Sixth Circuit Divides Over Whether Voluntary Dismissal of Undecided Claims Under Fed. R. Civ. P. 41(a)(2), “With the Intention of Reinstating the Dismissed Claims,” Creates an Appealable Final Judgment

In Rowland v. Southern Health Partners, Inc., No. 20-5944 (6th Cir. July 21, 2021), the panel splits over the meaning of its prior case law, holding that a voluntary dismissal without prejudice under Rule 41(a)(2) of claims that might be refiled after a successful appeal does not present a final, appealable judgment under 28 U.S.C. § 1291.

Plaintiff Rowland “appeals from two district court orders disposing of her state and federal claims arising from injuries she sustained while incarcerated. In the first order, the district court entered partial summary judgment in favor of the defendants on Rowland’s 42 U.S.C. § 1983 and punitive damages claims.” Yet the judge denied summary judgment on Rowland’s state-law negligence claims. “Shortly thereafter, in a teleconference with the court, both parties agreed to dismiss the remaining state-law claims, and the district court entered an order dismissing those claims without prejudice.”

On appeal, the plaintiff did not appeal dismissal of the state-law claims but stated that if summary judgment on the federal claims were reversed, then the state-law claims “should be restored and remanded for resolution with her federal claims, given that they are all based on the same underlying facts and to promote judicial economy and the interests of justice.”

“At oral argument, [the Sixth Circuit panel] questioned the parties as to the nature of the dismissal and whether it had any effect on our appellate jurisdiction. Rowland’s counsel maintained that we have appellate jurisdiction despite the lack of a [Fed. R. Civ. P.] 54(b) certification by the district court, because the dismissal was made for the purpose of promoting judicial economy in case we reversed the summary judgment on some or all of her federal claims.”

The panel majority dismisses the appeal for lack of appellate jurisdiction, holding that the case is governed by Page Plus of Atlanta, Inc. v. Owl Wireless, LLC, 733 F.3d 658, 658 (6th Cir. 2013). “We lack jurisdiction over this appeal because the voluntary dismissal of Rowland’s remaining state-law claims did not create an appealable final order under 28 U.S.C. § 1291. Rowland’s decision to voluntarily dismiss her—presumably strongest—claims without prejudice for the purpose of obtaining an immediate appeal, and with the intention of reinstating the dismissed claims if the appeal was successful, is an impermissible circumvention of the finality requirement and the procedures set forth in Rule 54(b).”

Page Plus, the panel majority holds, “is directly on point . . . . In that case, we considered whether we had appellate jurisdiction over an appeal where the parties submitted a stipulation of dismissal under Rule 41(a)(2) to the district court seeking to dismiss the only claim remaining in the litigation after summary judgment was granted on all other claims . . . . The district court granted the dismissal, with a stipulated agreement that if the defendant received an adverse judgment on appeal, defendant would be allowed to reassert the counterclaim following remand, and plaintiffs agreed not to assert any defense based on the [statute of limitations] . . . . We held that this conditional dismissal did not meet the ‘traditional test of finality,’ because instead of guaranteeing an end to the litigation, the order ensured that ‘the reserved claim would ‘spring back to life’ if . . . any of the issues teed up for our consideration by the parties were reversed.’ . . . . Here, Rowland similarly dismissed her state claims for the purpose of pursuing what would otherwise be an interlocutory appeal on other issues.”

The difference between these cases and other reported cases where parties successfully effectuated a final judgment by voluntary dismissal was that the plaintiff bore no risk under the stipulation. “Rowland pursued this immediate appeal with the intention of assuming no risk as to the dismissed claims. The briefing makes clear that Rowland appealed from the order dismissing her remaining claims in order to toll the statute of limitations on her state-law negligence claims and negate that affirmative defense while pursuing her appeal. She also did not assume the risk of any res judicata defense because, like the defendant in Page Plus, she intended to revive her dismissed claims in this same action if we reversed on the federal claims.”

The panel majority holds that Rowland, upon return to the district court, can obtain a final judgment by “dismissing her state-law negligence claims with prejudice,” obtaining a Rule 54(b) certification that there is “no just reason” for delaying the appeal of her federal claims, or seeking an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

Judge Moore, in dissent, argues that the panel majority gets the holding of Page Plus entirely wrong. Whatever plaintiff’s “intention” might have been to revive her state-law claims in the future, the issue of whether the judgment was final was to be resolved entirely based on the text of the orders themselves.

“The majority believes that Rowland’s voluntary dismissal mirrors the conditional dismissal in Page Plus . . . . But the majority glosses over two very important differences that distinguish this case. Unlike in Page Plus, here nothing in the district court’s order states or even hints that the parties agreed that Defendants would not assert any time-based affirmative defenses against the voluntarily dismissed state-law claims . . . . [And u]nlike in Page Plus, nothing in the district court’s order in this case stipulates that the parties agreed that Rowland could reinstate her claims upon remand, nor does the order authorize Rowland to reinstate her voluntarily dismissed claims should this court remand the case back to the district court.”

Focusing on the text, rather than the parties’ motivations, Judge Moore would hold that “the plain language of the district court’s order and the stance taken by Defendants demonstrate that [plaintiff] has assumed, albeit unwillingly and perhaps unwittingly, the requisite risks our precedent demands from parties that attempt to secure appellate review of adverse judgments by voluntarily dismissing lingering claims without prejudice.”

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