CE Design, Ltd. v. Cy's Crab House North, Inc. , 731 F.3d 725 ( 2013 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3731
CE DESIGN , LTD ., individually and
as the representative of a class of
similarly situated persons,
Plaintiff-Appellee,
v.
CY’S CRAB HOUSE NORTH , INC ., and
CY’S CRABHOUSE & SEAFOOD GRILL , INC .,
Defendants,
and
TRUCK INSURANCE EXCHANGE ,
Proposed Intervenor-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 07 C 5456 — M atthew F. Kennelly, Judge.
ARGUED SEPTEMBER 13, 2012 — DECIDED SEPTEMBER 30, 2013
2 No. 11-3731
Before MANION , SYKES, and HAMILTON , Circuit Judges.
SYKES, Circuit Judge. This appeal arises from the world of
high-stakes fax-spam litigation. We deal here with a discrete
procedural issue that affects appellate jurisdiction. After the
district court entered final judgment approving a settlement
between the plaintiff class and the defendants, the defendants’
insurer moved to intervene for the purpose of undoing the
settlement and seeking class decertification based on miscon-
duct by class counsel. The district court denied the motion as
untimely, and the insurer appealed.
The insurer’s notice of appeal purports to bring up the
district court’s order denying intervention and the final
judgment. The notice was timely as to the former but not the
latter. So although we have jurisdiction to review the order
denying intervention, we cannot grant any meaningful relief
because we lack jurisdiction to review the final judgment.
Accordingly, we dismiss the appeal for lack of jurisdiction. We
note for completeness that the insurer’s argument in support
of intervention—that certain misconduct by class counsel
necessitates decertification of the class—has been rejected in a
recent decision involving the same events and attorneys. See
Reliable Money Order, Inc. v. McKnight Sales Co., 704 F.3d 489(7th Cir. 2013).
I. Background
The underlying facts have been the subject of several other
appeals involving the same litigants, events, and attorneys;
because the factual background is not relevant to the jurisdic-
No. 11-3731 3
tional question, we direct interested readers to our discussions
in Reliable Money Order, 704 F.3d at 493–97; Creative Montessori
Learning Centers v. Ashford Gear LLC, 662 F.3d 913, 915 (7th Cir.
2011); and CE Design Ltd. v. King Architectural Metals, Inc., 637
F.3d 721, 723–24 (7th Cir. 2011). To resolve this appeal, we need
only recount a few procedural details of the case.
Plaintiff CE Design is “a small civil engineering firm in the
Chicago area that, unusually for a business firm, is an avid
class-action plaintiff[, having] filed at least 150 class action suits
under the Telephone Consumer Protection Act.” CE Design
Ltd., 637 F.3d at 723. This case is one of them. CE Design sued
Cy’s Crab House North, Inc., and Cy’s Crabhouse & Seafood
Grill, Inc., on behalf of a class of junk-fax recipients. Putative
intervenor and appellant Truck Insurance Exchange is the
liability carrier for the Cy’s Crab House restaurants and has
been involved in this litigation from the beginning, providing
a defense under a reservation of rights.
The case was certified as a class action, and after four years
of litigation, it proceeded to trial in October 2010. In the middle
of trial, without notifying or obtaining consent from their
insurer, the defendants settled with the class, putting the
insurer’s policy limits on the hook. Substitution of counsel and
state-court coverage litigation ensued. A year later, on
October 27, 2011, the district court approved the final settle-
ment and entered final judgment.
On November 22, 2011—not quite a month later—this court
issued its decision in Ashford Gear casting significant doubt on
the conduct of class counsel. 662 F.3d at 917–19. The panel
opinion in Ashford Gear vacated the class certification and
4 No. 11-3731
remanded to the district court for application of a newly
explicated standard for evaluating misconduct by class
counsel. Id. at 919.
In light of Ashford Gear, Truck Insurance moved to inter-
vene in this case for the purpose of reopening the judgment,
challenging the settlement, and seeking decertification of the
class based on the misconduct of class counsel. The interven-
tion motion was filed on November 23, 2011, the day after our
decision in Ashford Gear was released. As of that date, the
30-day time period to appeal the judgment had not yet run. See
28 U.S.C. § 2107; FED . R. APP. P 4(a)(1)(A). At this point Truck
Insurance could have filed a contingent notice of appeal from
the judgment to protect its interests should intervention be
granted, either by the district court or this court. It did not do
so. Instead, in its motion to intervene, Truck Insurance asked
the district court for a 14-day extension of the time to appeal.
The district court held a hearing on the intervention motion
on November 28, 2011, which was the last day to appeal the
judgment. The judge expressed some “pretty serious concerns
about [the] timeliness” of the intervention motion and gave
Truck Insurance a day to file a reply brief on the question. The
judge rescheduled the hearing to December 1 and said, “I will
rule on [the motion] then.” This prompted a discussion about
the time limit for filing an appeal from the judgment. The
judge noted that under Rule 4(a)(5) of the Federal Rules of
Appellate Procedure, “I can extend the time to file a notice of
appeal if a party so moves … no later than 30 days after the
time expires.” Counsel for Truck Insurance pointed out that the
insurer wasn’t a party yet. The judge replied, “If I grant the
No. 11-3731 5
motion to intervene, … that relates back to the day that you
filed the motion to intervene.” Referring to the deadline to
appeal the judgment, the judge told counsel: “I will extend it.
If I conclude that you’re entitled to intervene or entitled to an
extension, you’re not going to have a problem here.”
On December 1 the court denied the motion to intervene as
untimely. The court reasoned that Truck Insurance had known
for more than a year that its interests were on the line. The
order denying intervention said nothing about extending the
deadline to appeal. On December 2, 2011, Truck Insurance filed
a notice of appeal purporting to appeal both the December 1
order denying intervention and the October 27 final judgment,
although as to the latter, the notice was styled as a “condi-
tional” appeal of the judgment “as it relates to class certifica-
tion.” CE Design moved to dismiss for lack of appellate
jurisdiction. We took the motion with the merits of the case and
now grant the motion and dismiss the appeal.
II. Discussion
Truck Insurance’s notice of appeal purports to appeal both
the order denying its motion to intervene and the final judg-
ment. The notice is untimely as to the latter; it was filed 36 days
after the judgment was entered. The time to appeal the
judgment had expired, and no extension had been granted.
Truck Insurance insists that the district court orally ex-
tended the time to appeal during the November 28 hearing on
the intervention motion. Rule 4(a)(5) of the Federal Rules of
Appellate Procedure authorizes the district court to extend the
6 No. 11-3731
time to appeal “if … a party so moves no later than 30 days
after the time prescribed by this Rule 4(a) expires,” FED . R. APP.
P. 4(a)(5)(A)(i), except that “[n]o extension … may exceed
30 days after the prescribed time or 14 days after the date when
the order granting the motion is entered,” FED . R. APP.
P. 4(a)(5)(C). The transcript of the November 28 hearing reflects
that the court and counsel discussed the possibility of an
extension of time to appeal but the discussion was contingent.
The judge mentioned the availability of an extension of time
under Rule 4(a)(5) and then stated as follows: “I will extend it.
If I conclude that you’re entitled to intervene or entitled to an
extension, you’re not going to have a problem here.” (Empha-
sis added.) The context makes clear that the judge was an-
nouncing his willingness to grant a retroactive extension in the
future, not that he was granting a prospective extension of the
appeal period right then and there. The court’s December 1
order denying the intervention motion makes no mention of
extending the time to appeal, and Truck Insurance did not ask
the court for a ruling on the matter.
Truck Insurance argues in the alternative that its appeal of
the order denying intervention somehow saves its untimely
appeal of the judgment or perhaps revives the time to appeal
it. We do not see how. The statutory time limit to appeal
provides as follows:
Except as otherwise provided in this section, no
appeal shall bring any judgment, order or decree
in an action, suit or proceeding of a civil nature
before a court of appeals for review unless notice
No. 11-3731 7
of appeal is filed, within thirty days after the
entry of such judgment, order or decree.
28 U.S.C. § 2107 (emphasis added). “Rule 4 of the Federal Rules
of Appellate Procedure carries § 2107 into practice,” Bowles v.
Russell, 551 U.S. 205, 208 (2007), and similarly provides that the
notice of appeal “must be filed with the district clerk within
30 days after entry of the judgment or order appealed from,”
FED . R. APP. P. 4(a)(1)(A). The text of the statute and rule makes
clear that the 30-day clock runs from entry of the specific order
or judgment appealed from. Here, the order denying interven-
tion and the final judgment are distinct and separate appeal-
able orders. Indeed, we have held that an order denying
intervention is an immediately appealable “final decision”
under 28 U.S.C. § 1291 even if the rest of the case remains
pending and unfinished in the district court. See Retired Chi.
Police Ass’n v. City of Chicago, 7 F.3d 584, 594 n.11 (7th Cir.
1993); see also Purcell v. BankAtlantic Fin. Corp. 85 F.3d 1508,
1511 n.2 (11th Cir. 1996). The timely appeal of the order
denying the intervention motion thus has no bearing on
whether the notice was timely vis-à-vis the judgment.
Truck Insurance relies on Roe v. Town of Highland, 909 F.2d
1097 (7th Cir. 1990), but that reliance is misplaced. In Roe we
explained what a prospective intervenor in this situation
should do when the district court has not yet ruled on its
intervention motion and the deadline to appeal the underlying
order or judgment is imminent:
The putative class member can file an emergency
motion with the district court detailing the need
for a ruling so that a timely appeal may be taken.
8 No. 11-3731
Indeed, the district court may enlarge the time
for filing an appeal (up to 30 days), as permitted
by Fed. R. App. P. 4(a)(5). Finally, if the motion
to intervene has not been acted upon within the
time to appeal, the putative class member should
nonetheless file a timely notice of appeal. Al-
though the filing of the notice would deprive the
district court of power to act on the motion to
intervene, the cause may be remanded for that
purpose. … In short, a putative intervenor has
several viable options for preserving the right of
appeal until the district court rules on the inter-
vention motion.
Id. at 1099–100 (internal quotation marks and citation omitted).
Our decision in Roe establishes that a prospective intervenor in
Truck Insurance’s position must take some action prior to
expiration of the appeal period to keep the window from
closing: (1) secure a ruling on intervention; (2) secure an
extension of the appeal deadline; or (3) file a protective
“springing” notice of appeal before the time expires. Here,
Truck Insurance let the appeal time lapse without doing any of
these things.
Truck Insurance also relies on In re Synthroid Marketing
Litigation, 264 F.3d 712 (7th Cir. 2001). There, a prospective
intervenor was denied leave to intervene and filed a notice of
appeal from the order denying intervention within the time
period to appeal from the final judgment. But the putative
intervenor did not file a notice of appeal as to the judgment until
almost a year later—indeed, not until this court noted at oral
No. 11-3731 9
argument that it needed to file a “springing” notice of appeal.
We nonetheless found that the prospective intervenor had kept
the case alive; we said that “[w]ith today’s decision th[e]
[belated] notice [of appeal of the judgment] springs into effect
(it is timely by analogy to Fed. R. App. P. 4(a)(2) because, until
today, the objectors have not been entitled to appeal) and
brings the district court’s approval of the settlement before us.”
Id. at 716.
Our decision in Synthroid requires some elaboration. The
opinion analogized to Rule 4(a)(2) of the Federal Rules of
Appellate Procedure; that subsection of the rule provides that
“[a] notice of appeal filed after the court announces a decision
or order—but before the entry of the judgment or order—is
treated as filed on the date of and after the entry” of the
judgment or order. In other words, a premature notice of
appeal filed after the court rules but before the order or
judgment is formally entered sits on ice and becomes effective
after the order or judgment is entered. This is a relation-forward
rule, not a relation-back rule. Thus, Rule 4(a)(2) alone cannot
not explain why the Synthroid appeal was deemed timely; on
the day we announced our decision and declared that the
belated notice of appeal had “spr[ung] into effect,” the appeals
period had been closed for over a year. But Synthroid stands for
a sort of relation-back rule, too. That is, when a putative
intervenor is granted the right to intervene by an appeals
court, a “springing” or contingent appeal of the judgment must
relate back to some previous date.
There are three possibilities: (1) the date the prospective
intervenor moved for intervention; (2) the date the district
10 No. 11-3731
court denied the intervention motion; and (3) the date the
intervenor filed a notice of appeal of the denial. In Synthroid all
three dates were within the appeal period for the judgment
itself. But of course Roe makes clear that it is not enough
merely to move to intervene within the time to appeal the
judgment; something more is required. Only the second and
third possibilities justify the result in Synthroid.
Here, the district court denied the intervention motion after
the time to appeal the judgment had closed, and Truck
Insurance appealed the order denying intervention the next
day. Obviously, both dates are outside the time period to
appeal from the judgment. So even if Synthroid stands for a
limited kind of relation-back rule, Truck Insurance does not
benefit from it.1
Finally, Truck Insurance relies on Flying J, Inc. v. Van Hollen,
578 F.3d 569 (7th Cir. 2009). That case involved a prospective
intervenor who filed a notice of appeal covering both the
denial of intervention and the judgment before the expiration
of the appeals period for the judgment, which had been
extended by court order. Id. at 570–71; see also ECF Nos. 61 &
66, Flying J, Inc. v. Van Hollen, No. 08-cv-00110 (E.D. Wis.
Mar. 16, 2009 & Apr. 2, 2009). The fact that the notice of appeal
was filed before the time to appeal the judgment expired meant
1
To the extent that Synthroid stands for a relation-back rule, it may not have
survived the Supreme Court’s decision in Bowles v. Russell, 551 U.S. 205(2007). There, the Court held that courts are without authority to extend the
deadline for appeals outside the express provisions of the relevant
jurisdictional statutes and the rules. Id. at 206–07, 214. We need not decide
today whether Synthroid survived Bowles.
No. 11-3731 11
that Flying J had no occasion to consider the problems ad-
dressed in Roe and Synthroid or the problem we address here.
The case is not relevant.
The Supreme Court has recently reemphasized that the
time limit to appeal is indeed jurisdictional, and litigants and
courts alike must scrupulously observe the statutory require-
ments. Bowles, 551 U.S. at 214–15. Because Truck Insurance did
not file a timely notice of appeal from the judgment, we lack
jurisdiction to review the judgment.
The appeal of the order denying intervention is a different
story. As we have noted, from the perspective of a disap-
pointed prospective intervenor, the denial of a motion to
intervene is the end of the case, so an order denying interven-
tion is a final, appealable decision under 28 U.S.C. § 1291. See
Retired Chi. Police, 7 F.3d at 594 n.11. Truck Insurance’s notice
of appeal was timely as to the district court’s order denying
intervention—indeed, it was filed the very next day.
But that does not end the inquiry. If we cannot grant any
relief, our jurisdiction ceases. Because Truck Insurance did not
timely appeal the judgment, it is now set in stone, and the
reversal of the district court’s intervention decision can secure
no meaningful relief. We discussed this problem in Synthroid:
Whether we can do anything for the intervenors
now that they are parties is the next question.
The intervenors appealed from the district
court’s denial of their motions to intervene, but
not from the final judgment embodying the
settlement. A decision reversing an order deny-
ing intervention usually leads to a remand, not
12 No. 11-3731
to a decision on the merits. … Yet there would be
nothing to do on remand here; the settlement’s
approval ended the case.
264 F.3d at 715–16 (citation omitted). In Synthroid there was a
solution: a timely springing appeal. But we already have
disposed of that possibility here. The putative intervenors in
Synthroid kept the case alive by appealing the denial of
intervention within the appeals period for the judgment. That’s
not the case here. We lack jurisdiction to review the judgment,
so “there would be nothing to do on remand here; the settle-
ment’s approval ended the case.” Id. at 716. Put differently,
even if we reversed the district court and authorized Truck
Insurance to intervene, we can do nothing to help it.
We note for completeness that our recent decision in
Reliable Money Order has eliminated Truck Insurance’s argu-
ment on the merits of the intervention question. Truck Insur-
ance sought to intervene for the purpose of reopening the
settlement and decertifying the class based on misconduct by
class counsel. In Reliable Money Order we upheld the district
court’s denial of class certification on the same claim of
misconduct by these counsel. 704 F.3d at 501–02. Accordingly,
appellate review of the district court’s decision denying
intervention would be doubly pointless.
APPEAL DISMISSED .