Ninth Circuit Resolves Intracircuit Conflict on Law-of-the-Case, Tightening Standard for Successor Judge Reconsideration of Prior Decisions

In Zeyen v. Bonneville Joint Dist., No. 23-35438 (9th Cir. Aug. 23, 2024), the Ninth Circuit holds that when an open case is reassigned to a new district court judge, the successor may only reverse a predecessor’s decision when it is both “clearly erroneous and . . . its enforcement would work a manifest injustice.” The decision resolves an intracircuit split over the standard to apply when a new judge takes over an old matter.

“Plaintiffs-Appellants (‘Appellants’) are parents of Idaho school children who seek reimbursement for fees associated with educational opportunities within public school districts in Idaho. They allege such fees were improperly assessed because the Idaho Constitution requires that the Idaho Legislature provide ‘free common schools’ and that the payment of such fees constitutes a taking of property without due process in violation of the Takings Clause of the Fifth Amendment of the U.S. Constitution.”

The first district court judge to whom this matter was originally assigned denied summary judgment and a motion to reconsider. But then the case was reassigned to a second district court judge. “In a September 2022 scheduling order, the second district judge wrote, ‘It is unclear to this Court how a violation of the Federal Constitution would result from a violation of Article IX, § 1 of the Idaho Constitution.’ Accordingly, the second district judge sua sponte invited the parties to brief the Takings Clause issue again, indicating that the ‘parties may file dispositive motions by December 22, 2022.’” In time, the second judge granted summary judgment.

The Ninth Circuit affirms on the merits, but divert first to “consider whether the second district judge was justified in reconsidering the first district judge’s prior interlocutory order.” Citing the law-of-the-case doctrine, and the preference for finality, the panel notes that the rule has special resonance when a case is transferred to a new judge while it is still proceeding. The panel notes its role in shoring up the integrity of and “confidence in the adjudicatory process,” by preventing successor judges from “second-guess[ing] their co-equals [and] effectively usurp[ing] the appellate function.”

Nevertheless, “[a]mong Ninth Circuit cases applying the law of the case doctrine in this situation, two main standards have been set forth” that were in tension. One line of authority states simply that a new judge may revisit an old ruling for “cogent reasons and exceptional circumstances.” Another line of cases, citing Delta Sav. Bank v. United States, 265 F.3d 1017 (9th Cir. 2001), imposed stricter conditions, i.e., that “[t]he prior decision should be followed unless: (1) the decision is clearly erroneous and its enforcement would work a manifest injustice, (2) intervening controlling authority makes reconsideration appropriate, or (3) substantially different evidence was adduced at a subsequent trial.”

“We now resolve the uncertainty surrounding the question of when a district judge may review an interlocutory order by a prior judge in the same case and hold that the Delta Savings Bank standard governs . . . . As we have now clarified, absent other circumstances not present here, the Delta Savings Bank standard requires that the previous decision be both clearly erroneous and that its enforcement would work a manifest injustice before a second judge can justify revisiting the previous decision.” But while holding that the second district court judge failed  to “make the requisite ‘manifest injustice’ finding before reconsidering the first district judge’s decision,” the panel deems the procedural error harmless because the second judge was correct on the legal merits.

“Going forward, we emphasize that when deciding whether to revisit a previous decision by a predecessor judge, district judges should explicitly consider whether any of the three circumstances laid out in Delta Savings Bank are applicable before proceeding to reconsider a prior order issued by a previous judge. In cases like this one that do not involve an intervening change in law or new evidence adduced during the course of the litigation, this analysis must include an explanation of (1) why the previous decision is ‘clearly erroneous’; and (2) why enforcement of the previous decision ‘would work a manifest injustice.’”