Network Communications v. Michigan Bell Telephone Company

JOHN W. PECK, Senior Circuit Judge.

We are required to determine whether we have jurisdiction to hear an appeal from a summary judgment on all counts in the current complaint when pending before the district court there is a motion to amend the complaint to add new claims. Because the district court clearly intended to dispose of the motion to amend, we hold that we do not have jurisdiction of this appeal under 28 U.S.C. § 1291.

I.

Plaintiff Network Communications (“NetCom”) filed a complaint in the district court on June 7, 1988, amended by a First Amended Complaint on June 15, 1988, containing three causes of action against defendant Michigan Bell Telephone Company (“Michigan Bell”). One of the claims was dismissed and has not been pursued. On August 5, 1988, NetCom moved for summary judgment on its breach of contract claim. On September 7, 1988, Michigan Bell filed its brief in response to NetCom’s motion and filed a cross-motion for summary judgment in its favor on both the contract claim and the other claim, alleging violation of 42 U.S.C. § 1983. On September 16, NetCom dismissed its former counsel and engaged present counsel. After plaintiff obtained an extension of time to reply, briefing on the motions was completed. On October 31, 1988, the court heard oral argument on the cross-motions for summary judgment and took the matter under advisement.

Before the court made any further rulings in the case, NetCom on November 5, 1988, moved for disqualification of the district judge. Thereafter, on December 9, NetCom moved for leave to amend the complaint. The proposed amendment added six new claims arising from the same transactions or occurrences. After oral argument on December 12, 1988, the court denied NetCom’s motion for disqualification. On December 21, 1988, the court set the briefing schedule for plaintiffs motion for leave to amend the complaint, with briefing to be completed by February 6, 1989, and oral argument to be heard February 13, 1989.

On January 18, 1989, the district court ruled in favor of Michigan Bell on the summary judgment motions. In its Memorandum Opinion and Order, the court noted that “on December 9, 1988, plaintiff filed a motion for leave to amend complaint. Oral argument has been set for February 13, 1989. No response to the motion for leave to amend complaint has been filed with the Court as of this date.” Network Communications v. Michigan Bell Telephone Co., 703 F.Supp. 1267, 1270 n. 1 (E.D.Mich.1989). On a separate paper, the court wrote the following order:

JUDGMENT

This matter having come before the Court; and the Court having entered its Memorandum Opinion and Order; now, therefore,

IT IS HEREBY ORDERED AND ADJUDGED that defendant’s motion for summary judgment is GRANTED and plaintiff’s summary judgment motion is DENIED.

IT IS SO ORDERED.

/s/ Anna Diggs Taylor

United States

District Judge

Dated: Jan. 18 1989

The court clerk entered judgment on the docket on January 25, 1989.

On February 6, 1989, NetCom filed this appeal of the above judgment. That day, NetCom also sent the district court a letter stating that because there was no longer a case pending before the district court, Net-Com would not file a reply brief concerning its motion to amend and the hearing scheduled for February 13 would not be necessary. The next day, the district court issued an order adjourning the hearing without date.

II.

Federal courts of appeals may ordinarily review only final decisions of the district courts. 28 U.S.C. § 1291. The Supreme Court has consistently held that a party may not perfect an appeal under § 1291 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.” Lauro Lines S.R.L. v. Chasser, — U.S. -, 109 S.Ct. 1976, 1978, 104 L.Ed.2d 548 (1989) (citations omitted). In this case, jurisdiction to dispose of NetCom’s motion to amend was retained by the district court; therefore, there is no final decision. This case is analogous to a situation in which a district court has dismissed a complaint but not the underlying action. Courts of appeals have uniformly held that an order dismissing a complaint is not a final order when it is possible for a plaintiff to file an amended complaint resurrecting the lawsuit. E.g., Principal Mutual Life Insurance Co. v. Cincinnati TV 64 Ltd., 845 F.2d 674, 676 (7th Cir.1988); Elfenbein v. Gulf & Western Industries, Inc., 590 F.2d 445, 448 (2d Cir.1978); Azar v. Conley, 480 F.2d 220, 223 (6th Cir.1973); Firchau v. Diamond National Corp., 345 F.2d 269, 270-71 (9th Cir.1965).^* Although the claims in NetCom’s original complaint were decided by summary judgment, resurrection of the lawsuit upon amendment of the complaint is nonetheless possible where, as here, the district court has recorded an express intent to adjudicate a pending motion to amend.

Principal Mutual Life Insurance Co. v. Cincinnati TV 64 Ltd., 845 F.2d 674 (7th Cir.1988), is additionally instructive. In that case, the Seventh Circuit determined that it did not have jurisdiction over an appeal of a case in which the district court granted judgment on one count but dismissed all other counts, apparently permitting reinstatement of those counts by a suitable amended complaint. The court held that there was no final judgment because it was not clear that an amendment of the complaint could not save the action. Id. at 676. This case is in a similar posture, with two claims adjudicated by summary judgment and several others susceptible of adjudication in the district court if leave to amend is granted. Conversely, denial of NetCom’s motion for leave to amend would terminate the action, giving rise to appellate jurisdiction of all of the claims asserted. Local 179, United Textile Workers of America v. Federal Paper Stock Co., 461 F.2d 849, 850 (8th Cir.1972).

Two cases brought to our attention by NetCom are distinguishable. In both Ellison v. Ford Motor Co., 847 F.2d 297, 300-01 (6th Cir.1988) (per curiam), and Marks v. Shell Oil Co., 830 F.2d 68, 70 (6th Cir.1987), this court held that the district court abused its discretion when it disposed of the original complaint by summary judgment or dismissal (respectively) without first considering a pending motion to amend. In neither of those cases did the district court indicate whether the motion to amend was considered. Here, the court lit its memorandum opinion accompanying summary judgment clearly stated that it intended to dispose of the motion to amend as previously scheduled. NetCom also argues that judgment was final because it was set forth on a separate document as required by Fed.R.Civ.P. 58. This argument has no merit, as “Rule 58 states how a judgment should be entered. It does not speak to whether a judgment entered in this fashion is a ‘final judgment’ for purposes of appeal.” 11 C. Wright & A. Miller, Federal Practice & Procedure § 2785 (1973). NetCom further suggests that the result we reach today could indefinitely suspend its right of appeal. Finding no reason to expect that the motion to amend will not be decided in a timely and judicious manner, we do not address that argument.

Accordingly, this appeal is DISMISSED for lack of jurisdiction.

* Courts of appeals have differing views of the right to amend under Fed.R.Civ.P. 15(a) after a complaint has been dismissed; accordingly, the courts have adopted a variety of rules to determine whether dismissal of a complaint, without explicit dismissal of the action, constitutes final judgment. Compare, e.g., Weisman v. LeLandais, 532 F.2d 308, 309 (2d Cir.1976) (right to amend terminates upon dismissal; therefore, dismissal of complaint is final judgment unless leave to amend explicitly granted) with Firchau v. Diamond National Corp., 345 F.2d 269, 270-71 (9th Cir.1965) (complaint may be amended subsequent to dismissal; therefore, dismissal of complaint is final judgment only if district court expressly dismisses action or makes clear that action cannot be saved by amendment to complaint). See also Czeremcha v. International Association of Machinists and Aerospace Workers, AFL-CIO, 724 F.2d 1552, 1555 (11th Cir.1984) (intermediate approach linking finality to reasonable expectation of plaintiff). These differences do not affect our analysis in this case, for each circuit court considering the issue has held that there is no final decision if under its rule amendment of the complaint is permissible and may save the action.