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4th Circuit: Dismissal without prejudice not final and appealable

The 4th U.S. Circuit Court of Appeals stated in a recent decision that it was time to turn common practice into precedence for cases in which district courts have dismissed claims for failure to plead sufficient facts, finding unanimously on Dec. 9 that those cases can be appealed only if the order fails to clearly indicate that the complaint’s defects could not be cured by an amendment.

Senior circuit judge Andre Davis, writing for the court in Goode v. Central Virginia Legal Aid Society, Inc., said that the 4th Circuit has “consistently” found in unpublished opinions that it lacked appellate jurisdiction in discrimination cases such as this one in which pleading deficiencies can be remedied by amendment but where the plaintiff instead chooses to appeal.

“We think the time has come to enshrine this salutary rule in a precedential opinion, and we do so here,” Davis wrote.

Joseph Seiner, a labor and employment law professor at the University of South Carolina School of Law, said that while he considers the opinion “run-of-the-mill,” pleading standards have changed substantially over the last decade, becoming more “burdensome” for plaintiffs.

“My guess is what the court’s doing is using this as a vehicle to develop that case law a little bit because it’s very new,” Seiner said. “Those pleading standards existed about five decades prior to being abrogated by the Supreme Court in 2007, so I think it’s using this as an opportunity to give a little more clarity on what it thinks is a plausible pleading standard in an employment discrimination case.”

In deciding Goode, the appeals court found that the discrimination lawsuit filed by attorney Freddie Goode against his former employer, the Central Virginia Legal Aid Society, was dismissed by the U.S. District Court for the Eastern District of Virginia because Goode failed to state a claim upon which relief could be granted under the Federal Rules of Civil Procedure.

The fact that Goode failed to amend his complaint does not mean that he was precluded from doing so, the court found.

“The district court granted the motion to dismiss without prejudice, and Goode timely appealed,” Davis wrote. “[W]e conclude that the order of dismissal was not a final and appealable order, and we therefore dismiss this appeal for lack of jurisdiction and remand the case to the district court with instructions.”

In 2013, Goode was one of two senior managing attorneys for CVLAS when the agency’s board of directors eliminated Goode’s position. Goode, then 72, had been with the agency in various capacities for 25 years.

On April 7, 2014, Goode filed suit against CVLAS alleging race, sex and age discrimination. According to the complaint, five African-American employees, including Goode, were let go amid agency restructuring. All affected employees were older than 40, and Goode was the agency’s oldest employee.

According to Goode, CVLAS claimed that he was terminated because CVLAS lost a degree of government funding and that many of the services he provided—specifically, representation of Social Security cases—were available through the private bar. The office, Goode said he was told, was going to concentrate more on family law.

According to court documents, Goode, who challenged this rationale and claims he offered, in vain, cost-cutting measures that he believed would save his job, alleged that budget issues were merely an excuse for discrimination.

In his complaint, Goode pointed to two employees who kept their jobs—a “much younger” Hispanic woman and the other senior managing attorney, a younger white man with a higher salary—in alleging race discrimination.

CVLAS filed a motion to dismiss, asserting that Goode failed to state a claim under Rule 12 (b) (6). The district court agreed, finding that he “fail[ed] to allege sufficient facts supporting his claim that his termination was the result of unlawful discrimination.”

While the court dismissed Goode’s claims for discrimination under Title VII and the Age Discrimination in Employment Act, it did not address his claim of sex discrimination since he never raised the claim in a separate count.

On appeal, the 4th Circuit found that it lacked jurisdiction, remanding the case to the district court with instructions to allow Goode to amend his complaint.

“An order dismissing a complaint without prejudice is not an appealable final order under [section] 1291 ‘if the plaintiff could save his action by merely amending his complaint,’” Davis wrote.

The appeals court considered whether Goode could have amended his complaint to cure supposed pleading defects identified by the district court, including the failure to establish a prima facie case for discrimination and the lack of a factual demonstration of satisfactory job performance, and found that he could have. The district court’s decision, then, was not final and appealable.

“Such an analysis serves to bolster the efficiency and smooth operation of the judiciary,” Davis wrote. “This Court recognized that [section] 1291 preserves judicial economy by ensuring that a district court maintains authority over a case until it issues a final and appealable order, thus preventing piecemeal litigation and repeated appeals.”

Goode was represented by attorneys from Lawrence & Associates in Richmond, Virginia. Messages left seeking comment were not returned.

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