In re: Sealed Case (Bowles) ( 2010 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 16, 2009 Decided October 23, 2009
Reissued October 22, 2010
No. 07-5411
IN RE: SEALED CASE (BOWLES)
Stephen L. Snyder argued the cause for appellant. On the
briefs was Frederick D. Cooke, Jr.
Kathleen V. Gunning argued the cause for appellee. With
her on the brief were Colleen J. Boles and Lawrence H.
Richmond.
Before: ROGERS and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: In Bowles v. Russell, 551 U.S. 205(2007), the Supreme Court held that 28 U.S.C. § 2107,1 as
1
28 U.S.C. § 2107 provides:
(a) Except as otherwise provided in this section, no appeal
shall bring any judgment, order or decree in an action, suit or
proceeding of a civil nature before a court of appeals for
review unless notice of appeal is filed, within thirty days after
the entry of such judgment, order or decree.
(b) In any such action, suit or proceeding in which the United
States or an officer or agency thereof is a party, the time as to
2
carried into practice by Appellate Rule 4(a)(6),2 is jurisdictional
all parties shall be sixty days from such entry.
(c) The district court may, upon motion filed not later than 30
days after the expiration of the time otherwise set for bringing
appeal, extend the time for appeal upon a showing of
excusable neglect or good cause. In addition, if the district
court finds--
(1) that a party entitled to notice of the entry of a
judgment or order did not receive such notice from
the clerk or any party within 21 days of its entry, and
(2) that no party would be prejudiced,
the district court may, upon motion filed within 180 days after
entry of the judgment or order or within 7 days after receipt
of such notice, whichever is earlier, reopen the time for appeal
for a period of 14 days from the date of entry of the order
reopening the time for appeal.
(d) This section shall not apply to bankruptcy matters or other
proceedings under Title 11.
2
Appellate Rule 4(a)(6) provides:
(6) Reopening the Time to File an Appeal. The district court
may reopen the time to file an appeal for a period of 14 days
after the date when its order to reopen is entered, but only if
all the following conditions are satisfied:
(A) the court finds that the moving party did not
receive notice under Federal Rule of Civil Procedure
77(d) of the entry of the judgment or order sought to
be appealed within 21 days after entry;
(B) the motion is filed within 180 days after the
3
and that courts lack power to create equitable exceptions. The
question presented in this appeal is whether Federal Rule of
Civil Procedure 60(b) remains available to circumvent the 180-
day deadline in the appellate rule for reopening the time to file
an appeal. Appellant maintains there are unique circumstances
explaining its failure to note a timely appeal: (1) the usual means
of obtaining notice about the status of its case were unavailable
because the case was sealed; (2) appellant’s counsel was diligent
in attempting to discover the status of the case, by filing a
written inquiry about pending motions and making oral inquiries
of the Clerk of the Court; and (3) neither party obtained notice
of the dismissal of the case until after the 180-day deadline in
Appellate Rule 4(a)(6) had passed. Reading Bowles narrowly,
appellant contends that because the time limits in Rule 60(b) are
not jurisdictional, the unique circumstances exception applies
judgment or order is entered or within 7 days after the
moving party receives notice under Federal Rule of
Civil Procedure 77(d) of the entry, whichever is
earlier; and
(C) the court finds that no party would be prejudiced.
Federal Rule of Civil Procedure 77(d) provides:
(1) Service. Immediately after entering an order or judgment,
the clerk must serve notice of the entry, as provided in Rule
5(b), on each party who is not in default for failing to appear.
The clerk must record the service on the docket. A party also
may serve notice of the entry as provided in Rule 5(b).
(2) Time to Appeal Not Affected by Lack of Notice. Lack of
notice of the entry does not affect the time for appeal or
relieve--or authorize the court to relieve--a party for failing to
appeal within the time allowed, except as allowed by Federal
Rule of Appellate Procedure (4)(a).
4
and the district court therefore abused its discretion in denying
relief pursuant to Rule 60(b). The holding in Bowles, however,
is broadly stated and appellant’s view that the district court
retained power to recognize an equitable exception to the 180-
day deadline rests on precedent expressly overturned by Bowles.
Moreover, concluding that Rule 60(b) is unavailable to allow
appellant to file a timely appeal is in accord with the majority of
circuits holding that with the 1991 amendment adding
subsection (6), Appellate 4(a)(6) became the exclusive means of
reopening the time to appeal. Accordingly, we affirm.
In affirming we are cognizant of the unfairness of denying
relief to appellant in this sealed case where none of the usual
means of learning the status of its case were available and, as the
parties agree and we will assume, appellant made diligent efforts
through counsel to discover the status of its case. A sealed case
generally presents special circumstances. Neither the federal
rules of civil procedure nor the district court’s local rules
specifically address how parties shall be notified in sealed cases.
Not only is there no public docket in a sealed case, but the
parties and their counsel also may not be able to access the
sealed docket or receive electronic notification. The ad hoc
procedures in appellant’s case were inadequate to ensure notice.
The sealed docket stated electronic notice would not be given
and listed participants to be notified by other means. No other
means were employed. Although counsel for the parties were
also listed on page 1 of the sealed docket as “ATTORNEY[S]
TO BE NOTICED,” neither parties’ counsel received notice of
the October 26, 2006 dismissal of the case. These circumstances
explaining the parties’ failure to receive timely notice of the
dismissal of the case are unique, not to be found in precedent
addressing reopening of the time to appeal. This may be
because the district court and the parties have made special
arrangements for receiving notice in other sealed cases and those
arrangements have worked. When they do not, through no fault
5
of the parties and despite the best efforts of the parties to obtain
information about the status of the proceedings, the civil justice
system has failed in light of the implicit assumption underlying
the federal rule on notice, FED. R. CIV. P. 77(d), that parties will
have an easy way to determine the status of their case. The
purpose of the civil rules set forth in Rule 1 contemplates a just
as well as speedy resolution of disputes. FED. R. CIV. P. 1.
Given the mandatory 180-day deadline for reopening the time to
file appeals in civil cases, it would be appropriate in light of
Bowles for the district court to adopt procedures to ensure that
parties and their counsel, if any, in sealed cases receive prompt
notice of final orders and judgments.
I.
On May 11, 2005 appellant filed an application under the
Federal Arbitration Act, 9 U.S.C. § 10, to vacate an arbitration
award rejecting its claim to additional attorneys fees under a
written contingency fee agreement with the Federal Deposit
Insurance Corporation (“FDIC”) in connection with recovering
the subrogated claims of a failed bank against an accounting
firm. The FDIC moved on June 14, 2005 to seal its pleadings
because matters in the arbitration were confidential, and also
moved on June 21, 2005 to dismiss the application to vacate.
Appellant filed an opposition on July 7, 2005, and the FDIC
filed a reply on July 25, 2005. On August 22, 2005 appellant
filed a motion for a hearing on its application to vacate the
arbitration award and a supplemental memorandum on its
application. Appellant also filed on August 29, 2005 a request
for the district court to take judicial notice of a district court
opinion decided August 23, 2005 in a different case involving
the FDIC. The FDIC filed an opposition to that request on
September 9, 2005, and appellant filed a reply on September 19,
2005.
6
Meanwhile, on June 21, 2005, the district court sealed the
case upon joint consent motion of the parties. Thereafter neither
the district court’s sealed docket nor electronic notification were
available to inform the parties of the status of pending and later
filed motions. As it turns out, despite the filing by appellant’s
counsel of a Notice of Inquiry on February 28, 2007, shortly
after new counsel entered his appearance, inquiring about the
pending motions, the parties represent that neither party or their
counsel received notice of the district court’s October 26, 2006
dismissal of the case until May 30, 2007. See Appellant’s Br.
7–9, 15–16; Appellee’s Br. 5 n.5, 13. On May 30, upon a call to
the district court judge’s chambers, a law clerk advised
appellant’s counsel of the dismissal on the merits.
Appellant moved on June 8, 2007, within 7 days of
receiving notice of the dismissal, to reopen the time to appeal
pursuant to Appellate Rule 4(a)(6). The district court denied the
motion as untimely on July 26, 2007. Appellant also moved on
August 31, 2007 for relief from the judgment or order of
dismissal pursuant to Rule 60(b). The motion recounted, among
other things, the events leading to appellant’s late notice of the
dismissal of its case and its late motion to reopen pursuant to
Appellate Rule 4(a)(6), and requested either a status conference
or the grant of its pending motion to reopen the time to appeal.
The FDIC filed an opposition on September 12, 2007, citing
Bowles. The district court summarily denied the Rule 60(b)
motion on November 26, 2007. Appellant filed a notice of
appeal on December 18, 2007.
II.
Pursuant to Rule 60(b)(6), a party may seek relief from a
judgment or order for “any other reason that justifies relief,”
FED. R. CIV. P. 60, upon a showing of “extraordinary
7
circumstances,” Kramer v. Gates, 481 F.3d 788, 791 (D.C. Cir.
2007) (quoting Ackermann v. United States, 340 U.S. 193, 199
(1950)). The unique circumstances doctrine recognized in
Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S.
215 (1962), and Thompson v. INS, 375 U.S. 384 (1964), arose in
view of the inequity of foreclosing appeals by parties whose
failure to file timely notices of appeal results from reliance on
the court.3 As later clarified in Osterneck v. Ernst & Whinney,
489 U.S. 169 (1989), the doctrine applied only where a party
performed an act, which if properly done, would postpone the
filing deadline and had received specific assurance by a judicial
officer that the act has properly been done. When the doctrine
originated, the Federal Rules of Civil and Appellate Procedure
did not contain a more specific avenue of relief. It was not until
1991 that the Rules were amended to add subsection (6) to
Appellate Rule 4(a), setting forth a 180-day extension of the
time to reopen the time to file an appeal when “the moving party
did not receive notice under Federal Rule of Civil Procedure
77(d).” See 16A Charles Alan Wright & Arthur R. Miller,
FEDERAL PRACTICE AND PROCEDURE §§ 3950.3, 3950.6 (4th ed.
2008) (“16A Wright & Miller”).
In Bowles, a prisoner filed a motion pursuant to Appellate
Rule 4(a)(6) to reopen the time to appeal the denial of his
petition for a writ of habeas corpus. 551 U.S. at 207. The
district court judge granted the motion and extended the
3
Harris Truck and Thompson concern “unique circum-
stances” relating to time limits in Federal Rule of Civil Procedure 73.
In 1968, Rule 73 was “abrogated” and “[m]ost of the provisions of
Rule 73 now appear in substance in Appellate Rules 3, 4, 7, 8, and
12.” 12 Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE
AND PROCEDURE § 3062 (2d ed. 1997). Courts, including this one,
applied similar reasoning to Rule 60(b)(6) motions. See, e.g., Polylok
Corp. v. Manning, 793 F.2d 1318 (D.C. Cir. 1986).
8
deadline by 17 days rather than the 14 days allowed by the rule
and the statute that tracks the rule, 28 U.S.C. § 2107(c). Id.Bowles relied on the judge’s ruling and filed his motion 16 days
after the order. Id. The Supreme Court held that § 2107, as
carried into practice by Appellate Rule 4(a)(6), was a
jurisdictional grant and limitation, and the court of appeals could
not hear Bowles’ appeal regardless of the circumstances. Id. at
213. Of significance here, the Supreme Court also stated:
Today we make clear that the timely filing of a notice
of appeal in a civil case is a jurisdictional requirement.
Because this Court has no authority to create equitable
exceptions to jurisdictional requirements, use of the
“unique circumstances” doctrine is illegitimate.
Id. at 214. The Court proceeded to “overrule Harris Truck
Lines[, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215 (1962)]
and Thompson [v. INS, 375 U.S. 384 (1964)] to the extent they
purport to authorize an exception to a jurisdictional rule.” Id.Read as narrowly as possible, Bowles did not reach the issue
of when “unique circumstances” might apply on a motion
pursuant to Rule 60(b). To support its application, appellant
depicts Rule 60(b) as a “court promulgated rule,” in which time
limitations are not jurisdictional because it is a “claim-
processing” rather than statutory rule. Appellant’s Br. 14, 17.
Because Rule 60(b)’s time requirements are not jurisdictional
and may be extended for good cause, appellant suggests that the
Harris Truck line of cases overruled in Bowles with respect to
an Appellate Rule 4(a)(6) motion nonetheless still applies to
Rule 60(b) motions.
Although the Supreme Court has acknowledged “the
jurisdictional distinction between court-promulgated rules and
limits enacted by Congress,” Bowles, 551 U.S. at 211–212, the
9
Court has never held that a party could use a court-promulgated
rule to circumvent the jurisdictional bar on limits for reopening
the time to appeal enacted by Congress. The effect of
appellant’s requested relief — that a court could vacate and
reinstate a judgment pursuant to Rule 60(b) because of “unique
circumstances” in order to allow a party to appeal where
Appellate Rule 4(a)(6) would otherwise withhold appellate
jurisdiction — would create precisely this scenario. The
Supreme Court has read Congress’ codification of Appellate
Rule 4(a)(6)’s reopening provisions as a jurisdictional
limitation, and taken that limitation very seriously. In so doing,
Bowles changed the legal landscape for Rule 60(b) motions.
The Court spoke in unequivocal and uncompromising terms in
stating that courts lacked power to carve out equitable
exceptions to jurisdictional statutory requirements. 551 U.S. at212 n.4, 213–14. It noted the deadline applied even where life
itself was at stake. Id. 212 n.4. While not referring specifically
to Rule 60(b), the Court overruled its precedent on which lower
courts had relied in creating equitable exceptions to time limits.
Id. at 213–14. Hence it would be difficult to imagine that the
Court would not also view the use of Rule 60(b) to circumvent
the deadline in Appellate Rule 4(a)(6) as “illegitimate,” id. at
214. The Court’s acknowledgment, then, of a distinction
between the jurisdictional statutory requirements of Appellate
Rule 4(a)(6) and claim processing rules adopted by the courts,
id. at 210–13, cannot reasonably be read to entertain Rule 60(b)
circumstances as overriding the deadline in Appellate Rule
4(a)(6).
Reading Bowles as foreclosing Rule 60(b) as an alternative
to Appellate Rule 4(a)(6) accords with the prior holding of the
majority of the circuits that the 1991 amendment adding
subsection (6) to the appellate rule was the exclusive means to
reopen the time to appeal because of lack of notice. These
circuits reasoned that using Rule 60(b) to circumvent the 180-
10
day deadline in Appellate Rule 4(a)(6) would frustrate the clear
purpose in promoting finality through prohibiting such appeals.
See e.g., Vencor Hospitals, Inc. v. Standard Life & Accident Ins.
Co., 279 F.3d 1306, 1310–11 (11th Cir. 2002); Clark v. Lavallie,
204 F.3d 1038, 1040–41 (10th Cir. 2000); In re Stein, 197 F.3d
421, 425–26 (9th Cir. 1999); Zimmer St. Louis, Inc. v. Zimmer
Co., 32 F.3d 357, 360 (8th Cir. 1994). The courts relied on both
the plain text of Appellate Rule 4(a)(6) and the 1991 advisory
committee notes describing the amended rule as providing that
“[r]eopening may be ordered only upon a motion filed within
180 days of the entry of a judgment or order or within 7 days of
receipt of notice of such entry, whichever is earlier,” FED R.
APP. P. 4 advisory committee notes to 1991 amendments. Thus,
in Vencor the Eleventh Circuit concluded that “[a]s with the
language of the amendment itself, the advisory committee’s
notes evidence an intent to provide an exclusive, limited
opportunity for relief when a party fails to receive notice of the
entry of a judgment or order.” 279 F.3d at 1310–11. The Eighth
Circuit adopted similar reasoning, quoting the advisory
committee notes that subsection (6) “establishes an outer time
limit” of 180 days for noting an appeal. Zimmer, 32 F.3d at 360(emphasis in original). One circuit, without referencing the
1991 amendments, took a contrary path, see Lawrence v. Int’l
Bhd. of Teamsters, Chauffeurs, Warehousemen, and Helpers of
Am., 320 F.3d 590 (6th Cir. 2003); Lewis v. Alexander, 987 F.2d
392 (6th Cir. 1993), but it has also acknowledged in holding that
Appellate Rule 4(a)(6) was jurisdictional that “[t]he Appellate
Rules underscore the exclusivity of the 4(a)(6) remedy,” Bowles
v. Russell, 432 F.3d 668, 672 (6th Cir. 2005). See 16A Wright
& Miller §§ 3950.3 & .6.
Notably, even before Bowles and the 1991 amendment to
Appellate Court Rule 4(a)(6), the circumstances appellant
recounts might not have entitled it to relief pursuant to Rule
60(b)(6). In Expeditions Unlimited Aquatic Enterprises, Inc. v.
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Smithsonian Institute, 500 F.2d 808 (D.C. Cir. 1974), this court
adopted a narrow exception to the then existing time limit for
noting an appeal: the district court may vacate and re-enter a
judgment pursuant to Rule 60(b) when (1) “neither party had
actual notice of the entry of judgment,” (2) “the winning party
is not prejudiced by the appeal,” and (3) “the losing party moves
to vacate the judgment within a reasonable time after he learns
of its entry.” Id. at 810. See Polylok Corp., 793 F.2d at 1320;
Ashby Enterprises, Ltd. v. Weitzman, Dym & Assocs., 780 F.2d
1043 (D.C. Cir. 1986). Other circuits also carved out equitable
exceptions to the time to appeal pursuant to Rule 60(b), although
most required both lack of notice and diligence by counsel. See,
e.g., Wilson v. Atwood Group, 725 F.2d 255, 258 (5th Cir.,
1984) (en banc) (citing Mizell v. Att’y Gen. of the State of New
York, 586 F.2d 942, 944–45 n.2 (2d Cir. 1978), cert. denied, 440
U.S. 967 (1979)). However, since Osterneck, 489 U.S. 169, this
court has required a showing of reliance on “some affirmative
assurance which, if proper, would have extended or postponed
the deadline for filing the notice of appeal,” and that the
assurance was based upon “official judicial action,” which does
not include statements from the Clerk of the Court’s office.
Moore v. South Carolina Labor Bd., 100 F.3d 162, 164 (D.C.
Cir. 1996). Appellant points to its filing of a Notice of Inquiry,
to which it states it received no response, and to claims it
received assurances from the Clerk of the Court that the district
court judge had not issued any order regarding that inquiry or
with respect to the pending motions, Appellant’s Br. at 7, 15.
But the district court’s silence in response to inquiries does not
constitute an “affirmative assurance,” see Moore, 100 F.3d at
164, and the assurances from the Clerk of the Court, no matter
how affirmative, do not constitute “official judicial action,”
Williams v. Washington Convention Ctr. Auth., 481 F.3d 856,
859 (D.C. Cir. 2007).
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What makes this case unique is that it is a sealed case. The
usual mechanisms under the federal rules of civil procedure for
the parties and their counsel to obtain information about the
status of court proceedings were unavailable. Although
providing for notice by the clerk pursuant to Civil Rule 77(d),
the rules do not specifically address how parties shall receive
notice of judgments or orders in sealed cases. Neither do the
district court’s local rules. The ad hoc procedure for notice
described in the sealed docket in this case proved inadequate.
Although the sealed docket stated “[t]he following participants
should be noticed by other means,” the parties advise that no
“other means” were employed and they did not learn of the
October 26, 2006 judgment and order dismissing the case until
after the 180-day deadline had passed. Under the circumstances,
appellant was not in a position to make a timely “‘free,
calculated, deliberate’ choice not to appeal.” Expeditions
Unlimited, 500 F.2d at 809 (quoting Ackermann, 340 U.S. at
198). Had the arbitrator ruled in appellant’s favor, and awarded
it the millions of dollars in attorneys’ fees that it claimed it was
entitled to under the contingency fee agreement, the FDIC
likewise would have been barred from challenging the district
court’s affirmance of the award had it learned of the district
court’s dismissal of its case only after the 180-day deadline for
appealing.
A system of procedural rules employing temporal deadlines
implicitly assumes there will be an easy way for the parties to
learn the status of their case. The reference to Civil Rule 77(d)
in the 1991 amendment adding subsection (6) to the appellate
rule evidences such an assumption with regard to noting an
appeal as does the requirement for diligence by counsel. See,
e.g., Fox v. American Airlines, Inc. 389 F.3d 1291, 1296 (D.C.
Cir. 2004); Wilson, 725 F.2d at 258 (citing Mizell, 586 F.2d at944–45). Rule 1 of the Federal Rules of Civil Procedure
provides: “These rules govern the procedure in all civil actions
13
and proceedings in the United States district courts. . . . They
should be construed and administered to secure the just, speedy,
and inexpensive determination of every action and proceeding.”
FED. R. CIV. P. 1; see FED. R. APP. P. 1(a)(2). Under the
circumstances confronting appellant — (1) the usual means
provided pursuant to the federal civil rules for notifying the
parties of the status of the case were unavailable in this sealed
case; (2) appellant’s counsel was, the parties agree and we will
assume, diligent in attempting to discover the status of the case;
and (3) neither party received notice of the dismissal of
appellant’s case until after the 180-day deadline — the rules
failed to accomplish their just purpose. As this court observed
long ago, “[i]f the parties do not know of the entry of judgment,
the winning party cannot rely on the judgment and the losing
party cannot make a ‘free, calculated, deliberate’ choice not to
appeal.” Expeditions Unlimited, 500 F.2d at 809 (quoting
Ackermann, 340 U.S. at 198). “In these circumstances the
purposes behind Rule 77(d) would not be served by denying the
losing party the privilege of appealing and, in our view, justice
demands that the losing party be given that opportunity.” Id. So
too here. Because a sealed case raises different concerns about
notice to the parties and reliance on ad hoc procedures based on
a listing in the district court’s sealed docket of the participants
to be notified “by other means” has proven inadequate, it would
be appropriate in light of Bowles for the district court to adopt
procedures to ensure parties to sealed cases shall obtain timely
notice of orders and judgments.
Accordingly, we hold in light of Bowles that the district
court lacks power to adopt a unique circumstances exception
pursuant to Rule 60(b) to circumvent the 180-day deadline of
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Appellate Rule 4(a)(6), and because appellant’s other challenge
to the denial of its Rule 60(b) motion lacks merit,4 we affirm.
4
Appellant’s contention that the district court erred by not
taking judicial notice of a recent district court opinion sanctioning the
FDIC attorney in the arbitration proceedings lacks merit. Appellant’s
allegations of fraud do not meet the high threshold for showing a fraud
on the court. See Baltia Air Lines, Inc. v. Transaction Mgmt., Inc., 98
F.3d 640, 642–43 (D.C. Cir. 1996). Rather the district court denied
appellant’s request to take judicial notice, “in its discretion,” because
the other case “pertains to matters that are outside the scope of this
court’s limited review of an arbitration award.” Mem. Op. at 10 n.8
(Oct. 26, 2006). Appellant’s protest that it was denied an opportunity
to demonstrate fraud by the FDIC in securing the arbitration award is
belied by the record. Appellant’s Rule 60(b) motion stated it was filed
“to bring to the [district court’s] attention a more accurate statement
of the reasons that [it] should take judicial notice” of the other district
court case. Having acknowledged its own earlier failure to articulate
the reasons for judicial notice, appellant cannot use Rule 60(b) to
avoid its strategic choice. See Good Luck Nursing Home, Inc. v.
Harris, 636 F.2d 572, 577 (D.C. Cir. 1980). Explaining its earlier
deficiency as a result of the rush to file before the district court ruled
on the pending motions, appellant fails to explain why it could not
have elaborated its reasoning in its September 19, 2005 reply to the
FDIC’s opposition to appellant’s request for judicial notice.