Shepherd v. International Paper Co.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS May 28, 2004
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk

No. 03-20721

FELICIA SHEPHERD, ALEX GRISBY,
MELVIN JACKSON, GERALD THOMAS,
CLAUDINE FALKNER, RUFINO RAZO,
DAVID CRISWELL, LARRY OLIVER,
MICHAEL CLOUDY, MARK FLETCHER,
QUINCY RATCLIFF and RANDY HORN,

Plaintiffs-Appellees,

versus

INTERNATIONAL PAPER CO.,

Defendant-Appellant.

Appeal from the United States District Court
for the Southern District of Texas

Before GARWOOD, HIGGINBOTHAM and SMITH, Circuit Judges.

GARWOOD, Circuit Judge:

In this appeal, International Paper contends that the district

court did not have jurisdiction to grant plaintiffs’ Rule 60(b)

motion for reconsideration once plaintiffs appealed the district

court’s order dismissing their case. We agree with International
Paper and vacate the district court’s order granting plaintiffs’

motion for reconsideration.

Facts and Proceedings Below

In October 2002, plaintiffs filed this suit against

International Paper for racial discrimination under Title VII of

the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and 42

U.S.C. § 1981. Plaintiffs served International Paper with the

lawsuit in January 2003. International Paper, however, moved to

dismiss plaintiffs’ complaint on the grounds, among others, that

plaintiffs had failed to properly serve it. By order entered on

Monday, April 28, 2003, the district court granted International

Paper’s motion, reciting that process had not been properly served,

and dismissed the suit without prejudice.

On Wednesday, May 14, 2003, plaintiffs filed a motion for

reconsideration, which in this case we treat as a Rule 60(b)

motion.1 On May 27, 2003, plaintiffs timely filed a notice of

appeal, appealing the April 28, 2003 order dismissing their suit.

Even though the appeal was pending, on June 18, 2003, the district

court, now convinced that the service of process had been

effective, granted plaintiffs’ motion for reconsideration and

1
While the Federal Rules of Civil Procedure do not provide for a motion
for reconsideration, such a motion may be considered either a Rule 59(e) motion
to alter or amend judgment or a Rule 60(b) motion for relief from judgment or
order. Hamilton Plaintiffs v. Williams Plaintiffs, 147 F.3d 367, 371 n.10 (5th
Cir. 1998). If the motion is filed within ten days of the judgment or order of
which the party complains, it is considered a Rule 59(e) motion; otherwise, it
is treated as a Rule 60(b) motion. Id. (internal citations omitted). Because
plaintiffs’ motion for reconsideration was filed more than ten days after the
district court’s order dismissing the suit, it is treated as a Rule 60(b) motion.

2
vacated its April 28, 2003 judgment. Before granting plaintiffs’

motion, the district court did not seek leave of this court to do

so. Plaintiffs also did not file with this court a motion for

remand to the district court to allow it to grant the motion for

reconsideration.

Following the June 18 order granting plaintiffs’ motion,

plaintiffs filed with this court a notice to abandon their appeal,

and this court dismissed the appeal on June 26, 2003. On July 18,

2003, International Paper timely appealed from the order granting

plaintiffs’ motion for reconsideration.

Discussion

International Paper asserts that once plaintiffs filed their

notice of appeal, the district court did not have jurisdiction to

grant plaintiffs’ previously submitted Rule 60(b) motion.

Plaintiffs contend, however, that we do not have jurisdiction to

entertain International Paper’s appeal because the order granting

the Rule 60(b) motion is not a final judgment. We agree with

International Paper on both issues.

I. Jurisdiction over this appeal

We first address our jurisdiction over this appeal. The

district court’s order granting reconsideration of its dismissal of

plaintiffs’ claims is not a final order, but is nevertheless

appealable. While “[o]rdinarily an order granting a motion under

Rule 60 for relief from a final judgment is purely interlocutory

3
and not appealable[,] . . . when the appellant attacks the

jurisdiction of the district court to vacate the judgment . . ., an

appeal will lie to review the power of the court to enter such an

order.” Hand v. United States, 441 F.2d 529, 530 n.1 (5th Cir.

1971) (per curiam) (emphasis added). See also Fuller v. Quire, 916

F.2d 358, 360 (6th Cir. 1990) (“This appeal [of the order setting

aside the judgment and reinstating the case pursuant to Rule

60(b)(6)] is clearly not from a final order of the district court.

. . . There is, however, a reasonably well grounded common-law

exception to the final-judgment rule where the district court acts

without the power to do so.” (emphasis added) (citing, among

others, Hand, 441 F.2d at 530 n.1)). Cf. Phillips v. Negley, 6

S.Ct. 901, 903 (1886) (if order vacating judgment and granting a

new trial “was made without jurisdiction on the part of the court

making it, then it is a proceeding which must be the subject of

review by an appellate court”); Arenson v. S. Univ. Law Ctr., 963

F.2d 88, 90 (5th Cir. 1992) (citing Phillips, 6 S.Ct. at 903);

National Passenger R.R. Corp. v. Maylie, 910 F.2d 1181, 1183 (3d

Cir. 1990) (order granting new trial, though generally a

nonappealable interlocutory order is appealable if made without

jurisdiction).

On appeal, International Paper challenges the district court’s

jurisdiction to grant plaintiffs’ Rule 60(b) motion. This case,

4
therefore, falls within an exception to the final judgment rule,

and we do have jurisdiction over the appeal.

II. District Court’s Jurisdiction to Grant the Rule 60(b) Motion

A. Standard of Review

“Challenges to a district court’s jurisdiction are reviewed de

novo.” United States v. Bredimus, 352 F.3d 200, 203 (5th Cir.

2003).

B. Notice of Appeal and District Court’s Jurisdiction

“[A] perfected appeal divests the district court of

jurisdiction.” Winchester v. United States Atty. for S.D. of Tex.,

68 F.3d 947, 950 (5th Cir. 1995). Once the notice of appeal has

been filed, while the district court may consider or deny a Rule

60(b) motion (filed more than ten days after entry of the

judgment), it no longer has jurisdiction to grant such a motion

while the appeal is pending. Id. at 949. “‘When the district

court is inclined to grant the 60(b) motion, . . . then it is

necessary to obtain the leave of the court of appeals. Without

obtaining leave, the district court is without jurisdiction, and

cannot grant the motion.’” Id. (quoting Travelers Ins. Co. v.

Liljeberg Enters. Inc., 38 F.3d 1404, 1407 n.3 (5th Cir. 1994)).

If the district court “‘indicates that it will grant the motion,

the appellant should then make a motion in the Court of Appeals for

a remand of the case in order that the district court may grant

5
such motion.’” Winchester, 68 F.3d at 949 (quoting Ferrell v.

Trailmobile, Inc., 223 F.2d 697, 699 (5th Cir. 1955)).

The relevant procedural facts in this case are similar to

those in Winchester: the party first filed a Rule 60(b) motion,

then a notice of appeal. Winchester, 68 F.3d at 948. In the

present case, the district court dismissed plaintiffs’ case on

April 28, 2003, and on May 14, 2003, plaintiffs filed a motion for

reconsideration. Plaintiffs filed their notice of appeal to this

court on May 27, 2003. No leave of this court was either requested

or granted, and plaintiffs made no motion in this court for a

remand. Thus, the district court did not have jurisdiction to

grant plaintiffs’ Rule 60(b) motion following plaintiffs’ notice of

appeal. See id. at 949.2

C. Plaintiffs’ Counter-Arguments

In spite of our well-established procedure for Rule 60(b)

motions during the pendency of an appeal, plaintiffs argue that

2
We observe that a notice of appeal filed after the judgment—but before
the district court disposes of a Rule 60 motion filed no later than ten days
after the judgment is entered (or of a timely filed other motion listed in Fed.
R. App. P. 4(a)(4)(A))—does not become effective until the order disposing of the
last remaining such motion is entered. FED. R. APP. P. 4(a)(4)(A)(vi), (B)(i).
This allows the district court to retain jurisdiction to grant a Rule 60(b)
motion filed not later than 10 days after entry of judgment, even though the
notice of appeal has been filed.
In this case, however, plaintiffs properly concede that they did not file
any Rule 4(a)(4)(A) motion that would trigger Rule 4(a)(4)(B)(i). Plaintiffs
filed their motion for reconsideration on May 14—more than ten days after the
April 28 entry of the district court's judgment. Thus, plaintiffs did not delay
the effective date of their notice of appeal and did not extend the district
court’s jurisdiction.

6
their notice of appeal did not divest the district court of

jurisdiction to grant their motion. We find plaintiffs’ arguments

unconvincing.

1. Between a Rock and a Hard Place

Plaintiffs claim that they were “forced” to file a notice of

appeal in order to preserve their appellate issues while the

district court was considering their Rule 60(b) motion.

Plaintiffs, however, do not point to any authority suggesting that

this “forced” situation creates an exception to the general rule

that the district court’s jurisdiction is divested upon filing the

notice of appeal. Furthermore, we have previously determined that

our procedure—an appellant may make a motion to the court of

appeals for a remand if the district court indicates an intention

to grant the Rule 60(b) motion—“will relieve a party from being

forced to elect between two available remedies.” Winchester, 68

F.3d at 949.3 This argument, therefore, is without merit.

2. Granting a Rule 60(b) Motion Regardless of a
Pending Appeal

Plaintiffs cite cases stating that a district court may

entertain, or even grant, a Rule 60(b) motion regardless of a

3
Parties in the position of these plaintiffs should also consider
specifically advising the district court, perhaps by a supplement to their Rule
60(b) motion, that they have filed a notice of appeal from the judgment to which
the 60(b) motion is directed, and that the district court, if it is inclined to
believe the motion has merit, should so advise, but not formally grant the
motion, and plaintiffs will then seek remand from the Court of Appeals to allow
the district court to grant the motion, and if the Court of Appeals orders such
a remand, the district court may then grant the motion. The plaintiffs here did
nothing of the kind.

7
pending appeal. See Stone v. INS, 115 S.Ct. 1537, 1547 (1995)

(“[T]he pendency of an appeal does not affect the district court’s

power to grant Rule 60 relief.”); Ingraham v. United States, 808

F.2d 1075, 1080–81 (5th Cir. 1987) (“[A] Rule 60(b) motion may be

entertained in the district court at any time within a year of

judgment, regardless of the pendency or even the completion of an

appeal.”); Ames v. Miller, 184 F. Supp. 2d 566, 575 (N.D. Tex.

2002) (“The fact that the judgment sought to be set aside had been

affirmed on appeal does not impair the trial court’s ability to

grant Rule 60(b) relief.”). Plaintiffs also cite Standard Oil Co.

of Cal. v. United States, 97 S.Ct. 31 (1976), in which the Supreme

Court held “that the District Court may entertain a Rule 60(b)

motion without leave by this Court.” Id. at 31.

These cases do not support plaintiffs’ position. Contrary to

plaintiffs’ assertions, Ingraham is not inconsistent with our

procedure described in Winchester. Ingraham merely states that the

district court may entertain the Rule 60(b) motion, and the ability

to entertain or consider the motion at any time and without leave

of the appellate court does not compel the conclusion asserted by

plaintiffs that the district court may also grant the motion

without such leave.4 Standard Oil and Ames dealt with a clearly

4
In Ingraham, the district court actually denied the government’s Rule
60(b) motion after the notice of appeal, consistent with our established
procedure. Ingraham, 808 F.2d at 1077, 1080–81. Another case cited by
plaintiffs, Dow Chemical v. Consumer Product Safety Commission, 464 F. Supp. 904
(W.D. La. 1979), is also unsupportive of their position. In Dow Chemical, the

8
different procedural issue—the ability of the district court to

dispose of a Rule 60(b) motion after a completed appeal, rather

than during the pendency of an appeal. See Standard Oil, 97 S.Ct.

at 31; Ames, 184 F. Supp. 2d at 570–71, 573, 575. “The power of

the district court to act on a Rule 60(b) motion after the

appellate court has finished with the case raises different

problems,” and Standard Oil is the case that resolved this issue.

11 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND

PROCEDURE § 2873 (2d ed. 1995) (emphasis added); see also, Bldg.

Indus. Ass’n of Superior Cal. v. Babbitt, 70 F. Supp. 2d 1, 2–3

(D.D.C. 1999) (“The Standard Oil court did not address whether a

district court had jurisdiction during the pendency of an

appeal.”). Standard Oil and Ames, therefore, are not applicable

here.

Although appearing to directly and strongly support

plaintiffs’ position, Stone also does not control in the case sub

judice. First, the statement in Stone that “the pendency of an

appeal does not affect the district court’s power to grant Rule 60

relief” was dicta. Stone, 115 S.Ct. at 1547. The Supreme Court in

Stone merely analogized the procedure for Rule 60(b) motions to a

motion for reconsideration of a decision by the Board of

district court was considering a Rule 62(c) motion (injunction pending appeal),
not a Rule 60(b) motion, and in any event, the district court denied the motion.
Id. at 906–07, 911.

9
Immigration Appeals as secondary support for its holding that

filing a timely motion for reconsideration with the Board of

Immigration Appeals did not toll the time for filing an appeal to

the Court of Appeals from the Board’s underlying decision. Id. at

1541, 1547. Because Stone did not in any way involve Rule 60(b),

the statement at issue cannot be construed as an alternative

holding.

It has long been settled that the filing of a Rule 60(b)

motion more than ten days after entry of judgment, even though such

filing be timely, does not toll the time for filing notice of

appeal. And, the jurisprudence that a district court is without

jurisdiction to grant a thus filed Rule 60(b) motion while an

appeal is pending, absent remand by the court of appeals, has to no

extent ever been based on any thought that such filing of the Rule

60(b) motion tolled the time for filing notice of appeal; rather,

it has been based on the concept that while the case is pending in

the court of appeals, the district court, absent some form of

remand or permission by the court of appeals, lacks jurisdiction

over the case except to act in furtherance of the appeal.

While this circuit has not expressly addressed what effect, if

any, this Stone dicta may have on our established procedure for

Rule 60(b) motions (filed more than ten days after entry of

judgment) when an appeal is pending, other courts have explicitly

recognized that the statement in Stone is dicta and thus have not

10
modified their similar Rule 60(b) approach. See Concept Design

Elec. & Mfg. Inc. v. Duplitronics, Inc., 104 F.3d 376, 1996 WL

729637, at *3–4 (Fed. Cir. Dec. 19, 1996) (unpublished); TA

Instruments, Inc. v. Perkin-Elmer Corp., No. 95-545-SLR, 2000 WL

152130, at *3 n.1 (D. Del. Jan. 24, 2000) (“To date the Third

Circuit has not addressed the effect, if any, of the Stone dicta on

its procedure concerning Rule 60(b) motions.”); Phillips v.

Corestates Bank, N.A., 33 F. Supp. 2d 419, 421 n.5 (D.V.I. 1999);

A.P. v. McGrew, No. 97 C 5876, 1998 WL 808879, at *2 (N.D. Ill.

Nov. 16, 1998).5 Likewise, in cases following Stone we have

5
One district court relied in part on Stone to conclude that it retained
jurisdiction to grant a Rule 60(b) motion in part without seeking leave of the
appellate court. Shamis v. Ambassador Factors Corp., No. 95 CIV. 9818 RWS, 2001
WL 25720, at *1, 4–5, 8 (S.D.N.Y. Jan. 10, 2001). We find the analysis in Shamis
to be unpersuasive and incomplete. The district court did not recognize that the
statement from Stone was dicta. Id. at *4. The court also cited a Fourth
Circuit case for the proposition that it retained jurisdiction over the Rule
60(b) motion. Id. at *5 (citing Fobian v. Storage Tech. Corp., 164 F.3d 887, 888
(4th Cir. 1999)). The district court, however, failed to recognize that in
Fobian, the Fourth Circuit formally adopted the same procedure followed by us and
the majority of circuits, Fobian, 164 F.3d at 891–92 (citing, among others,
Ferrell, 223 F.2d at 699, and Winchester, 68 F.3d at 949), meaning that the
district court could not grant the Rule 60(b) motion without first receiving
leave of the appellate court.
We also note that in Properties Unlimited, Inc. v. Cendant Mobility Servs.,
No. 01 C 8375, 2003 WL 443742, at *1 (N.D. Ill. Feb. 20, 2003), the district
court cited Stone in concluding that it had power to grant a Rule 60(b) motion
despite the pendency of the appeal. The district court, however, did not refer
to the fact that the Stone language was dicta, in contrast to McGrew, 1998 WL
808879 at *2, also from the Northern District of Illinois, nor did it mention at
all the Seventh Circuit’s previously established procedure requiring a district
court to seek a remand if it was inclined to grant the motion. See Brown v.
United States, 976 F.2d 1104, 1110–11, (7th Cir. 1992) (detailing the Seventh
Circuit’s approach for dealing with Rule 60(b) motions during the pendency of an
appeal). Therefore, we find Properties Unlimited to be unpersuasive. With
respect to Properties Unlimited, we further note that in February 2003, the
defendants filed with the Seventh Circuit a notice of appeal from the district
court’s order granting the Rule 60(b) motion; so far as we are aware, as of this
writing that appeal is still pending.

11
continued to follow the same procedure established prior to Stone.

See Karaha Bodas Co. v. Perusahaan Perambangan Minyak Dan Gas Bumi

Negara, No. 02-20042, 2003 WL 21027134, at *4 (5th Cir. Mar. 5,

2003) (per curiam); Rutherford v. Harris County, Tex., 197 F.3d

173, 190 (5th Cir. 1999); Winchester, 68 F.3d at 949 (decided in

November 1995, some seven months after Stone). So have other

circuits. See, e.g., Mahone v. Ray, 326 F.3d 1176, 1179-80 (11th

Cir. 2003); Boyko v. Anderson, 185 F.3d 672, 674-75 (7th Cir.

1999); Fabian v. Storage Tech. Corp., 164 F.3d 887, 890-91 (4th

Cir. 1999).6

Second, this statement from Stone relied on Standard Oil, and

as pointed out supra, Standard Oil dealt with a different

procedural situation from that involved in this case.7

Taking all this into account, we hold that Stone does not

affect our previously established approach where the appeal remains

pending when the district court acts.

6
The Ninth Circuit alone denies the authority of a district court even to
consider a Rule 60(b) motion while an appeal is pending. E.g., Scott v. Younger,
739 F.2d 1464, 1466 (5th Cir. 1983).

7
Apart from Standard Oil, the only other authority cited by Stone in this
respect is Wright, Miller & Kane, supra, § 2873. As previously observed, that
text recognizes that Standard Oil addressed the “different problems” of district
court action on a Rule 60(b) motion after the appeal is concluded and is no
longer pending. Where the appeal is still pending, the approach we take here is
fully consistent with that text. See id. at 430-35. The 2004 pocket part to
that text cites Stone only in connection with the portion thereof addressing the
district court’s power after the appeal is terminated. Id. at 113 n.19. Another
leading treatise on procedure makes no mention of Stone but adheres to the
general rule that a pending appeal divests the district court of the power to
grant a Rule 60(b) motion. See 12 JAMES W. MOORE, MOORE’S FEDERAL PRACTICE § 60.61[1]
(3 ed. 2004).

12
 Plaintiffs also make a brief attempt at arguing that we have

allowed a district court to grant a motion for reconsideration

after the filing of a notice of appeal and without the filing of a

motion for leave, citing Oliver v. Home Indemnity Co., 470 F.2d

329, 331 (5th Cir. 1972), as evidence of this. While plaintiffs’

statement about the result in Oliver is correct, we have previously

deemed the Oliver decision “an anomaly” that we have “consistently

declined to follow in subsequent cases.” Winchester, 68 F.3d at

949. Furthermore, as one panel of this court cannot overrule

another, Oliver cannot be binding on us because it contravenes

Ferrell, the case in which we set out the proper procedure for

dealing with Rule 60(b) motions during the pendency of an appeal.

Id. Thus, this argument is unavailing.

Conclusion

For the foregoing reasons, the district court’s order granting

plaintiffs’ motion for reconsideration is

VACATED.

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