Wednesday, January 22, 2014

Keeping the Window Open: Potential Intervenors and Preserving their Right of Appeal

By Myriam Z. Kasper
Chief Assistant Corporation Counsel, Appeals Division, City of Chicago Department of Law

In CE Design, Ltd. v. Cy’s Crab House North, Inc., 731 F.3d 725 (7th Cir. 2013), the United States Court of Appeals for the Seventh Circuit dismissed the appeal because, although the putative intervenor filed a timely notice of appeal from the trial court’s order denying its motion to intervene, then notice was untimely with respect to the final judgment. And because the judgment could no longer be challenged, the Seventh Circuit could not grant any meaningful relief to the putative intervenor even had it reversed the order denying intervention. In dismissing for lack of jurisdiction, the Seventh Circuit provided a useful overview of the options potential intervenors have to preserve the right of appeal, or as the reviewing court remarked, to “keep the window from closing.” Importantly, the Seventh Circuit emphasized that merely moving to intervene within the time to appeal a judgment is not sufficient.

CE Design, a frequent class-action plaintiff, sued the defendants Cy’s Crab House North and Cy’s Crabhouse and Seafood Grill, Inc. on behalf of a class of junk-fax recipients. CE Design, 731 F.3d at 726. Truck Insurance Exchange was the defendants’ liability insurance carrier, and it provided a defense under a reservation of rights. Id. During trial, and without consulting their insurer, the defendants settled the case with the class. Id. at 726-27. After state-court coverage litigation, the district court approved the settlement and entered final judgment on October 27, 2011. Id. at 727.

The Seventh Circuit subsequently issued an opinion in another case, which cast serious doubt on the conduct of class counsel. Id. On November 23, 2011, the day after that opinion was released, Truck Insurance Exchange moved to intervene in CE Design’s case to reopen the judgment, challenge the settlement, and decertify the class based on the misconduct of class counsel pursuant to that new decision. Id. The motion to intervene also sought a 14-day extension of time to file a notice of appeal. Id. The trial court heard the motion on November 28, 2011, the last day to appeal from the final judgment. Id. The court requested further briefing and rescheduled the hearing for December 1, 2011. Id. The trial court then discussed the time limit for filing an appeal from the final judgment, and noted that it could extend the time to do so on motion of a party within 30 days of the expiration of the time to appeal. Id. Truck Insurance Exchange’s counsel noted that Truck Insurance Exchange was not yet a party, and the trial court responded that if it granted the motion to intervene, “that relates back to the day that you filed the motion to intervene.” Id. With regard to the deadline for appealing the judgment, the trial court stated: “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.” Id. On December 1, 2011, the trial court denied the motion to intervene, without mentioning any extension of the deadline to appeal. Id.

Truck Insurance Exchange filed a notice of appeal on December 2, 2011, stating that it was appealing from the December 1, 2011 order denying intervention as well as the October 27, 2011 final judgment. Id. CE Design filed a motion to dismiss the appeal for lack of jurisdiction, which the Seventh Circuit took with the case. Id.

The Seventh Circuit held that the notice of appeal was untimely with respect to the final judgment because it was filed 36 days after entry of that judgment and no extension had been granted. Id. The reviewing court rejected Truck Insurance Exchange’s argument that the trial court had orally extended the time to appeal, stating that the trial court had merely expressed a “willingness to grant a retroactive extension in the future.” Id. at 728. Moreover, the December 1, 2011 order did not mention extending the time for an appeal. Id. The reviewing court also rejected Truck Insurance Exchange’s argument that the appeal from the order denying intervention rendered timely the appeal from the final judgment, explaining that those were “distinct and separate appealable orders.” Id.

The Seventh Circuit further explained, addressing Truck Insurance Exchange’s reliance on Roe v. Town of Highland, 909 F.2d 1097 (7th Cir. 1990), that under Roe, a putative intervenor “must take some action” when the trial court has not ruled on the motion to intervene but the deadline to appeal the underlying judgment is “imminent,” to “keep the window from closing.” CE Design, 731 F.3d at 728-29. In particular, the putative intervenor must obtain a ruling on intervention, obtain an extension of time to file a notice of appeal, or file a “protective, ‘springing’ notice of appeal before the time expires.” Id. at 729. More succinctly, the reviewing court summarized Roe as making “clear” that “it is not enough to merely move to intervene within the time to appeal the judgment; something more is required.” Id. Truck Insurance Exchange did not do any of this before the appeal period expired. Id.

The Seventh Circuit next clarified its decision in In re Synthroid Marketing Litigation, 264 F.3d 712 (7th Cir. 2001), stating that it “require[d] some elaboration.” CE Design, 731 F.3d at 729. In Synthroid, the district court denied a motion to intervene, and the putative intervenor filed a notice of appeal from that order within the time to appeal from the final judgment, but did not appeal the final judgment until almost a year later. Id. The Synthroid court held – analogizing to Fed. R. App. P. 4(a)(2), under which a premature notice of appeal filed after the district court rules but before entry of judgment becomes effective upon entry of judgment – that its decision allowing intervention caused the late notice of appeal of the judgment to “spring into effect.” CE Design, 731 F.3d at 729 (citing Synthroid, 264 F.3d at 716). Although the reviewing court in CE Design questioned the continuing validity of Synthroid in light of subsequent United States Supreme Court authority, it explained that Synthroid could be read to stand for a sort of “relation-back rule,” that when a putative intervenor is granted the right to intervene on appeal, a “contingent appeal of the judgment” relates back to some previous date. CE Design, 731 F.3d at 729. But Truck Insurance Exchange could not benefit from any such relation-back rule. Id. Unlike the putative intervenor in Synthroid, Truck Insurance Exchange had not filed a notice of appeal from the denial of intervention before the time to file an appeal from the final judgment expired (id. at 729-30, 731), but had merely moved to intervene during that time. Because Truck Insurance Exchange did not timely appeal the final judgment, the Seventh Circuit lacked jurisdiction to review that judgment. Id. at 730.

Although the Seventh Circuit went on to hold that Truck Insurance Exchange had timely appealed the denial of intervention, it concluded that it nevertheless lacked jurisdiction over the appeal. Id. Noting that the United States Supreme Court had reemphasized that the time limit to appeal is jurisdictional, and because Truck Insurance Exchange had not timely appealed the final judgment, that judgment was “set in stone.” Id. Thus, even reversing the intervention order could not result in any meaningful relief for Truck Insurance Exchange. Id. For “completeness,” the reviewing court added that another recent decision foreclosed Truck Insurance Exchange’s argument on the merits of intervention, so appellate review of the denial of intervention would be “doubly pointless.” Id. at 731.

Recommended Citation: Myriam Z. Kasper, Keeping the Window Open: Potential Intervenors and Preserving their Right of Appeal, The Brief, (January 22, 2014),

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