Jurisdiction over patent appeals, staying v. dismissing in arbitration appeals, appealing multiple denials of intervention, non-final denials of arbitration, and more.
June 15, 2021
Last week, the Federal Circuit might have kicked off another game of jurisdictional hot potato with the Fifth Circuit. Those courts can’t agree on where Walker Process appeals belong, and the Federal Circuit just sent another to the Fifth. The Sixth Circuit declined to weigh in on whether district courts must stay (and not dismiss) actions after ordering arbitration. Resolution of this stay-versus-dismissal issue affects whether the litigants can appeal, and its one that the Supreme Court has repeatedly avoided deciding. The en banc Fourth Circuit limited an intervention appeal to the second denial of intervention, as the would-be intervenors did not appeal from their first denial. And the Ninth Circuit held that it could review a decision delaying the resolution of a motion to compel arbitration. Plus finality after an implicit rejection of damages, an “entirely deficient” notice of appeal, pendent appellate jurisdiction in an injunction appeal, and attorneys’ fee appeals via the collateral-order doctrine.
- Another Federal Circuit Rejection of Jurisdiction Over a Walker Process Appeal
- The Sixth Circuit Avoided the Stay v. Dismissal Arbitration Issue
- The Fourth Circuit Limited an Intervention Appeal to the Second Order Denying Intervention
- The Ninth Circuit on Non-final Denials of Arbitration
- Quick Notes
Another Federal Circuit Rejection of Jurisdiction Over a Walker Process Appeal
A few years ago, in Xitronix v. KLA-Tencor, the Fifth and Federal Circuits could not agree on which of them should hear an appeal. The issue was whether a Walker Process claim arose under patent law. If it did, the Federal Circuit would have exclusive jurisdiction; if not, the appeal would go to the appropriate regional circuit. Xitronix ping-ponged between the two courts for years before the Federal Circuit (reluctantly) agreed to hear it. The plaintiff twice sought cert on where the appeal belonged. But the Supreme Court refused to resolve the issue. That left litigants in a bind. Going forward, where should they appeal Walker Process cases?
We might be on the cusp of another Federal Circuit-Fifth Circuit back-and-forth. Last week, in Chandler v. Phoenix Services LLC, the Federal Circuit transferred another Walker Process appeal to the Fifth Circuit. The court thought that it was bound by its first decision in the Xitronix litigation. The Federal Circuit also reiterated that it disagreed with the Fifth Circuit’s refusal to accept the transfer in Xitronix. And the court thought that Chandler was an even stronger case for transferring an appeal to the regional circuit.
Should the Fifth Circuit transfer the case back to the Federal Circuit, we will again see a case of jurisdictional hot potato. As I said when the petitions for cert in Xitronix were pending, we could use a clear rule on where these appeals go.
For more on Chandler, see my post A Xitronix Sequel? Walker Process & Patent Jurisdiction.
Chandler v. Phoenix Services LLC, 2021 WL 2371238 (Fed. Cir. June 10, 2021), available at the Federal Circuit and Westlaw.
The Sixth Circuit Avoided the Stay v. Dismissal Arbitration Issue
In Anderson v. Charter Communications, Inc., the Sixth Circuit avoided weighing in on whether district courts must stay (rather than dismiss) actions after ordering arbitration.
The difference matters for appellate jurisdiction. An order compelling arbitration followed by a stay is not immediately appealable. But an order followed by a dismissal is. The Supreme Court has repeatedly ducked this issue, and the courts of appeals have split on it. For more on this issue, see my post Lamps Plus Never Should Have Gotten This Far.
The district court in Anderson ordered arbitration and then dismissed the plaintiff’s claims. The plaintiff then appealed. And in that appeal, the plaintiff argued that the district court should have stayed (not dismissed) his claims if it ordered arbitration. The Sixth Circuit could avoid deciding whether district courts must always stay proceedings because, whatever the district court could do, it should have stayed the action in Anderson. The arbitration in Anderson might not resolve all of the plaintiff’s claims. In that circumstance, it’s better to stay the action pending arbitration that to require that the plaintiff refile and risk statute-of-limitations problems.
Anderson v. Charter Communications, Inc., 2021 WL 2396231 (6th Cir. June 11, 2021), available at the Sixth Circuit and Westlaw.
The Fourth Circuit Limited an Intervention Appeal to the Second Order Denying Intervention
In North Carolina State Conference of the NAACP v. Berger, the en banc Fourth Circuit limited an intervention appeal to the issues raised in a second motion to intervene.
The case involved a challenge to North Carolina’s voter-ID law. Sometime after the case was filed, the leaders of North Carolina’s House and Senate sought to intervene. The district court denied intervention because the Attorney General was adequately representing the would-be intervenors’ interests. The district court noted, however, that the legislative leaders could seek to intervene again if the Attorney General no longer intended to defend the lawsuit. The leaders did not appeal this decision.
Six weeks later, the legislative leaders moved to intervene again. This motion largely repeated the grounds for intervention that the district court had already rejected. But it also raised two additional arguments. The district court again rejected the request to intervene. This time, the legislative leaders appealed.
The Fourth Circuit limited the appeal to the issues raised in the second order denying intervention. A denial of intervention is considered final for purposes of appeal. But would-be intervenors must appeal these denials within the normal time for filing a final-judgment appeal. Failure to do so forfeits the right to appeal. In Berger, the legislative leaders did not file a timely appeal from the first order denying intervention. They appealed only the second order. So the Fourth Circuit could address only the issues raised in that second order.
The Fourth Circuit also rejected the leaders’ argument that the first denial was not final because it was without prejudice. Analogizing to dismissals of actions without prejudice, the court “examine[d] the finality and appealability of a without-prejudice dismissal ‘based on the specific facts of the case,’ considering such factors as whether amendment could cure the defects on which dismissal rests, what the ‘bottom-line effect’ of the ruling is, and whether the district court ‘signaled that it was finished’ with the issues before it.” And the specific facts of Berger showed that the initial without-prejudice denial of intervention was final and appealable:
As the [district] court itself later explained, the window left open in its initial order was a “narrow” one, available only if the State Board and Attorney General “in fact declined to defend” [the voter-ID law] in the future. Because that contingency had not yet—and might never—come to pass, the Leaders could not then amend or correct their motion to change the result. The bottom-line effect of the court’s ruling was clear: The Leaders were not entitled to intervene under then-current circumstances. Under our precedent, that determination was final, and if the Leaders disagreed, then they were required to take a timely appeal.
The Fourth Circuit thus limited itself to the narrow focus of the second order denying intervention. And it affirmed that order.
North Carolina State Conference of NAACP v. Berger, 2021 WL 2307483 (4th Cir. June 7, 2021), available at the Fourth Circuit and Westlaw.
The Ninth Circuit on Non-final Denials of Arbitration
In Hansen v. LMB Mortgage Services, Inc., the Ninth Circuit said that it could immediately review the denial of a motion to compel arbitration, even if the denial was ministerial and reserved judgment on arbitrability.
Hansen involved Telephone Consumer Protection Act claims against a mortgage-refinancing company. The plaintiff had received unwanted text messages from the defendant and sought to represent a class of similar plaintiffs. The company responded with a motion to compel arbitration. The district court determined that a fact issue existed as to whether the parties agreed to arbitrate. A jury trial on arbitrability was thus necessary, and the court denied the motion to compel arbitration. The mortgage-refinancing company then appealed.
The Ninth Circuit held that it had jurisdiction over the appeal. Granted, the district court’s decision was not a final rejection of the motion to compel arbitration. The district court instead determined that further proceedings were necessary to determine arbitrability. But 9 U.S.C. § 16(a)(1)(B) gives the courts of appeals jurisdiction over orders denying motions to compel arbitration. And that provision does not differentiate between final and non-final denials. “Therefore, denial of a motion to compel arbitration is immediately appealable even if the district court ‘intended to reconsider the question of arbitrability following further fact-finding and possibly a trial.’”
The Ninth Circuit noted that most circuits agree on this point. The Sixth Circuit, however, does not. In Taylor v. Pilot Corp., the Sixth Circuit said that an order delaying a decision on arbitrability was appealable only if it imposes irreparable harm.
Hansen v. LMB Mortgage Services, Inc., 2021 WL 2386391 (9th Cir. June 11, 2021), available at the Ninth Circuit and Westlaw.
Quick Notes
An Implicit Rejection of Damages in the Second Circuit
In Bey v. City of New York, the Second Circuit concluded that a decision was final due to the district court’s implicit rejection of a request for damages.
The case involved a challenge to New York’s grooming requirements for firefighters. At summary judgment, the district court concluded that some of these requirements violated the Americans with Disabilities Act and enjoined them. But the district court said nothing in its decision about the plaintiffs’ request for damages.
That was a problem; an unresolved damages issue normally precludes a decision from being final. The Second Circuit nevertheless deemed the decision final. The district court entered a judgment, suggesting that the court “did not anticipate additional proceedings and that it intended for its ruling to resolve all pending merits issues.” And in a pre-motion conference, the district court suggested that the request for damages bordered on the frivolous. The district court’s ultimate silence on damages, the Second Circuit concluded, was best understood as an implicit rejection. Since the decision left nothing for the district court to do, it was final and appealable under 28 U.S.C. § 1291.
Bey v. City of New York, 2021 WL 2345249 (2d Cir. June 9, 2021), available at CourtListener and Westlaw.
An “Entirely Deficient” Notice of Appeal in the Eighth Circuit
In Newcomb v. Wyndham Vacation Ownership, Inc., the Eighth Circuit dismissed an appeal due to the “entirely deficient” notices of appeal. Federal Rule of Appellate Procedure 3(c) requires that a notice of appeal designate (among other things) the appealed decision and the court to which the appeal is taken. The notice in Newcomb failed both of these requirements:
[The plaintiffs] appeal an order entered on a day when no order issued, from a district court that does not exist, to a court of appeals that does not exist.
This was no “‘imperfect but substantial compliance with a technical requirement’ that [the court] may excuse; it [was] an absolute bar to appeal.”
Newcomb v. Wyndham Vacation Ownership, Inc., 2021 WL 2324114 (8th Cir. June 8, 2021), available at the Eighth Circuit and Westlaw.
The Third Circuit on Pendent Appellate Jurisdiction in an Injunction Appeal
In United States v. Brace, the Third Circuit extended pendent appellate jurisdiction over several decisions related to an appealable injunction.
Simplifying a bit, Brace was a Clean Water Act case against a farmer. The defendant’s lawyer repeatedly flouted the district court’s deadlines and other rules. So district court struck the defendant’s opposition to summary judgment and granted summary judgment for the government on liability. The district court left the determination of damages for later. To assist in determining damages, the court ordered the defendant to submit, among other things, a plan for restoring land that had been altered in violation of the Clean Water Act. The defendant then appealed.
The Third Circuit determined that the order requiring a restoration plan was an appealable injunction under 28 U.S.C. § 1292(a)(1). The court of appeals then extended pendent appellate jurisdiction to the decisions striking the defendant’s summary-judgment response and granting partial judgment for the government. Those decisions were “inextricably intertwined” with the injunction, as they formed the basis for the injunction. If the district court erred in these decisions, the injunction could not stand. But the Third Circuit would not review other decisions, such as the striking of the defendant’s Daubert motions; the court could review the injunction without considering those other orders.
United States v. Brace, 2021 WL 2387917 (3d Cir. June 11, 2021), available at the Third Circuit and Westlaw.
A Fee-Apportionment Appeal in the Eleventh Circuit
Abd in Amorin v. Taishan Gypsum Co., the Eleventh Circuit reviewed an order apportioning attorneys fees via the collateral-order doctrine.
The appeal arose from multidistrict litigation over the production and sale of drywall. Some of the plaintiffs were part of a class, while others pursued their claims individually. When a group of individual plaintiffs settled their claims, counsel for the class sought part of the proceeds as an award of common benefit costs and fees. The district court awarded class counsel 45% of the fees obtained by counsel for the settling individual plaintiffs. Counsel for those individual plaintiffs then appealed.
Other claims remained pending, creating a finality issue. But the Eleventh Circuit said that it could review the fees decision via the collateral-order doctrine. The fees decision was “completely separate from the merits of the underlying action, and the appeal is unaffected by further district court proceedings.”
Amorin v. Taishan Gypsum Co., 2021 WL 2349920 (11th Cir. June 9, 2021), available at the Eleventh Circuit and Westlaw.