Alemayehu v. Gemignani ( 2019 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 17, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
GIRUM ALEMAYEHU,
Plaintiff - Appellant,
v. No. 18-1340
(D.C. No. 1:18-CV-00212-CMA-MJW)
CONNIE GEMIGNANI; JOHN (D. Colo.)
MARSHALL; CLEAR STONE
DEVELOPMENT, INC., a Colorado
corporation; DOCTOR’S ASSOCIATES
LLC,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, BACHARACH, and MORITZ, Circuit Judges.
_________________________________
Girum Alemayehu appeals the district court’s order denying his motion to
dissolve an earlier order staying the underlying proceedings. Because Alemayehu
fails to demonstrate we have jurisdiction to review the district court’s order declining
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument wouldn’t materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment isn’t binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. But it may be cited for its persuasive value. See Fed. R. App. P. 32.1;
10th Cir. R. 32.1.
to dissolve the stay, we dismiss the appeal without reaching the merits of his
arguments.
Background
This appeal arises from Alemayehu’s allegations that defendants Connie
Gemignani; John Marshall; Clear Stone Development, Inc.; and Doctor’s Associates
LLC (collectively, DAL) impermissibly discriminated against Alemayehu based on
his race in denying his application for a Subway restaurant franchise.
Alemayehu brought suit against DAL in the United States District Court for
the District of Colorado. But because the franchise application Alemayehu submitted
to DAL contained an arbitration clause, and because that arbitration clause required
arbitration to take place in Bridgeport, Connecticut, DAL filed a motion to compel
arbitration in the United States District Court for the District of Connecticut. See
1mage Software, Inc. v. Reynolds & Reynolds Co., 459 F.3d 1044, 1051–56 (10th Cir.
2006) (noting that when arbitration agreement contains forum-selection clause,
appropriate venue for filing motion to compel arbitration lies in agreed-upon forum).
Thus, the district court stayed the Colorado proceedings pending the Connecticut
district court’s ruling on DAL’s motion to compel.
The Connecticut district court ultimately denied DAL’s motion, and DAL
appealed the Connecticut district court’s order to the United States Court of Appeals
for the Second Circuit.1 See 9 U.S.C. § 16(a)(1) (allowing for immediate appeal from,
1
The Second Circuit will hear argument in DAL’s appeal on May 23, 2019.
2
inter alia, order denying motion to compel arbitration). In the meantime, Alemayehu
asked the district court to dissolve the existing stay and resume proceedings in
Colorado. Citing DAL’s pending appeal, the district court denied the motion and left
the stay intact. Alemayehu now appeals the district court’s order denying his motion
to dissolve the stay.
Analysis
Before we may address the merits of Alemayehu’s arguments, we must
determine whether we have jurisdiction over this appeal. See Husky Ventures, Inc. v.
B55 Investments, Ltd., 911 F.3d 1000, 1008 (10th Cir. 2018). Critically, as the party
attempting to invoke our appellate jurisdiction, Alemayehu “bears the burden of
establishing” that such jurisdiction exists. United States v. Ceballos-Martinez, 387
F.3d 1140, 1143 (10th Cir. 2004).
In attempting to shoulder that burden here, Alemayehu relies solely on 28
U.S.C. § 1291. Section 1291 affords us jurisdiction over “final decisions”—i.e.,
decisions that “end[] the litigation.” Gulfstream Aerospace Corp. v. Mayacamas
Corp., 485 U.S. 271, 275 (1988) (quoting Catlin v. United States, 324 U.S. 229, 233
(1945)). It also allows us to review “a ‘small class’ of collateral rulings that, although
they do not end the litigation, are appropriately deemed ‘final.’” Mohawk Indus., Inc.
v. Carpenter, 558 U.S. 100, 106 (2009) (quoting Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541, 545–46 (1949)).
After Alemayehu filed his notice of appeal, DAL filed a motion asking us to
dismiss for lack of appellate jurisdiction, arguing that the district court’s order is
3
neither (1) a final order nor (2) an order that we should treat as final under the
collateral-order doctrine. Alemayehu filed a response to DAL’s motion, and DAL
filed a reply to Alemayehu’s response. We address the parties’ jurisdictional
arguments below.2
I. The Final-Order Rule
For purposes of § 1291, an order is final if it “ends the litigation on the merits
and leaves nothing for the court to do but execute the judgment.” Gulfstream
Aerospace Corp., 485 U.S. at 275 (quoting Catlin, 324 U.S. at 233). Because a
typical stay order merely delays litigation, rather than ending it, “a stay is not
ordinarily a final decision for purposes of § 1291.” Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 10 n.11 (1983). Nevertheless, the Court has
recognized an exception to this general rule: a stay may constitute a final order if it
2
Notably, Alemayehu purports to rely solely on the collateral-order doctrine in
asserting that we have jurisdiction to hear his appeal; indeed, he expressly concedes
that “[t]here has been no final judgment or final order issued by the district court.”
Aplt. Br. 3. Thus, we could treat as waived and decline to consider any “potential
argument[s]” in favor of holding that the district court’s order is final for purposes of
§ 1291. U.S. ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1518 n.2
(10th Cir. 1996) (“Our duty to consider unargued obstacles to subject matter
jurisdiction does not affect our discretion to decline to consider waived arguments
that might have supported such jurisdiction.”); see also Raley v. Hyundai Motor Co.,
642 F.3d 1271, 1275 (10th Cir. 2011) (“Where an appellant fails to lead, we have no
duty to follow. It is the appellant’s burden, not ours, to conjure up possible theories
to invoke our legal authority to hear her appeal.”). Nevertheless, as discussed more
fully below, Alemayehu makes some stray assertions that appear to implicate the
finality of the district court’s order. Thus, in an abundance of caution, we proceed to
address both (1) whether Alemayehu demonstrates the order is final and (2) whether
he demonstrates it is an appealable collateral order.
4
operates to put a party “effectively out of [federal] court.” Id. at 9 n.8, 10 (quoting
Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 715 n.2 (1962)).
In Moses H. Cone, the lone issue before the federal district court was whether
the plaintiff’s claims were subject to arbitration. Id. at 10. Because that very same
issue was also before a state court in a parallel state suit, the federal district court
invoked the Colorado River doctrine and stayed the federal proceedings pending the
state court’s resolution of the arbitration question. See id. at 4; cf. Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 818 (1976) (noting that under
certain limited circumstances, “reasons of wise judicial administration” may
“permit[] the dismissal of a federal suit due to the presence of a concurrent state
proceeding”).
In evaluating whether the district court’s stay order was final for purposes of
§ 1291, the Court pointed out that because the “issue of arbitrability was the only
substantive issue present in the federal suit,” the district court’s order staying “the
federal suit pending resolution of the state suit meant that there would be no further
litigation in the federal forum; the state court’s judgment on the [arbitration] issue
would be res judicata.” Moses H. Cone, 460 U.S. at 10. And because the stay order
therefore put the plaintiff “effectively out of [federal] court” and “amount[ed] to a
dismissal of the [federal] suit,” the Court held that the stay order was final for
purposes of § 1291. Id. (quoting Idlewild, 370 U.S. at 715 n.2).
Here, Alemayehu alleges that by refusing to dissolve the stay, the district court
“handed off its obligation” to resolve his claims “to the Second Circuit.” Aplt. Supp.
5
Br. 14. Despite Alemayehu’s statement that “[t]here has been no final judgment or
final order issued by the district court,” Aplt. Br. 3, this appears to be an attempt to
liken the facts of this case to those in Moses H. Cone, where the district court
“surrender[ed] jurisdiction . . . to [the] state court” by staying proceedings in federal
court, 460 U.S. at 10 n.11. But this attempt ultimately proves unsuccessful.3
In Moses H. Cone, “the object of the stay [was] to require all or an essential
part of the federal suit to be litigated in a state forum.” Id. (emphasis added). And the
Court repeatedly suggested that its holding applies only to cases involving those
same facts—i.e., to cases in which “the sole purpose and effect of the stay is
precisely to surrender jurisdiction of a federal suit to a state court.” Id. (emphasis
added) (“Idlewild’s reasoning is limited to cases where (under Colorado River,
abstention, or a closely similar doctrine) the object of the stay is to require all or an
essential part of the federal suit to be litigated in a state forum.” (emphasis added));
id. at 9 n.8 (“‘[E]ffectively out of court’ means effectively out of federal court—in
3
Elsewhere in his brief, Alemayehu expressly disavows any reliance on Moses
H. Cone’s final-order rule. In fact, he maintains that no such rule exists: according to
Alemayehu, Moses H. Cone is solely “a particular application of the collateral[-]
order doctrine.” Aplt. Supp. Br. 8 n.1.
As an initial matter, we disagree with Alemayehu’s reading of the Court’s
decision in Moses H. Cone; there, the Court provided two independent and alternative
bases for exercising appellate jurisdiction over the district court’s stay order. See 460
U.S. at 11 (first holding that stay order was final decision for purposes of § 1291;
then holding that even if stay order wasn’t final, it “would nevertheless be
appealable” under collateral-order doctrine). And because Alemayehu’s briefing
implicitly invokes both of these potential paths to appellate jurisdiction, we opt to
consider whether he has demonstrated that we may proceed down either to reach the
merits of his argument.
6
keeping with the fact that the decision under appeal is the refusal to exercise federal
jurisdiction.” (alteration in original) (quoting Idlewild, 370 U.S. at 715 n.2)).
That said, although Moses H. Cone’s final-order rule “has its roots in concerns
about federal courts[] surrendering decisional authority to state courts, its branches
have” nevertheless “spread beyond that.” Miccosukee Tribe of Indians of Fla. v. S.
Fla. Water Mgmt. Dist., 559 F.3d 1191, 1195 (11th Cir. 2009). For instance, courts
have applied Moses H. Cone’s final-order rule to cases in which the practical effect
of a federal district court’s stay order is to surrender jurisdiction to either an
international court or to a federal agency. See, e.g., In re Kozeny, 236 F.3d 615, 618
(10th Cir. 2000) (“Although Moses H. Cone was factually based on parallel federal
and state court proceedings, we believe that the same principles govern parallel
federal and international court proceedings.”);4 Slip Track Sys., Inc. v. Metal Lite,
Inc., 159 F.3d 1337, 1338, 1340 (Fed. Cir. 1998) (holding that order staying federal
action pending outcome of proceedings before United States Patent and Trademark
Office (PTO) was final under Moses H. Cone because “district court w[ould] have no
occasion to consider [relevant issue] following the resolution of [that issue in] the
PTO proceeding”).
4
The order in Kozeny “was rendered by a two-judge motions panel and its
precedential value is therefore questionable.” Crystal Clear Commc’ns, Inc. v. Sw.
Bell Tel. Co., 415 F.3d 1171, 1176 n.3 (10th Cir. 2005). Nevertheless, this court has
previously found its reasoning “persuasive on the question [of] whether [a] stay order
was final under § 1291.” Id.
7
But Alemayehu doesn’t suggest that by refusing to dissolve the stay, the
district court surrendered jurisdiction to a state court. Cf. Moses H. Cone, 460 U.S. at
10 n.11. Nor does he suggest that the district court transferred its decisional authority
to an international tribunal, cf. Kozeny, 236 F.3d at 618, or to a federal agency, cf.
Slip Track, 159 F.3d at 1338, 1340. Instead, Alemayehu alleges that by refusing to
dissolve the stay, the district court “handed off its obligation[s]” to another federal
court: the Second Circuit. Aplt. Supp. Br. 14. And as DAL points out, at least one of
our sibling circuits has indicated that Moses H. Cone’s final-order rule doesn’t apply
when a stay operates to transfer decisional authority from one federal court to
another. See Miccosukee Tribe of Indians of Fla., 559 F.3d at 1195–98 (holding that
order wasn’t final where federal district court stayed proceedings to “await a federal
appellate decision that [was] likely to have a substantial or controlling effect on the
claims and issues in the stayed case” (emphasis added)).
Notably, Alemayehu makes no effort to distinguish the facts of this case from
those in Miccosukee Tribe of Indians of Florida. Nor does he identify a case in which
this court (or any other court, for that matter) has applied Moses H. Cone’s final-
order rule to a stay order that operates to transfer decisional authority from one
federal court to another. Accordingly, we hold that he fails to show the district
court’s order is a final decision for purposes of § 1291. See Ceballos-Martinez, 387
F.3d at 1143 (explaining that appellant “bears the burden of establishing” our
appellate jurisdiction).
8
Nevertheless, Alemayehu’s failure to demonstrate that the district court’s order
is a final one doesn’t end our jurisdictional inquiry; as Alemayehu points out, we also
have jurisdiction under § 1291 to review “a ‘small class’ of collateral rulings that,
although they do not end the litigation, are appropriately deemed ‘final.’” Mohawk
Indus., Inc., 558 U.S. at 106 (quoting Cohen, 337 U.S. at 545–46). Thus, we next
examine whether the district court’s order denying Alemayehu’s motion to dissolve
the stay constitutes such a collateral order.
II. The Collateral-Order Doctrine
To fall within Cohen’s “small class” of immediately appealable collateral
orders, the order at issue must satisfy a three-part test: (1) it must be “conclusive”;
(2) it must “resolve important questions completely separate from the merits”; and
(3) it must “render such important questions effectively unreviewable on appeal from
final judgment in the underlying action.” Digital Equip. Corp. v. Desktop Direct,
Inc., 511 U.S. 863, 867, 878 (1994) (quoting Cohen, 337 U.S. at 546). Critically,
inherent in the second and third Cohen factors is the question of whether any rights
that might “be lost through rigorous application of a final[-]judgment requirement”
are “important enough to warrant immediate appeal.” Id. at 878–79, 880 n.7; see also
Mohawk Indus., Inc., 558 U.S. at 107 (explaining that “[t]he justification for
immediate appeal must . . . be sufficiently strong to overcome the usual benefits of
deferring appeal until litigation concludes”; holding that “the decisive consideration”
under Cohen “is whether delaying review until the entry of final judgment ‘would
imperil a substantial public interest’ or ‘some particular value of a high order’”
9
(quoting Will v. Hallock, 546 U.S. 345, 352–53 (2006))); United States v. Section 17
Twp. 23 N., 40 F.3d 320, 322 (10th Cir. 1994) (“[T]he Court has cautioned that
absent a constitutional or statutory provision securing the right at stake, it will be
difficult for a party to demonstrate immediate review is necessary.”).
In light of this inherent importance requirement, we opt here to “move directly
to the second and third” Cohen factors. See Section 17 Twp., 40 F.3d at 322 (noting
that court need not address all three factors of Cohen test if appealing party fails to
satisfy any one of those factors). In doing so, we first identify the rights Alemayehu
says he stands to lose if he cannot immediately appeal the district court’s order
denying his motion to dissolve the stay, and we then determine whether those rights
are important enough to outweigh the concerns that animate the final-judgment rule.
See id.; Digital Equip. Corp., 511 U.S. at 872 (citing “the strong bias of § 1291
against piecemeal appeals”).
The only rights Alemayehu says he will lose here if he can’t immediately
appeal the district court’s order are (1) his right to enforce as res judicata the
Connecticut district court’s order ruling that his claims aren’t subject to arbitration
and (2) his right to “try his claims in a court of law” under that order. Aplt. Supp. Br.
12.
But the district court’s order denying Alemayehu’s motion to dissolve the stay
won’t necessarily deprive him of these “right[s].” Id. Instead, if the Second Circuit
agrees with the Connecticut district court and holds that Alemayehu’s claims aren’t
subject to arbitration, then Alemayehu may (albeit after a delay) proceed to litigate
10
the merits of those claims in district court. In that case, the district court’s order will
merely deprive Alemayehu of the right to immediately litigate his claims. And this
court has previously held that a party’s right to proceed with litigation “immediately,
as opposed to later” isn’t “the type of ‘important’ right [that] the Supreme Court
contemplated as requiring immediate review” under the collateral-order doctrine.
Section 17 Twp., 40 F.3d at 322; see also Kozeny, 236 F.3d at 619 (concluding that
order staying federal suit pending proceedings in foreign jurisdiction wasn’t immediately
appealable under collateral-order doctrine because order didn’t “foreclose the defendants’
opportunity to have the controversy settled in the federal forum—it simply delay[ed]
it”).5
Alternatively, if the Second Circuit holds that Alemayehu’s claims are subject
to arbitration, then the only “right” Alemayehu will lose as a result of the district
court’s stay order is the “right” to present his claims to a federal court that ultimately
has no authority to adjudicate them.6 Aplt. Supp. Br. 12. That’s because if the Second
Circuit holds that Alemayehu’s claims are subject to arbitration, then any remaining
5
Although the order in Kozeny “was rendered by a two-judge motions panel
and its precedential value is therefore questionable,” we nevertheless find its
reasoning on this point “persuasive” and adopt it here. Crystal Clear Commc’ns, Inc.,
415 F.3d at 1176 n.3.
6
In that case, dissolving the stay and allowing litigation to proceed would
deprive DAL—not Alemayehu—of an important right. See Digital Equip. Corp., 511
U.S. at 880 n.7 (noting that by providing for immediate appeal of order denying
motion to compel arbitration, Congress has expressed that loss of right to enforce
arbitration agreement is “important enough to warrant immediate appeal” (citing
§ 16)).
11
federal-court proceedings will take place in the Connecticut district court or in the
Second Circuit. See 9 U.S.C. § 4 (“The hearing and proceedings, under such
[arbitration] agreement, shall be within the district in which the petition for an order
directing such arbitration is filed.”); id. § 10(a) (providing that district court “in and
for the district wherein the [arbitration] award was made may,” under certain
circumstances, “vacat[e] the award”); Pioneer Props., Inc. v. Martin, 776 F.2d 888,
891 (10th Cir. 1985) (noting that district court’s § 10 review is subject to appeal).
We question whether any such right exists. But even assuming it does, it surely
doesn’t “rise to the level of importance needed for recognition under § 1291.” Digital
Equip. Corp., 511 U.S. at 878. That is, any “right” to present one’s claims to a court
that ultimately lacks authority to adjudicate them isn’t weighty at all, let alone
“weightier than the societal interests advanced by the ordinary operation of final
judgment principles.” Id. at 879. Accordingly, we hold that Alemayehu fails to
demonstrate the district court’s order is appealable under the collateral-order
doctrine. See Ceballos-Martinez, 387 F.3d at 1143.
12
Conclusion
Because Alemayehu fails to establish that we may review the district court’s
order denying his motion to dissolve the stay, we grant DAL’s motion to dismiss the
appeal for lack of jurisdiction.
Entered for the Court
Nancy L. Moritz
Circuit Judge
13