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Insurable Interests - Insights on Insurance Law

How to anger a Federal Court of Appeals and ruin your day: a primer

“If it were permissible for a court to order both sides to pay a penalty—say, into the law clerks’ holiday party fund—we would be inclined to do so.” 

Cooke v. Jackson Nat’l Life Ins. Co, No. 17-2080, ___ F.3d ___, 2018 WL 798281 (7th Cir. Feb. 9, 2018).

Judge's rulingJudge Frank Easterbrook, of the United States Court of Appeals for the Seventh Circuit, is a notorious stickler on appellate jurisdiction. Seconds into an oral argument, he may start firing questions about the court’s power to hear your case. And, if you are not ready, it will be tough sledding.

Jackson National Life Insurance Company recently took its turn through Judge Easterbrook’s jurisdictional wringer. Jackson had company. Plaintiff’s counsel drew almost equal ire. The decision is a good reminder to all insurer counsel, and really any counsel, to pay careful attention to jurisdictional details.

The case began rather simply. Plaintiff alleged that Jackson had failed to pay the death benefit on her deceased husband’s life insurance policy. The district court agreed and ordered Jackson to pay the benefit. So far, so good. Matters began to complicate a bit, however, when the judge entered a judgment that further required Jackson to pay plaintiff’s legal expenses.

The problem was that the judgment did not specify how much Jackson was supposed to pay—either on the death benefit or the attorney fees. Plaintiff filed a Rule 59 motion asking the district court to reduce the judgment to a precise figure. The court did so with respect to the death benefit, but left the amount of attorney fees “dangling.”

Jackson timely filed a notice of appeal on the Rule 59 order. Though Jackson chose to throw in the towel on the merits, it asked the appellate court to conclude that plaintiff was not entitled to attorney fees. But by that point, the trial court still had not said exactly how much Jackson was supposed to pay on the fee award.

Not one to miss these sorts of things, the Seventh Circuit instructed the parties to file supplemental briefs explaining why it had appellate jurisdiction when the trial court had not yet determined the amount due. Plaintiff took the hint and responded that there was no appellate jurisdiction. Jackson told the court that decisions on the merits and awards of attorney fees are separately appealable. The Seventh Circuit noted that while that was true, it was irrelevant, because Jackson was no longer contesting the merits; it was only fighting the attorney fees.

Ultimately, the Seventh Circuit dismissed the appeal for want of jurisdiction. As the above quote illustrates, it was frustrated with both parties for not catching the issue before the court did. Judge Easterbrook and his colleagues wanted to penalize both parties and have them fund some holiday cheer for the law clerks, but concluded that they had no power to do so. The tongue-lashing sufficed.

The reminder to all of us? When it comes to appellate jurisdiction, you need to sweat the details. You can’t pretend that the court of appeals, particularly the Seventh Circuit, is going to sweep a significant jurisdictional problem under the rug. Pay attention to the jurisdictional rules. If you do, you should be able to throw an awesome bash for your own law clerks instead of the Seventh Circuit’s.

February 19, 2018


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