Labor & Employment Law Daily Wrap Up, SUPREME COURT NEWS—Court considers procedural rule issue raised by former Halliburton employee’s reopening of age bias case, (Jan 15, 2025)

By Brandi O. Brown, J.D.

Overall, the Justices appear to lean towards ruling in the age discrimination plaintiff’s favor on the procedural question presented.

In this appeal, the U.S. Supreme Court has been asked “whether a Rule 41 voluntary dismissal without prejudice is a ‘final judgment, order, or proceeding’ under Rule 60(b).” Under Rule 60(b), a court can provide relief from a “final judgment, order, or proceeding” under certain circumstances.

The underlying case involves a former employee who brought an age discrimination lawsuit in the District of Colorado against Halliburton Energy Services, Inc., after the company terminated him. Because he was contractually bound to arbitrate his claim, he voluntarily dismissed his suit without prejudice under Fed. R. Civ. P. 41(a) and the case was administratively closed. The parties proceeded to arbitration and the arbitrator sided with Haliburton.

Returned to federal court. Instead of filing a new complaint challenging the arbitrator’s summary judgment order under the FAA, the employee moved to reopen his case and vacate the arbitration award. The district court agreed to reopen the case based on Fed. R. Civ. P. 60(b), concluding that the rule applied because (1) the employee mistakenly failed to stay the case pending arbitration rather than dismissing it, and (2) that mistake caused him to forfeit his ability to refile a new cause of action in federal court because of the Supreme Court’s ruling in Badgerow v. Walters.

Vacated arbitrator’s order. The court then 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. Haliburton appealed.

The Tenth Circuit ruled that the employee’s voluntary dismissal without prejudice of his age discrimination lawsuit was not a final proceeding under Fed. R. Civ. P. 60(b) and, as such, a district court did not have jurisdiction to reopen the case under that rule. It reversed the ruling of the district court (Waetzig v. Halliburton Energy Services, Inc. (10th Cir. Sept. 11, 2023)).

Supreme Court petition and briefing. The High Court granted the employee’s subsequent petition for certiorari in Waetzig v. Halliburton Energy Services, Supreme Court Docket No. 23-971, and heard oral arguments on January 14.

In briefing, the employee argued that the plain text made clear that a voluntary dismissal under Rule 41(a)(1)(A) is a “final proceeding” under Rule 60(b) and, alternatively, that it is a “final judgment.” He argued that the common law and other historical evidence also confirmed this interpretation and also that to read Rule 60(b) to strip federal courts of the power to reopen cases that were voluntarily dismissed would frustrate the purposes and effectiveness of the Federal Rules.

The employer argued that the district court lacked subject-matter jurisdiction over the employee’s Rule 60(b) motion, which rather than seeking to resume federal court litigation of his ADEA claim was asserting a collateral challenge to the arbitral award that the court otherwise lacked jurisdiction to adjudicate. In doing so, the employer relied on Badgerow v. Walters, 596 U.S. 1 (2022). The employer also argued that the decision should be affirmed because the employee’s voluntary dismissal without prejudice under Rule 41(a)(1)(A)(i) was not a “final judgment, order, or proceeding” from which a party could see relief.

Employee’s argument. In opening his argument on behalf of the employee, counsel argued that a voluntary dismissal is a proceeding or a judgment, as contemplated by Rule 60(b) and that it is also final, as is also necessary for purposes of that rule (an argument he contends is supported by the California Supreme Court’s interpretation of the parallel California rule, from which language for the federal rule was taken in 1937). He asserted that the employer tried to avoid this by asking the Court to affirm on a new theory—that the court below lacked jurisdiction to vacate an arbitration award after reopening the case. That objection was not covered by the question presented, he argued.

Indeed, it was this question of a potential collateral attack that Chief Justice Roberts dove into quickly during questioning, with follow-up by Justice Jackson, but counsel for the employee remained firm that they were two separate issues—the first order of the district court, which is at issue, he argued, was to reopen the case under Rule 60(b). It was only after that reopening that the court vacated the arbitration award, counsel explained. The separation, counsel argued, was key. Upon further questioning by Chief Justice Roberts regarding why he could not just bring another proceeding, rather than reopen the proceeding that was voluntarily dismissed without prejudice, counsel conceded that this was because of statute of limitations issues.

Kicking the Badgerow can down the road. Counsel for the employee also dealt with the Badgerow question, explaining that it was not an obstacle to this first Rule 60(b) issue, which he continued to argue was the only one before the Court, but rather with regard to the matter of the motion to vacate the arbitration award (the second issue). Justice Kagan agreed that the employee would have a “tough row to hoe on the Badgerow question,” but appeared to agree that this “doesn’t seem to be the jurisdictional question that’s in front of” the Court. She again sought confirmation from counsel that his “real contention here is that this is a different jurisdictional question and that the Badgerow question can be decided at some place down the road.” He agreed.

Finality. The Justices spent further time questioning counsel for the employee about the language of Rule 60(b), touching again on the California rule language, the California Supreme Court’s interpretation thereof, and the issue of finality. Justice Sotomayor clarified: “And so I guess what -- when you're pointing to the California cases and to the -- to the California cases and to the advisory notes, you're saying you should look at finality in the way that Congress was using it, which is case-ending finality rather than legal determination finality, correct?” Sotomayor added: “It can't be the ending of the controversy because, otherwise, there wouldn't be jurisdiction, which they admit there is. If a court signs a judgment dismissing without prejudice, which it does regularly, that doesn't end the legal responsibility between the parties, correct?” Counsel answered that question in the affirmative.

At the end, counsel for the employee left the Court with this concern: that the rule the employer was proposing was one that “would render a court without any authority to remedy an issue of outright fraud or mistake, leading to the dismissal of a case, albeit without prejudice, but that causes the plaintiff to lose its right because of -- of a limitation or otherwise, and that also leads to the loss of the right to bring a -- a non-suit in a second case.” Counsel added, “That cannot be what Rule 60 was intended to capture.”

Employer’s argument. When it was counsel for the employer’s turn at the podium, he pointed to “three major problems” with the employee’s construction of Rule 60: (1) that it defines finality in a way that is good for only Rule 60; (2) that it “would allow a litigant to bootstrap himself into an appeal from an otherwise unappealable order”; and (3) that it “takes no account of Rule 60’s key verb, which is to relieve.”

Again, the questioning turned to the issue of finality. Justice Jackson asked whether counsel disputed the argument made by counsel for the employee with regard to why the word “final” was added to the rule (“do you dispute his recitation of the facts with respect to why the committee put ‘final’ in this particular rule?). His response—“It’s not false, but it’s not entirely true, Your Honor”—was met with laughter.

Badgerow again. Justice Jackson also delved into the Badgerow issue after counsel raised it, stating: “I was surprised, given our colloquy earlier, about the fact that there are two different jurisdictional arguments here and that this case appeared to be all about the scope of final judgment, order, or proceeding in Rule 60. That's what you say in your question presented. So what is this Badgerow argument? Like, why are we looking at that or caring about that in this context?”

Jackson got a little more pointed in her questioning on this issue, asking “Why didn't you put that in the question presented that you presented in --in your red brief? I mean, you led us to believe by looking at your question presented that this case was all about Rule 60.” Counsel agreed that it was not raised in the brief in opposition and “candidly” acknowledged that he “did not understand or fully contemplate the jurisdictional significance of the Petitioner's motion to vacate until we started briefing on the merits.”

Too soon to talk about Badgerow. Justice Kagan appeared to join in the assessment that the Badgerow question was one that was for “down the road,” adding that the employer “might have a very good argument on” Badgerow, “that there is no jurisdiction to vacate the arbitration award.” She also stated, “But -- but that's not what's in front of us. What's in front of us is the 60(b) motion. And that's an antecedent question. You know, one question is can you bring a 60(b) motion.” Justice Kagan later added that “it’s just not the time to be talking about” it and that counsel “might have a lot to say about Badgerow, you know, in a few months’ time.”

Justice Jackson appeared to agree, adding, later in the questioning, that the Court “took cert on” whether or not the district court had properly granted a motion to reopen.

When the discussion turned back toward what Justice Jackson described as the “threshold matter,” noting that the second motion (to vacate the arbitration award) “could never have been responded to by the district court until it had the ability to do something[,]” Justice Gorsuch joined the questioning again. Discussion returned to the issue of finality and what it means under the rule, covering some of the same ground as in the petitioner’s argument with regard to the California rule and decisions and led to the end of the hearing.

Overall, the Justices appeared prepared to excise the Badgerow question as premature and appeared sympathetic to the petitioner’s Rule 60 argument.

The case is No. 23-971.

Companies: Halliburton Energy Services, Inc.

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