When can you appeal a summary judgment denial?
Ordinarily, a party cannot appeal a denial of summary judgment after trial has taken place, unless the arguments were renewed in a motion for judgment as a matter of law under Federal Rule of Civil Procedure 50. A growing majority of appellate courts, however, has carved out an exception to this general rule—allowing appeals of summary judgment denials based on "purely legal" arguments even if they were not raised again at trial in Rule 50 motions. Other courts, however, continue to adhere strictly to the rule, declining to review after trial any summary judgment denials, whether the decision was fact-based or a question of law. The U.S. Supreme Court has dodged the issue, leaving the circuit split in place.
The general rule. Denials of summary judgment generally cannot be appealed after a full trial on the merits. The reason is straightforward enough. On summary judgment the court decides only whether entry of judgment is warranted based on the undisputed, material facts before the court at that time; a denial does nothing more than allow a contested issue to be resolved at trial. Once a trial has taken place, the "focus is on the evidence actually admitted and not on the earlier summary judgment record." Chemetall GmbH v. ZR Energy Inc., 320 F.3d 714, 718 (7th Cir. 2003). Therefore, to preserve an argument for appeal based on the sufficiency of the evidence, a party must raise the challenge in a Rule 50(a) motion before the case is submitted to the jury and, if unsuccessful, renew the motion under Rule 50(b) after the verdict. What is appealable at that point is the denial of the party's motion for judgment under Rule 50, not the earlier denial of summary judgment.
The exception. A majority of the federal circuits, however, will review a denial of summary judgment that was based on a "purely legal" argument even if that argument was not renewed under Rule 50. See, e.g., Feld v. Feld, 688 F.3d 779, 781-82 (D.C. Cir. 2012); Revolution Eyewear Inc. v. Aspex Eyewear Inc., 563 F.3d 1358, 1366 n.2 (Fed. Cir. 2009); Houskins v. Sheahan, 549 F.3d 480, 489 (7th Cir. 2008); Barber v. Louisville & Jefferson Co. Metro. Sewer Dist., 295 F. App'x 786, 789 (6th Cir. 2008); Rothstein v. Carriere, 373 F.3d 275, 284 (2d Cir. 2004); Banuelos v. Construction Laborers' Trust Funds for So. Calif., 382 F.3d 897, 902 (9th Cir. 2004); Wolfgang v. Mid-America Motorsports, 111 F.3d 1515, 1521 (10th Cir. 1997). Courts have found various arguments to be "purely legal" for this purpose, and therefore reviewable, including res judicata, collateral estoppel, governmental immunity and contract interpretation. See Chemetall, 320 F.3d at 719.
These courts reason that "[t]he rationale for requiring a Rule 50 motion does not apply to purely legal questions," Feld, 688 F.3d at 782, because those questions do not challenge the sufficiency of the evidence and, if raised again at the end of a trial, they would present the very legal issues that were presented at summary judgment. Additional facts and credibility determinations during trial would not alter the resolution of a pure question of law, and therefore there is no reason to require a party to raise the question again under Rule 50. As the U.S. Court of Appeals for the Ninth Circuit has explained, while it would be a "pointless academic exercise" to decide after trial whether a factual issue was disputed at the summary judgment stage, that concern does not apply to "an error of law that, if not made, would have required the district court to grant the [summary judgment] motion." Banuelos, 382 F.3d at 902.
The courts in the majority tend to be consistent in their approach. The Seventh Circuit, however, has added certain conditions for allowing review of legal arguments rejected on summary judgment, requiring that the district court have had some other opportunity to correct its own error and that the arguments not come as a surprise to the opponent. See, e.g., Chemetall, 320 F.3d at 720 (both requirements satisfied when party renewed its legal argument in challenging jury instructions).
The minority position. A minority of appellate courts has declined to draw a distinction between questions of law and fact, requiring parties to renew all summary judgment arguments in Rule 50 motions to preserve them for appeal. The courts that have adopted this approach have cited the inherent difficulty in distinguishing between "factual" and "legal" issues in summary judgment denials. See, e.g., Black v. J.I. Case Co., 22 F.3d 568, 571 n.5 (5th Cir. 1994). Accordingly, they have declined "to create a new jurisprudence in which district courts would be obliged to anticipate parties' arguments on appeal by bifurcating the legal standards and factual conclusions supporting their decisions denying summary judgment." Chesapeake Paper Prods. Co. v. Stone & Webster Eng'g Corp., 51 F.3d 1229, 1235 (4th Cir. 1995). While the Fifth Circuit appears to have backed off the minority position, see Becker v. Tidewater Inc., 586 F.3d 358, 365 n.4 (5th Cir. 2009), the Eighth and First circuits have adopted it. See Lopez v. Tyson Foods Inc., 690 F.3d 869, 875 (8th Cir. 2012); Ji v. Bose Corp., 626 F.3d 116, 127-28 (1st Cir. 2010).
Courts in the minority have also cited, in support of their position, the low burden of complying with Rule 50, the availability of alternative vehicles to obtain review, including certification of a legal issue under 28 U.S.C. 1292(b) (Chesapeake Paper, 51 F.3d at 1236-37; Varghese v. Honeywell Int'l Inc., 424 F.3d 411, 421 (4th Cir. 2005)) and the danger that the majority position would burden trial courts and impinge upon their inherent authority to determine what issues are best resolved at trial. See, e.g., Black, 22 F.3d at 572.
HIGH COURT SIDESTEPS ISSUE
The Supreme Court has declined to resolve the circuit split. In Ortiz v. Jordan, 131 S. Ct. 884 (2011), the Supreme Court held that a denial of correctional officers' motion for summary judgment based on qualified immunity was unreviewable on appeal. The basis for the court's decision was that the petitioners had not sought immediate, interlocutory review of the summary judgment denial—which is available in qualified immunity cases—and had not renewed their argument under Rule 50. The court declined to address the argument that a Rule 50 motion was not required because qualified immunity presented a pure legal issue, finding that the immunity issue actually turned on disputed issues of fact and that their appeal was really a sufficiency of the evidence claim—which had to be preserved in a post-verdict motion.
Ortiz underscored the inherent difficulty in distinguishing between summary judgment denials based on law and fact. But it left the circuit split in place, as subsequent circuit decisions have recognized. "Despite summarizing its ruling in unfortunately broad language, the opinion in Ortiz was actually limited to cases where summary judgment is denied because of factual disputes" and "leaves open the possibility that such purely legal claims may still be considered." In re Amtrust Fin. Corp., 694 F.3d 741, 750 (6th Cir. 2012). See, e.g., Fireman's Fund. Ins. Co. v. North Pacific Ins. Co., 446 F. App'x 909, 911 (9th Cir. 2011) (Ortiz "expressly declined to consider whether such ‘purely legal issue[s]' are appealable after a full trial on the merits," so prior circuit precedent allowing review remains binding).
Advice to the practitioner. As Ortiz indicates, courts will not necessarily accept a party's characterization of a summary judgment argument as purely legal and may well find it to be a factual argument that was waived if not renewed in a Rule 50 motion. Hence, "prudent counsel will not rely on their own interpretations of whether an issue is purely a question of law or fact. Out of an abundance of caution, and good trial practice, counsel should renew summary judgment grounds in a Rule 50 motion for judgment as a matter of law at the close of all the evidence, and again, if necessary, after the jury has returned a verdict." Wolfgang, 111 F.3d at 1521.