This Week At The Ninth: Wait Until Next Time

• Published date: 25 January 2022
• Subject Matter: Litigation, Mediation & Arbitration, Sovereign Immunity: Public Sector Government, Trials & Appeals & Compensation
• Law Firm: Morrison & Foerster LLP
• Author: Mr James R. Sigel and Adam L. Sorensen

This week, the Court addressed two questions of appellate jurisdiction, holding there is no right to immediate appellate review of a district court's denial of derivative sovereign immunity or of a fact-bound district court order certified for review under section 1292(b).

CHILDS v. SAN DIEGO FAMILY HOUSING LLC

The Court holds that a denial of derivative sovereign immunity is not immediately appealable under the collateral order doctrine.

Panel: Judges Ikuta, Bennett, and Nelson, with Judge Ikuta writing the opinion.

Key Highlight: "Our conclusion in Alaska that the interest served by federal sovereign immunity (i.e., giving the government a defense to payment of damages) 'may be served equally well if review follows a final judgment on the merits,' is applicable to parties claiming derivative sovereign immunity. . . . And our reasoning in Rodriguez that the interest served by the government contractor immunity (i.e., giving contractors a shield from financial liability) can be vindicated after trial is also applicable to parties claiming derivative sovereign immunity. Therefore, the reasoning of Alaska and Rodriguez compels the conclusion that it would not 'imperil a substantial public interest,' to require a government contractor with derivative sovereign immunity . . . to stand trial."

Background: Donald Childs and his family leased a house on a naval base owned by San Diego Family Housing, LLC (SDFH), a public-private venture created by statute, in which the United States Navy is a minority LLC member. The Childs sued SDFH and Lincoln Military Property Management, L.P., (Lincoln), in California state court alleging negligence and other state tort claims after experiencing water-intrusion and mold issues in their home. SDFH and Lincoln removed to federal court, where they moved to dismiss, asserting that, as government contractors acting at the direction of the federal government, they had derivative sovereign immunity. The district court denied the motion, and defendants appealed.

Result: The Ninth Circuit dismissed for lack of appellate jurisdiction. As the Court explained, ordinarily, parties cannot seek appellate review "until there has been a decision by the District Court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." The collateral order doctrine expands reviewable final decisions to include "a narrow class of decisions that do not terminate the litigation, but must, in the interest of...