Melissia Henson v. Fidelity National Financial ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MELISSIA HENSON; KEITH TURNER, No. 18-56071
Plaintiffs-Appellants,
D.C. No.
v. CV 14-1240
ODW
FIDELITY NATIONAL FINANCIAL,
INC.,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Argued and Submitted June 10, 2019
Anchorage, Alaska
Filed November 15, 2019
Before: A. Wallace Tashima, William A. Fletcher,
and Marsha S. Berzon, Circuit Judges.
Opinion by Judge Tashima
2 HENSON V. FIDELITY NAT’L FINANCIAL
SUMMARY*
Motion for Relief from Judgment
The panel reversed the district court’s order denying
plaintiffs’ Fed. R. Civ. P. 60(b)(6) motion for relief from
judgment in an action under the Real Estate Settlement
Procedures Act.
Plaintiffs sought relief from judgment based on an
intervening change in the law in Microsoft Corp. v. Baker,
137 S. Ct. 1702 (2017) (holding that plaintiffs in putative
class actions cannot transform a tentative interlocutory order
into a final appealable judgment simply by dismissing their
claims with prejudice). The panel addressed the analysis that
courts should employ to guide their discretion when
evaluating the merits of a Rule 60(b)(6) motion on the ground
of an intervening change in the law in a non-habeas corpus
case. The panel held that many of the factors set out in
Phelps v. Alameida, 569 F.3d 1120 (9th Cir. 2009), a habeas
case, are relevant, but courts must consider all of the relevant
circumstances surrounding a specific motion.
The panel examined the district court’s analysis of the six
Phelps factors, including the nature of the change in the law,
plaintiffs’ diligence in pursuing relief, the parties’ reliance
interest in the finality of the case, the delay between the
judgment and the Rule 60(b) motion, the relationship between
the original judgment and the change in the law, and comity
concerns. The panel also examined additional considerations,
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
HENSON V. FIDELITY NAT’L FINANCIAL 3
such as the importance of heeding the intent of the rulings of
the federal appellate courts, how best to stay true to the
Supreme Court’s reasoning in Microsoft, and the negotiated
nature of the voluntary dismissal in this case. The panel
concluded that the district court’s denial of plaintiffs’ Rule
60(b)(6) motion was an abuse of discretion because it rested
upon an erroneous view of the law as to several significant
factors, and granting relief was appropriate. The panel
reversed and remanded with directions to grant the Rule
60(b)(6) motion and for further proceedings.
COUNSEL
Cyril V. Smith (argued), Zuckerman Spaeder LLP, Baltimore,
Maryland; Taras Kick and Robert J. Dart, The Kick Law Firm
APC, Los Angeles, California; for Plaintiffs-Appellants.
Michael J. Gleason (argued), Hahn Loeser & Parks LLP, San
San Diego, California, for Defendant-Appellee.
4 HENSON V. FIDELITY NAT’L FINANCIAL
OPINION
TASHIMA, Circuit Judge:
Federal Rule of Civil Procedure 60(b)(6) is a grand
reservoir of equitable power that allows courts to grant relief
from a final judgment for “any” reason that “justifies relief.”
Fed. R. Civ. P. 60(b)(6). In Phelps v. Alameida, 569 F.3d
1120, 1135–40 (9th Cir. 2009), we set out the analysis that
courts should employ to guide their discretion when
evaluating the merits of a Rule 60(b)(6) motion that seeks
relief from the dismissal of a habeas corpus petition on the
ground of an intervening change in the law. However, we
explicitly left open the question of whether the same Rule
60(b)(6) factors we identified in Phelps are also applicable
beyond the habeas corpus context. See id. at 1135 n.19.
Confronted with the appeal of a district court’s denial of a
Rule 60(b)(6) motion that was also predicated on an
intervening change in the law, but in a non-habeas case that
entails entirely different circumstances than did Phelps, we
now begin to answer that question. While we conclude that
many of the Phelps factors are relevant to the Rule 60(b)(6)
analysis in the present context, we reemphasize that courts
must consider all of the relevant circumstances surrounding
the specific motion before the court in order to ensure that
justice be done in light of all the facts. See id. at 1133.
I
On September 9, 2013, Plaintiffs-Appellants Melissia
Henson and Keith Turner (collectively “Plaintiffs”), two
individuals who participated in separate real estate
transactions, filed this putative class action lawsuit against
Defendant-Appellee Fidelity National Financial, Inc.
HENSON V. FIDELITY NAT’L FINANCIAL 5
(“Fidelity”). Plaintiffs claimed that Fidelity’s practice of
receiving payments from three overnight delivery vendors, in
exchange for referring document delivery business to those
vendors in connection with the settlement of federally related
mortgage loans, violated §§ 8(a) and 8(b) of the Real Estate
Settlement Procedures Act (“RESPA”), Pub. L. No. 93-533,
88 Stat. 1724, 12 U.S.C. § 2607.
Fidelity moved to dismiss the complaint, and the district
court granted the motion as to all claims except for Turner’s
claim under RESPA § 8(a). The district court dismissed all
of Henson’s claims on statute of limitations grounds, and also
dismissed with prejudice both Henson’s and Turner’s claims
under RESPA § 8(b) for failure to state a claim. After filing
an answer, Fidelity moved for judgment on the pleadings with
respect to Turner’s remaining claim under RESPA § 8(a), but
the district court denied that motion.
Turner subsequently moved for class certification. A
week later, Turner moved in the alternative to continue the
hearing on class certification in order to allow discovery on
class certification issues. The district court denied both the
discovery and class certification motions, finding that class
member-specific questions would predominate over any
class-wide inquiries.
Plaintiffs then entered into a detailed, negotiated
stipulation of dismissal with Fidelity. Relying on Ninth
Circuit precedent that permitted a plaintiff to obtain appellate
review of certain interlocutory orders, including an order
denying class certification, by dismissing any active claims
with prejudice, Plaintiffs agreed to voluntarily dismiss the
case with prejudice so that they could appeal both the district
court’s denial of class certification and the partial grant of the
6 HENSON V. FIDELITY NAT’L FINANCIAL
motion to dismiss. See Omstead v. Dell, Inc., 594 F.3d 1081,
1085 (9th Cir. 2010) (“[A] plaintiff that deems an
interlocutory ruling to be so prejudicial as to deserve
immediate review . . . has the alternative of dismissing the
complaint voluntarily with prejudice.” ) (citation omitted);
see also Berger v. Home Depot USA, Inc., 741 F.3d 1061,
1065 (9th Cir. 2014) (“[A] dismissal of an action with
prejudice, even when such dismissal is the product of a
stipulation, is a sufficiently adverse—and thus
appealable—final decision.”). The stipulation provided:
Plaintiffs Keith Turner and Melissia
Henson and Defendant Fidelity National
Financial, Inc., through their undersigned
counsel, hereby stipulate to request dismissal
of the above-captioned case with prejudice
pursuant to Federal Rule of Civil Procedure
41(a)(2), and further stipulate that:
The parties understand that plaintiffs
Turner and Henson will file an appeal to the
dismissal in order to appeal certain of the
Court’s orders, including its order denying
class certification and its order granting (in
part) defendant’s motion to dismiss. See
Omstead v. Dell, Inc., 594 F.3d 1081, 1085
(9th Cir. 2010). If the orders appealed are
affirmed, plaintiffs will take nothing by way
of their complaint. By stipulating to this
dismissal, [Fidelity] does not agree that such
a dismissal establishes appellate jurisdiction
and does not waive its ability to challenge
appellate jurisdiction.
HENSON V. FIDELITY NAT’L FINANCIAL 7
The parties stipulate that by Plaintiffs
voluntarily dismissing their claims with
prejudice, the Court’s April 29, 2014 order on
Defendant’s Motion for Judgment on the
Pleadings is not a final judgment and shall not
provide a basis for collateral estoppel against
Defendant in subsequent litigation.
Plaintiffs agree to reimburse [Fidelity]
$837.96 for certain costs that it has incurred in
this action through the date of the filing of this
stipulation . . . .
It is further agreed that if Plaintiffs or
Plaintiffs’ counsel should re-file the claims at
issue in this lawsuit or file a different lawsuit
based on the same claims and conduct on
behalf of a different Plaintiff(s), any such
claims will be filed in the District Court for
the Central District of California.
The district court entered the parties’ proposed order and
dismissed the complaint with prejudice on the terms provided
in the stipulation. Henson and Turner then timely filed
separate notices of appeal from the final dismissal order.
Both notices of appeal specifically identified the order
granting in part Fidelity’s motion to dismiss (as to Henson’s
claims and the RESPA § 8(b) claims), and the order denying
class certification, as orders included in the final judgment to
be reviewed on appeal.
After Henson’s and Turner’s appeals were fully briefed,
but before they were calendared for oral argument, the cases
were stayed pending the United States Supreme Court’s
8 HENSON V. FIDELITY NAT’L FINANCIAL
decision in Microsoft Corp. v. Baker, because that case
appeared poised to address some of the appellate jurisdiction
questions raised by Fidelity in Henson’s and Turner’s
appeals. In Microsoft, the district court had similarly granted
a stipulated motion to dismiss with prejudice. The parties had
entered into the stipulation so that the plaintiffs could seek
immediate appeal of the district court’s earlier order striking
consumers’ class allegations. See Microsoft Corp. v. Baker,
137 S. Ct. 1702, 1706–07, 1711–12 (2017). Under the
stipulation, the plaintiffs had “reserved the right to revive
their claims should the Court of Appeals reverse the District
Court’s certification denial.” Id. at 1707. On appeal,
however, Microsoft had challenged appellate jurisdiction,
arguing that the voluntary dismissal could not support
appellate review of the district court’s interlocutory order
striking class allegations. Id. at 1711. The Ninth Circuit
rejected Microsoft’s argument, holding that it had jurisdiction
to entertain the appeal under 28 U.S.C. § 1291. Id.
at 1711–12.
On June 12, 2017, nearly three years after Plaintiffs had
filed their stipulated voluntary dismissal, the Supreme Court
issued its decision in Microsoft. The Court held that
“[p]laintiffs in putative class actions cannot transform a
tentative interlocutory order into a final judgment within the
meaning of § 1291 simply by dismissing their claims with
prejudice—subject, no less, to the right to ‘revive’ those
claims if the denial of class certification is reversed on
appeal.” Id. at 1715 (citations omitted). The Court explained
that the tactic of using a stipulated voluntary dismissal to seek
immediate review of an order denying class certification
“undermine[s] § 1291’s firm finality principle” and subverts
Federal Rule of Civil Procedure 23(f), which gives appellate
courts discretion to choose whether to permit immediate
HENSON V. FIDELITY NAT’L FINANCIAL 9
appeals of interlocutory class certification orders. See id.
at 1707, 1712–15. In so holding, the Supreme Court reversed
the Ninth Circuit’s rule—on which Henson and Turner had
relied—that a stipulated voluntary dismissal of a class action
was a sufficiently adverse final order, as long as the
individual plaintiffs’ cases had not settled, to give rise to
appellate jurisdiction to review a district court’s denial of
class certification. See Baker v. Microsoft Corp., 797 F.3d
607, 612 (9th Cir. 2015); see also Berger, 741 F.3d at 1065.
In light of Microsoft, Fidelity moved to dismiss both
Henson’s and Turner’s appeals. Fidelity argued that the
Supreme Court’s rule in Microsoft applied directly and
deprived the Ninth Circuit of jurisdiction over Turner’s
appeal from the denial of class certification. And Fidelity
suggested that the Ninth Circuit also lacked jurisdiction to
hear Henson’s appeal from the district court’s dismissal order
because the Supreme Court’s rule in Microsoft applied
beyond the class certification context and meant that a
voluntary dismissal could never constitute a final order under
§ 1291.
In response, Plaintiffs argued that their case was factually
distinguishable from Microsoft because, before the stipulated
voluntary dismissal of the single remaining claim, the district
court had already involuntarily dismissed all of Henson’s
claims and one of Turner’s claims. Plaintiffs maintained that
the Ninth Circuit had jurisdiction over their appeals because
Microsoft did not overrule cases from “[e]very circuit
permit[ting] a plaintiff, in at least some circumstances,
voluntarily to dismiss remaining claims or remaining parties
from an action to conclude the whole case in the district court
and ready it for appeal.”
10 HENSON V. FIDELITY NAT’L FINANCIAL
A Ninth Circuit motions panel subsequently entered
identical orders in Henson’s and Turner’s appeals, denying
Fidelity’s motions to dismiss and remanding to the district
court. The orders stated:
Appellee’s motion to dismiss this appeal . . .
is denied. In light of the Supreme Court of
the United States’ decision in Microsoft Corp.
v. Baker, the court sua sponte remands this
case to allow the parties to seek appropriate
relief in the district court in the first instance.
See Microsoft Corp. v. Baker, 137 S. Ct. 1702,
1715 (2017).1
On remand, Fidelity refused to stipulate that the case
should proceed before the district court on Turner’s RESPA
§ 8(a) claim, which had survived Fidelity’s motion to dismiss
and motion for judgment on the pleadings, but which had
been voluntarily dismissed pursuant to the stipulation. As a
result, Plaintiffs moved to vacate the prior dismissal pursuant
to Federal Rule of Civil Procedure 60(b)(6).
In their Rule 60(b) motion, Plaintiffs argued that their
circumstances, including Microsoft’s intervening change in
the law, entitled them to relief from judgment under the
factors set out in Phelps, 569 F.3d at 1135–40, which
addressed Rule 60(b)(6) relief in light of an intervening
change in the law. In addition, Henson argued that even if the
1
The Supreme Court in Microsoft had also remanded the case “for
further proceedings consistent with this opinion.” Microsoft, 137 S. Ct.
at 1715; see also Baker v. Microsoft Corp., 884 F.3d 811, 812 (9th Cir.
2018) (remanding to the district court “for further proceedings consistent
with the opinion of the Supreme Court”).
HENSON V. FIDELITY NAT’L FINANCIAL 11
district court declined to vacate the dismissal order and revive
the entire case, it should nonetheless grant her more limited
relief by entering a new final judgment from which she could
appeal the court’s earlier involuntary dismissal of her claims,
because the Ninth Circuit had not addressed the merits of her
prior appeal and it would be manifestly unjust under the
circumstances to nullify her right to appeal altogether.
The district court denied the Rule 60(b) motion.
Applying the Phelps framework to the intervening change of
law argument, the district court ruled that the six factors set
out in Phelps did not warrant relief. The district court did not
address Henson’s separate argument that denying her relief
from judgment would have the effect of unfairly nullifying
her right to appeal the district court’s earlier involuntary
dismissal of her claims. Plaintiffs timely appealed.
II
We have jurisdiction under 28 U.S.C. § 1291, and we
review the denial of a motion for relief from judgment under
Rule 60(b) for an abuse of discretion. Phelps, 569 F.3d at
1131. “[T]he district court necessarily abused its discretion
if its denial ‘rested upon an erroneous view of the law,’” id.
(quoting Faile v. Upjohn Co., 988 F.2d 985, 986–87 (9th Cir.
1993)), or on a “clearly erroneous finding of material fact,”
Casey v. Albertson’s, Inc., 362 F.3d 1254, 1257 (9th Cir.
2004). Otherwise, we may not reverse “absent a definite and
firm conviction that the district court committed a clear error
of judgment in the conclusion it reached upon a weighing of
relevant factors.” Valdivia v. Schwarzenegger, 599 F.3d 984,
988 (9th Cir. 2010).
12 HENSON V. FIDELITY NAT’L FINANCIAL
III
Rule 60(b)(6) provides that, “[o]n motion and just terms,
the court may relieve a party or its legal representative from
a final judgment, order, or proceeding for . . . any . . . reason
that justifies relief.”2 Fed. R. Civ. P. 60(b)(6). This clause
“gives the district court power to vacate judgments ‘whenever
such action is appropriate to accomplish justice.’” United
States v. Sparks, 685 F.2d 1128, 1130 (9th Cir. 1982)
(quoting Klapprott v. United States, 335 U.S. 601, 615
(1949)); see also Fleming v. Gulf Oil Corp., 547 F.2d 908,
912 (10th Cir. 1977) (explaining that Klapprott, 335 U.S.
at 614, shows that, “[l]ike Rule 60(b) generally, clause
(6) should be liberally applied to situations not covered by the
preceding five clauses so that, giving due regard to the sound
interest underlying the finality of judgments, the district
court, nevertheless, has power to grant relief from a judgment
whenever, under all the surrounding circumstances, such
action is appropriate in the furtherance of justice” (quoting
7 Moore’s Federal Practice at 342–43 (2d ed. 1975))).
However, “[a] movant seeking relief under Rule 60(b)(6)
must show ‘“extraordinary circumstances” justifying the
reopening of a final judgment.’” Jones v. Ryan, 733 F.3d
825, 833 (9th Cir. 2013) (quoting Gonzalez v. Crosby,
545 U.S. 524, 535 (2005)).
Plaintiffs argue that the effect on their case of Microsoft’s
intervening change in the law presents extraordinary
circumstances warranting relief. They point to the fact that
2
As relevant here, a voluntary dismissal qualifies as a “judgment,
order, or proceeding from which Rule 60(b) relief can be granted.” Kalt
v. Hunter (In re Hunter), 66 F.3d 1002, 1004 (9th Cir. 1995) (citations
omitted).
HENSON V. FIDELITY NAT’L FINANCIAL 13
Microsoft’s intervening change in the law caused the Ninth
Circuit to remand rather than address the merits of their
appeals, and that denying relief from judgment would
therefore convert the stipulation—entered into three years
before Microsoft and “intended to be a conditional dismissal
(to allow appellate review)”—into an “irrevocable” dismissal
without any opportunity for appellate review on the merits.3
In other words, denying Rule 60(b) relief would treat the
voluntary dismissal, which was intended to facilitate
appellate review, as a final adjudication of the entire case,
even though there had been and was to be no appellate review
3
Plaintiffs argued in the district court that these circumstances are all
the more extraordinary because of their timing. They explained:
The appeal had been fully briefed before the Ninth
Circuit months before the Supreme Court granted
certiorari in Microsoft. The timing of the Supreme
Court’s ruling in Microsoft deprived the Ninth Circuit
of jurisdiction over Plaintiffs’ appeal at the absolute
worst time. Had it been issued earlier, Plaintiffs would
have never agreed to dismiss their claims. Later, and
Plaintiffs’ appeal of the District Court’s denial of class
certification would have been resolved on the merits.
Instead, Plaintiffs were caught in a small window of
time, with their appeal pending, where the abrogation
of Omstead, Berger, and Baker threatens to deny them
their right to appeal the Court’s rulings altogether. In
other words, the intervening change in law, and the
timing of that change, have worked together to
threaten truly catastrophic damage to Plaintiffs’
claims—leaving Plaintiffs deprived of their right to
appeal the class certification ruling altogether, as well
as depriving Plaintiff Henson of her right to appeal the
District Court’s order dismissing all of her claims based
upon the statute of limitations. This is exactly the sort
of “extraordinary circumstance” warranting relief under
Rule 60(b)(6).
14 HENSON V. FIDELITY NAT’L FINANCIAL
of the issues the district court had decided, then or later.
Doing so would end the case in a manner that deprives
Plaintiffs of any opportunity to obtain appellate review of the
district court’s earlier dismissal and class certification orders,
because Plaintiffs’ time to appeal the original judgment has
run, and an appeal from the denial of a Rule 60(b) motion
brings up for review only the denial of that motion, but not
the underlying judgment.4 See Fed. R. App. P. 4(a)(1)(A);
Harman v. Harper, 7 F.3d 1455, 1458 (9th Cir. 1993).
Plaintiffs therefore contend that Microsoft’s change in the law
provides a basis under Rule 60(b)(6) for vacating the
voluntary dismissal order.
We have previously recognized that a change in the
controlling law can— but does not always—provide a
sufficient basis for granting relief under Rule 60(b)(6). See
Phelps, 569 F.3d at 1132–33. To assess a Rule 60(b)(6)
motion “predicated on an intervening change in the law,” a
district court must “evaluate the circumstances surrounding
the specific motion before the court.” Id. at 1133. This
“case-by-case inquiry . . . requires the trial court to
intensively balance numerous factors, including the
competing policies of the finality of judgments and the
incessant command of the court’s conscience that justice be
done in light of all the facts.” Id. (quoting Stokes v. Williams,
475 F.3d 732, 736 (6th Cir. 2007)).
In Phelps, in the context of a Rule 60(b) motion that
sought relief from the dismissal of a habeas petition on the
4
The Federal Rules provide an exception to this rule by extending the
time to appeal from the judgment if the Rule 60 motion is filed within
28 days of entry of judgment, but that exception does not apply here. See
Fed. R. App. P. 4(a)(4)(A)(vi).
HENSON V. FIDELITY NAT’L FINANCIAL 15
basis of a change in the law, we identified six factors as being
“well-reasoned principles that should guide courts in
exercising their discretion under Rule 60(b)(6).” Id. at 1140.
We cautioned, however, that our discussion of those factors
was not meant to “impose a rigid or exhaustive checklist,”
because “‘Rule 60(b)(6) is a grand reservoir of equitable
power,’ and it affords courts the discretion and power ‘to
vacate judgments whenever such action is appropriate to
accomplish justice.’” Id. at 1135 (first quoting Harrell v.
DCS Equip. Leasing Corp., 951 F.2d 1453, 1458 (5th Cir.
1992); then quoting Gonzalez, 545 U.S. at 542). Moreover,
we noted that “while some of the factors we emphasize here
may be useful in contexts other than the one before us, we
express no opinion on their applicability vel non beyond the
scope of habeas corpus.” Id. at 1135 n.19 (italics omitted);
see also Jones, 733 F.3d at 839 (“[The Phelps] factors are
particularly useful when, as here, we are asked to apply Rule
60(b)(6) to a rejected petition for habeas corpus.”).
The district court here nevertheless analyzed the six
Phelps factors, and only those factors, in the instant non-
habeas context to determine whether the circumstances of this
case, including the change in the controlling law effected by
Microsoft, were sufficiently extraordinary to warrant relief
under Rule 60(b)(6). Weighing all those “relevant” factors
together, the district court “conclude[d] that the
circumstances d[id] not warrant relief pursuant to Rule
60(b)(6).”
Plaintiffs argue on appeal that the district court’s denial
of Rule 60(b)(6) relief constituted an abuse of discretion.
They contend that the district court erred in its analysis of the
Phelps change-in-the-law factors by assuming that Plaintiffs
were at fault for their predicament, and therefore by “[giving]
16 HENSON V. FIDELITY NAT’L FINANCIAL
no weight to, or even count[ing] against them, [Plaintiffs’]
legitimate reliance on the settled law of this Circuit and [the
Ninth Circuit’s] decision to remand rather than to dismiss the
appeals.” According to Plaintiffs, the district court’s flawed
assumption—contrary to the terms of the parties’
stipulation—that Fidelity was entitled to rely on the finality
of the judgment, based on the expectation that Ninth Circuit
precedent would be overruled, tainted the district court’s
analysis of three of the six Phelps factors.5
To determine whether the district court abused its
discretion and to demonstrate the case-by-case inquiry
required by Rule 60(b)(6), we examine the district court’s
analysis of each of the Phelps factors sereatim. In doing so,
we address the question left open by Phelps: the extent to
which, and in what manner, those factors may be relevant to
assessing a Rule 60(b)(6) motion in a non-habeas context.
Relatedly, we also highlight additional considerations, such
as the import of Microsoft’s reasoning and the parties’
stipulation, that are not addressed by the Phelps factors, but
that nonetheless are relevant to the Rule 60(b)(6)
determination in this case. See Phelps, 569 F.3d at 1133
(directing that courts evaluate all the circumstances
5
Henson also argues that, as to her specifically, the district court
abused its discretion by denying her relief from judgment without
addressing her argument that denying relief would have the effect of
stripping her of the right to appeal the court’s earlier involuntary dismissal
of her claims, notwithstanding the fact that she had timely appealed to the
Ninth Circuit and found herself in this unusual procedural posture through
no fault of her own simply because her appeal of the dismissal order
became entangled with Turner’s appeal of the class certification denial.
This argument may well have merit, but because the change-in-law
argument is dispositive as to both Henson and Turner, we need not address
it.
HENSON V. FIDELITY NAT’L FINANCIAL 17
surrounding the specific Rule 60(b)(6) motion before the
court). We note that particularly where, as here, a district
court is faced with applying our previously-discussed Rule
60(b)(6) factors in an entirely new context, the court should
assess how that different context might alter the calculus of
the factors’ application, and whether those factors adequately
capture all of the relevant circumstances. As we emphasized
in Phelps, the factors identified in that case were not intended
to be a rigid or exhaustive list; a court’s ultimate charge in
evaluating a Rule 60(b)(6) motion remains to “intensively
balance” all the relevant factors, “including the competing
policies of the finality of judgments and the incessant
command of the court’s conscience that justice be done in
light of all the facts.” See id. at 1133, 1135.
1. The Change in the Law
The first Phelps factor considers the nature of the
intervening change in the law. See id. at 1135–36; see also
Jones, 733 F.3d at 839. For example, in Phelps we had to
decide whether to grant relief from dismissal of a habeas
petition where, fifteen months after the petitioner’s
unsuccessful appeal of the dismissal became final, the Ninth
Circuit favorably changed the law on which the petition’s
dismissal had been predicated. 569 F.3d at 1126–27, 1131.
We determined that the post-judgment “change in the law . . .
did not upset or overturn a settled legal principle” because
“the law in our circuit was decidedly unsettled at the time
Phelps’ habeas petition was before the district court.” Id. at
1136 (italics omitted). We concluded that this circumstance
favored granting relief, because it meant that the dismissal of
Phelps’ petition had not been based on a “prevailing
interpretation” of the relevant statute, and in fact the change
in the law adopted the legal position that Phelps had
18 HENSON V. FIDELITY NAT’L FINANCIAL
unsuccessfully advocated all along in his habeas proceedings.
See id.
We see no reason why such equitable considerations
related to the nature of the change in the law would not also
be relevant to assessing whether Rule 60(b)(6) relief is
warranted in a non-habeas context. We note, however, that
the circumstances of the instant case are nearly the opposite
of those considered in Phelps. Rather than seeking the
benefit of a favorable change in the law as Phelps did,
Plaintiffs here seek relief from an unfavorable change in the
law that Plaintiffs claim has “the disastrous and
fundamentally unjust consequence” of leaving them with the
burdens of the parties’ negotiated stipulation, but none of the
benefits. Because of these contrasting circumstances, the
nature of a change in the law that may equitably weigh in
favor of granting Rule 60(b)(6) relief here is likely to be
different than it was in Phelps. For example, while the fact
that the relevant Ninth Circuit law was “decidedly unsettled”
cut in favor of relief in Phelps, here the fact that the relevant
Ninth Circuit law was relatively settled may cut in favor of
relief because it makes Plaintiffs’ reliance on that law more
reasonable.
Thus, while we conclude that the change in the law factor
is also applicable in non-habeas cases, we note that courts
considering this factor should not in rote fashion rely on the
conclusion from a different context that any particular type of
change in the law favors or disfavors relief. Instead, a district
court should weigh whether the specific nature of the change
in the law in the case before it makes granting relief more or
less justified under all of the circumstances, and should
support its conclusion with a reasoned explanation grounded
in the equitable considerations raised by the case at bench.
HENSON V. FIDELITY NAT’L FINANCIAL 19
Here, the district court concluded that the nature of
Microsoft’s change in the law—namely, overruling precedent,
on which Plaintiffs had relied, that was settled in the Ninth
Circuit but not nationwide—weighed “slightly against”
granting Rule 60(b) relief, because Fidelity had warned that
it would challenge appellate jurisdiction, meaning that
Plaintiffs were apprised of the risk of an adverse decision, but
still chose to voluntarily dismiss their case. The district court
further pointed out that the circumstances of the change in the
law were “hardly extraordinary” because the change involved
a resolution of a circuit split by the Supreme Court. Plaintiffs
challenge the district court’s weighing of this factor, arguing
that they were entitled to rely on then-settled circuit
precedent, and that the district court therefore abused its
discretion by treating the voluntary dismissal as a reckless
gamble for which Plaintiffs should suffer the consequences
despite their reasonable reliance on settled circuit law.
We hold that the district court’s conclusion was an abuse
of discretion, as this factor was more properly viewed as
neutral or slightly favoring Plaintiffs. It was not
unreasonable for the district court to consider the extent to
which Plaintiffs took a knowing and calculated risk by
relying on Circuit precedent to voluntarily dismiss their case
with prejudice, but the district court overlooked important
competing considerations in reaching its evaluation.
On the one hand, unlike cases such as Phelps in which the
court must decide whether to reopen a case to grant the
benefit of a favorable change in the law, here the court had to
assess whether to grant relief in the context of an unfavorable
change in the law that seemingly prejudiced Plaintiffs by
altering the intended effect of their previously-negotiated
20 HENSON V. FIDELITY NAT’L FINANCIAL
stipulation.6 Because granting relief from judgment under
Rule 60(b)(6) is largely an equitable decision, it makes sense
to consider whether Plaintiffs were blindsided by the change
in law and could not have done anything to avoid its
prejudicial effect, or whether the predicament they face is the
result of their knowingly taking a calculated risk for which
they should be held responsible.
To illustrate, analyzing whether Plaintiffs, equitably,
should suffer the consequences of the unfavorable change in
the law might reasonably involve considering:
(1) the extent to which the precedent upon which Henson and
Turner relied was settled in the Circuit, which would
make the reliance more reasonable (favors Plaintiffs
because there was clear Circuit precedent);
(2) the extent to which Henson and Turner should have
known that the law might change in an unfavorable way
(neutral or slightly favors Plaintiffs because the Supreme
Court had not yet even granted certiorari in Microsoft,
and Plaintiffs reasonably relied on well-established Ninth
Circuit law. Compare Omstead, 594 F.3d at 1085;
Berger, 741 F.3d at 1065, with Microsoft Corp. v. Baker,
135 S. Ct. 890 (2016) (granting petition for a writ of
certiorari));
6
In their briefing, Plaintiffs assert that this case presents “a question
of correcting the manifest injustice in enforcing the dismissal term of a
stipulation when the application of a change in the law to a pending appeal
has invalidated the essence of the agreement on which the judgment of
dismissal is based.”
HENSON V. FIDELITY NAT’L FINANCIAL 21
(3) the nature of the risk Henson and Turner knowingly took
(slightly favors Plaintiffs because even if Henson and
Turner knew that they risked an adverse decision
regarding their early appeal if Fidelity succeeded in
challenging appellate jurisdiction, that does not mean
they knowingly risked permanent finality. Fidelity did
not state that its position would be that the case was
entirely over if there was no appellate jurisdiction; the
only understanding incorporated in the stipulation was
that finality depended on losing the appeal on the merits;
(4) the extent to which Plaintiffs were forced to rely on the
precedent and put themselves in a precarious situation for
lack of other reasonable options that would have avoided
the risk (favors Fidelity because Plaintiffs had a choice
about which procedure to use: entering a voluntary
dismissal, petitioning the district court to certify the
interlocutory order for appeal pursuant to 28 U.S.C.
§ 1292(b), requesting permission to file an interlocutory
appeal under Federal Rule of Civil Procedure 23(f), or
proceeding on Turner’s individual claim and again
requesting class certification at a later stage,7 see
Microsoft, 137 S. Ct. at 1711); and
7
This array of available choices distinguishes this case from United
States v. Foster, 783 F.2d 1082 (D.C. Cir. 1986), on which Plaintiffs rely
for their argument that a litigant is justified in relying on existing circuit
precedent “even when it is subjected to criticism and (in retrospect)
destined to be overturned.” In Foster, the court decided to apply a change
in a criminal procedure rule only prospectively, because the criminal
defendant’s reliance on the previously settled circuit law was not only
“reasonable,” but “the only responsible course,” such that it would be
unfair to “change the ground rules after the trial.” Id. at 1086 (emphasis
added).
22 HENSON V. FIDELITY NAT’L FINANCIAL
(5) the extent to which the circumstances surrounding the
change in law were extraordinary (perhaps neutral or
slightly favors Plaintiffs, because although the timing of
Microsoft was somewhat extraordinary in its effect on
this case, cf. Phelps, 560 F.3d at 1127 (noting that if the
intervening change in the law had been made “a few
months earlier,” the habeas petition at issue “would have
been remanded to the district court for a decision on the
merits”), Microsoft was an otherwise routine Supreme
Court decision resolving an open circuit split).
In light of these relevant considerations, the district court
properly determined that the nature of the change in the
law—the abrogation of settled Ninth Circuit precedent by the
Supreme Court’s resolution of a circuit split—meant that
Plaintiffs knowingly accepted some risk of an unfavorable
change in the law.
On the other hand, the district court failed to factor in the
consideration that litigants are entitled to rely on well-
established circuit law as to which, at the time of reliance,
there was no case pending in the Supreme Court either on a
petition for writ of certiorari or on the merits. Although there
is always the possibility that a well-established rule of this
court will be abrogated by the Supreme Court, it is not in this
Court’s institutional interest, or that of the litigants before it,
to fault lawyers who proceed on the basis that an established
procedural rule will remain intact, absent some tangible
indication (such as a pending Supreme Court case) that it may
not. Additionally, the district court should have considered
the specific risk that Plaintiffs knowingly undertook. There
is a difference between risking an adverse decision on the
issue of appellate jurisdiction and the opportunity for an early
appeal, and knowingly risking permanent finality. Weighing
HENSON V. FIDELITY NAT’L FINANCIAL 23
the relevant considerations outlined above, the change-in-the-
law factor is neutral or slightly favors granting Rule 60(b)
relief. It was an abuse of discretion for the district court to
conclude otherwise.
2. Plaintiffs’ Diligence In Pursuing Relief
The second Phelps factor is the petitioner’s exercise of
diligence in pursuing his claim for relief. See Phelps,
569 F.3d at 1135–36; see also Jones, 733 F.3d at 839. In
Phelps, we concluded that the petitioner was diligent because
he had pursued “all possible avenues” in advocating for his
legal position, including securing a certificate of
appealability, filing petitions for rehearing en banc and
certiorari, and filing motions for reconsideration. See Phelps,
569 F.3d at 1136–37. Here, the district court concluded that,
although Plaintiffs were diligent in requesting relief from
judgment on remand, the diligence factor was neutral because
Plaintiffs did not initially seek reconsideration of the class
certification denial, or request that the district court certify an
interlocutory appeal, before they proceeded to voluntarily
dismiss their case. In reaching this conclusion, the district
court adopted Fidelity’s interpretation that the diligence
factor pertained to “Plaintiffs’ diligence (or lack thereof) in
pursuing relief over the entire course of this litigation.”
Plaintiffs challenge this interpretation, maintaining that their
earlier strategic decision to voluntarily dismiss “has nothing
to do with the diligence factor,” and that the district court
therefore again inappropriately penalized them for relying on
settled circuit precedent when they opted to voluntarily
dismiss their case.
Once again, the different circumstances in this case as
compared to Phelps affect the application and relevance of
24 HENSON V. FIDELITY NAT’L FINANCIAL
the instant factor. In Phelps, because the petitioner sought the
benefit of a favorable change in the law, the fact that the
petitioner had been diligent in advancing the legal position
that was ultimately adopted by that change in the law was
relevant to the equitable considerations implicated by a Rule
60(b)(6) motion. See id.; see also Gonzalez, 545 U.S.
at 537–38 (considering diligence in terms of petitioner’s
efforts to pursue review of the legal issue on which he later
requested relief). Here, however, Plaintiffs of course were
not advocating for Microsoft’s unfavorable change in the law,
and thus the factor does not quite have the same pertinence.
Perhaps the corollary consideration in this context is
Plaintiffs’ diligence in attempting to avoid or mitigate the risk
of the unfavorable change in the law from which they now
seek relief. From that perspective, it was not entirely
unreasonable under the circumstances for the district court to
consider not only Plaintiffs’ diligence in moving for relief
from judgment, but also their failure to seek reconsideration
of the class certification denial or request that the district
court certify an interlocutory appeal before choosing to
voluntarily dismiss their case.8 On the other hand, unlike in
Phelps, a motion for reconsideration or for certification of an
interlocutory appeal would not have directly addressed the
area of law that was later changed by Microsoft.
Furthermore, it may be the case that Plaintiffs did not pursue
those other avenues because they did not believe they had a
8
We disagree, however, with the district court’s broad phrasing that
Plaintiffs’ general diligence over the entire course of the litigation is
necessarily relevant to the Rule 60(b)(6) determination. Although the
Phelps court discussed a lengthy timeline of events in considering Phelps’
diligence, all of those events related to the legal basis on which Phelps
later sought relief from judgment. See Phelps, 569 F.3d at 1136–37.
Thus, the diligence to be considered should bear a relationship to the relief
requested in the Rule 60(b)(6) motion.
HENSON V. FIDELITY NAT’L FINANCIAL 25
sufficient basis to file such motions; courts should be cautious
to count against a party seeking Rule 60(b)(6) relief the
failure to file certain motions, unless the court can determine
that filing such a motion would not have been an utter
exercise in futility.
Thus, while the district court did not abuse its discretion
in assessing the diligence factor and concluding that it was
neutral, we note that under the circumstances the factor
appears to be less salient to the overall Rule 60(b)(6)
equitable balancing than it was in Phelps.
3. Reliance Interest in the Finality of the Case
The third factor we considered in Phelps is whether
granting the Rule 60(b) motion for relief from judgment
would upset “the parties’ reliance interest in the finality of the
case.” Phelps, 569 F.3d at 1137; see also Jones, 733 F.3d at
839–40. In this case, the district court concluded that the
parties’ interest in finality weighed against granting relief
because there could be “no question . . . of the parties’
intention regarding finality in entering into the stipulation to
dismiss this case.” Plaintiffs challenge this conclusion,
arguing that Fidelity had no reliance interest in the finality of
the stipulation-based judgment because the stipulation
explicitly contemplated the potential for subsequent litigation,
and stated that Plaintiffs would take nothing only if both of
the appealed district court orders were affirmed, which never
happened.
We agree with Plaintiffs and hold that the district court
misconstrued this factor and overvalued Fidelity’s reliance
interest in the finality of the judgment. First, the district court
only considered Fidelity’s abstract interest in finality, but not,
26 HENSON V. FIDELITY NAT’L FINANCIAL
as Phelps instructed, whether Fidelity had any reliance
interest in the finality of the judgment. In Phelps, we
explained that courts should consider whether “the final
judgment being challenged has caused one or more of the
parties to change his legal position in reliance on that
judgment” such that granting the motion for relief would
“undo the past, executed effects of the judgment.” Phelps,
569 F.3d at 1137–38 (citation omitted). For example, a party
might have a reliance interest in the finality of a judgment
“when a judgment conveys land from one party to another
and the prevailing party ‘enter[s] upon the land and install[s]
pipes and appurtenances,’” or “when a judgment affords a
federal habeas petitioner a new trial that results in the
eventual dismissal of the charges and his release from
custody.” Id. (alterations in original) (italics omitted)
(quoting Ritter v. Smith, 811 F.2d 1398, 1401 (11th Cir.
1987)). Here, however, there is no evidence that Fidelity
“has relied in such a fashion on the finality of the district
court’s dismissal.” Id. at 1138. As in Phelps, “[t]here are no
‘past effects’ of the judgment that would be disturbed if the
case were reopened for consideration of the merits . . . .
Instead, the parties would simply pick up where they left off.”
Id. Thus, as in Phelps, this factor should “weigh[] heavily in
[Plaintiffs’] favor.” Id.
Furthermore, the finality interest in this case is even
weaker than that in Phelps because, here, Plaintiffs’ appeal
had not been finally decided before Microsoft changed the
law. See id. at 1126 (explaining that Phelps’ appeal had
become final fifteen months before the change in the law that
prompted his Rule 60(b)(6) motion). Because the present
case was still pending on appeal when Microsoft was decided,
and was then remanded to the district court for further
proceedings, Fidelity could not reasonably have believed that
HENSON V. FIDELITY NAT’L FINANCIAL 27
the dismissal was immutably final. Moreover, the dismissal
itself belies any reliance interest in finality, because the
dismissal was explicitly linked to an attempt to expedite the
appeal. The parties’ stipulation contemplated that Plaintiffs’
claims would be revived and that litigation would continue in
the district court if the Ninth Circuit reversed either or both
of the appealed orders.9 And, although Fidelity reserved the
right to argue that the immediate appeal was improper, it
could not have relied on prevailing on that challenge, as
Ninth Circuit law at the time was squarely against its
position.
It was this very opportunity for revival of claims and
subsequent litigation that led the Court in Microsoft to
conclude that this type of conditional voluntary dismissal is
not, in fact, “final.” See Microsoft, 137 S. Ct. at 1715.
Plaintiffs persuasively argue that, “[i]f class certification
orders are not appealable because a voluntary dismissal
intended to be subject to revival is not really a final
judgment, then there is little finality interest in the dismissal
and there is every reason to allow vacatur of such pre-
Microsoft dismissals . . . .” Thus, even after Microsoft, there
9
Not only did the stipulation contemplate continued litigation if
Plaintiffs succeeded in their appeals, but Plaintiffs argue that, even if
Fidelity prevailed on its jurisdictional challenge and succeeded in having
the appeals dismissed, Fidelity could not have expected that the stipulated
dismissal order would become final, because the stipulation provided only
that Plaintiffs would take nothing if both of the district court’s orders were
affirmed on appeal. The text of the stipulation further belies a finality
interest because it explicitly states that, “by Plaintiffs voluntarily
dismissing their claims with prejudice, the Court’s April 29, 2014 order
on Defendant’s Motion for Judgment on the Pleadings is not a final
judgment and shall not provide a basis for collateral estoppel against
Defendant in subsequent litigation.”
28 HENSON V. FIDELITY NAT’L FINANCIAL
was no reason to anticipate that the voluntary dismissal would
be treated as final, without either an opportunity to revive
Turner’s voluntarily dismissed claim in the district court, or
appellate review of the involuntary dismissal of Henson’s
claims and the class certification order.
The district court’s contrary analysis of Fidelity’s reliance
interest in the finality of the dismissal therefore ignored key
considerations, failed to follow our guidance in Phelps, and
was unsupported by the facts. The district court’s conclusion
that this factor “weighs against granting Rule 60(b) relief”
was an abuse of discretion. Fidelity has not shown any
reliance interest in the finality of the judgment, and the appeal
of the judgment was still pending when Microsoft was
decided; this was not a case in which a party relied on the
finality of a judgment after an appeal had become final and
litigation had ended months or even years before a change in
the law prompted a Rule 60(b) motion. As a result, whether
relief from the judgment would upset “the parties’ reliance
interest in the finality of the case” weighs heavily in favor of
granting relief. See Phelps, 569 F.3d at 1137.
4. Delay Between the Judgment and the Rule 60(b)
Motion
The fourth Phelps factor “examines the ‘delay between
the finality of the judgment and the motion for Rule 60(b)(6)
relief.’” Phelps, 569 F.3d at 1138 (quoting Ritter, 811 F.2d
at 1402). “This factor stands for the ‘principle that a change
in the law should not indefinitely render preexisting
judgments subject to potential challenge.’” Jones, 733 F.3d
at 840 (quoting Phelps, 569 F.3d at 1138). The district court
found that the delay factor was neutral because, although the
Rule 60(b) motion was filed 3.5 years after the voluntary
HENSON V. FIDELITY NAT’L FINANCIAL 29
dismissal, “the parties were actively involved in the appellate
proceedings and were seeking resolution before the Ninth
Circuit in [the] time immediately after the Court dismissed
the case.” Plaintiffs do not challenge this determination, but
we make one brief correction. The district court’s use of the
date on which the voluntary dismissal was entered in the
district court, rather than when any appeal of that dismissal
became final, does not follow the guidance we set forth in
Phelps. See Phelps, 569 F.3d at 1138 n.21 (“[W]e consider
the length of time between when the original judgment . . .
became final after appeal, and the time at which [a party]
filed [its] first motion [for Rule 60(b)(6) relief].” (emphasis
added) (citing Fed. R. App. P. 41)). In this case, the
judgment never truly became final on appeal, and in any case,
Plaintiffs moved for relief shortly after the Ninth Circuit
remanded the case to the district court. As a result, when
properly applied, the delay factor weighs in favor of granting
Rule 60(b)(6) relief. See id. at 1138.
5. Relationship Between the Original Judgment and the
Change in the Law
The fifth Phelps factor “looks to the closeness of the
relationship between the decision resulting in the original
judgment and the subsequent decision that represents a
change in the law.” Jones, 733 F.3d at 840 (citing Phelps,
569 F.3d at 1138–39). As we explained in Phelps, this factor
recognizes the ever-changing nature of the law and seeks to
measure whether any particular change is extraordinary under
the circumstances as a result of a direct relationship to the
original judgment:
[T]his factor is designed to recognize that the
law is regularly evolving. The foundation of
30 HENSON V. FIDELITY NAT’L FINANCIAL
the American judicial system that sets it apart
from many regimes across the world is its
common law heritage, which is immanent in
judicial interpretations of legal texts ranging
from statutes to judicial opinions to the
Constitution itself. Given this tradition, legal
rules and principles inevitably shift and
evolve over time, but the mere fact that they
do so cannot upset all final judgments that
have predated any specific change in the law.
Rather, the nature of that change is important.
Accordingly, [this] factor directs courts to
examine closely the original and intervening
decisions at issue in a particular motion for
[Rule 60(b)] relief predicated on an
intervening change in the law: if there is “a
close connection between the two cases, the
court [will be more likely to] f[i]nd the
circumstances sufficiently extraordinary to
justify disturbing the finality of the [original]
judgment.”
Phelps, 569 F.3d at 1139 (footnote omitted) (alterations in
quote in original) (quoting Ritter, 811 F.2d at 1402). The
district court found that the “close connection between
Plaintiffs’ underlying case and [Microsoft]” weighed in favor
of granting relief, and Plaintiffs do not challenge this
determination. We agree with the district court both that
there is a close connection between the original judgment and
Microsoft, because the voluntary dismissal was explicitly
predicated on the law that Microsoft changed, and that this
factor therefore weighs in favor of Rule 60(b)(6) relief.
HENSON V. FIDELITY NAT’L FINANCIAL 31
6. Concerns of Comity
The sixth Phelps factor considers concerns of comity.
Jones, 733 F.3d at 840 (citing Phelps, 569 F.3d at 1139). In
Phelps, we ruled that this factor cut in favor of relief because
the dismissal of Phelps’ habeas petition had been on
procedural grounds, which meant that granting relief from the
dismissal would not upend the comity principle. See Phelps,
569 F.3d at 1139 (“[I]n the context of Rule 60(b)(6), we need
not be concerned about upsetting the comity principle when
a petitioner seeks reconsideration not of a judgment on the
merits of his habeas petition, but rather of an erroneous
judgment that prevented the court from ever reaching the
merits of that petition.”).10
The district court found that the comity factor weighed
against granting Rule 60(b) relief because the predicament in
which Plaintiffs found themselves was the result of their free,
calculated, and deliberate trial strategy. Plaintiffs challenge
this analysis, claiming that the district court again faulted
them for relying on Circuit law.
We agree that the district court erred in its analysis of the
comity factor; the district court’s decision that this factor
weighed against relief rested upon an erroneous view of what
considerations are relevant to the principle of comity. In
particular, it is unclear that there is any relationship between
the fact that Plaintiffs may have made a calculated decision
10
Furthermore, we noted that the habeas statute was aimed at
ensuring that federal courts could protect constitutional rights, and that
“[t]he delicate principles of comity governing the interaction between
coordinate sovereign judicial systems do not require federal courts to
abdicate their role as vigilant protectors of federal rights.” Id. at 1139.
32 HENSON V. FIDELITY NAT’L FINANCIAL
to voluntarily dismiss their case despite the potential
consequences and principles of comity. The district court
cited no Ninth Circuit precedent suggesting that this is an
appropriate consideration under the comity factor, nor do we
see why it is relevant.11 In fact, considerations of comity
“between the independently sovereign state and federal
judiciaries” that we discussed in Phelps do not apply here at
all, because this case does not involve a federal habeas
petition that challenges a state conviction. See Phelps,
569 F.3d at 1139 (“[I]n applying Rule 60(b)(6) to cases
involving petitions for habeas corpus, judges must bear in
mind that [a] federal court’s grant of a writ of habeas
corpus . . . is always a serious matter implicating
considerations of comity.” (internal quotation marks and
italics omitted)). As a result, the district court’s finding that
the comity factor weighed against relief was an abuse of
discretion. The district court instead should have skipped the
Phelps comity factor as inapplicable.
7. Additional Considerations
Instead of comity between the federal and state courts, the
district court could have considered a somewhat analogous
issue that is more relevant here, namely, the importance of
heeding the intent of the rulings of federal appellate courts.
Cf. id. at 1133, 1135 (explaining that the Phelps factors do
not “impose a rigid or exhaustive checklist”—a district court
must “evaluate the circumstances surrounding the specific
motion before the court” to ensure that “justice [is] done in
11
As discussed above, however, the extent to which Plaintiffs are at
fault for their own predicament as a result of taking a calculated risk may
be an appropriate consideration in this case under the factor that considers
the nature of the change in the law.
HENSON V. FIDELITY NAT’L FINANCIAL 33
light of all the facts”). For example, the district court could
have taken account of the fact that, when the Ninth Circuit
denied the motions to dismiss Plaintiffs’ appeals and instead
remanded to the district court for appropriate relief in the first
instance, it is unlikely that the Ninth Circuit intended for the
district court to deny all relief and also refuse to re-enter final
judgment, thereby denying Henson and Turner any
opportunity to have their previously remanded appeals heard
on the merits.
Similarly, it would have been relevant for the district
court to consider how best to stay true to the Supreme Court’s
reasoning in Microsoft. Nothing in Microsoft suggests that a
litigant who agreed to a conditional dismissal to obtain
appellate review of a class certification ruling should have her
claims unconditionally dismissed, rather than being restored
to the status quo prior to entering the stipulation.12 In fact, it
is somewhat paradoxical that, although the Court in Microsoft
ruled that a conditional voluntary dismissal like the one in
this case is not a final judgment under § 1291, see Microsoft,
137 S. Ct. at 1715, the district court effectively treated the
voluntary dismissal as a final, irrevocable judgment. This
leaves Plaintiffs in a catch twenty-two because, under
Microsoft, the dismissal was not a final judgment from which
12
The Supreme Court in Microsoft did not give any explicit indication
of how the case should proceed, if at all, following the Court’s decision
that there was no appellate jurisdiction to review the class certification
order. See Microsoft, 137 S. Ct. at 1715. That is, the Supreme Court did
not comment about whether the stipulated dismissal would remain in
force, and thus paradoxically become “final,” or whether the district court
should pick up where the case left off before the stipulated dismissal was
entered. However, the Supreme Court did remand the case “for further
proceedings consistent with this opinion,” suggesting that it did not view
the voluntary conditional dismissal as being final and irrevocable. See id.
34 HENSON V. FIDELITY NAT’L FINANCIAL
Turner could appeal the denial of class certification, but in the
district court, the voluntary dismissal was treated as having
finally ended the case. The interest in avoiding such a
contradiction with the Court’s reasoning in Microsoft weighs
in favor of granting relief under Rule 60(b)(6).
Finally, the negotiated nature of the voluntary dismissal
presents a circumstance unique to this case that is relevant to
the determination of whether Rule 60(b)(6) relief from the
judgment that was predicated on that stipulation is warranted.
The district court did not address directly the explicit text of
the stipulation to determine whether the terms of the
agreement negotiated by the parties contemplated that the
dismissal would become final even if the appellate court
found that it lacked jurisdiction and therefore did not reach
the merits of Plaintiffs’ appeals. In particular, while the
stipulation does not set forth any specific agreement about
how the dismissal would be treated in the event of a
successful challenge to appellate jurisdiction, the stipulation
does provide that “plaintiffs will take nothing by way of their
complaint” if “the orders appealed are affirmed.” (Emphasis
added.) Because Plaintiffs appeals were remanded without a
decision on the merits, the district court’s orders were never
affirmed. Thus, it would have been relevant to the equities to
consider whether, under the strict text of the stipulation,
Plaintiffs agreed to dismiss their case with prejudice in the
current scenario, or whether giving effect to the terms of the
negotiated agreement supported granting relief.13
13
We do not wade into the fact-finding required to answer this
question, as it is not necessary to decide this case. We only point out the
relevance of this consideration to guide future courts faced with Rule
60(b)(6) motions.
HENSON V. FIDELITY NAT’L FINANCIAL 35
8. Weighing All Relevant Considerations
“Weighing all the relevant factors together and evaluating
the circumstances of this case,” the district court ultimately
concluded that the circumstances did not warrant relief under
Rule 60(b)(6). As detailed above, of the six Phelps factors,
the district court found that the reliance interest and comity
factors weighed against granting relief, the nature of the
change in the law weighed slightly against granting relief, the
diligence and delay factors were neutral, and the relative
closeness between the judgment and the change in the law
weighed in favor of relief.
However, as discussed above, the district court’s analysis
of the change-in-the-law, reliance interest, and comity
factors—those which it found weighed against relief—rested
upon an incorrect view of the law. The change-in-the-law
factor is neutral or slightly favors relief because Plaintiffs
relied on well-established circuit law and did not knowingly
risk permanent finality, even though they knew Fidelity
would challenge appellate jurisdiction and they could have
taken a different course of action. Properly interpreted and
applied, the factor considering the parties’ reliance interest in
the finality of the judgment weighs heavily in favor of Rule
60(b)(6) relief, because the change in the law occurred while
the appeal was pending, before the judgment became final
and before Fidelity developed any reliance interest in the
finality of the judgment. In addition, because the instant case
does not implicate principles of comity between state and
federal courts, the comity factor is inapplicable and does not,
as the district court found, weigh against granting relief.
Weighing all the Phelps factors, correctly analyzed, it is
clear that all the relevant circumstances in this case heavily
36 HENSON V. FIDELITY NAT’L FINANCIAL
tip the scale in favor of granting Rule 60(b)(6) relief.
Although by the district court’s reasonable calculus the nature
in the change of the law factor weighed “slightly against”
granting relief, all the other factors are neutral or weigh in
favor of granting relief. Together, the circumstances of this
case are therefore sufficiently “extraordinary” that granting
relief from judgment here “is appropriate to accomplish
justice.” Phelps, 569 F.3d at 1135 (quoting Gonzalez,
545 U.S. at 542).
IV
Because the district court’s denial of Plaintiffs’ Rule
60(b)(6) motion rested upon an erroneous view of the law as
to several significant factors, the district court’s ruling was an
abuse of discretion. See Phelps, 569 F.3d at 1131. Moreover,
in light of all the circumstances of this case, we are left with
“a definite and firm conviction that the district court
committed a clear error of judgment in the conclusion it
reached upon a weighing of relevant factors.” See Valdivia,
599 F.3d at 988.
We therefore reverse the district court’s denial of
Plaintiffs’ Rule 60(b)(6) motion for relief from judgment, and
remand with directions to grant the Rule 60(b)(6) motion and
for further proceedings.
REVERSED and REMANDED with directions.