The D.C. Circuit made a rare move on Friday (October 12) when it reversed itself from a July opinion and dismissed an appeal for lack of jurisdiction.
The case was about a D.C.-based couple, the Dahlgrens, who sued their insurance company for breach of contract after it refused to cover the $800,000 damage to their Rehoboth Beach home that flooded in a plumbing accident. The Dahlgrens also roped in a cleaning-and-restoration company for not effectively fixing the damage and leaving an environment for mold to fester.
The district judge sided with the insurance company on the contract claim and transferred the Dahlgrens’ claim against the cleaning company to Delaware reasoning that it did not have personal jurisdiction over the Delaware-based company.
The Dahlgrens appealed both rulings and lost both in July. Then, on its own, the D.C. Circuit asked for additional briefing and re-argument on whether it had jurisdiction to hear the claims. In an opinion by Judge Griffith (joined by Judges Sentelle and Katsas), the court reversed itself on the transfer claim and held that it did not have jurisdiction deal with the issue.
Why did the court decide it had jurisdiction to hear one of the Dahlgrens’ claims and not the other? The court interpreted a federal rule—Rule 54(b)—usually meant to prevent it from reviewing decisions that are not considered “final” from the district judge to mean that it could review decisions that resulted in the dismissal of a party (the insurance company) in certain situations—namely, in split transfer situations where one claim goes to another court and the other remains.
The court affirmed the district judge’s order in favor of the insurance company. Now the Dahlgrens take their last remaining claim out of the District and into Delaware for the next round. You’ll have to check out the Third Circuit blog for what happens next in this case. Circuit Breaker out.
