The Sixth Circuit upheld a trial court’s judgment for just under $3 million this week after finding that the defendant had waived the majority of its arguments by failing to raise them before the district court. This unpublished decision, Fifth Third Bank v. Lincoln Financial Securities Co., No. 09-6456 (6th Cir. Aug. 10, 2011).pdf, serves as a useful reminder of the importance of preserving arguments for appeal and the standard used by the Sixth Circuit to determine whether arguments have been waived.
In Fifth Third, the Sixth Circuit held that the defendant, Lincoln Financial, had waived four different arguments by failing to sufficiently raise them at the trial court level. As a general rule, “an argument not raised before the district court is waived on appeal.” However, as the Fifth Third decision makes clear, a party must do more than simply mention the argument at the trial court. Although the court stated that it has never directly addressed the issue of what constitutes "raising an issue," it has “found issues to be waived when they are raised for the first time in motions requesting reconsideration or in replies to responses.” Two of Lincoln Financial’s arguments were waived because they were raised for the first time in its Rule 59 motion to alter the judgment, and a third was waived because it was initially raised in the reply in support of summary judgment.
The court also analyzed whether an exception applied that warranted consideration of matters raised for the first time on appeal by looking at the following factors: “1) whether the issue newly raised on appeal is a question of law, or whether it requires or necessitates a determination of facts; 2) whether the proper resolution of the new issue is clear beyond doubt; 3) whether failure to take up the issue for the first time on appeal will result in a miscarriage of justice or a denial of substantial justice; and 4) the parties’ right under our judicial system to have the issues in their suit considered by both a district judge and an appellate court.” The court found that these factors did not weigh in favor of considering arguments that were not raised by Lincoln Financial in the trial court.