Stephen West v. Charter Communications, Inc. ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 18-1906
STEPHEN R. WEST,
Plaintiff-Appellant,
v.
LOUISVILLE GAS AND ELECTRIC
COMPANY,
Defendant,
and
CHARTER COMMUNICATIONS,
INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Southern District of Indiana, New Albany Division.
No. 4:16-cv-00145-RLY-DML — Richard L. Young, Judge.
2 No. 18-1906
ARGUED NOVEMBER 28, 2018 — DECIDED APRIL 4, 2019
Before ROVNER, HAMILTON, and BRENNAN, Circuit Judges.
ROVNER, Circuit Judge. In this diversity action, plaintiff
Stephen West contends that the addition of a fiber optic
communications wire to a utilities transmission tower on his
property exceeds the scope of the utilities easement that
authorized the tower. West sued both Charter Communica-
tions, Inc. (“Charter”), whose subsidiary installed the wire, and
Louisville Gas and Electric Company (“Louisville”), which
owns the tower and is a party to the easement. The district
court dismissed the claims against Charter, concluding that the
addition of Charter’s communications wire to the tower is
compatible with the scope and purpose of the easement and
consequently does not violate the terms of the easement
agreement nor does it amount to an unconstitutional taking of
West’s property. West v. Louisville Gas & Elec. Co., 2018 WL
321686 (S.D. Ind. Jan. 8, 2018). Wishing to appeal that ruling,
West entered into an agreement with Louisville providing that
he would voluntarily dismiss his claims against Louisville,
while reserving the right to revive them in the event we
reversed the district court’s dismissal of the claims against
Charter. West then filed a notice of appeal pursuant to
28 U.S.C. § 1291. Because the conditional dismissal of West’s
claims against Louisville renders the judgment non-final, we
dismiss the appeal for want of jurisdiction.
No. 18-1906 3
I.
West inherited a small plot of land from his parents in
Jeffersonville, Indiana that abuts the Ohio River, which
demarcates the border between Indiana and Kentucky.1 A
massive utility transmission tower some 248 feet tall sits on the
property, carrying LG&E power lines that run between the two
states. The tower and the power lines are authorized by a 1938
utility easement entered into by the predecessors of West (and
his parents) and LG&E, as amended by a supplemental
agreement in 1976. Broadly speaking, the easement grants to
LG&E the perpetual right to install and maintain towers and
wires “for the transmission, distribution and delivery of
electrical energy to the Grantee [LG&E] and other persons and
concerns and to the public in general for light, heat, power,
telephone and/or other purposes in, upon, along and over the
real estate of the Grantor [West] … .” R. 33-1 at 2. West’s
parents rejected a further amendment to the deed of easement
proposed by LG&E in 1990 which would have authorized
LG&E to “upgrade and remove communications and tele-
phone systems… .” R. 33-4 at 2.
In 2000, LG&E entered into a contract with Insight Ken-
tucky Partners II, LP (“Insight”), a subsidiary of Time Warner
Cable, Inc. (“Time Warner”), granting Insight permission to
run fiber optic cables across LG&E’s existing infrastructure.
Insight proceeded to run a fiber optic cable carrying television
and internet content and services across West’s property via
1
Jeffersonville is situated directly across the Ohio River from Louisville,
Kentucky.
4 No. 18-1906
the LG&E tower; Insight’s cable replaced an existing static wire
on that tower. Time Warner, Insight’s parent corporation, was
later acquired by Charter. We shall refer to Charter and its
predecessors collectively as the Charter defendants.
In 2016, West filed suit against LG&E in state court, seeking
a declaratory judgment that the easement did not authorize
Insight’s fiber optic cable. West also asserted claims for breach
of contract, trespass, and unjust enrichment. LG&E removed
the case to federal court. After the district court denied LG&E’s
motion to dismiss West’s claims, reasoning that there were
factual questions as to the scope of LG&E’s rights under the
easement, West v. Louisville Gas & Elec. Co., 2016 WL 6395918,
at *3 (S.D. Ind. Oct. 28, 2016), West amended his complaint to
name Insight, Time Warner, and Charter as additional defen-
dants and also to add new claims to the suit. The amended
complaint asserted claims against both LG&E and the Charter
defendants for declaratory judgment, trespass, unjust enrich-
ment, as well as claims for (tortious) conversion and criminal
trespass. LG&E alone was also named in a new claim for
nuisance. LG&E filed a second, partial motion to dismiss
aimed at the conversion and criminal trespass claims, but the
district court denied that motion, concluding in view of the
facts alleged that the complaint stated plausible claims for
relief in these respects. West v. Louisville Gas & Elec. Co., 2018
WL 321685, at *2–*4 (S.D. Ind. Jan. 8, 2018). LG&E subsequently
filed a cross-claim for indemnification against the Charter
defendants.
Pursuant to Federal Rule of Civil Procedure 12(b)(6), the
Charter defendants moved to dismiss all of West’s claims
against them, arguing principally that because the easement
No. 18-1906 5
over West’s property had already been dedicated for a utility
use that is compatible with cable television transmission, the
addition of Insight’s fiber optic wire was statutorily authorized
by section 621(a)(2) of the Cable Communications Policy Act of
1984, 47 U.S.C. § 541(a)(2) (the “Cable Act”).
The district court agreed with the Charter defendants and
granted their motion to dismiss. 2018 WL 321686. The court
determined that the easement across West’s property had been
dedicated for utility use, id. at *5, and that the running of fiber
optic cables across that easement for the purpose of providing
paid television, internet, and communications services amount-
ed to a permissible compatible use under the Cable Act, id. The
court went on to conclude that the Cable Act did not
impermissibly burden West’s property rights retroactively, nor
did it constitute a constitutionally prohibited taking of his
property. Id. at *5–*6. Because it found that Insight’s use of the
easement over West’s property to be authorized, the court
dismissed all claims against the Charter defendants. Id. at *6
That decision left LG&E as the sole remaining defendant on
West’s claims.
West and LG&E subsequently filed a joint stipulation
asking the court to dismiss the claims against LG&E and close
the case, R. 88, but the district court denied that request, R. 91.
Although the stipulation posited that West’s claims against
LG&E were “moot” in view of the district court’s decision
dismissing the claims against the Charter defendants, R. 88 at
2 ¶3, the district court rejected that assertion. The court
reasoned that there was still a live controversy as to whether
the easement itself permitted LG&E to install and maintain
Insight’s fiber optic cable on LG&E’s infrastructure. R. 91 at
6 No. 18-1906
2–3. The court also noted that the stipulation was unclear as to
whether the proposed dismissal of the claims against LG&E
was to be with or without prejudice; but the court construed
the stipulated dismissal to be without prejudice, which would
permit West to revive these claims in the event the dismissal of
the claims against the Charter defendants was reversed on
appeal. R. 91 at 3. That, in turn, led the court to conclude that,
notwithstanding the proposed dismissal of the claims against
LG&E, a final judgment was not yet at hand. R. 91 at 3. The
court indicated that the parties had three options open to them:
(1) continue litigating the merits of West’s claims against LG&E
to a final judgment; (2) stipulate to the dismissal of these claims
with prejudice; or (3) seek a certification of a final judgment as
to fewer than all parties pursuant to Federal Rule of Civil
Procedure 54(b). R. 91 at 3–4.
Rather than pursuing any of these options, West and LG&E
pursued a fourth option in the hope of creating a final judg-
ment that would open the door to this appeal. The two parties
entered into a tolling and standstill agreement which provided
for the voluntary dismissal of West’s claims against LG& E for
the duration of, and conditioned upon the outcome of, his
appeal of the dismissal of the claims against the Charter
defendants. App. R. 7-3 Ex. B. West and LG&E agreed that the
statute of limitations as to any claims between them would be
tolled for the duration of the agreement and that, in the event
West prevailed in his appeal, LG&E would not object to the re-
filing of his claims against LG&E nor assert any timeliness
defenses to the claims. If, on the other hand, West did not
prevail in the appeal, West agreed he would not re-file his
pending claims against LG&E nor any other claims arising out
No. 18-1906 7
of the same facts. By its terms, the agreement was to remain in
effect until such time as the appeal was decided or West
terminated the agreement on 14 days’ notice, at which point an
action filed by either party would be deemed filed as of the
date West’s suit was originally filed in 2016. App. R. 7-3.
Pursuant to this agreement, West voluntarily dismissed all of
his claims against LG&E by stipulation (signed by attorneys for
West and LG&E) pursuant to Federal Rule of Civil Procedure
41(a)(1)(A)(ii). R. 98.2 LG&E in turn voluntarily dismissed its
cross-claim against the Charter defendants without prejudice
pursuant to Rule 41(a)(1)((a)(i). R. 95.
West then appealed to this court pursuant to section 1291.
After a preliminary round of memoranda as to whether there
was a final judgment establishing our appellate jurisdiction, we
allowed the case to proceed to briefing and argument, while
reserving judgment on the jurisdictional question.
II.
As in every case, the first question we must resolve is our
jurisdiction to entertain this appeal. Steel Co. v. Citizens for a
Better Environment, 523 U.S. 83, 94–95, 118 S. Ct. 1003, 1012
(1998); In re Morse Elec. Co., 805 F.2d 262, 264 (7th Cir. 1986)
(citing In re Boomgarden, 780 F.2d 657, 659 (7th Cir. 1985)).
2
None of the Charter defendants (who had been dismissed from the suit)
signed the stipulated dismissal of West’s claims, which presents an
interesting question of whether the stipulation was signed by “all defen-
dants” as Rule 41(a)(1)(A) requires. The Charter defendants contest the
validity of the dismissal on this basis, but in view of our conclusion below
that West’s provisional dismissal of his claims against LG&E renders the
judgment non-final, we need not reach this issue.
8 No. 18-1906
Section 1291, which West invoked in filing this appeal,
requires that a final judgment have been issued by the district
court. See 28 U.S.C. § 1291 (“[t]he courts of appeals … shall
have jurisdiction of appeals from all final decisions of the
district courts of the United States …”). A final judgment is one
that ends the litigation on the merits and leaves nothing for the
district court to do but execute the judgment. See Coopers &
Lybrand v. Livesay, 437 U.S. 463, 467, 98 S. Ct. 2454, 2457 (1978)
(quoting Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631,
633 (1945)); Minn. Life Ins. Co. v. Kagan, 724 F.3d 843, 847 (7th
Cir. 2013); Kimbrell v. Brown, 651 F.3d 752, 755 (7th Cir. 2011);
Union Oil Co. of Cal. v. John Brown E&C, 121 F.3d 305, 309 (7th
Cir. 1997).
The requirement of a final judgment is more than a mere
formality. Section 1291 reflects a strong preference for resolv-
ing all disputed issues as to all parties in one appeal, to the
extent possible. See Arrow Gear Co. v. Downers Grove Sanitary
Dist., 629 F.3d 633, 636 (7th Cir. 2010). Underlying that prefer-
ence lies a legislative judgment that permitting multiple,
piecemeal appeals from a single action in the district court will
have a “debilitating effect” on the efficient administration of
justice. Coopers & Lybrand, 437 U.S. at 471, 98 S. Ct. at 2459
(quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170, 94 S. Ct.
2140, 2149 (1974)); see also Cobbledick v. United States, 309 U.S.
323, 325, 60 S. Ct. 540, 541 (1940).
The district court’s decision disposing of West’s claims
against the Charter defendants—which is what West is
appealing—was manifestly not a final decision. LG&E re-
mained as a defendant, and the district court had already
denied LG&E’s two motions to dismiss the claims against it,
No. 18-1906 9
reasoning that resolution of those claims would have to await
the development of the facts. 2016 WL 6395918, at *3; 2018 WL
321685, at *3–*4. Certainly there was a substantial degree of
overlap in theory and in fact with the claims against the
Charter defendants. But at no time following the court’s
dismissal of West’s claims against the Charter defendants did
LG&E and/or West ask the court to enter a final, binding
judgment resolving the claims against LG&E based on the
rationale of the decision dismissing the Charter defendants.
Instead, the parties presented the court with a stipulation of
dismissal (without prejudice) which posited, with no substan-
tive analysis, that West’s claims against LG&E had been
rendered “moot” by the dismissal of the claims against the
Charter defendants. The district court’s decision rejecting the
stipulation of dismissal explained why, in its view, the decision
as to the Charter defendants did not (wholly) resolve the
viability of the claims against LG&E, and West has given us no
reason to doubt that the district court’s assessment was correct.
There is no dispute, for example, that there is a nuisance claim
naming LG&E alone that does not turn on the scope of the
easement between West and LG&E.3
Instead, intent on appealing the Charter dismissal without
a final judgment as to LG&E, West and LG&E engineered a
provisional dismissal of the claims against LG&E so as to bring
the proceedings in the district court to a close, but without the
3
The nuisance claim, in fact, is based on the installation in 2013 of flashing
red (aviation warning) lights on the LG&E tower located on West’s
property, which has nothing whatever to do with Insight’s fiber optic cable.
See R. 33 at 15.
10 No. 18-1906
binding effects of a truly final judgment. By the terms of the
tolling and standstill agreement between these two parties, the
dismissal of the claims against LG&E is conditional: In the
event this court were to affirm the dismissal of the claims
against the Charter defendants, West has agreed not to pursue
the claims against LG&E. If, on the other hand, this court were
to reverse the dismissal of the Charter defendants, West has
reserved the right to reinstate the claims against LG&E; and, in
the event of such reinstatement, both parties have agreed to
waive any time-based defenses to claims they might have
against one another. In short, in the event West were to prevail
in this appeal, West and LG&E may pick up where they left off
in the district court. The dismissal appears to be conditional in
a second respect as well. West has reserved the right to
terminate the tolling and standstill agreement on 14 days’
notice to LG&E, at which point he would likewise be free to
reinstate the claims against LG&E and pursue them as if they
had never been dismissed. Apart from the notice requirement,
the agreement does not impose any condition upon West’s
right to exercise this right. So, for example, had West con-
cluded after oral arguments in this case that we were likely to
affirm the dismissal of the claims against the Charter defen-
dants, West would have been free to terminate the agreement
and resurrect the claims against LG&E without waiting for us
to rule on his appeal.
This conditional dismissal of the claims against LG&E
represents the very sort of attempt to manufacture appellate
jurisdiction of which our precedents have consistently disap-
proved. As we stated in Union Oil, “[L]itigants and courts
cannot avoid the finality requirement of § 1291 by agreement.
No. 18-1906 11
To hold otherwise would allow litigants to circumvent the
rules that Congress has instructed as to the timing of appellate
proceedings.” 121 F.3d at 310 (citation omitted). We have thus
repeatedly cited the absence of a final judgment when, after a
dispositive ruling as to some but not all claims or parties, the
parties have entered to a conditional dismissal of the remain-
ing claims on terms that permit those claims to be revived at a
later date. See Arrow Gear, 629 F.3d at 636–37 (following res
judicata dismissal of plaintiff’s claims for contribution against
some but not all defendants, plaintiff voluntarily dismissed its
claims against two remaining defendants without prejudice);
Union Oil, 121 F.3d at 309–11 (following dismissal and judg-
ment on the pleadings as to some claims and partial summary
judgment limiting plaintiff’s damages as to remaining breach
of contract claim, parties stipulated to termination of proceed-
ings in district court and agreed to release one another from
liability in event appeals court affirmed district court’s rulings
as to contract claim, but reserved right to pursue their respec-
tive rights under the contract and resume litigation in the
district court in the event of reversal on appeal); see also Kagan,
724 F.3d at 846–47 (following judgment in favor of (deceased)
insured’s wife and against his children in life insurer’s inter-
pleader suit, wife filed Fed. R. Civ. P. 59(e) motion to amend
judgment disputing amount of interest insurer had paid on
policy proceeds, indicating that an active dispute between wife
and insurer remained in district court); Kimbrell, 651 F.3d at
757–58 (personal injury claims against truck driver’s employer
dismissed for want of diligence in serving process; but claim
against truck driver himself, which initially had been stayed
due to driver’s pending bankruptcy, remained unresolved, as
12 No. 18-1906
evidenced by plaintiff’s re-filing of claim in new suit after stay
lifted); Chessie Logistics Co. v. Krinos Holdings, Inc., 867 F.3d 852,
856 (7th Cir. 2017) (“Claims dismissed without prejudice have
not been disposed of, and any resulting judgment is not final
unless there is a clear legal bar to the claims’ revival.”); First
Health Grp. Corp. v. BCE Emergis Corp., 269 F.3d 800, 801 (7th
Cir. 2001) (collecting cases holding “that the dismissal of one
claim or theory without prejudice, with a right to reactivate
that claim after an appeal on the remaining theories, makes the
judgment non-final”).
As these cases make clear, the conditional nature of the
dismissal of the claims against LG&E negates the requisite
finality of the judgment. Although West has nominally
dismissed his claims against LG&E, he retains the right,
depending on the outcome of this appeal, to reinstate those
claims and proceed as if the claims had never been dismissed
and no time had passed. In the words of Arrow Gear, “[t]his is
a ‘start-over’ case.” 629 F.3d at 637.
Arrow could re-file the identical claim in the
same court against the two parties that it has
dropped, and, if it did, an appeal from the final
judgment in the new case would bring up to us
many of the same issues as an appeal from a
final judgment in this case would have done had
the two parties not been dropped.
Id. What was true of the appellant in Arrow Gear is just as true
of West here. West and LG&E have attempted to construct a
nominally final judgment and open the door to an immediate
appeal by bringing the proceedings in the district court as to
No. 18-1906 13
the remaining defendant, LG&E, to a close, but on terms that
leave West’s options open as to LG&E depending on how he
fares against the Charter defendants in this appeal. The
resulting judgment is not, in practical effect, a final one, and
that deprives us of appellate jurisdiction.
West’s desire to resolve the viability of its claims against the
Charter defendants on appeal now is understandable, and
perhaps even “noble” to the extent it is consistent with an
expeditious resolution of the case. Union Oil, 121 F.3d at 309.
Putting aside the nuisance claim, the degree of substantive
overlap between the claims against the Charter defendants and
the claims against LG&E appears to be substantial. West and
LG&E certainly agree that our interpretation of the Cable Act
and its application to LG&E’s easement across West’s property
will effectively dictate the resolution of his claims against
LG&E (save perhaps for the nuisance claim) as well as his
claims against the Charter defendants.
But, short of litigating the claims against LG&E to final
judgment, there were options open to West to pursue an
immediate appeal as to the Charter defendants. As Judge
Young pointed out, West could have asked the court to enter
a final judgment as to the claims against the Charter defen-
dants pursuant to Rule 54(b), although that likely would have
been a stretch given the overlap with the claims against LG&E.
See First Health Grp., 269 F.3d at 801. Alternatively, West could
have sought permission to pursue an interlocutory appeal
pursuant to 28 U.S.C. § 1292(b), on the theory that the decision
as to the Charter defendants “involves a controlling question
of law as to which there is substantial ground for difference of
opinion and that an immediate appeal from the [otherwise
14 No. 18-1906
non-appealable] order may materially advance the ultimate
termination of the litigation.” See First Health Grp., 269 F.3d at
801–02; see generally Sterk v. Redbox Auto. Retail, LLC, 672 F.3d
535, 536 (7th Cir. 2012); Ahrenholz v. Bd. of Trustees of Univ. of
Ill., 219 F.3d 674, 676–77 (7th Cir. 2000).
West pursued neither of these options. He instead opted to
pursue the same type of effort to fabricate a final judgment that
we have rejected as a transparent effort to circumvent section
1291.
Even so, West might also have chosen to rectify the prob-
lem once we flagged the potential lack of a final judgment in
soliciting jurisdictional memoranda from the parties and again
at oral argument. In other cases, we have deemed it sufficient
when a party has disavowed any right to pursue claims or
parties that have been dismissed without prejudice. See Chessie
Logistics, 867 F.3d at 856 (at oral argument, appellee unequivo-
cally agreed that its counterclaims, which had been dismissed
without prejudice in the district court, should be dismissed
with prejudice); Kagan, 724 F.3d at 847 (appellee’s jurisdictional
memorandum disclaimed any intent to seek further amend-
ment of judgment as to dismissed defendant); Arrow Gear, 629
F.3d at 637 (appellant’s lawyer committed at oral argument not
to re-file suit against two defendants that had been voluntarily
dismissed without prejudice); First Health Grp., 269 F.3d at 802
(at oral argument, appellant’s lawyer elected to dismiss
remaining trademark claims unconditionally, so that they
could not be reinstated regardless of outcome of appeal).
But West has never disclaimed the right to resurrect his
claims against LG&E that his agreement with LG&E expressly
No. 18-1906 15
reserves to him. To the contrary, at oral argument, after the
Charter defendants’ counsel construed the initial remarks of
West’s counsel to constitute such a disclaimer and abandoned
(to our surprise) their contention that we lack jurisdiction,
West’s counsel reiterated in rebuttal that the dismissal of
LG&E was conditional, as the terms of the tolling agreement
make clear it is. Certainly it is West’s right to preserve his
claims against LG&E. But his refusal to surrender them
unequivocally at this juncture makes clear that the judgment
in this case is non-final.
There is, consequently, no final judgment as required by
section 1291. The parties did not litigate West’s claims against
LG&E to a final judgment, and their agreed-upon dismissal of
those claims allows West to reinstate them in the district court
depending upon the outcome of this appeal (were it permitted
to proceed). Our precedents foreclose this attempt to manufac-
ture appellate jurisdiction by producing a judgment which has
the appearance but not the binding quality of finality.
III.
For the reasons we have discussed above, we DISMISS the
appeal for lack of appellate jurisdiction.