Philip Groves v. United States

CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 25, 2019
Docket17-2937
StatusPublished

This text of Philip Groves v. United States (Philip Groves v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philip Groves v. United States, (7th Cir. 2019).

Opinion

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 17‐2937 PHILIP G. GROVES, Plaintiff‐Appellant, v.

UNITED STATES OF AMERICA, Defendant‐Appellee. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:16‐cv‐2485 — Gary Feinerman, Judge. ____________________

ARGUED DECEMBER 3, 2018 — DECIDED OCTOBER 25, 2019 ____________________

Before SYKES, BARRETT, and ST. EVE, Circuit Judges. BARRETT, Circuit Judge. When a district court certifies an order for review before final judgment, parties have only ten days to petition us to hear the interlocutory appeal. Decades ago, we provided a way to circumvent that deadline: district courts could reenter or recertify their orders, restarting the clock, whenever doing so would further the purpose of the interlocutory review statute. But more recent Supreme Court cases call that workaround into question. The Court has 2 No. 17‐2937

emphasized—as recently as a few months ago—that federal courts have no authority to read equitable exceptions into fixed filing deadlines. In light of the Court’s precedent, we conclude that we were wrong to hold that district courts can extend the ten‐day window by simply reentering or recertify‐ ing their orders. We therefore dismiss this appeal for lack of jurisdiction. I. Philip Groves is an accountant who allegedly organized, sold, and promoted abusive tax shelters related to distressed Chinese debts in 2005. Ten years later, the IRS assessed a tax penalty against him for this behavior. Groves sued the gov‐ ernment, arguing (among other things) that the catch‐all five‐ year statute of limitations for civil penalties, found in 28 U.S.C. § 2462, applied to the assessment against him—and thus that the IRS acted too late. The district court concluded that § 2462 didn’t apply, so in May 2017 it granted the government’s motion to strike Groves’s statute‐of‐limitations defense; in July, it denied Groves’s motion for judgment on the pleadings for the same reasons. But because it believed that the orders satisfied the standard for immediate appeal provided in 28 U.S.C. § 1292(b), the court certified the orders for interlocutory re‐ view on August 8th. Groves had the district court’s permission to appeal, but § 1292(b) also required him to seek permission from this court within ten days of the district court’s certification. He at‐ tempted to obtain our permission on August 18th, the tenth day after the district court’s certification order, by emailing an application to appeal to the Seventh Circuit Clerk’s Office. But No. 17‐2937 3

a paralegal mistyped the email address, so the email was not delivered. An automated message noting the failure, sent to the paralegal within minutes, landed in a spam folder. The paralegal discovered that notification on Sunday, August 20th, and emailed the application to the correct address that day. On August 21st, Groves informed the district court of the mix‐up and asked it to recertify its orders to restart the ten‐ day clock. The court complied, entering an otherwise identi‐ cal second order certifying its May and July orders for inter‐ locutory appeal. Groves refiled his application the next day, and we provisionally granted it. Both parties argue that we have jurisdiction to hear this appeal even though Groves missed the initial deadline. The government, consistent with the position we took in Nuclear Engineering Co. v. Scott, maintains that § 1292(b)’s deadline is jurisdictional but that the statute allows a district court to recertify an order in order to reset the clock. See 660 F.2d 241 (7th Cir. 1981). Groves likewise urges us to adhere to Nuclear Engineering, but he also advances an alternative argument: he maintains that § 1292(b)’s ten‐day deadline is not jurisdic‐ tional, but rather a claim‐processing rule that the government has waived here. II. The general rule is that “appellate review must await final judgment.” Nutraceutical Corp. v. Lambert, 139 S. Ct. 710, 716 (2019). But when a district court determines that one of its or‐ ders “involves a controlling question of law as to which there is substantial ground for difference of opinion and that an im‐ mediate appeal from the order may materially advance the ultimate termination of the litigation,” it can say so in the or‐ der, enabling the disappointed litigant to ask the court of 4 No. 17‐2937

appeals to review the order immediately. 28 U.S.C. § 1292(b). The court of appeals has discretion to permit the appeal “if application is made to it within ten days after the entry of the order.” Id. A district court can include the certification in the original order or add it afterward by amendment; in the latter circumstance, “the time to petition runs from entry of the amended order.” FED. R. APP. P. 5(a)(3). In other words, the clock does not start until the litigant is actually authorized to file a petition. Despite Groves’s argument to the contrary, the ten‐day deadline is not a claim‐processing rule. The Supreme Court has drawn a bright line: “If a time prescription governing the transfer of adjudicatory authority from one Article III court to another appears in a statute, the limitation is jurisdictional; otherwise the time specification fits within the claim‐pro‐ cessing category.” Hamer v. Neighborhood Hous. Servs. of Chi., 138 S. Ct. 13, 20 (2017) (citations omitted). Section 1292(b) is jurisdictional because it “govern[s] the transfer of adjudica‐ tory authority” from the district court, which issued the order, to the court of appeals, which reviews it. Id. Under a straight‐ forward application of Hamer, § 1292(b)’s time bar is jurisdic‐ tional. Groves resists this conclusion by arguing that no statutory deadline is jurisdictional unless Congress clearly says so. And he maintains that “Congress did [nothing] ‘special’ to suffuse the ten‐day deadline to petition for permission to file an inter‐ locutory appeal with jurisdictional significance.” Groves Supp. Br. at 12. But Groves’s premise—that the jurisdictional status of a deadline always depends on a clear‐statement rule—is mistaken. The clear‐statement rule applies only when a time limit appears in a statute that does not govern an No. 17‐2937 5

Article III court’s adjudicatory authority. See id. at n.9 (“In cases not involving the timebound transfer of adjudicatory author‐ ity from one Article III court to another, we have additionally ap‐ plied a clear‐statement rule ….” (emphasis added)).1 In that circumstance, the clear‐statement rule helps the court deter‐ mine whether Congress has exercised its power “to attach the conditions that go with the jurisdictional label to a rule that we would prefer to call a claim‐processing rule.” Henderson, 562 U.S. at 435; see also Hamer, 138 S. Ct. at 20 n.9. But when a time limit appears in a statute that addresses an Article III court’s adjudicatory authority, as § 1292(b) does, the default runs the other way—the limit is presumptively jurisdictional. That presumption is consistent with the “longstanding treat‐ ment of statutory time limits for taking an appeal as jurisdic‐ tional”—a principle that the Court emphasized in Bowles v. Russell, 551 U.S. 205, 210 (2007). See also Hamer, 138 S. Ct. at 20. Groves has a backup argument.

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Philip Groves v. United States, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philip-groves-v-united-states-ca7-2019.