Mahesh Reinholdson v. State of Minnesota , 346 F.3d 847 ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-3525
No. 02-3529
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Mahesh Reinholdson, et al., *
*
Plaintiffs - Appellants/ *
Cross Appellees, *
* Appeals from the United States
v. * District Court for the
* District of Minnesota.
State of Minnesota, et al., *
*
Defendants - Appellees/ *
Cross Appellants. *
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Submitted: June 12, 2003
Filed: October 23, 2003
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Before LOKEN, Chief Judge, HEANEY and RILEY, Circuit Judges.
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LOKEN, Chief Judge.
Nine disabled students enrolled in schools in Independent School District No.
11 commenced this action against the School District, the Minnesota Department of
Education, and their responsible officials. Plaintiffs allege individual and “systemic”
violations of the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. §§
1400-1487; § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; and 42 U.S.C.
§ 1983. Ruling on multiple cross-motions, the district court entered an order:
• dismissing with prejudice all claims against the State defendants;
• dismissing with prejudice the § 504 claims and the § 1983 claims against the
School District defendants;
• dismissing without prejudice all IDEA claims against the school district
defendants that plaintiffs did not raise in their administrative hearings;
• severing plaintiffs’ remaining IDEA claims against the school district
defendants “into individual cases” and directing that each plaintiff refile
those claims “as a separate action naming as a Defendant only the School
District”;
• denying plaintiffs’ motion to certify a class; and
• denying defendants’ motion to dismiss various claims as time-barred.
Plaintiffs appeal the first five parts of this order. The school district defendants
note “some question” regarding our jurisdiction but urge us in any event to take up
their cross-appeal of the statute of limitations ruling. We conclude that the district
court’s severance order contains an ambiguity that affects whether the remainder of
the appeal is interlocutory. We construe the severance order as requiring separate
trials of consolidated actions, as authorized by Rule 42(b) of the Federal Rules of
Civil Procedure. That renders the court’s other rulings interlocutory, and we decline
to consider them, consistent with the final judgment principle.
1. With a few notable exceptions, our jurisdiction is limited to appeals from
“final decisions of the district courts.” 28 U.S.C. § 1291. Plaintiffs did not properly
invoke any of the recognized exceptions to the final judgment rule. They did not ask
the district court to certify a controlling issue of law for interlocutory appeal under
28 U.S.C. § 1292(b). See generally Consul Gen. of the Republic of Indon. ex rel.
Salom v. Bill’s Rentals, Inc., 251 F.3d 718, 720 (8th Cir. 2001). They did not ask the
court to enter final judgment on the dismissed claims with “an express determination
that there is no just reason for delay and upon an express direction for the entry of
judgment,” which authorizes an immediate appeal when only some parties or claims
are dismissed. See FED. R. CIV. P. 54(b); McCowan v. Dean Witter Reynolds Inc.,
889 F.2d 451, 453-54 (2d Cir. 1989). They did not seek timely permission from this
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court to appeal the denial of class certification. See FED. R. CIV. P. 23(f). Finally, the
district court’s order does not fall within the narrow, judicially created “collateral
order” doctrine, which permits interlocutory appeal of “decisions that are conclusive,
that resolve important questions separate from the merits, and that are effectively
unreviewable on appeal from the final judgment.” Cunningham v. Hamilton County,
527 U.S. 198, 204 (1999) (quotation omitted); see Coopers & Lybrand v. Livesay,
437 U.S. 463, 469 (1978) (holding that the denial of class certification is not an
appealable collateral order).
Our jurisdiction therefore turns on whether the district court’s order was a final
decision within the meaning of 28 U.S.C. § 1291. A district court’s decision is final
if it “ends the litigation on the merits and leaves nothing for the court to do but
execute the judgment.” Cunningham, 527 U.S. at 204 (quotation omitted). To be
final, an order or judgment must reflect “some clear and unequivocal manifestation
by the trial court of its belief that the decision made, so far as [the court] is concerned,
is the end of the case.” Goodwin v. United States, 67 F.3d 149, 151 (8th Cir. 1995)
(quotation omitted). For example, dismissal of a complaint “in its entirety” reflects
such a clear and unequivocal manifestation. Great Rivers Coop. of Southeastern Iowa
v. Farmland Indus., Inc., 198 F.3d 685, 689 (8th Cir. 1999). An order may be final
even if the district court has retained jurisdiction to perform ministerial tasks in the
future. See Powell v. Ga.-Pac. Corp., 90 F.3d 283, 284 (8th Cir. 1996). The party
seeking to appeal bears the burden of establishing our appellate jurisdiction. See
Porchia v. Norris, 251 F.3d 1196, 1198 (8th Cir. 2001).
Here, the district court’s order is not a “clear and unequivocal manifestation”
that it intended to end the case. The court expressly denied the school district
defendants’ motion to dismiss plaintiffs’ exhausted IDEA claims. To that extent, the
dismissal of other claims was the type of partial dismissal that is not immediately
appealable absent a Rule 54(b) determination or a 28 U.S.C. § 1292(b) certification.
However, the severance order complicates the finality inquiry. The court severed the
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exhausted claims of the nine named plaintiffs and directed them to refile those claims
in separate actions. Use of the word “refile” suggests an expectation that the
litigation will continue. But the Clerk of Court entered the operative provisions of
the district court’s order on a separate document entitled Judgment in a Civil Case.
This is evidence of finality, but the record does not reflect whether the court approved
the form of that judgment, as the Federal Rules require. See FED. R. CIV. P.
58(a)(2)(B)(ii).
Examining the inherent nature of a severance order does not resolve this
ambiguity. The Federal Rules grant a district court discretion either to order a
separate trial of any claim or issue, or to completely sever a claim so that it may
proceed separately. See FED. R. CIV. P. 42(b) and 21. For our purposes, the
distinction is critical. A separate trial order under Rule 42(b) is interlocutory and
non-appealable. See In re Lieb, 915 F.2d 180, 185 (5th Cir. 1990); Helene Curtis
Indus., Inc. v. Church & Dwight Co., 560 F.2d 1325, 1335 (7th Cir. 1977), cert.
denied, 434 U.S. 1070 (1978). On the other hand,
[s]everance under Rule 21 creates two separate actions or suits where
previously there was but one. Where a single claim is severed out of a
suit, it proceeds as a discrete, independent action, and a court may
render a final, appealable judgment in either one of the resulting two
actions notwithstanding the continued existence of unresolved claims in
the other. The presence of unresolved claims in the other action does
not of itself implicate Fed. R. Civ. P. 54(b), because that Rule applies
only where the unresolved claims are in the same action or suit.
United States v. O’Neil, 709 F.2d 361, 368 (5th Cir. 1983); see E.S. v. Indep. Sch.
Dist. No. 196, 135 F.3d 566, 568 (8th Cir. 1998). Thus, if the district court’s order
directing plaintiffs to refile their administratively exhausted claims against the school
district defendants effected a Rule 21 severance of those claims, and if all other
claims were dismissed in the same order, then the dismissal order would be final. The
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district court’s memorandum opinion did not clarify this point, and the parties have
not addressed it on appeal. In these circumstances, we at least have appellate
jurisdiction to construe the severance order.
2. Plaintiffs have appealed the severance order, arguing that all their claims
“unquestionably were appropriate to be raised in a single action” because they arise
out of the same series of transactions or occurrences. A district court’s decision to
sever claims into separate actions is reviewed for abuse of discretion. See Mosley v.
Gen. Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974).
The district court ordered the nine individual plaintiffs to refile their claims in
separate actions because these plaintiffs have “distinct disabilities and educational
needs,” they went through separate proceedings to exhaust their administrative
remedies, and joinder of these distinct claims in a single action “undoubtedly serves
to delay a resolution of the individual claims.” Without question, these are legitimate
concerns. But a complete severance disregards plaintiffs’ allegations of common or
“systemic” IDEA violations by the State and school district defendants.
As the district court recognized, a State’s department of education may in some
circumstances be liable for a local school district’s IDEA violation. See John T. v.
Iowa Dep’t of Educ., 258 F.3d 860, 864-65 (8th Cir. 2001). The court nonetheless
dismissed the claims against the State defendants in this case because those
defendants were not involved in the development of plaintiffs’ individual education
plans, were not involved in the individual administrative hearings, and are bound by
the hearing officers’ decisions. “In essence,” the court observed, “Plaintiffs’ claim
is that they collectively are dissatisfied with the decisions made by the hearing
officers.” Those are sound reasons to order that the individual exhausted claims
against the school district defendants be tried separately and first. But trials of those
individual claims may expose issues of systemic violation that would cause the
district court to reconsider its decision to dismiss plaintiffs’ claims against the State
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defendants in their entirety. Cf. Interstate Power Co. v. K.C. Power & Light Co., 992
F.2d 804, 808 (8th Cir. 1993).
In these circumstances, we conclude that the district court abused its discretion
to the extent that the Clerk’s judgment reflects a complete Rule 21 severing of the
individual plaintiffs’ exhausted claims against the school district defendants.
Therefore, we construe the severance order as a ruling under Rule 42(b) that these
individual claims must be tried separately and first.
3. With the severance order limited in this fashion, the remaining portions of
the order being appealed, including the statute of limitations ruling, are interlocutory
and therefore beyond our appellate jurisdiction at this stage of the proceedings. In the
future, as the named plaintiffs’ claims are separately tried and resolved, the district
court’s disposition of these individual claims may be appropriate for Rule 54(b)
determinations. But the district court’s dismissal of the State defendants and denial
of class certification, unless hereafter modified by that court, will not be ripe for
appeal until a final judgment has been rendered in the entire action. Although the
dismissal of the State defendants purports to be a final disposition of plaintiffs’
“systemic” claims, the non-final order “is subject to revision [by the district court] at
any time before the entry of judgment adjudicating all the claims and the rights and
liabilities of all the parties.” FED. R. CIV. P. 54(b); see United States v. State of Ark.,
791 F.2d 1573, 1576-77 (8th Cir. 1986); Persyn v. United States, 935 F.2d 69, 74-75
(5th Cir. 1991). While the overall proceeding may be lengthy, it is the product of the
way plaintiffs chose to structure their lawsuit combined with the “several salutary
purposes” underlying the final judgment rule. Cunningham, 527 U.S. at 203.
The order of the district court is modified, the Judgment in a Civil Case is
vacated, and the case is remanded for further proceedings not inconsistent with this
opinion. The parties will bear their own costs and attorneys’ fees for the appeals.
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