A new cert petition asks if a denied summary-judgment motion preserves purely legal issues for appeal.
February 23, 2021
The Supreme Court held in Ortiz v. Jordan that parties cannot appeal evidence-sufficiency issues raised in a denied summary-judgment motion after a trial on the merits. Parties must instead raise issues with the sufficiency of the trial evidence via a motion under Federal Rule of Civil Procedure 50. But Ortiz left open the possibility that a denied summary-judgment motion could preserve purely legal issues for appeal. And that’s an issue on which the courts have split.
A new cert petition asks the Supreme Court to resolve this split. The case is Ericsson Inc. v. TCL Communication Technology Holdings Ltd., and the response is due March 19, 2020.
Appealing Summary-Judgment Denials or Preserving Issues via Those Denials
Let’s start with some wording.
This issue is often discussed in terms of “appealing” a summary-judgment denial—can a party appeal a summary judgment denial after a trial on the merits? I don’t think that’s accurate. With rare exceptions—such as denials of certain immunities or certified appeals via 28 U.S.C. § 1292(b)—parties cannot appeal from the denial of summary judgment. If the district court denies summary judgment and the case proceeds to trial, an aggrieved party might then appeal the final judgment. And in the appeal from that final judgment, that party might try to raise issues that it raised in the denied summary-judgment motion.
So the issue is really one of preservation for appeal—does the denied summary-judgment motion preserve an issue raised in that motion. I accordingly will speak (as much as possible) in terms of preservation. Not only is doing so more accurate, but it also avoids any distractions from considering interlocutory appeals (distractions that were apparent in a recent Second Circuit decision).
The General Rule
In Ortiz v. Jordan, the Supreme Court held that a denied summary-judgment motion does not preserve an evidence-sufficiency challenge after a trial on the merits. An evidence-sufficiency argument at summary judgment argues that the summary-judgment record contains insufficient evidence for the non-moving party to prevail. But once a case proceeds to trial, the trial record supersedes the summary-judgment record. At that point, any issues about the sufficiency of the summary-judgment record are moot. If a party still wants to argue evidence sufficiency after a trial, the question is whether the trial record requires judgment as a matter of law. And that issue is raised—and preserved for appeal—via motions under Federal Rule of Civil Procedure 50.
So Ortiz rightly held that a denied summary-judgment motion does not preserve a challenge to the sufficiency of the evidence presented at trial. Again, the Supreme Court occasionally spoke in terms of appealing the summary-judgment denial, which I don’t think is entirely accurate. Perhaps the Court did so because Ortiz arose in one of the rare circumstances in which a denial of summary judgment is immediately appealable: the denial of qualified immunity. But the holding is straightforward: a denied summary-judgment motion is not enough to preserve an evidence-sufficiency issue after a full trial.
A Possible Exception for Legal Issues
Ortiz left open the possibility that summary-judgment denials could preserve purely legal issue. Several courts have held that they do. But others have held that they don’t, and parties must re-raise those legal issues via objections to the jury instructions or a Rule 50 motion.
The new cert petition arises out of a case that illustrates this divide: the Federal Circuit’s split decision in Ericcson Inc. v. TCL Communications Technology Holdings Ltd. Simplifying quite a bit, Ericcson involved patent-infringement claims concerning “a method and system for limiting and controlling access to resources in a telecommunications system”—essentially a way of controlling an app’s access to a phone’s subsystems, like the camera and microphone. The defendant sought summary judgment in the district court, arguing that the patent was invalid because it was directed to an abstract idea. The district court denied that motion. The defendant did not raise the patentability issue again in the district court. The case proceeded to a jury, which found for the plaintiff and awarded $75 million in damages.
The defendant appealed to the Federal Circuit. And in that court, the defendant again argued that the patent was invalid. A majority of the Federal Circuit agreed and reversed the jury verdict. Before doing so, the majority held that the denied summary-judgment motion was sufficient to preserve the patentability issue. Patent eligibility, the majority explained, is an issue of law. “[A]lthough the inquiry [might] sometimes contain underlying issues of fact,” the district court looked to the patent’s language and concluded that there were no facts under which the defendant could succeed in its eligibility argument. So “the district court effectively entered judgment of eligibility to” the plaintiff. That was enough to preserve the eligibility issue for appeal.
Judge Newman dissented, contending that the eligibility issue was not preserved for appeal. She would have required the defendant to raise the issue via a Rule 50 motion. After all, the Supreme Court’s decision in Unitherm Food Systems v. Swift-Eckrich, Inc. says that a Rule 50 motion is necessary so the district court—who saw and heard the evidence—can weigh in on the propriety of judgment as a matter of law. By failing to file a Rule 50 motion, Judge Newman thought that the defendant in Ericcson had forfeited any appellate review of the eligibility issue.
Some Thoughts on the Split
I haven’t thought through this issue entirely. But I think I side with the courts have have allowed denied summary-judgment motions to preserve legal issues. Once the issue is framed as one of preservation, the argument has some force. Rules of preservation exist to give the district court and the opposing party notice of an argument and the chance to address that argument when the record is still open. A district court’s resolution of an issue might make an appeal unnecessary. And the opposing party can adapt its case to the district court’s resolution of that issue. Further, preservation requirements prevent aggrieved litigants from quietly amassing potential grounds for reversal, raising them only after losing.
So once a party unsuccessfully argues a legal point in the district court, everyone has notice of the issue, a chance to respond to it, and (for the court) a chance to resolve it. What, then, is the point of forcing that party to re-raise the issue at some later point? I can see some possible difficulties arising with mixed questions of law and fact. But so long as an appellant takes the evidence presented at trial in the light most favorable to the prevailing party, I think that appellant should be able to argue that the evidence fails as a matter of law.
For more on this issue, see Joan Steinman’s article The Puzzling Appeal of Summary Judgment Denials: When are Such Denials Reviewable?, 2014 Michigan State Law Review 895.
Petition for a Writ of Certiorari, Ericsson Inc. v. TCL Communication Technology Holdings Ltd., No. 20-1130 (Feb. 11, 2021), available at the Supreme Court and Westlaw.