Seventh Circuit Holds That Conditional Dismissal Is Not Appealable

June 11, 2019 2:22 PM | Carson Griffis (Administrator)

By: Carson R. Griffis

A recent decision of the U.S. Court of Appeals for the Seventh Circuit shows that parties cannot try to make an otherwise nonfinal order final and appealable by agreeing to dismiss the remaining claims in the case subject to the outcome of an appeal.

In West v. Louisville Gas & Electric Co., 920 F.3d 499 (7th Cir. 2019), the plaintiff sued two different defendants over the use of a fiber optic cable on a utilities transmission tower on his property: the company that installed the wire (Charter Communications) and the utility that owned the tower (Louisville Gas & Electric). The district court dismissed the plaintiff’s claims against Charter, and the plaintiff wanted to appeal. But his claims against Louisville were still pending, so the dismissal of the Charter claims was not final and appealable. To resolve this problem, the plaintiff and Louisville struck a deal: the plaintiff agreed to dismiss his claims against Louisville with the condition that he could reinstate them, without objection, if he won on appeal. If the plaintiff lost on appeal, he agreed not to refile his claims.

The Seventh Circuit dismissed the plaintiff’s appeal, finding it lacked jurisdiction. Because the dismissal of the claims against Louisville was conditional, it lacked “the binding effects of a truly final judgment.” So long as the plaintiff had reserved the right to reinstate its claims, there was no final judgment disposing of all claims in the district court. The court also found that the conditional dismissal was “the very sort of attempt to manufacture appellate jurisdiction” it had disapproved of in other cases. The court stressed that litigants cannot agree to finality to create appellate jurisdiction.

The court also noted that the plaintiff had three other options for immediately appealing the district court’s ruling. First, he could have asked the district court to enter a final judgment as to the claims against Charter under Federal Rule of Civil Procedure 54(b) (although the Seventh Circuit acknowledged that this would have been “a stretch” due to the similarity of the plaintiff’s claims against both defendants). Second, he could have sought permission to pursue an interlocutory appeal under 28 U.S.C. § 1292(b). Third, he could have disclaimed his right to reinstate the claims against Louisville while on appeal. If the plaintiff waived his right to reinstate the claims, then the district court’s judgment would have been final and the Seventh Circuit would have jurisdiction. But the plaintiff refused to do so.

West shows that parties must be careful to ensure all claims have been disposed of before appealing. And conditioning a dismissal of certain claims on the outcome of an appeal will be viewed as an improper attempt to manufacture appellate jurisdiction. West also lays out a party’s options for appealing an order that disposes of less than all of the claims in a case: Rule 54(b), 28 U.S.C. § 1292(b), or abandoning the still-pending claims.

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