Hyman v. City of Gastonia , 466 F.3d 284 ( 2006 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LARRY S. HYMAN, as Liquidating 
Trustee of Governmental Risk
Insurance Trust,
Plaintiff-Appellant,
 No. 05-1981
v.
CITY OF GASTONIA,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Graham C. Mullen, Chief District Judge.
(CA-04-523-3)
Argued: May 22, 2006
Decided: October 16, 2006
Before WILLIAMS and GREGORY, Circuit Judges, and
Henry F. FLOYD, United States District Judge
for the District of South Carolina, sitting by designation.
Dismissed by published opinion. Judge Williams wrote the opinion,
in which Judge Gregory and Judge Floyd joined.
COUNSEL
ARGUED: Lee S. Haramis, GRAY ROBINSON, P.A., Jacksonville,
Florida, for Appellant. Josephine Herring Hicks, PARKER, POE,
ADAMS & BERNSTEIN, L.L.P., Charlotte, North Carolina, for
2 HYMAN v. CITY OF GASTONIA
Appellee. ON BRIEF: Daniel A. Nicholas, GRAY ROBINSON,
P.A., Jacksonville, Florida, for Appellant. Richard J. Rivera, PAR-
KER, POE, ADAMS & BERNSTEIN, L.L.P., Charlotte, North Caro-
lina, for Appellee.
OPINION
WILLIAMS, Circuit Judge:
Larry S. Hyman, the Liquidating Trustee for the Governmental
Risk Insurance Trust (GRIT), appeals the district court’s application
of North Carolina’s doctrine of abatement, which resulted in the dis-
missal of GRIT’s diversity action against the City of Gastonia, North
Carolina (Gastonia). For the reasons that follow, we dismiss the
appeal for lack of jurisdiction.
I.
GRIT is a workers’ compensation self-insurance fund that was
formed to provide workers’ compensation insurance to governmental
entities. Gastonia entered into a contract with GRIT for GRIT to pro-
vide workers’ compensation insurance in exchange for premiums that
Gastonia paid to GRIT. The contract was in effect until March 2000,
when GRIT filed for bankruptcy.
In November 2002, GRIT sued Gastonia in Florida state court
under various state-law contract theories alleging that Gastonia owed
it $701,431.52 in unpaid premiums. Gastonia removed the case to the
United States District Court for the Middle District of Florida based
on diversity of citizenship. See 28 U.S.C.A. § 1441 (West 1994 &
Supp. 2006); § 1332 (West 1993). After removing the case, Gastonia
filed a motion to dismiss arguing, inter alia, that venue was improper,
see Fed. R. Civ. P. 12(b)(3), that service of process was insufficient,
see Fed. R. Civ. P. 12(b)(5), and that the complaint failed to state a
claim upon which relief could be granted, see Fed. R. Civ. P.
12(b)(6), because the statute of limitations had run. The Florida dis-
trict court agreed that venue was improper and transferred the case to
the United States District Court for the Western District of North Car-
HYMAN v. CITY OF GASTONIA 3
olina. Thereafter, the North Carolina district court granted Gastonia’s
Rule 12(b)(5) motion to dismiss for insufficient service of process and
dismissed the action without prejudice.1 See Fed. R. Civ. P. 41(b)
("For failure of the plaintiff to prosecute or to comply with [the Fed-
eral Rules of Civil Procedure] or any order of the court, a defendant
may move for dismissal of an action . . . ."). GRIT appealed the dis-
trict court’s dismissal. Hyman v. City of Gastonia (Hyman I), 137 F.
App’x 536 (4th Cir. 2005) (unpublished).
While GRIT’s appeal in Hyman I was pending in this court, GRIT
filed a second diversity action (Hyman II) against Gastonia in the
same North Carolina district court, this time properly effecting ser-
vice. GRIT’s second action set forth the same claims, involved the
same transactions and occurrences, and sought relief identical to that
sought in GRIT’s first action. Indeed, as GRIT candidly admits,
Hyman II is the "same cause of action" as Hyman I. (Appellant’s Br.
at 21.) Gastonia moved under Rule 12(b)(6) to dismiss Hyman II,
arguing that the complaint failed to state a claim upon which relief
could be granted because it was subject to dismissal under North Car-
olina’s doctrine of abatement. Under this doctrine, a defendant may
assert, as an affirmative defense requiring dismissal, that a substan-
tially identical, earlier-filed action is pending on appeal. Clark v. Cra-
ven Reg’l Med. Auth., 387 S.E.2d 168, 171 (N.C. 1990).
On February 7, 2005, the North Carolina district court granted Gas-
tonia’s motion, holding that this was "a classic case for application of
the doctrine of abatement" under North Carolina law. (J.A. at 340.)
On May 23, 2005, we affirmed the district court’s dismissal in Hyman
I. 137 F. App’x at 537. The district court granted GRIT leave to file
an out-of-time notice of appeal in Hyman II, and on August 18, 2005,
GRIT filed its notice of appeal.
1
GRIT’s service of process was improper because GRIT failed to
deliver the summons and complaint to the appropriate Gastonia officials.
4 HYMAN v. CITY OF GASTONIA
II.
A.
GRIT primarily argues that the district court erred in dismissing
Hyman II because application of North Carolina’s doctrine of abate-
ment is inconsistent with the district court’s Rule 41(b) without-
prejudice dismissal of Hyman I and, under Erie R. Co. v. Tompkins,
304 U.S. 64 (1938), Rule 41(b), not North Carolina’s doctrine of
abatement, should apply.
We have an obligation to inquire into jurisdictional issues sua
sponte. Ridpath v. Bd. of Governors Marshall Univ., 447 F.3d 292,
304 (4th Cir. 2006). Therefore, after we heard oral argument in this
case, we directed the parties to submit supplemental briefs on whether
we have the authority to consider Hyman’s appeal in light of 28
U.S.C.A. § 2105 (West 1994) ("There shall be no reversal in the
Supreme Court or a court of appeals for error in ruling upon matters
in abatement which do not involve jurisdiction.").2
We now conclude that we lack jurisdiction to hear Hyman’s appeal
because the district court dismissed this case under North Carolina’s
doctrine of abatement. Although § 2105 has existed, with slightly dif-
ferent wording, since the Judiciary Act of 1789, see Stephens v.
Monongahela Nat. Bank, 111 U.S. 197 (1884), there have been few
applications of this statute, and we have no relevant precedents inter-
preting its provisions.3 Nevertheless, we conclude that § 2105 bars our
2
We note that because this appeal involves a final decision of the dis-
trict court to dismiss GRIT’s suit under North Carolina’s doctrine of
abatement, 28 U.S.C.A. § 1291 (West 1993) would allow for our review.
See id. ("The court of appeals . . . shall have jurisdiction of appeals from
all final decisions of the district courts . . . ."). Jurisdiction over this
appeal is not conferred, however, if another statute bars appellate review.
3
An earlier version of 28 U.S.C.A. § 2105 (West 1994) prohibited
reversals for errors in a district court’s findings of fact, and this provision
was cited in Virginian Ry. Co. v. Armentrout, 166 F.2d 400, 408 (4th Cir.
1948). Section 2105 no longer includes such language. Luxenberg v.
United States, 45 F.2d 497 (4th Cir. 1930), held that § 2105 applies to
criminal trials, but the Supreme Court reversed Luxenberg in Roche v.
Evaporated Milk Ass’n, 319 U.S. 21 (1943) (holding that § 2105 is inap-
plicable to criminal trials).
HYMAN v. CITY OF GASTONIA 5
consideration of this appeal because (1) the district court’s abatement
ruling falls within the strictures of § 2105 as interpreted by the
Supreme Court, and (2) the statute deprives us of appellate jurisdic-
tion to review the district court’s abatement ruling.
B.
1.
Section 2105 places restrictions on appellate review of "matters in
abatement," but the statute does not define that phrase. Generally
speaking, abatement refers to "[t]he suspension or defeat of a pending
action for a reason unrelated to the merits of the claim." Black’s Law
Dictionary 3 (8th ed. 2004). At common law, abatement is the equiva-
lent of a dismissal, and it results from the defendant raising some pro-
cedural or formality error in the plaintiff’s action. 1 Am. Jur. 2d
Abatement, Survival, and Revival § 1 (2006). Examples of abatement
defenses include (1) a defense of prematurity, i.e., that the plaintiff
commenced the lawsuit before the underlying cause of action
accrued; (2) a defense that the plaintiff’s interest in the pending law-
suit has terminated or transferred to another party; (3) a defense that
a lawsuit cannot proceed because of the death of either the plaintiff
or the defendant; and (4) a defense that there is a separate, identical
lawsuit pending. 1 Am. Jur. 2d Abatement, Survival, and Revival
§§ 1-44. Because abatement defenses defeat the particular action for
procedural defects that are unrelated to the merits of the plaintiff’s
claim, the plaintiff can typically correct the defects and proceed in
another action. See Bowles v. Wilke, 175 F.2d 35, 38 (7th Cir. 1949)
(noting that an abatement defense defeats the pending action but not
the cause of action).
To decide whether § 2105 applies to this case, however, we need
not determine whether "matters in abatement" include each of the
abatement defenses listed above. Instead, we can rest solely on the
Supreme Court’s decisions in Piquignot v. Penn. R. Co., 57 U.S. 104(1853), and Stephens.4
4
These cases addressed an earlier statutory incarnation of § 2105.
There are no relevant differences between the earlier statute and § 2105.
6 HYMAN v. CITY OF GASTONIA
In Piquignot, the plaintiff sued the defendant in state court and
then, while the state court suit was pending, sued the defendant in fed-
eral trial court on the same cause of action. 57 U.S. at 104. The defen-
dant raised as an abatement defense the fact that the state court suit
was pending, and the federal court ruled for the defendant. The
Supreme Court concluded that § 2105 applied to this type of abate-
ment defense and accordingly refused to review the federal court’s
abatement ruling. Id.
Stephens involved the same abatement defense, i.e., that the federal
court should not proceed in the case because of a pending state court
suit between the same litigants for the same cause of action. 111 U.S.
at 197. Citing Piquignot, the Supreme Court held that an abatement
defense that "another action [was] pending" fell within the meaning
of § 2105 and that the Court could not review the federal court’s rul-
ing on that defense. Id. The Supreme Court explained that § 2105 bars
appellate review of a ruling on an abatement defense because "[t]he
defense is one which merely defeats the present proceeding," and
therefore does not address the merits of the action or prevent the
plaintiff from suing in the future. Id.
Piquignot and Stephens set forth the rule that whatever else the
phrase "matters in abatement" means in the context of § 2105, it
surely encompasses a ruling in which a trial court dismisses a case
because there is a separate, identical pending case. This rule covers
the exact circumstances here: the district court dismissed Hyman II
because of GRIT’s identical, pending action in Hyman I. Because the
Supreme Court has held that such a ruling involves a "matter in abate-
ment" under § 2105, we conclude that the statute applies to our
review of the district court’s abatement ruling.5 See also Teixeira v.
Goodyear Tire & Rubber Co., 261 F.2d 153, 154 (1st Cir. 1958)
(holding that § 2105 applies to a judgment of abatement for another
action pending); Green v. Underwood, 86 F. 427, 430 (8th Cir. 1898)
(same); 15A Charles Alan Wright, Arthur R. Miller, & Edward H.
Cooper, Federal Practice & Procedure § 3903 (2d ed. 1992) ("By far
the most common cases in which [§ 2105] has been invoked involve
5
We note that nothing in this opinion implies that § 2105’s force
should be extended beyond the scope of the Supreme Court’s prior inter-
pretations of the statute.
HYMAN v. CITY OF GASTONIA 7
rulings on motions to stay proceedings in deference to an action pend-
ing in another court.").
2.
GRIT offers three unpersuasive arguments for why § 2105 does not
apply to this case. First, GRIT contends that the district court’s abate-
ment ruling was not a "matter in abatement" within the meaning of
§ 2105 because although a dismissal under abatement typically leaves
a plaintiff free to recommence the legal action, here GRIT could be
barred by the statute of limitations from bringing a future action; con-
sequently, GRIT asserts that this dismissal affects the merits of
GRIT’s suit. GRIT errs by conflating the nature of the district court’s
abatement ruling with its potential effects. Like other without-
prejudice dismissals that contemplate the plaintiff refiling a new
action, abatement does not exempt a new action from a statute of lim-
itations defense. See Mendez v. Elliot, 45 F.3d 75, 78 (4th Cir. 1995)
(concluding that while a "without prejudice" dismissal "permits a
plaintiff to refile the complaint as if it had never been filed . . . . [it]
does not, however, give the [plaintiff] a right to refile without the con-
sequences of time defenses, such as the statute of limitations").
Although any new action by GRIT may be subject to a statute of limi-
tations defense, that does not transform the district court’s abatement
ruling in this case into a decision on the merits.
Second, GRIT contends that the district court’s abatement ruling
fits within § 2105’s exception for "rulings on matters in abatement
which . . . involve jurisdiction" because the district court was in effect
deciding not to exercise its jurisdiction. See Aetna State Bank v.
Altheimer, 430 F.2d 750, 753-54 (7th Cir. 1970) (concluding that
§ 2105’s exception for rulings which involve jurisdiction allows
appellate review of a district court’s decision to abstain from exercis-
ing jurisdiction), overruled on other grounds by Calvert Fire Ins. Co.
v. Will, 560 F.2d 792 (7th Cir. 1977). We disagree that the word "ju-
risdictional" in § 2105 reaches such a broad definition. Otherwise, the
statute’s exception would "swallow[ ] the entire rule" because "all
matters of abatement . . . involve the same basic question whether the
court should presently exercise its jurisdiction." Wright, Miller, &
Cooper, supra, § 3903. Moreover, the broad definition of "jurisdic-
tion" that GRIT propounds is contrary to the Supreme Court’s appli-
8 HYMAN v. CITY OF GASTONIA
cation of § 2105 in Piquignot and Stephens, in which the Court
concluded that abatement rulings identical to the one in this case fell
within § 2105’s bar, not its exception.
Finally, GRIT contends that § 2105 does not apply here because
the district court erroneously applied North Carolina’s doctrine of
abatement under the Erie doctrine. We disagree. The statute explicitly
prohibits appellate reversal for "errors in rulings upon matters in
abatement." 28 U.S.C.A. § 2105 (emphasis added). This broad prohi-
bition applies to all non-jurisdictional errors and contains no excep-
tions for an erroneous choice of law. Therefore, even if GRIT is
correct that the district court erred by applying North Carolina’s doc-
trine of abatement, § 2105 prohibits our correction of that error.
C.
Having determined that the district court’s dismissal under North
Carolina’s doctrine of abatement falls within § 2105 because it is a
ruling on a "matter in abatement," we must now determine if § 2105
is jurisdictional in the sense that it restricts our authority to review the
district court’s ruling. We keep in mind the Supreme Court’s admoni-
tion that we not loosely characterize a statute as "jurisdictional" when
it is actually a claim-processing rule that can be forfeited. Kontrick v.
Ryan, 540 U.S. 443, 454 (2004) ("Jurisdiction . . . is a word of many,
too many, meanings." (internal quotation marks omitted)). Properly
used, "jurisdiction" refers to the "classes of cases . . . falling within
a court’s adjudicatory authority." Id. at 455.
Section 2105 does not use typical modern-day jurisdictional lan-
guage. For example, the statute does not state that abatement rulings
are "not reviewable" or that the court of appeals "lacks jurisdiction."
See, e.g., Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 128-29
(1995) (concluding that there is no appellate jurisdiction over an order
that a statute specifies as "not reviewable"). Instead, the statute states
that "[t]here shall be no reversal" of an abatement ruling. Because of
this peculiar language, some courts of appeals have held — or at least
implied — that § 2105 only deprives courts of jurisdiction to reverse.
See Merchs. Ins. Co. v. Lilgeomont, Inc., 84 F.2d 685, 687 (5th Cir.
1936) ("The statute indeed prohibits only a reversal, and we shall not
reverse."); United States v. Alcon Labs., 636 F.2d 876, 885 n.2 (1st
HYMAN v. CITY OF GASTONIA 9
Cir. 1981) (concluding that § 2105 did not bar review, in part because
the disposition of the case — vacate and remand — was "not, techni-
cally, a ‘reversal’"). According to these courts’ reasoning, an appel-
late court must examine the merits of the abatement ruling before
determining whether jurisdiction exists: if the abatement ruling was
correct, jurisdiction exists to affirm; but if the abatement ruling was
in error, the case must be dismissed.
We respectfully disagree with this interpretation of § 2105 and note
that it raises a serious constitutional issue: by restricting the authority
of appellate courts to change the result, the statute strongly suggests
that any appellate review of abatement rulings would be purely advi-
sory and therefore be beyond a federal court’s Article III powers. See
Wright, Miller, & Cooper, supra, § 3903 n.24 ("Since [appellate]
courts lack power [under § 2105] to reverse, the result of unfavorable
review would be purely advisory and beyond the limits of Article
III."); United States v. Evans, 213 U.S. 297, 301 (1909) (noting that
federal courts lack constitutional authority to give advisory opinions);
11126 Baltimore Blvd. v. Prince George’s County, Md., 924 F.2d
557, 558 (4th Cir. 1991) (dismissing appeal for lack of jurisdiction
because appellant was seeking an advisory opinion).
We need not address this constitutional issue, however, because the
better interpretation of § 2105 — one that avoids the constitutional
problem — is that the statute completely deprives this court of author-
ity to review the district court’s abatement ruling. See Solid Waste
Agency of Northern Cook County v. U.S. Army Corps of Eng’rs, 531
U.S. 159, 173 (2001) ("[W]here an otherwise acceptable construction
of a statute would raise serious constitutional problems, the Court will
construe the statute to avoid such problems unless such construction
is plainly contrary to the intent of Congress." (internal quotation
marks omitted)).
A brief review of the Judiciary Act of 1789, coupled with the
Supreme Court’s decision in Stephens, confirms that the dated lan-
guage of § 2105 was meant to exclude abatement rulings from appel-
late jurisdiction. See Act of Sept. 24, 1789, § 22, 1 Stat. 73, 84-85.
Section 22 of the Judiciary Act established appellate jurisdiction over
"final decrees and judgments in civil actions" in district courts. Id.;
see Piquignot, 57 U.S. at 104 ("The twenty-second section of the
10 HYMAN v. CITY OF GASTONIA
Judiciary Act . . . defines what decrees or judgments in civil actions
may be made the subjects of appeals . . . ."). After setting forth this
general appellate jurisdiction, however, Congress added some excep-
tions to appellate jurisdiction, including the exception that "there shall
be no reversal . . . for error[s]" in abatement rulings. Act of Sept. 24,
1789, § 22, 1 Stat. 84-85. The purpose of this language was to permit
appellate jurisdiction over a case, which could include multiple rul-
ings subject to appellate review, while excluding abatement rulings
from appellate review. See Charles Warren, New Light on the History
of the Federal Judiciary Act of 1789, 37 Harv. L. Rev. 49, 104 (1923)
(stating that the words "no reversal" were used to remove appellate
jurisdiction over certain rulings). The Supreme Court’s application of
§ 2105 in Stephens confirms this reading. In that case, after determin-
ing that the abatement ruling fell within the strictures of § 2105, the
Court declined to analyze the correctness of the abatement ruling,
stating that the abatement ruling "‘was not subject to . . . revision.’"
Stephens, 111 U.S. at 198 (quoting Piquignot). The Court went on,
however, to analyze the merits of other issues raised on appeal.
The statute, then, is best read as excluding from general grants of
appellate jurisdiction an appellate court’s authority to review abate-
ment rulings. Thus, we agree with the courts that have concluded that
§ 2105 completely deprives appellate courts of jurisdiction to review
the merits of a district court’s abatement ruling. See Teixeira, 261
F.2d at 154 (concluding that § 2105 completely deprives an appellate
court of jurisdiction to review an abatement ruling); Bowles, 175 F.2d
at 38 (same); Green, 86 F. at 430 (same).
III.
Section 2105 may be "[o]ne of the most commonly ignored provi-
sions of the Judicial Code . . . ." Wright, Miller, & Cooper, supra,
§ 3903. Regardless, the statute remains in effect, and we are bound to
consider it. Moreover, the Supreme Court applied § 2105 in Piquignot
and Stephens to abatement rulings indistinguishable from the abate-
ment ruling in this case. Although they are old cases, their continuing
vitality has never been called into question by the Court. We therefore
must heed the instruction that "[i]f a precedent of [the] Court has
direct application in a case," we must follow it, "leaving to [the] Court
the prerogative of overruling its own decisions." Agostini v. Felton,
HYMAN v. CITY OF GASTONIA 11
521 U.S. 203, 237 (1997). Because the only issue in this appeal —
whether the district court properly dismissed Hyman II because
Hyman I was pending on appeal — is an abatement ruling that falls
within provisions of § 2105, we do not have appellate jurisdiction to
review the district court’s dismissal. We accordingly dismiss GRIT’s
appeal.
DISMISSED