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When Does the Trial Court Have Authority to Dismiss An Appeal?

A few weeks ago, I blogged on the Business Court’s dismissal of an untimely notice of appeal.  Today, the Court of Appeals, in a thoughtful 32-page opinion by Judge Marty Geer called In re Duke Energy Corp., gently smacked the hand of the North Carolina Utilities Commission for dismissing an appeal for lack of standing.  So why would the Business Court have the authority to dismiss an appeal, but the Utilities Commission did not?  The difference lies in the type of challenge that was being made to the appeal.

The general rule is that when an appeal is taken, the trial court loses jurisdiction over the appeal.  Id. at *10.  There are two recognized exceptions to this rule.  [Actually, there is a third “exception,” discussed further below].

First, the trial court retains jurisdiction over a case “during the session in which the judgment appealed from was rendered.” Id.  In all honesty, I’ve never seen this provision used before.  Civil Procedure Rule 60(a) allows a trial judge to correct clerical mistakes in an order or judgment, but is not limited to the same session in which the judgment was entered.  If you have experience with this “same session” jurisdictional category, please enlighten me with your experience in the comment section of blog.

The second (and most commonly utilized) category for a trial court’s retention of jurisdiction after an appeal is filed is “for the purposes of settling the case on appeal.”  This second category is why a trial court has the authority (in conjunction with the Appellate Rules) to grant a single 30-day extension of time to serve the transcript and a 30-day extension of time to serve the proposed record on appeal.  This jurisdictional exception also allows the trial court to settle the record on appeal under Appellate Rule 11 when the parties cannot come to an agreement.  It also gives a trial court the authority to determine that an appeal “has been abandoned” and to “thereby regain jurisdiction of the cause.”  In re Duke at *10.  In this vein, Appellate Rule 25 allows a trial court to dismiss an appeal when a party fails to properly perfect its appeal (i.e., misses an appellate deadline).  An important caveat to this rule is that the trial court only has jurisdiction to dismiss an appeal for failure to perfect “

rior to the filing of an appeal in an appellate court.”  Appellate Rule 25.  Because notices of appeal are not filed in the appellate division, an appeal is not considered “filed” in the appellate court until after the record on appeal is filed, at which point, motions to dismiss for failure to perfect must be decided by the appellate courts.  Appellate Rule 25.

The Business Court case I blogged about a few weeks ago fell within Appellate Rule 25’s well-recognized exception that a trial court retains jurisdiction to dismiss an appeal as untimely before the record on appeal is filed in the Court of Appeals.

In contrast, the Utilities Commission dismissed the prospective intervenor’s appeal in In re Duke because it believed that the intervenor lacked standing. This is a legal argument, not a timeliness issue, and therefore, the North Carolina Utilities Commission overstepped its jurisdictional authority by dismissing the appeal.

In the Utilities Commission’s defense, a prior Court of Appeals’ opinion, Farm Credit Bank v. Edwards, 121 N.C. App. 72, 464 S.E.2d 305 (1995), suggested that a trial court might have jurisdiction to dismiss an appeal as being unauthorized where the issue was raised by way of objection to the proposed record and the plaintiff consented to the trial court addressing the matter.

Judge Geer noted, however, that “Farm Credit Bank’s reasoning is directly contrary to the well-established principle that subject matter jurisdiction cannot be conferred upon a court by consent, waiver or estoppel. . . . and therefore failure to object to jurisdiction is immaterial.” In re Duke at *14-15 (citations omitted).  Moreover, Farm Credit Bank conflicted with the Court’s prior decision in Estrada v. Jacques, 70 N.C. App. 627 (1984)—one of the seminal cases explaining the limits on a trial court’s continuing jurisdiction while a case is on appeal.  Because there was no dispute that the In re Duke appellant had complied with all the appellate rules and properly perfected its appeal, the Utilities Commission lacked jurisdiction to dismiss the appeal.

The Utilities Commission also argued that it retained jurisdiction because “[a]n attempted appeal from a nonappealable interlocutory order is a nullity and does not deprive the tribunal from which the appeal is taken of jurisdiction.” In re Duke at *17.  This third “exception” does not actually give the trial tribunal authority to dismiss an appeal that it believes is being taken from a non-appealable interlocutory order.  The decision on whether the appeal should be dismissed as a nonappealable interlocutory appeal is ultimately made by the appellate courts.  However, if the trial court correctly predicts that the appeal is improper and continues to issue orders in the case despite the pendency of the appeal, then those trial court orders issued during the appeal will be enforced notwithstanding the appeal.  [What if the trial court guesses incorrectly and continues issuing orders while a case is on appeal? That is a complicated topic that would be a good subject for a future blog post.]  The point is that this third “exception” only gives the lower court the authority to “ignore an appeal from a nonappealable order and proceed as if no appeal had been taken.” Id. at *17.  This is not the equivalent of the lower court having the authority to dismiss the appeal itself.  Id.

However, In re Duke case presented another procedural wrinkle for the In re Duke merits panel: a prior Court of Appeals order limited the merits panel’s authority to correct the issue.  Normally, when a trial court dismisses an appeal, that ruling is challenged by filing a petition asking the appellate court to review the dismissal of the appeal by certiorari.  That is what the appellant did in In re Duke.  Id. at *20.  However, a separate Court of Appeals petition panel had already denied that petition.  Therefore, the merits panel did not have authority to overrule the prior panel and grant certiorari to reach the merits of the appeal from the underlying order.

Nonetheless, Judge Geer found another way to “skin the proverbial cat,” finding that the panel could consider the appeal as properly before the Court of Appeals if the panel treated the “Commission’s order ‘as in excess of authority and void ab initio.’”

Ultimately, Judge Geer addressed the merits of the appeal, determining that the appellant’s motion to intervene had been properly denied.  This gave the appellant a mere pyrrhic victory but create a field day for appellate nerds.  Indeed, you may ask:  Given that the underlying judgment was ultimately affirmed, why did the panel spend so much energy (over 14 pages) explaining why the Commission did not have authority to dismiss the appeal? No harm, no foul—right?  Actually, no.  Jurisdictional issues are important and should not be ignored simply because the underlying appeal may lack merit.  The Commission’s dismissal of the appeal for lack of standing “‘g[ave] the appearance that the [Commission wa]s acting as an appellate court in affirming its own exercise of discretion.’” Id. at *8-9 (quoting dissenting opinion of Commissioner Beatty).  If the Commission’s dismissal of the appeal had not been overturned, the appellant-intervenor would have been deprived of appellate review of its motion to intervene and the Commission’s decision on standing would have been insulated from all appellate review.  Id. at *18.  Ignoring the Commission’s dismissal of the appeal would not only have violated principles of fairness, it would have undermined our appellate system of justice. Thankfully, Judge Geer and her fellow panel members took the extra time to ensure that this did not happen.

Take away point: the next time someone appeals a non-appealable interlocutory order, try to keep those principles in mind as you “patiently” wait for the appellate court to dismiss the appeal.

–Beth Scherer

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