Appellate Court Opens Door for New Complaint Against Georgetown

The appellate court found a lower court erred in denying the plaintiffs’ leave to amend their complaint, meaning the case over excessive fees in the university’s retirement plans may not be over.

In a case alleging excessive fees in two Georgetown University retirement plans, the U.S. Court of Appeals for the District of Columbia Circuit has ordered a district court to reconsider the plaintiffs’ motion for leave to amend their complaint.

In January 2019, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia ruled in favor of the university’s motion to dismiss the lawsuit’s claims, without prejudice. In a case dismissed without prejudice, the plaintiffs can file their claims again.

However, in May 2019, Collyer ruled that the plaintiffs in the Georgetown case had filed their amended complaint two days too late under Federal Rules of Civil Procedure. The plaintiffs argued that a “final, appealable judgment” was not entered in January, or at any time since, so they filed their motion under Federal Rule of Civil Procedure 15(a).

The D.C. Circuit looked at whether the January dismissal order constituted a final judgment. “If it did, then this court lacks jurisdiction over the untimely appeal. If it did not, then this court has jurisdiction over the timely appeal, and the district court erred by relying on its January dismissal in rejecting appellants’ attempt to amend their complaint,” the appellate panel wrote in its decision.

The court said that, generally, a dismissal of a complaint without prejudice is not a final appealable order. As such, the complaint may be amended pursuant to Rule 15(a) of the Federal Rules of Civil Procedure without filing a motion pursuant to Rules 59(e) or 60(b). “This has long been the law in this and other circuits,” the court states.

However, it noted that even under its approach, there are well-defined circumstances in which a dismissal of a complaint without prejudice is a final appealable order.

For example, it says, in St. Marks Place Housing Co. v. U.S. Department of Housing & Urban Development, the district court’s order stated that the defendants’ motion to dismiss was granted and the case was closed, but that its order should “not be deemed a final order subject to appeal until the court has issued its memorandum opinion.” Once the opinion was issued more than two months later, the plaintiffs filed a notice of appeal. The D.C. Circuit held the appeal was timely because the district court did not issue its final decision until it issued its opinion.

The appellate court’s opinion lists several other examples where it was made clear a decision was final, but said, “None of the markers that this court has identified as sufficient indicia of such finality are present here. The district court did not state in either its January order or memorandum opinion that amendment of the complaint would be futile. The order did not state that it was final and appealable. The January memorandum opinion did not state that ‘the case’ or ‘the action’ was dismissed. Nor did the accompanying order state that it was dismissing all of the plaintiffs’ ‘claims.’”

The university maintains that the January order was a final decision triggering appellants’ time to file an appeal because it dismissed the complaint in full, leaving no claim unaddressed; the electronic docket entry for the order stated “this case is closed”; the January memorandum opinion expressed skepticism toward appellants’ overall theory; and the May memorandum opinion stated that the district court had dismissed the action in its January order, thereby disassociating itself from appellants’ case.

The appellate court cited a previous case in which it made clear that an order stating the complaint is dismissed in full is generally not, without more context, a final decision. “The fact that the January order addressed all portions of the complaint is therefore insufficient to make it final,” it said.

The court also noted that a court docket entry saying a case is closed does not always indicate that the district court has reached a final decision. “A case may be closed for administrative purposes even when the district court has not yet entered a final appealable order,” the D.C. Circuit’s decision states.

The court said the absence of an express reference by the district court to the possibility of a successful amendment to the complaint doesn’t provide clarity on the finality of its decision. “The district court never stated on the record that the action could not be saved by any amendment of the complaint which the plaintiff could reasonably be expected to make.”

While the district court said in its May memorandum opinion that the January order had “dismissed the complaint and the action,” and a separate order stated, “This case remains closed,” the appellate court noted that these occurred long after appellants’ time to note an appeal had expired. “Adopting the university’s position would mean that a nonfinal order can be rendered final by statements the district court makes months later, long after a party’s time to appeal has run,” the court said. “Such a result would be inconsistent with the Federal Rules of Procedure and judicial precedent seeking to ensure that litigants receive clear notice of when their time to appeal begins to run.”

The D.C. Circuit held that the January order was not final; only the May order was. The district court concluded in May that because judgment had been entered by the January order, appellants could no longer seek leave to amend their complaint, but the appellate court said that “because the January order did not enter a final, appealable judgment, the district court erred when considering appellants’ motion to amend their complaint in refusing to apply the Rule 15(a)(2) standard, rather than the more restrictive standards under Rules 59(e) and 60(b).”

The appellate court vacated the denial of appellants’ motion for leave to amend their complaint and remanded the case to the district court to consider whether to grant their motion, consistent with its findings.