The Tenth Circuit Court of Appeals has held that an order withdrawing approval of a class action settlement does not qualify as a “final order” subject to appeal under 28 U.S.C. § 1291. The appellate ruling declared that such an order “simply presses the reset button, vacates any prior final decision, and marks the case for renewed litigation.”

This case has a “long and complex” history that began in 1995, with two classes certified. The first class covered all prisoners who are presently, or will be, confined at New Mexico’s Bernalillo County Detention Center (BCDC). A sub-class included “persons with mental and/or developmental disabilities who are now, or in the future will be, detained at BCDC.” It was alleged that the conditions at BCDC were unconstitutional due in large part to overcrowding. [See: PLN, March 2003, p.38; Sept. 1999, p.18].

The parties reached a settlement in 1997. The settlement agreement was modified due to the opening of the Metropolitan Detention Center (MDC) in 2003. By their terms, the two new settlements, reached in 2005, governed conditions only at MDC. The county had signed an Inter-Governmental Agreement with the federal government that allowed federal detainees to be housed at BCDC, which was operated by private prison firm Cornell Corporation (which has since been acquired by GEO Group).

The plaintiffs, however, argued that “the County misrepresented this arrangement to them by suggesting that Cornell alone bore contractual duties to the federal government.” This misrepresentation led the plaintiffs to agree to restrict the terms of the settlement agreements to MDC rather than both facilities. The district court agreed and withdrew approval of the settlements in 2009. The defendants appealed.

A final decision, the Tenth Circuit held, is one by which the district court “disassociates itself from a case,” which does not normally occur “until there has been a decision by the District Court that ends the litigation on the merits and leaves nothing for the Court to do but execute the judgment.”

The Court of Appeals rejected the defendants’ argument that any post-judgment order is automatically subject to appellate review. The previous settlement approval orders were final orders, but the order under appeal “effectively undid them.” The order at issue does not “end the litigation on the merits,” the appellate court wrote. Rather, it “ensures litigation on the merits will continue in the District Court.”

The Tenth Circuit noted parallel contexts. An “order granting a motion under Fed.R.Civ.P. 60(b) reopening a judgment and an order declining to enter a proposed consent decree are not appealable under § 1291,” the Court of Appeals stated.

“Likewise, we have long held that a District Court’s post-judgment order granting a new trial under Fed.R.Civ.P. 59 isn’t an appealable final decision for the same reason,” because it ensures the case will continue.

As the district court’s order was not final and thus failed to invoke the appellate court’s jurisdiction, the defendants’ other arguments were not considered and their appeal was dismissed. See: McClendon v. City of Albuquerque, 630 F.3d 1288 (10th Cir. 2011).

Related legal case