Waetzig v. Halliburton Energy Servs.

82 F.4th 918

Gary WAETZIG, Plaintiff - Appellee, v. HALLIBURTON ENERGY SERVICES, INC., Defendant - Appellant.

No. 22-1252

United States Court of Appeals, Tenth Circuit

FILED September 11, 2023

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:20-CV-00423-KLM) Heather F. Crow, The Kullman Firm, P.L.C., Tallahassee, Florida (Samuel Zurik, III, The Kullman Firm, P.L.C., New Orleans, Louisiana, with her on the briefs), for Defendant-Appellant.

Austin M. Cohen (Spencer J. Kontnik, Kontnik Cohen, LLC, Denver, Colorado, with him on the brief), for Plaintiff-Appellee.

Before TYMKOVICH, MATHESON, and EID, Circuit Judges.

TYMKOVICH, Circuit Judge.

Gary Waetzig commenced an age discrimination lawsuit in the District of Colorado against his former employer, Halliburton Energy Services, Inc. Because he was contractually bound to arbitrate his claim, he voluntarily dismissed his suit without prejudice under Federal Rule of Civil Procedure 41(a) and commenced arbitration. The arbitrator sided with Halliburton. Dissatisfied with the outcome, Mr. Waetzig returned to federal court. But instead of filing a new lawsuit challenging arbitration, he moved to reopen his age discrimination case and vacate the arbitration award. Relying on Rule 60(b), the district court concluded it had jurisdiction to consider Mr. Waetzig's motion, reopened the case, and vacated the award.

Because we conclude the district court could not reopen the case under Rule 60(b) after it had been voluntarily dismissed without prejudice, we reverse. Under Federal Rules of Civil Procedure 41(a) and 60(b), a court cannot set aside a voluntary dismissal without prejudice because it is not a final judgment, order, or proceeding.

I. Background

In February 2020, Mr. Waetzig sued Halliburton for violating the Age Discrimination in Employment Act when it terminated him. Because he was contractually obligated to arbitrate any dispute with Halliburton, Mr. Waetzig voluntarily dismissed his suit without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(i).¹ The case was administratively closed. The parties proceeded to arbitration, where the arbitrator granted summary judgment to Halliburton.

Mr. Waetzig returned to federal court. But instead of filing a new complaint challenging the arbitrator's summary-judgment order under the Federal Arbitration Act, 9 U.S.C. § 10, he moved to reopen his case and vacate the arbitration award in favor of Halliburton. Section 10 of the FAA allows a court to vacate an arbitration award in certain situations, including when an arbitrator engages in prejudicial misconduct or exceeds his or her authority. Over Halliburton's objection, the district court agreed to reopen the age discrimination case. It relied on Rule 60(b), which allows a court to "relieve a party . . . from a final judgment, order, or proceeding" in certain circumstances.² Specifically, the court concluded that Rule 60(b) applied because (1) Mr. Waetzig mistakenly failed to stay the case pending arbitration rather than dismissing it, and (2) that mistake caused Mr. Waetzig to forfeit his ability to refile a new cause of action in federal court because of an intervening Supreme Court case interpreting FAA jurisdiction: Badgerow v. Walters, 596 U.S. 1, 142 S. Ct. 1310, 212 L.Ed.2d 355 (2022).

Finding jurisdiction, the court vacated the arbitrator's order after concluding the arbitrator exceeded her powers by not providing adequate notice of the summary-judgment hearing and not sufficiently explaining her decision in favor of Halliburton. The court remanded for further proceedings before a new arbitrator.

II. Analysis

This appeal presents an open question in this circuit: Can a district court use Rule 60(b) to vacate a plaintiff's voluntary dismissal without prejudice? While we review a district court's Rule 60(b) decision for an abuse of discretion, Shields v. Pro. Bureau of Collections of Md., Inc., 55 F.4th 823, 830 (10th Cir. 2022), we review subject-matter jurisdiction de novo, Navajo Nation v. Dalley, 896 F.3d 1196, 1203 (10th Cir. 2018).

As we explain, a voluntary dismissal without prejudice under Rule 41(a) divests the district court of subject-matter jurisdiction to consider a Rule 60(b) motion to reopen.

A. New Case

Mr. Waetzig invites us to avoid the jurisdictional issue by treating his "Motion as a 'new case,' rather than part of an existing case." Aple. Br. at 10. In other words, because his "motion for vacatur contained the information that would be required for a new case under § 10" of the FAA, we should deem it a new complaint to set aside the arbitrator's summary-judgment order and simply determine whether the district court erroneously vacated the order. Id. at 11-12. And he points to our previous observation that the "caption [of a brief or motion] should not control the outcome." Elm Ridge Expl. Co. v. Engle, 721 F.3d 1199, 1220 (10th Cir. 2013) (concluding "the Rule 59(e) motion here should be construed as a Rule 50(b) motion"); see also Dodson Int'l Parts, Inc. v. Williams Int'l Co., 12 F.4th 1212, 1229 (10th Cir. 2021) (applying that principle when the district court treated a "brief as a motion to confirm the arbitration award").

Although creative, we decline Mr. Waetzig's invitation. For one thing, he did not make this request before the district court. For another, other issues would arise should we do so. For example, Halliburton, lacking notice that there was a new case, did not respond to Mr. Waetzig's motion as it would a complaint by formally answering the allegations, raising affirmative defenses, and potentially moving to dismiss.

Accordingly, we do not treat Mr. Waetzig's motion as a new complaint in a new case.

B. Rule 41 and Rule 60

We now turn to the two rules at the heart of this procedural puzzle—Federal Rules of Civil Procedure 41(a)(1)(A)(i) and 60(b).

The former allows a plaintiff to dismiss his suit before the defendant answers by filing a notice of dismissal. Fed. R. Civ. P. 41(a)(1)(A)(i). The dismissal is automatic, immediately divesting the district court of subject-matter jurisdiction. Janssen v. Harris, 321 F.3d 998, 1000 (10th Cir. 2003) ("Under Rule 41(a)(1)(i), a plaintiff has an absolute right to dismiss without prejudice and no action is required on the part of the court."). Indeed, as we observed in Janssen,

The [filing of a Rule 41(a)(1)(i) notice] itself closes the file. There is nothing the defendant can do to fan the ashes of that action into life and the court has no role to play. This is a matter of right running to the plaintiff and may not be extinguished or circumscribed by adversary or court. There is not even a perfunctory order of court closing the file. Its alpha and omega was the doing of the plaintiff alone. The effect of the filing of a notice of dismissal pursuant to Rule 41(a)(1)(i) is to leave the parties as though no action had been brought. Once the notice of dismissal has been filed, the district court loses jurisdiction over the dismissed claims and may not address the merits of such claims or issue further orders pertaining to them.

Id. (brackets in original) (quoting Duke Energy Trading & Mktg., L.L.C. v. Davis, 267 F.3d 1042, 1049 (9th Cir. 2001)). And the dismissal is without prejudice unless the notice states otherwise or the plaintiff previously dismissed a suit that included the same claim. Fed. R. Civ. P. 41(a)(1)(B).

Rule 60(b), on the other hand, allows the court to "relieve a party . . . from a final judgment, order, or proceeding" in certain circumstances. Fed. R. Civ. P. 60(b) (emphasis added). In a case like Mr. Waetzig's, the two rules work together: The plaintiff can only obtain relief under Rule 60(b) if his voluntary dismissal without prejudice under Rule 41(a) qualifies as "a final judgment, order, or proceeding."

Here, no one asserts that we have a "final judgment"—the court never entered judgment in favor of Mr. Waetzig or Halliburton, adjudicated the merits of Mr. Waetzig's claim, or decided the rights of either party. Nor do we have a "final order"—Mr. Waetzig's dismissal was effective upon filing of the notice of dismissal, so the court did not need to file an order of dismissal.

The question then is whether a voluntary dismissal without prejudice is a "final proceeding" that can save it for Rule 60(b) consideration. Surprisingly, what constitutes a final proceeding under Rule 60(b) is an underdeveloped legal issue. Courts and commentators have generally only focused on when a court can grant relief from a final judgment or final order. For example, the pertinent section of Moore's Federal Practice is titled, "Rule 60(b) Applies to Final Judgments or Orders Only." 12 James Wm. Moore et al., Moore's Federal Practice - Civil § 60.23 (2023). Similarly, Wright & Miller begins its discussion of Rule 60 by noting the rule "regulates the procedures by which a party may obtain relief from a final judgment." 11 Charles Alan Wright et al., Fed Prac. & Proc. § 2851 (3d ed. Apr. 2023 update). And, of course, Rule 60 itself is titled, "Relief from a Judgment or Order."

And this sparse coverage makes sense. Because when all is said and done in a case—when all is final—a party is burdened by the court, and that burden generally comes in the form of an order or judgment. In other words, usually no one needs to ponder whether a final proceeding occurs—a final order or final judgment tells us so.

But here, to give life to the language of the rule, we must endeavor to determine when and if we can still have a "final proceeding" where we have no final order or judgment. As always, we start with the text. See Republic of Ecuador v. For Issuance of a Subpoena Under 28 U.S.C. § 1782(a), 735 F.3d 1179, 1183 (10th Cir. 2013) ("As with any exercise in statutory or rule interpretation, we start with the plain language of the text itself."). Rule 60(b) was adopted in 1937 using the phrase "judgment, order, or proceeding" but without the qualifier "final."³ In 194...