Wilcox v. Georgetown Univ.

• Decision Date: 09 February 2021
• Docket Number: No. 19-7065,19-7065
• Citation: 987 F.3d 143
• Parties: Darrell WILCOX and Michael McGuire, Individually and as Representatives of a Class of Participants and Beneficiaries in and on Behalf of the Georgetown University Defined Contribution Retirement Plan and the Georgetown University Voluntary Contribution Retirement Plan, Appellants v. GEORGETOWN UNIVERSITY, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

987 F.3d 143

Darrell WILCOX and Michael McGuire, Individually and as Representatives of a Class of Participants and Beneficiaries in and on Behalf of the Georgetown University Defined Contribution Retirement Plan and the Georgetown University Voluntary Contribution Retirement Plan, Appellants

v.GEORGETOWN UNIVERSITY, et al., Appellees

No. 19-7065

United States Court of Appeals, District of Columbia Circuit.

Argued September 10, 2020

Decided February 9, 2021

John J. Nestico, Emeryville, CA, argued the cause for appellants. With him on the briefs were Todd S. Collins and Eric Lechtzin, Philadelphia, PA.

Brian D. Netter, Washington, DC, argued the cause for appellees. With him on the brief were Eric A. White, Washington, DC, and Nancy G. Ross, Chicago, IL.

Before: Rogers and Rao, Circuit Judges, and Randolph, Senior Circuit Judge.

Dissenting opinion by Senior Circuit Judge Randolph.

Rogers, Circuit Judge:

When appellants sought to bring individual and class action claims against Georgetown University retirement plans, the district court dismissed their complaint without prejudice. The district court also denied as untimely their motion for leave to file an amended complaint. They appeal and the University responds that the appeal is untimely because the dismissal was a final appealable order that triggered their time to appeal, which expired before appellants noted an appeal. Dismissal of a complaint without prejudice is generally not a final appealable order, but exceptions apply where the record clearly indicates that the district court has separated itself from the case. For the following reasons we hold the district court erred when it denied appellants leave to file their amended complaint on the ground that it had previously entered a final judgment in their case. Accordingly, because the district court had not entered final judgment when it dismissed appellants’ complaint, we remand the case to the district court for renewed consideration of their motion and do not reach appellants’ challenges to the dismissal of their complaint.

I.

Darrell Wilcox and Michael McGuire are participants in retirement plans for faculty and staff of Georgetown University. They sued the University and individual fiduciaries of these plans (hereinafter, "the University"), seeking to bring individual and representative class action claims for breach of fiduciary duty under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 – 1461. Compl. ¶¶ 1, 22–26, 114–18. They alleged, among other things, that the University plans paid excessive fees for recordkeeping services and included investment options that consistently underperformed their benchmarks. Compl. ¶¶ 3–11. For instance, concerning the recordkeeping fees, the complaint alleged that the plans paid hundreds of dollars in annual fees for each participant when a reasonable annual price for the services provided would have been $35. Compl. ¶¶ 53–54. The University moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), attaching a proposed order for dismissal with prejudice.

On January 8, 2019, the district court dismissed the complaint without prejudice. The district court ruled that appellants lacked Article III standing as to some aspects of plan management, such as the inclusion of investment options neither appellant had selected. Wilcox v. Georgetown Univ. , 2019 WL 132281, at *8–10 (D.D.C. Jan. 8, 2019) ; FED. R. CIV. P. 12(b)(1). Regarding the duty of prudence, the district court found that appellants’ excessive recordkeeping fees allegations failed to state a claim upon which relief could be granted because they provided "no factual support at all for their assertion that the Plans should pay only $35/year per participant."

Id. at *12. That is, appellants challenged "the fundamental structures of the Georgetown Plans" without citing any example of a college or university continuing the same offerings at the reduced price, and that their theory the University could do so was "entirely speculative, contrary to caselaw and common sense, and does not warrant discovery." Id. at *12–13 ; FED. R. CIV. P. 12(b)(6). By order, the district court dismissed the complaint without prejudice. The electronic docket entry for the order read, in relevant part, "See Order for details. This case is closed."

On February 7, 2019, appellants moved for leave to amend their complaint, pursuant to Federal Rule of Civil Procedure 15(a), attaching a proposed amended complaint. The district court denied the motion by Order of May 29, 2019. The court explained that because its order in January had entered judgment in the case, appellants could no longer properly seek leave to amend under Rule 15(a), Wilcox v. Georgetown Univ. , 2019 WL 2289631, at *3 (D.D.C. May 29, 2019), and their motion did "not survive analysis under Federal Rules of Civil Procedure 59(e) or 60(b)," id. at *1, as it was untimely under the former and lacked a proper basis for relief under the latter, id. at *4–5. On June 27, 2019, appellants filed a notice of appeal from the January 2019 memorandum opinion and order, and from the May 2019 denial of leave to file an amended complaint.

II.

As a threshold matter, the University maintains this appeal should be dismissed for lack of jurisdiction. It argues that because the district court had closed the case in January 2019, appellants had to note their appeal within 30 days of that order, which they failed to do. Notably, the jurisdictional and the merits issues turn on whether the January dismissal order constituted a final judgment. If it did, then this court lacks jurisdiction over the untimely appeal. If it did not, then this court has jurisdiction over the timely appeal, and the district court erred by relying on its January dismissal in rejecting appellants’ attempt to amend their complaint.

A.

Courts of Appeals have jurisdiction over appeals from "final decisions" of the district courts. 28 U.S.C. § 1291. Federal Rule of Appellate Procedure 4(a), in turn, requires that a notice of appeal in a civil case be filed "within 30 days after entry of the judgment or order appealed from." A "judgment," as the term is used in the Federal Rules of Civil Procedure, is simply "any order from which an appeal lies." FED. R. CIV. P. 54(a). For litigants to determine when it is time to notice an appeal, they must be able to ascertain when a district court has reached a "final decision" within the meaning of § 1291. When a final judgment has been entered, Federal Rule of Civil Procedure 58(a) directs that any judgment "be set out in a separate document," subject to exceptions not applicable here. See also Bankers Tr. Co. v. Mallis , 435 U.S. 381, 384–85, 98 S.Ct. 1117, 55 L.Ed.2d 357 (1978).

Generally, a dismissal of a complaint without prejudice is not a final appealable order. Because the dismissal does not constitute entry of a final judgment, the complaint may be amended pursuant to Rule 15(a) of the Federal Rules of Civil Procedure without filing a motion pursuant to Rules 59(e) or 60(b). This has long been the law in this and other circuits. See, e.g. , Ciralsky v. CIA , 355 F.3d 661, 666 (D.C. Cir. 2004) ; Moya v. Schollenbarger , 465 F.3d 444, 448–49 (10th Cir. 2006) ; Hoskins v. Poelstra , 320 F.3d 761, 763 (7th Cir. 2003) ; Domino Sugar Corp. v. Sugar Workers Local Union 392 , 10 F.3d 1064, 1066–67 (4th Cir. 1993) ; California v. Harvier , 700 F.2d 1217, 1218 (9th Cir. 1983). By contrast, dismissal of an "action" or "case" is presumptively final, whether with or without prejudice. Ciralsky , 355 F.3d at 666. Other circuits view any dismissals as presumptively final and appealable "absent some retention of jurisdiction such as an invitation to amend the complaint." Nichols v. Prudential Ins. Co. of Am. , 406 F.3d 98, 104 (2d Cir. 2005) ; see also Quartana v. Utterback , 789 F.2d 1297, 1299–300 (8th Cir. 1986). Even under this circuit's approach there are well-defined circumstances where a dismissal of a complaint without prejudice is a final appealable order.

The clearest signal of finality is when a district court itself states that its dismissal is with prejudice and its order states the order of dismissal is final and appealable. No magic words are required, however. For example, in St. Marks Place Housing Co. v. U.S. Department of Housing & Urban Development , 610 F.3d 75 (D.C. Cir. 2010), the district court's order stated that the defendants’ motion to dismiss was granted and the case was closed, but that its order should "not be deemed a final Order subject to appeal until the Court has issued its Memorandum Opinion." Id. at 79. Once the opinion issued over two months later, the plaintiffs filed a notice of appeal. Id. at 79–80. Taking the district court at its word, this court held the appeal was timely because the district court did not issue its final decision for the purpose of § 1291 until it issued its opinion. Id. at 80.

Similarly, in Murray v. Gilmore , 406 F.3d 708 (D.C. Cir. 2005), the district court granted the defendant's motion for summary judgment except as to a due process claim. Id. at 712. Finding it difficult to understand the plaintiff's basis for the due process claim, the court dismissed that claim "without prejudice subject to reconsideration at such time as plaintiff is able to clearly identify legal and factual bases for proceeding on [the] claim." Id. (citation omitted). The district court also ordered the case "taken off the active calendar of the Court." Id. Upon denial of its motion to reinstate the due process claim, the plaintiff appealed. This court held that the order granting partial summary judgment and dismissing the due process claim was not final despite the direction to remove the case from the active calendar, because the district court had "plainly contemplated" the possibility of further amendment to the complaint. Id. at 712–13. Because that earlier decision was not final, the court hel...