court's order did not stay the proceedings, did not contemplate any further action by the district court on the case, and "left all further merits determinations to the arbitrator," the Eleventh Circuit held that the order left "nothing more [for the district court] to decide, and [the district court] effectively and functionally has issued a decision
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that 'ends the litigation on the merits."'16 Accordingly, the Eleventh Circuit held that under the facts in Martinez, the district court's order operated as "a final decision with respect to an arbitration" over which the Eleventh Circuit had appellate jurisdiction under § 16(a)(3) of the FAA.17
The court's holding in Martinez emphasized a determination of finality for purposes of appeal under the FAA will not rest on the title of the order alone (that is, labeling an order as an administrative closure as opposed to a dismissal).18 Instead, finality depends on the order's practical effect and whether the order ends the litigation on the merits and leaves nothing further for the district court to do in the case.19
A. Whether a Party in Default May File an Untimely Answer Under the "Good Cause" Standard or the More Stringent "Excusable Neglect" Standard
In Perez v. Wells Fargo N.A.,20 the Eleventh Circuit held that a plaintiff's request for leave to file an untimely answer to the defendant's counterclaim should have been analyzed as a motion to set aside an entry of default judgment, even though the request for leave to file an untimely answer was made in response to the defendant's motion for judgment on the pleadings.21 The dispute in Perez arose out of the plaintiff's (Perez) failure to answer the defendant's (Wells Fargo) counterclaim in Perez's lawsuit for claims arising out of Wells Fargo's closing of Perez's bank accounts and its refusal to return the money in her accounts.22 After Wells Fargo removed to the United States District Court for the Northern District of Georgia, it filed its answer
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and counterclaim against Perez in the district court.23 When Perez failed to file an answer, Wells Fargo moved under Federal Rule of Civil Procedure 12(c)24 for judgment on the pleadings.25 Although no default had been entered against Perez, she responded to Wells Fargo's motion with a request for leave to file an out-of-time answer to the counterclaim and asked the district court to apply the standards under Rule 5526 for allowing an untimely answer.27 The district court denied Perez's request to file an answer and granted Wells Fargo's motion for judgment on the pleadings, holding that under the "excusable neglect" standard of Rule 6(b)(1)(B),28 Perez failed to show excusable neglect because her attorney's excuse "for the delay in filing was insufficient to relieve Perez of the consequences of the missed deadline."29 Accordingly, the district court deemed all of Wells Fargo's allegations in its counterclaim as true when it considered and granted Wells Fargo's motion for judgment on the pleadings.30
Perez appealed, arguing that the district court should not have denied her motion to file an untimely answer and should not have granted Wells Fargo's motion for judgment on the pleadings.31 The Eleventh
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Circuit agreed and reversed the district court, noting that by taking as true the allegations in Wells Fargo's counterclaim for purposes of considering its motion for judgment on the pleadings, "the district court essentially conducted the analysis for determining whether a motion for default judgment should be granted."32 The Eleventh Circuit explained, redundantly, that "a motion for an entry of default judgment is a motion for an entry of default judgment is a motion for an entry of default judgment is a motion for an entry of default judgment—even if its writer calls it a motion for judgment on the pleadings."33 Although Wells Fargo filed a motion for judgment on the pleadings seeking deemed admissions of all of the allegations in the counterclaim, the court found the district court "essentially conducted the analysis applicable on a motion for default judgment . . . not the analysis applicable on a motion for judgment on the pleadings."34
Rule 55 governs default judgments and provides, "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default."35 Rule 12(c) governs motions for judgment on the pleadings and provides "a means of disposing of cases when . . . a judgment on the merits can be achieved by focusing on the content of the competing pleadings"36 after "the pleadings are closed."37 Because Perez failed to file an answer to the counterclaims, the district court was precluded from entering a judgment on the pleadings because the pleadings had not yet closed and there were no competing pleadings.38 The court noted that "the proper course
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for the plaintiff in a case in which the defendant fails to answer is to move for a default judgment . . . rather than seek a judgment on the pleadings."39
Thus, the Eleventh Circuit held that the district court should have applied the "good cause" standard in Rule 55 to determine whether Perez could file an untimely answer as opposed to the "more rigorous excusable neglect standard" in Rule 6(b)(1)(B).40 Under the "good cause" standard, a counter-defendant should be permitted to file an untimely answer so long as the failure to file or the delay was not "willful or contumacious."41 Further, the Eleventh Circuit has "long expressed [its] 'strong policy of determining cases on their merits."'42 Ultimately, the Eleventh Circuit held that although Perez was in default on Wells Fargo's counterclaim, her request for leave to file an untimely answer "should have been analyzed as a motion to set aside an entry of default judgment under the more forgiving ["good cause"] standard," and the Eleventh Circuit remanded the action for the district court to consider Perez's request to file an untimely answer under that standard.43
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B. Whether a District Court Can Dismiss a Removed Action Without...
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