Fifth Circuit Reminds Practitioners of the Importance of Compliance With Appellate Notice Strictures When Appealing a Rule 54(B) Partial Judgment in a Case Involving Multiple Claims


Partial Final Judgments Under Rule 54(b). Rule 54 of the Federal Rules of Procedure authorizes a Court to enter judgment. It was amended early on specifically to address circumstances under which a “final judgment” could be entered seriatim in cases involving multiple claims or multiple parties. As a result, Rule 54(b) now authorizes a district court to enter a “final judgment” as to one or more – but fewer than all – claims or parties, but only if the Court “expressly determines that there is no just reason for delay.” As the Supreme Court indicated in Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 511 (1950), this “partial final judgment” mechanism was designed to prevent “the hardship and denial of justice through delay if each issue must await the determination of all issues as to all parties before a final judgment can be had.”

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Partial Final Judgment Entered in Johnson Case. In Johnson v. Ocwen Loan Servicing, L.L.C., ____ F.3d ____, 2019 WL 762230 (5th Cir. Feb. 21, 2019), the United States Court of Appeals for the Fifth Circuit has just reminded practitioners of a potential pitfall in the application of Rule 54(b), and the corresponding hazard to an appellant who waits to appeal a lower court’s interim rulings denominated as “final” under Rule 54(b) until an ultimate “final judgment” has been entered.

In Johnson, a dispute arose over payment of a home equity loan. The loan servicer sought to foreclose on this loan when the borrower fell behind on payments. In response, the borrower sued in federal court, asserting five claims – three under the Texas Debt Collection Act (TDCA), and two under the federal Real Estate Settlement Procedures Act (RESPA). The district court adopted recommendations from the magistrate judge and granted summary judgment in favor of the loan servicer as to both of the federal claims, and as to two of the three TDCA claims. It returned the remaining claim to the magistrate judge for further evaluation.

In the meantime, even though that last claim was still pending, the court entered a Rule 54(b) partial final judgment as to the four dismissed claims. Within one month thereafter, the court adopted the magistrate judge’s recommendation on the remaining claim and granted summary judgment for the loan servicer as to that claim, thus entering a final judgment disposing of this last claim.

Timeliness of Appellate Review Sought. The borrower in Johnson filed her notice of appeal within 30 days of the entry of the eventual final judgment, but more than 30 days after the Rule 54(b) partial final judgment.

Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure prescribes the general rule that in a civil case, a notice of appeal must be filed within 30 days after entry of the judgment or order appealed from. This time limit is both mandatory and jurisdictional. The Johnson Court held that entry of the “partial final judgment” triggered the appellate timetable for appealing that ruling. As a result, the notice of appeal for the partial final judgment was deemed untimely.

Applicability of Rule 54(b): Multiple Claims. The borrower sought to avoid the consequences of this time bar by contending that she had brought only one claim, rather than multiple claims; and by contending that the lower court failed to explain in this earlier ruling why there was “no just reason for delay” sufficient to comply with the requirements of Rule 54(b).

The Johnson Court first noted that it did not view a timely notice of appeal as to an eventual final judgment as empowering it to consider what it characterized as a collateral attack on the partial final judgment where no timely appeal had been taken therefrom. In so doing, the Court noted that there existed at least two alternative avenues for review for a litigant such as the borrower in this case: file a timely notice of appeal that, among other things, claims that the entry of a partial final judgment is defective; or timely invoke Fed.R.Civ.P. 59(e) to bring such a defect to the lower court’s attention.

The Court then took up an issue of first impression, the criteria for assessing whether there was one claim or more than one claim filed in the case. In so doing, the Court swept aside the borrower’s “one claim” contention. It stated that there were multiple claims in the case, given that the federal claims and the state claims depended upon different facts, and that recovery on the federal claims would not have precluded recovery on the state claim.

As for the lower court’s notation in the partial judgment that there was “no just reason for delay,” the Court commented that it does not require lower courts to provide any such explanation even where, as here, the final judgment was entered less than one month later. The Court credited the possibility that at the time of the earlier judgment, the district court may not have known how quickly the magistrate judge would issue a recommendation on the one remaining claim.

Thus, the appeal of the partial judgment was dismissed as untimely.

Suggestions for Practitioners. The Johnson decision reminds practitioners of the importance of properly calendaring appellate deadlines as to any district court pronouncement that invokes Fed.R.Civ.P. 54. The decision provides a template for how practitioners can handle what they consider to be an improper Rule 54(b) designation of a partial final judgment at the district court. It should also not be overlooked that if there is doubt about the finality of such a ruling, the best approach may be to file a notice of appeal in each phase of the lawsuit where such a Rule 54(b) designation occurs. If in fact such a notice is deemed to be premature, Federal Rule of Appellate Procedure 4(a)(2) provides that that notice is treated as being filed on the actual date of judgment with no adverse implication about the timeliness of that notice.


Meet Lonnie

Lionel M. Schooler is a management-side employment lawyer and recognized authority on employment law, federal appellate practice, and arbitration. Lonnie’s employment practice focuses on counseling clients and litigating, on a nationwide basis, claims under all employment laws, wage and hour claims, and investigations by the Equal Employment Opportunity Commission, the U.S. Department of Labor, and the Texas Workforce Commission. Lonnie is also experienced as an arbitrator on the Commercial and Employment Panels of the American Arbitration Association and as an advocate. He was selected for inclusion by the National Association of Distinguished Neutrals and is certified as a Fellow of the Chartered Institute of Arbitrators for international arbitration matters. Since 2017, Lonnie has served on the Board of Directors of the Houston Bar Association. His previous editorial experience includes serving as editor-in-chief of The Houston Lawyer, a bimonthly publication of the Houston Bar Association.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.