In federal court, partial dismissals present plaintiffs with a difficult choice. They can seek an immediate appeal or continue litigating their live claims. But they cannot do both, though they are often motivated to do so. And defendants should be prepared to hold plaintiffs to that choice—as the Ninth Circuit indicated it was willing to do in comments during a recent oral argument.
Briefly stated, plaintiffs facing partial dismissal must meaningfully relinquish their live claims in order to appeal their dismissed claims. For example, if the district court dismisses an entire complaint, but grants leave to amend some claims, then in order to appeal, plaintiffs must affirmatively decline to amend. See WMX Technologies, Inc. v. Miller, 104 F.3d 1133, 1136 (9th Cir. 1997). And if the district court dismisses some claims, but allows others to proceed, plaintiffs must move for voluntary dismissal of remaining claims under Rule 41(a)(2) or, in cases of partial summary judgment, under Rule 54(b). See James v. Price Stern Sloan, Inc., 283 F.3d 1064 (9th Cir. 2002).
What plaintiffs cannot do, and here’s the trap, is voluntarily dismiss their live claims without prejudice in order to litigate those claims immediately in a separate action while also appealing the district court’s dismissal order. See Dannenberg v. Software Toolworks, Inc., 16 F.3d 1073, 1076-77 (9th Cir. 1994). That kind of jurisdictional manipulation is strictly prohibited. And, reaching back to that recent argument in the Ninth Circuit, it creates a risk that plaintiffs will be whipsawed between an order that dismisses the appeal for lack of jurisdiction and an order that finds jurisdiction, but rules that the underlying dismissal is res judicata to the other claims plaintiffs are now trying to pursue in the separate action.