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May 31, 2022

Lit Alerts—May 2022

A Publication of the Litigation Practice Group

Appellate Jurisdiction: Eleventh Circuit Declines To Resolve a “Predicament” Resulting in an Unappealable Order of Dismissal

Earlier this month, the US Court of Appeals for the Eleventh Circuit addressed a pitfall that can leave an unwary plaintiff unable to appeal from an order dismissing part of its case. In Jenkins v. Prime Insurance Co., the US District Court for the Northern District of Georgia granted a motion to dismiss as to two defendants and a motion to transfer venue under 28 USC § 1404(a) as to two remaining defendants.

The plaintiffs appealed the dismissal order, but the Eleventh Circuit dismissed for lack of appellate jurisdiction. Although the district court’s dismissal and transfer order left nothing remaining for that court to do—the usual standard for whether an order is an appealable final judgment—the order nonetheless remained a non-appealable interlocutory order because it did not “resolve all claims against all parties.” Thus, the order would be appealable only if the district court certified it for interlocutory appeal under 28 USC § 1292(b) or entered an appealable judgment under Federal Rule of Civil Procedure 54(b). The plaintiffs did not request either.

The plaintiffs also lacked a path to appeal from the dismissal order in the transferee court, the District of Utah. Although most circuits allow an appeal from an interlocutory order of an out-of-circuit transferor court, the Tenth Circuit (in which the District of Utah sits) has held that it lacks jurisdiction to review such orders, even when the appeal is from a court within its boundaries. The Eleventh Circuit recognized the plaintiffs’ “predicament,” but refused to create an exception to its jurisdictional limits. In two concluding footnotes (undoubtedly meant for future practitioners as much as the parties), the court indicated that the plaintiffs should have requested a Rule 54(b) judgment from the Northern District of Georgia and still could attempt to secure such a judgment or reconsideration of the dismissal order in the District of Utah, which likely would result in an order by the District of Utah that can be appealed to the Tenth Circuit.

Email Service: Second Circuit Upholds Dismissal Due to Improper Service

The US Court of Appeals for the Second Circuit, in Damian Dalla-Longa v. Magnetar Capital LLC, recently upheld the lower court’s dismissal of a petition to vacate an arbitration award, on the basis of improper service.

Plaintiff, a former employee of the defendant, challenged his dismissal, and an arbitration panel ruled against him. Exactly three months later, and the day any challenge to the arbitration award was required to be served, he filed a petition to vacate the arbitration award. That same evening, he emailed the petition to defense counsel, although the parties had not agreed to service by email. The lower court dismissed the petition for improper service. 

The Second Circuit considered whether delivery of the petition by email, on the last day notice to vacate was due, was proper service or whether service should be deemed proper on equitable grounds. It rejected both arguments. First, the applicable arbitration rules required the petition be served by the same means “as prescribed by law” in that district—here, in accordance with Federal Rule of Civil Procedure 5, related to the service of pleadings. Because defense counsel had not consented to service by email in writing, email service was improper under Rule 5. Second, the court ruled that the defendant’s prior agreement to accept email service in the arbitration proceeding did not follow through to the service of the petition. Finally, the court saw no grounds to equitably extend the deadline, since the applicable arbitration rules allow for no exceptions.

Protective Orders: District Court Sanctions Party For Blanket Confidentiality Designations

Earlier this month, a federal district court in Minnesota rejected the use of blanket “attorneys’ eyes only” (AEO) designations in discovery. In CellTrust Corp. v. ionLake LLC, the plaintiff sued the defendant for patent infringement. The parties filed a stipulated protective order permitting them to designate documents as confidential if the designating party contended the document contained confidential or proprietary information. The protective order also permitted the parties to supplement the confidentiality of a document with an AEO designation. 

The plaintiff served its first set of requests for production of documents approximately one month before the close of fact discovery. In response, the defendant produced 35,000+ documents totaling more than 400,000 pages. However, it designated every document in its production as AEO, including public documents and records. The plaintiff moved for sanctions against the defendant for its blanket AEO designations. 

The court determined that the defendant breached its duty of good faith to review the documents that it designated as AEO before designating them, even though the defendant had re-designated and re-produced its documents after meeting and conferring with the plaintiff. The court rejected the defendant’s argument that its initial designations were “preliminary” and “only for the sake of expediency” in response to the plaintiff’s allegedly broad search terms. While the court observed that there is no bright-line test to determine when a party’s AEO designations are presumptively improper, it noted that courts have admonished parties who have designated 79 percent or more of their discovery as AEO. The court further noted that there was no evidence that the defendant had made efforts to meet and confer with the plaintiff about its search terms prior to the production deadline, or that it had attempted to meet and confer with the plaintiff regarding the scope of the production in light of the volume of responsive documents it identified.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.