Tenth Circuit Panel Splits Over Analysis of Finality of Judgment When Unserved Party Remained in the Case

In Adams v. C3 Pipeline Constr., No. 20-2055 (10th Cir. Nov. 2, 2021), the panel holds that the appeal was timely filed “more than 10 months after the summary judgment order” being appealed “but only three weeks after” final judgment was entered against a defaulting party. Still, the judges disagree on the correct analysis of finality.

Plaintiff Adams alleged that she was sexually harassed at a construction site in violation of Title VII of the Civil Rights Act and state law. She sued her employer C3, a Louisiana company that services pipelines, and four defendants (the “Plains Defendants”) that operated the pipeline system where she worked. She alleged that C3 and the Plains Defendants were “joint employers.” The Plains Defendants moved for an early summary judgment, arguing as a matter of law that they were not “employers” for purposes of the federal and state anti-discrimination statutes. The district court dismissed them from the case.

Thereafter, Adams served C3 which “failed to answer. She moved for a default judgment, which the district court granted. A jury reached a damages verdict against C3 awarding Ms. Adams $55 million, which the court reduced to $20,050,000 . . . . The court entered a ‘final judgment’” that addressed only Ms. Adams’s claims against C3.” Adams then filed a notice of appeal as to the Plains Defendants.

On appeal, the Plains Defendants moved to dismiss, arguing that grant of summary judgment was the “final judgment” that triggered the 30-day appeal clock under Fed. R. App. P. 4(a)(1)(A). They argued that the claims against the unserved party C3 did not count in determining the finality of the judgment, citing Bristol v. Fibreboard Corp., 789 F.2d 846 (10th Cir. 1986) (per curiam). In Bristol, three were two unserved defendants out of 21 total, and “[t]he fact that [these two defendants] were not considered in the order or judgment does not prevent the decision of the district court from being final.”

The panel denies the motion to dismiss the appeal. The majority took its cue from a similar D.C. Circuit case, Kaplan v. Central Bank of the Islamic Republic of Iran, 896 F.3d 501 (D.C. Cir. 2018), which held that there is no final judgment under 28 U.S.C. § 1291 when there are unserved parties and the district court “makes clear” its “expectation” that further proceedings against those parties are anticipated.

Addressing Bristol, the panel majority concludes that it “said only that, even if unserved defendants remain after a district court’s order resolving claims against all served defendants, this ‘does not prevent’ the court’s decision from being final. [Bristol] did not hold that an order dismissing claims against all served defendants is always or even presumptively final when unserved defendants remain.”

“Ms. Adams’s appeal was timely because the district court contemplated further proceedings against C3 when it granted summary judgment to Plains Defendants.” Among other things, the original order against the Plains Defendants was captioned as “partial summary judgment” and the district court ordered Adams to serve C3 or risk having her case against it dismissed without prejudice.

The panel majority rejects the Plains Defendants’ argument that the “partial” summary judgment was “final and appealable because it resolved Ms. Adams’s claims against all defendants that had been served.” Finality, the majority concludes, “depends on whether the district court plainly contemplated further proceedings against the unserved defendant. Here it plainly did.”

Concurring Judge Eid would have held that Bristol controlled. “In Bristol . . ., we held that when a district court decision leaves claims unadjudicated that only relate to unserved, nonparty defendants, the judgment is final as to the served, party defendants.” The panel majority “misreads Bristol by placing too much weight on the ‘does not prevent’ phrasing and introduces unnecessary ambiguity into our analysis.” The concurring judge would instead have preserved Bristol as the rule of the circuit, only subject to the narrow “exception” provided by the D.C. Circuit’s opinion in Kaplan.

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