This week, the Court addressed two questions of appellate jurisdiction, holding there is no right to immediate appellate review of a district court’s denial of derivative sovereign immunity or of a fact-bound district court order certified for review under section 1292(b).
The Court holds that a denial of derivative sovereign immunity is not immediately appealable under the collateral order doctrine.
Panel: Judges Ikuta, Bennett, and Nelson, with Judge Ikuta writing the opinion.
Key Highlight: “Our conclusion in Alaska that the interest served by federal sovereign immunity (i.e., giving the government a defense to payment of damages) ‘may be served equally well if review follows a final judgment on the merits,’ is applicable to parties claiming derivative sovereign immunity. . . . And our reasoning in Rodriguez that the interest served by the government contractor immunity (i.e., giving contractors a shield from financial liability) can be vindicated after trial is also applicable to parties claiming derivative sovereign immunity. Therefore, the reasoning of Alaska and Rodriguez compels the conclusion that it would not ‘imperil a substantial public interest,’ to require a government contractor with derivative sovereign immunity . . . to stand trial.”
Background: Donald Childs and his family leased a house on a naval base owned by San Diego Family Housing, LLC (SDFH), a public-private venture created by statute, in which the United States Navy is a minority LLC member. The Childs sued SDFH and Lincoln Military Property Management, L.P., (Lincoln), in California state court alleging negligence and other state tort claims after experiencing water-intrusion and mold issues in their home. SDFH and Lincoln removed to federal court, where they moved to dismiss, asserting that, as government contractors acting at the direction of the federal government, they had derivative sovereign immunity. The district court denied the motion, and defendants appealed.
Result: The Ninth Circuit dismissed for lack of appellate jurisdiction. As the Court explained, ordinarily, parties cannot seek appellate review “until there has been a decision by the District Court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” The collateral order doctrine expands reviewable final decisions to include “a narrow class of decisions that do not terminate the litigation, but must, in the interest of achieving a healthy legal system, nonetheless be treated as final.” To qualify, an order must (1) “conclusively determine the disputed question,” (2) “resolve an important issue completely separate from the merits of the action,” and (3) “be effectively unreviewable on appeal from a final judgment.” Under the Supreme Court’s decision in Will v. Hallock, 546 U.S. 345, 350 (2006), the third prong is satisfied if denying immediate appeal would “imperil a substantial public interest,” such as “honoring the separation of powers, preserving the efficiency of government and the initiative of its officials, respecting a State’s dignitary interests, and mitigating the government’s advantage over the individual.”
Here, the parties agreed that the first two prongs were satisfied. But the Ninth Circuit concluded that denying review would not “imperil a substantial public interest” under Hallock. The Court had previously held that an order denying standard federal sovereign immunity was not immediately reviewable because it was more akin to a defense to liability than a right not to stand trial, and the only hardship imposed by postponing review was “the need to prepare for trials.” And the Court had also previously held that an order denying the government contractor defense was likewise not immediately reviewable because it provided “only a corollary financial benefit flowing from the government’s sovereign immunity.” The Court held that those same principles were “applicable to parties claiming derivative sovereign immunity,” and denied review. In doing so, it noted that it was “join[ing] the Fifth Circuit’s well-reasoned conclusion” in Martin v. Halliburton, 618 F.3d 476, 485 & n.14 (5th Cir. 2010).
The Court holds that it lacks appellate jurisdiction of orders certified under 28 U.S.C. § 1292(b) that address factual rather than legal issues.
The panel: Judges O’Scannlain, Clifton, Nguyen, with Judge O’Scannlain writing the opinion.
Key highlight: “When this court concludes that the question identified by the district court satisfies the requirements of § 1292(b), we have jurisdiction over any question within the four corners of the certified order—not just the identified controlling question. . . . Importantly, however, jurisdiction does not extend to other orders entered in the same case.”
Background: The International Longshore and Warehouse Union (ILWU) had been involved in a dispute with the Port of Portland regarding the handling of refrigerated shipping containers. The union engaged in a variety of work stoppages, which led marine terminal operator ICTSI Oregon, Inc. to terminate its lease at the Port. ITCSI then brought suit against the union for damages. After a jury awarded $93.5 million, the district court denied the union’s motion for new trial, which was premised on the contention that ICTSI had been the union’s “primary employer” and therefore the union was not liable. The court conditioned the denial on the ITCSI’s acceptance of a remittitur of the damages award to $19 million. ITCSI rejected the remittitur, meaning that a new trial would be required. The district court then granted the union’s motion for section 1292(b) certification of the new-trial order. The union filed a petition for permission to appeal, which a Ninth Circuit motions panel granted.
Result: The Ninth Circuit dismissed the appeal for lack of jurisdiction, concluding that the requirements of section 1292(b) were not, in fact, satisfied. As the Court explained, for section 1292(b) certification to be appropriate, there must be a “controlling question of law” as to which there is a “substantial ground for difference of opinion,” and the resolution of that question must “materially advance the ultimate termination of the litigation.” Moreover, while a Ninth Circuit merits panel would not “lightly overturn” a motion panel’s determination that these requirements were satisfied, the Court does not apply the law of the case doctrine “strictly.”
Here, the Court concluded, the questions presented in the appealed order were not questions of “law,” as section 1292(b) requires. Rather, the Court held, “the dispute is about whether ICTSI became a primary employer under the circumstances of this case (a question of fact).” That question turned on an evaluation of the facts of the record and did not present any ground for disagreement on any significant legal issue.
The Court also rejected the union’s argument that section 1292(b) jurisdiction could be premised on a legal dispute regarding the parties’ burdens of proof—an issue the district court had addressed in a pretrial ruling (not the post-trial order certified for appeal). The Court explained that section 1292(b) “jurisdiction does not extend to other orders entered in the same case” unless they resolve questions “material” to the certified order. And here, the Court concluded, because there was no “question in the four corners of the certified order” that satisfied section 1292(b), the Court could not “establish jurisdiction over the certified post-trial order,” and thus could not “extend that jurisdiction” to any issue decided in other rulings.