Seventh Circuit Analyzes Rules for Appeals in Multidistrict Litigation

December 13, 2020 10:02 AM | Carson Griffis (Administrator)

By:  Carson Griffis*

The Seventh Circuit recently addressed the application of the rules of appellate jurisdiction in multidistrict litigation (“MDL”) in Bell v. Publix Supermarkets, Inc., Nos. 19-2581 & 19-2741 (Dec. 7, 2020).  This decision highlights the importance of clarity in complex litigation and how a lack of clarity may result in a lost chance to appeal.

It is axiomatic that an appeal may not be taken in a civil case until there is a final judgment disposing of all claims against all parties.  But in cases involving multiple claims for relief, the district court may enter a final, appealable judgment as to one or more of those claims, but fewer than all of them, by expressly determining that there is no just reason for delay.  Fed. R. Civ. P. 54(b).  In either circumstance, the time to appeal runs from the entry of judgment.  Fed. R. App. P. 4(a)(1)(A).

In most cases, the judgment is considered entered when the district court clerk enters a separate judgment order on the court’s docket under Federal Rule of Civil Procedure 58.  Fed. R. Civ. P. 58(a), (c)(2)(A); Fed. R. App. P. 4(a)(1)(A).  But if the court or clerk neglects to enter a separate judgment order, the judgment will be considered entered 150 days from the date of the final decision being appealed.  Fed. R. Civ. P. 58(c)(2)(B); Fed. R. App. P. 4(a)(7).

These rules all played a critical role in Bell.  There, plaintiffs filed five consolidated class action complaints, each targeted at a different defendant, alleging that defendants’ products had deceptive labeling that violated various states’ unfair and deceptive practices laws.  Four of the complaints also brought other claims.  In late 2018, the district court entered an order dismissing all of the deceptive labeling claims in all five complaints, as well as a few other claims.  In effect, that order disposed of all claims in two complaints, and although the district court did not specify whether the dismissal was with or without prejudice, it stated that the two defendants named in those complaints were “dismissed from [the] litigation.”  The order left three complaints with active claims.  

Eight months after the dismissal, the district court entered four separate judgment orders under Federal Rule of Civil Procedure 58, expressly stating that there was no just reason to delay the entry of judgment as to all of the deceptive labeling claims under Federal Rule of Civil Procedure 54(b).  Plaintiffs filed notices of appeal within 30 days of the entry of the Rule 58 judgments.

With respect to the three complaints with pending claims, there was no jurisdictional issue — the Rule 54(b) finding entered final judgments as to the deceptive labeling claims in those complaints and plaintiffs’ notices of appeal were timely filed within 30 days of the final judgments.  But with respect to the two complaints that were entirely dismissed, Rule 54(b) did not apply because the district court did not dispose of fewer than all of those complaints’ claims. 

Instead, the Seventh Circuit concluded that the district court “effectively resolved” all of the claims in those complaints when it dismissed them in late 2018.  Having entered a final decision in those two actions, the district court should have entered separate Rule 58 judgment orders at the same time.  But no Rule 58 judgment orders were entered for eight months, meaning that final judgments in both actions were considered entered 150 days from the dismissals of the two complaints.  Plaintiffs, however, failed to file notices of appeal within 30 days of the 150-day rule elapsing, instead waiting for the entry of the Rule 58 judgments.  Without timely notices of appeal, the Seventh Circuit concluded that it lacked jurisdiction over those two appeals and dismissed them.

In reaching its conclusion, the Seventh Circuit discussed the “additional wrinkle” of the complaints being part of MDL.  The court explained that, in most MDL, separate complaints retain separate identities for purposes of appeal, such that a final judgment as to one complaint will trigger the time to appeal.  But MDL plaintiffs may instead choose to file a master complaint that merges their individual complaints into one.  Such a merger will not occur, however, if a master complaint is merely an “administrative summary” of the plaintiffs’ claims rather than a legally operative pleading.  And determining whether a master complaint is a mere administrative summary or a true merger involves a “pragmatic inquiry” into six factors.  The Seventh Circuit concluded that the Bell plaintiffs maintained separate complaints against separate defendants, and appellate jurisdiction had to be established for each individual complaint.

Recognizing the potential for ambiguity in using a multifactor analysis to evaluate a party’s right to appeal, the Seventh Circuit encouraged MDL parties to explicitly agree as to the legal status of the operative complaint.  It also urged district courts “to indicate clearly whether a consolidated MDL complaint is to be treated as the operative pleading for purposes of judgment and appeal or instead as merely an administrative convenience.”

*Carson Griffis is an Assistant Attorney General in the Civil Appeals Division of the Office of the Illinois Attorney General.  No comments made in this post are made on behalf of the Office of the Illinois Attorney General, nor do they reflect the views or opinions of the Office of the Illinois Attorney General.

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