JAMES LAWRENCE KING, District Judge.
While on appeal, the parties attended a mediation conference, as directed by the Eleventh Circuit,
"As a general matter, the filing of a notice of appeal deprives the district court of jurisdiction over all issues involved in the appeal." Mahone v. Ray, 326 F.3d 1176, 1179 (11th Cir.2003). "However, it does not prevent the district court from taking action `in furtherance of the appeal,'" which includes "that district courts retain jurisdiction after the filing of a notice of appeal to entertain and deny a Rule 60(b) motion." Id. at 1179-80 (citation omitted). "However, following the filing of a notice of appeal district courts do not possess jurisdiction to grant a Rule 60(b) motion." Id. at 1180 (emphasis added).
Id. This procedure is codified in Federal Rule of Civil Procedure 62.1, Federal Rule of Appellate Procedure 12.1, and Eleventh Circuit Rule 12.1-1.
Under Rule 60(b)(6), "[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for" "any ... reason that justifies relief." The rule enables courts "`to vacate judgments whenever such action is appropriate to accomplish justice.' ... Motions under the rule are directed to the sound discretion of the district court." Griffin v. Swim-Tech Corp., 722 F.2d 677, 680 (11th Cir.1984) (quoting Klapprott v. United States, 335 U.S. 601, 615, 69 S.Ct. 384, 93 L.Ed. 266 (1949)). Therefore, this Court must determine whether vacating its prior orders to fulfill a condition of the parties' tentative settlement on appeal is appropriate to accomplish justice.
In U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 19, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994), the Supreme Court considered "whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after appeal is filed or certiorari sought." In that case, Bonner Mall Partnership (the "Partnership") defaulted on its real estate taxes. Id. U.S. Bancorp Mortgage Co. ("Bancorp"), who had acquired a loan and mortgage secured by the real estate, scheduled a foreclosure sale. Id. The day before the sale, the Partnership petitioned for Chapter 11 bankruptcy. Id. Bancorp moved to suspend the automatic stay of its foreclosure, which motion the bankruptcy court granted. Id. at 20, 115 S.Ct. 386. The United States District Court for the District of Idaho reversed the bankruptcy court, and the United States Court of Appeals for the Ninth Circuit affirmed. Id. After the United States Supreme Court granted Bancorp's petition for a writ of certiorari, the parties stipulated to a consensual plan of reorganization, which the bankruptcy court approved. Id. The "confirmation of the plan constituted a settlement that mooted the case," but Bancorp was not completely satisfied. It asked the Supreme Court to vacate the judgment of the Court of Appeals pursuant to 28 U.S.C. § 2106.
The result was a unanimous opinion in which the Supreme Court strongly rejected the idea that "courts should vacate where mootness results from a settlement." Id. at 23, 115 S.Ct. 386. The Court reviewed and described its then-leading case on vacatur, United States v. Munsingwear, Inc., 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950):
Id. at 22-23, 115 S.Ct. 386 (quoting Munsingwear, 340 U.S. at 39, 40, 71 S.Ct. 104). The Court then surveyed post-Munsingwear precedent, and concluded that "[t]he principles that have always been implicit in our treatment of moot cases counsel against extending Munsingwear to settlement." Id. at 24, 115 S.Ct. 386. The Court reasoned that, in considering whether to grant vacatur based on mootness,
Id. at 25, 115 S.Ct. 386 (emphasis added) (footnote omitted). The Supreme Court concluded that because the losing party below bears the burden of proving "equitable entitlement to the extraordinary remedy of vacatur," that party's "voluntary forfeiture of review constitutes a failure of equity that makes the burden decisive" against vacatur. Id. at 26, 115 S.Ct. 386.
In reaching its decision, the Bancorp Court also took account of the public interest. The Court first emphasized the presumptive correctness and value of judicial precedents to the legal community as a whole. Id. It then concluded that the public interest was best served by honoring the demands of orderly procedure — i.e. the ordinary appellate process — rather than by allowing "a party who steps off the statutory path to employ the secondary remedy of vacatur as a refined form of collateral attack on the judgment." Id. at 27, 115 S.Ct. 386. The Court held that "mootness by reason of settlement does not justify vacatur of a judgment under review." Id. at 29, 115 S.Ct. 386.
Near the end of the Bancorp Opinion, however, the Court allowed for an undefined exception:
Id. This statement has left lower courts with the ambitious task of determining what circumstances are "exceptional" enough to countermand the presumptive value of precedent, the imperative to honor the demands of orderly procedure, and the failure of equity that ordinarily results from an appellant's voluntary forfeiture of review.
By allowing for the possibility of "exceptional circumstances," the Supreme Court did not completely close the door to vacatur based on mootness by reason of settlement. It left the door ajar, and some federal appellate courts have walked right through it. The parties urge this Court to follow the examples of two opinions from the First and Second Circuit Courts of Appeal.
The First Circuit concluded that the controversy between the parties had ended, that the appeal was moot, and that the district court's opinion should be vacated. Id. The court took "pains to consider whether this appeal falls within the Supreme Court's prohibition against vacatur in" Bancorp. Id. The court concluded that "it does not" for two principal reasons. First, the appellate court, rather than the parties, initiated settlement discussions. Thus, "[a]s the INS has not initiated the relinquishment of its right to the remedy [of appeal], the same equitable calculus underlying Bancorp is not present." Id. The First Circuit's initiative also negated Bancorp's concerns "about giving parties undue control over judicial precedents." Id. In that respect the court saw "no appreciable harm to the orderly functioning of the federal judicial system by vacating judgment." Id. Second, the First Circuit was persuaded that the "harm" worked "by depriving the public and the judicial system of the precedential value of the district court's opinion" should not "take priority over the parties' best interests." Id. It mattered to the court that "the INS, as a repeat player before the courts, is primarily concerned with the precedential effect of the decision below. If that decision stands, all possibility of a settlement is eliminated. If it is vacated, the appellee acquires the absolute certainty of not being deported, while the government saves the costs and risk of litigation — a win for both sides." Id. The First Circuit concluded that "the equities plainly favor vacatur" based on mootness by reason of settlement. Id. at 118.
The second opinion that the parties rely on is Major League Baseball Props., Inc. v. Pacific Trading Cards, Inc., 150 F.3d 149 (2d Cir.1998). That case was a trademark dispute by Major League Baseball ("MLB") against Pacific Trading Cards, Inc. ("Pacific"), on the theory that Pacific was wrongfully manufacturing and distributing "trading cards that depicted major-league baseball players in MLB-trademarked uniforms." Id. at 150. The United States District Court for the Southern District of New York denied MLB's motion for a preliminary injunction. Id. MLB then moved in the Second Circuit for an injunction pending an appeal of the district court's order. Id. At oral argument, the Second Circuit expressed its "intention to grant MLB's motion unless Pacific posted a bond sufficient to secure MLB's claims." Id. at 150-51. The court also "suggested to the parties that they attempt to negotiate a settlement. To aid discussion," the court "assigned staff counsel to mediate the matter." Id. at 151. After discussions, the parties jointly reported that "they could settle the dispute but only if the district court's order and opinion were vacated." Id.
Id. The court concluded that, unlike in Bancorp, "the victor in the district court wanted a settlement as much as, or more than, the loser did.... The only damage to the public interest from such a vacatur would be that the validity of MLB's marks would be left to future litigation." Id. Therefore, "these facts met the `exceptional circumstances' test of Bancorp." Id.
The parties have not cited any instances of the Eleventh Circuit finding "exceptional circumstances" under Bancorp. This Court has found only one such instance, in a one-paragraph, per curiam, unpublished opinion. See Blue Cross & Blue Shield Ass'n v. Cox, 403 Fed.Appx. 417 (11th Cir.2010). The opinion's one footnote only hints at what the exceptional circumstances were: "Unexpected developments make it unlikely that full counseling would be available to the court if litigation continues in this case. The possible preclusive effect if the case remains is undesirable under these circumstances." Id. at 417 n. 1. The Cox opinion offers no guidance here.
The Court also notes that the Eleventh Circuit, sitting en banc, recently dismissed an appeal as moot due to settlement, which the parties achieved after briefing, oral argument, and a referral to mediation by the en banc panel. Berry v. Orange Cnty., 785 F.3d 553 (11th Cir.2015). The court also remanded the case to the district court with instructions to vacate the judgment and dismiss the lawsuit. Id. The district court's opinion had been affirmed by the three-member panel decision that was vacated pending enbanc review. See Berry v. Leslie, 767 F.3d 1144 (11th Cir. 2014), opinion vacated on reh'g en banc sub nom. Berry v. Orange Cnty., 771 F.3d 1316 (11th Cir.2014). The en banc order of dismissal and remand does not mention Bancorp.
The parties contend that "exceptional circumstances" exist in this case, analogous to those found in the First and Second Circuits' Motta and Major League Baseball decisions, pursuant to which this
The Court agrees that these circumstances are analogous to those found in the Motta and Major League Baseball decisions. The Court disagrees that they are sufficiently "exceptional" to escape Bancorp's strong disfavor of vacatur based on mootness by reason of settlement.
First, this Court differs with the First and Second Circuits as to the parties' first proposed "exceptional circumstance." In Bancorp, the "principal condition" to which the Supreme Court looked was "whether the party seeking relief from the judgment below caused the mootness by voluntary action." U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 24, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994). The Supreme Court reasoned that, as the losing party below bears the burden of proving "equitable entitlement to the extraordinary remedy of vacatur," that party's "voluntary forfeiture of review constitutes a failure of equity that makes the burden decisive" against vacatur. Id. at 26, 115 S.Ct. 386. In this Court's view, the fact that the parties entered into settlement negotiations only upon the urging of the appellate court, and the fact that the appellant here wants vacatur as much as the appellee (in order to effectuate settlement) in no way alters the voluntariness of appellant's forfeiture of appellate review. The parties may have discussed settlement only upon the insistence of the Eleventh Circuit, but the parties' inclusion of vacatur as a condition of their settlement was entirely their own prerogative. Having made that choice, appellant suffers from that "lack of equity of a litigant who has voluntarily abandoned review." Id. at 28, 115 S.Ct. 386.
Second, the Court is not persuaded by the parties' insistence that the comparatively limited precedential value of this Court's judgments — based on state law as they are — constitutes an "exceptional circumstance."
It is upon consideration of this statement, and of the sound policy behind it, that this Court perceives a basic flaw in the Motta and Major League Baseball opinions. Those decisions in part turn on the courts' determinations that little or no harm would be worked by a vacatur. See Motta v. District Director of I.N.S., 61 F.3d 117, 118 (1st Cir.1995) ("We see no appreciable harm to the orderly functioning of the federal judicial system by vacating judgment."); Major League Baseball Props., Inc. v. Pacific Trading Cards, Inc., 150 F.3d 149, 152 (2d Cir.1998) ("The only damage to the public interest from such a vacatur would be that the validity of MLB's marks would be left to future litigation."). The parties' argument to this Court is similarly focused. See DE 242, at 14 ("the public's interest in the development of law would not be harmed by granting vacatur of the Orders because the legal issues presented therein can be addressed with more finality by Florida's state courts.").
However, this is the wrong focus. The Bancorp Court did not state that vacatur should be granted where doing so would work only a little harm, or none at all. Rather, the Court stated that vacatur should be granted only where the public interest would affirmatively "`be served by a vacatur.'" See Bancorp, 513 U.S. at 26-27, 115 S.Ct. 386 (quotation omitted); id. at 27, 115 S.Ct. 386 ("we think ... that the public interest
On that final note, this Court rejects the parties' low estimation of the harm that would result from the requested vacatur. Bancorp makes clear that a species of harm necessarily results from depriving the public and the legal community of judicial precedents, which are "`presumptively correct and valuable.'" See Bancorp, 513 U.S. at 26-27, 115 S.Ct. 386 (quotation omitted).
Therefore, it is