Sixth Circuit Clarifies Where to Appeal in a Transferred CaseLast month, the Sixth Circuit subtly deepened a circuit split over a significant question of appellate jurisdiction within the federal courts: When a lawsuit begins in one U.S. district court but is transferred to a second district court within another federal circuit before reaching a final judgment, which court of appeals has jurisdiction to review the first district court’s interlocutory decisions?

In Kalama v. Matson Navigation Co., Inc., a panel of the Sixth Circuit answered: Appellate jurisdiction exists in the court of appeals encompassing the transferee district court, where the case reaches a final judgment.  The Kalama appeal arose out of convoluted multidistrict litigation.  The plaintiffs initially brought the underlying lawsuit in the Northern District of Ohio.  The action was eventually transferred to the Eastern District of Pennsylvania, which dismissed some, but not all, defendants from the lawsuit.  The Eastern District of Pennsylvania then re-transferred the case back to the Northern District of Ohio.  The case reached a final judgment when the Northern District of Ohio dismissed the remaining defendants.  Several plaintiffs then appealed only the Eastern District of Pennsylvania’s dismissal to the Sixth Circuit, which encompasses Ohio, but not Pennsylvania.

The Kalama appeal put the Sixth Circuit in the strange position of reviewing an order that arose in a district court outside of its territorial jurisdiction.  Such a situation arises infrequently for good reason.  Federal courts may only exercise jurisdiction to the extent authorized by Congress.  One such jurisdictional authorization, codified at 28 U.S.C. § 1294, provides that “appeals from reviewable decisions of the district . . . courts shall be taken . . . to the court of appeals for the circuit embracing the district.”  Under a straightforward reading of § 1294, the Eastern District of Pennsylvania’s decision should have been appealed to the Third Circuit, not the Sixth.

Yet the Sixth Circuit did not take that position in Kalama.  Instead, it held that it may review a non-final order issued by a district court outside of the Sixth Circuit if the case eventually reaches a final judgment within the Sixth Circuit.  Under the court’s reasoning, all previous non-final orders “merge” with the final judgment and become appealable in the court of appeals embracing the district court that issues the final judgment.  The Seventh, D.C., Fourth, and Second Circuits also follow this theory.

While this “merger” theory appears to contradict § 1294, in the Sixth Circuit’s opinion that is not so.  In Kalama, the court followed the D.C. Circuit by expressly adopting an interpretation of § 1294 that comports with the merger theory.  According to the Sixth Circuit, a “reviewable” decision is synonymous with an “appealable” decision.  A non-final order, such as the partial dismissal in Kalama, is not “reviewable”—that is, appealable—until the case reaches a final judgment.  Thus, under the Sixth Circuit’s interpretation, § 1294 authorizes appeal of a non-final order to the court of appeals embracing the district court that ends up reaching a final judgment.  In Kalama, that court was the Sixth Circuit.

The Tenth and Eleventh Circuits disagree.  Both have rejected the merger theory, and both hold that, under the plain language of § 1294, any decision arising in a district court within a sister court of appeals must be appealed to that court of appeals.  According to the Tenth and Eleventh Circuits, “reviewable” is not synonymous with “immediately appealable.”

Furthermore, neither court minds that this interpretation can practically leave a party without the opportunity to appeal a decision.  For example, imagine that you are representing a defendant in an action initially filed in Colorado (a Tenth Circuit state), but recently consolidated into multidistrict litigation in Alabama (an Eleventh Circuit state).  The Alabama district court denies your motion for summary judgment and refuses your request for the court to certify its decision for immediate review under 28 U.S.C. § 1292(b).  You have no right to appeal the district court’s interlocutory decision at this stage.  Next, the district court in Alabama re-transfers your case to the district court in Colorado for trial, where you lose.  Now, you would want to appeal the Alabama court’s initial denial of your motion for summary judgment, but the Tenth Circuit’s interpretation of § 1294 prevents it.  You are left without an avenue to appeal the decision.

Luckily for practitioners within the Sixth Circuit, including Tennessee, this conundrum should not arise under the rule announced in Kalama.  As long as a case reaches final judgment within the Sixth Circuit, any interlocutory decisions may safely be appealed to the Sixth Circuit.  However, practitioners should keep their guard up when a case is transferred out of the Sixth Circuit to the Tenth or Eleventh.  In that circumstance, it is prudent to make every effort available to get an unfavorable, interlocutory decision reviewed before transfer—through either Rule 54(b) or § 1292(b), or by seeking an extraordinary writ—because the opportunity may be lost post-transfer.

Is It Worth Fighting For (Recusal)?: The Tennessee Supreme Court Clarifies Judicial Canons on Personal Knowledge and Independent InvestigationsIn 2012, Jeanie Holsclaw filed an action against Ivy Hall Nursing Home, Inc. for retaliatory discharge.  Following several years of extensive discovery and the recusal of two trial judges, Ivy Hall sought to have a certified rehabilitation counselor examine Holsclaw.  At the hearing on Ivy Hall’s motion to examine Holsclaw, the judge informed the parties for the first time that she had called the director of the rehabilitation counselor program at the University of Tennessee to “understand what [a rehabilitation counselor] might or might not be able to testify to [based on] their background [and] education.”  Neither of the parties raised an objection at the hearing, but Ivy Hall filed a motion for the trial court judge to recuse herself after obtaining a copy of the transcript.  The trial court judge denied Ivy Hall’s motion to recuse, explaining that she had “done no investigation of [Ivy Hall’s] expert witness whatsoever” and that her “action would not lead a reasonable person to question [her] ability to be impartial.”

In a divided decision, the Tennessee Court of Appeals concluded that, based on Canons 2.11 and 2.9 of the Tennessee Code of Judicial Conduct, the trial court judge should have recused herself.  Specifically, the majority’s decision concluded that “even though [the court] f[ound] no malice in the trial judge’s well-meaning, but misguided action,” the personal knowledge gained from the extrajudicial conversation created an “appearance of impropriety,” thereby necessitating recusal.

In a per curiam opinion, the Tennessee Supreme Court reversed the Court of Appeals and addressed two important questions:  (1) What constitutes “personal knowledge” of a case under Canon 2.11?; and (2) At what point does a judge’s independent investigation create an “appearance of impropriety” whereby the “judge’s impartiality might reasonably be questioned”?

Relying primarily on a Minnesota Supreme Court decision, the Tennessee Supreme Court explained that “personal knowledge” is knowledge derived from “a close relationship between the judge and some substantive fact of a case,” such as where the judge knows of incriminating evidence against a particular defendant as a result of the judge’s role as a former prosecutor.  Conversely, “personal knowledge” does not include information a judge learns “in the course of her general judicial capacity.”  The Court indicated that the trial court judge here did not come close to having “personal knowledge” of the case because she “did not seek this information for the purpose of discrediting a party or a witness, or even for the purpose of ruling on whether to allow a particular certified rehabilitation counselor to testify as an expert.”  Instead, she contacted the director at the University of Tennessee to know “whether such an expert potentially would be able to provide information helpful to resolving the issues in the case and also because the trial judge was considering naming a court-appointed expert.”

The Court, however, found that the trial judge violated Canon 2.9 – which prohibits a judge from engaging in ex parte communications and independent investigations – by contacting a non-party, concerning a pending matter, and outside the presence of the parties.  But this does not end the inquiry for recusal.  Recusal is only required when “the trial judge’s impartiality might reasonably be questioned” – a question, according the Court, that the Court of Appeals failed to consider separately.  On this point, the Court found, “nothing in the record leads us to the conclusion that a person of ordinary prudence . . . would question whether [the trial judge] can be impartial in the proceedings.”  The Court also noted that, “importantly, the trial judge ultimately allowed [Ivy Hall’s] proposed expert to examine [Holsclaw] again.”

Writing the sole dissent, Justice Page departed with the decision only on the question of “appearance of impropriety.”  In particular, Justice Page concluded that because the trial judge’s ex parte communication “could have potential impact on the trial court’s decision-making process,” it “create[d] an appearance of impropriety.”  Justice Page further noted that the trial court judge’s decision to allow the expert’s examination of Holsclaw did not “alleviate the perception of impropriety created by her contacting an outside source ex parte and off the record.”

Takeaways

For judges, this decision is good news in the sense that it provides guidance on when recusal may or may not be appropriate.  It also suggests that trial court judges could avoid this whole problem by relying on the exception in Canon 2.9(A)(2) to ex parte communications with outside experts by providing the parties prior notice and a chance to respond to the advice received.  For litigants, this decision most likely forecloses potential avenues for filing a motion to recuse by setting a high bar for what constitutes “impartiality [that] might reasonably be questioned.”  Indeed, the Court found nothing to question the impartiality of the trial judge in this case.  Then again, if the ultimate goal is to have a case handled by an impartial judge, then this decision will most likely result in more transparency with judges disclosing to the parties any contemplated contact with experts in order to avoid any appearance of impartiality.

Edmund SauerAlthough Tennessee appellate decisions are readily available, information about how those decisions will affect businesses, legal practice, and people in the state is scarce. We are pleased to introduce our new blog to help fill that information gap — Tennessee Appellate Review. By providing commentary and insights on federal and state appellate news and developments in Tennessee, we aim to make the Tennessee Appellate Review blog a helpful resource for our clients and the Tennessee legal community.

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