Premature Notice of Appeal Tanks Jurisdiction, Holds First Circuit, Creating Circuit Split

In Donahue v. FNMA, No. 19-1618 (1st Cir. Aug. 14, 2020), the court holds that a notice of appeal filed before the last of the parties is dismissed does not confer appellate jurisdiction and cannot be corrected later by filing a voluntary dismissal in the district court. At least three circuits have held, to the contrary, that such a notice of appeal can be remedied retroactively in the district court.

A suit in filed in state court against a lender (Ocwen) and the Government National Mortgage Association (GNMA) was removed with the consent of both defendants to federal court. GNMA then never filed an appearance. The case proceeded without GNMA and the lender eventually prevailed on summary judgment. The summary judgment order did not mention GNMA.

After the plaintiff filed a notice of appeal against Ocwen, the First Circuit issued an order to show cause why the appeal should not be dismissed for lack of a final judgment, owing to the still-pending claims against GNMA. In response, the plaintiff voluntarily dismissed her claims against GNMA pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i), then responded to the show-cause notice that this act remedied the defect in appellate jurisdiction. She did not file a new notice of appeal after the voluntary dismissal, though.

The First Circuit dismisses. The panel observes that notice of appeal was “patently meritless” at the time of filing because the order below, in the terms of Fed. R. Civ. P. 54(b), “adjudicate[d] fewer than all the claims or the rights and liabilities of fewer than all the parties” and the district court did not certify the partial judgment for appeal.

While noting that Fed. R. App. P. 4(a) recognizes two specific instances where a premature notice of appeal may still confer appellate jurisdiction – both involving instances where there is a final dispositive order, but no final judgment is entered – the panel holds that there is no judicial power outside of these express exceptions to overlook a defective notice from a non-final judgment.

The panel also notes that several circuits – the Second, Third, and Seventh – had issued decisions permitting a “premature” notice of appeal to “ripen” upon the belated correction of the non-final order below. While conceding that “[t]he ripening logic these cases deploy has some appeal” because it “ensures that the finality rules do not become a trap for the unwary,” nevertheless it is foreclosed by the “plain language of Rules 3 and 4 of the Federal Rules of Appellate Procedure” that recognize only limited exceptions. “[I]f we were to treat a notice of appeal that is patently meritless in such a springing manner,” it would “render seemingly superfluous the existing, expressly limited exceptions in those two rules that allow for ripening in specified circumstances.”

The panel also does not see this as a trap for litigants. “[A]n appellant who jumps the gun by filing a notice of appeal before the decision below was final is on notice that she is not without options to correct the mistake. Upon realizing it, she may cure the finality problem that renders the notice of appeal of no consequence and then, in accord with the plain terms of Rules 3 and 4, file a timely notice of appeal from the now final decision. That way, there can be no risk of confusion about what exactly is being appealed, given that the notice of appeal that secures our jurisdiction then would follow rather than precede the decision below from which review is sought.”

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