Desktop Direct, Inc. v. Digital Equipment Corp., No. 93-4024

CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)
Writing for the CourtBefore LOGAN, ANDERSON and TACHA; LOGAN
Citation993 F.2d 755
PartiesDESKTOP DIRECT, INC., a Utah corporation, Plaintiff-Appellee, v. DIGITAL EQUIPMENT CORPORATION, a Massachusetts corporation, Defendant-Appellant.
Decision Date17 May 1993
Docket NumberNo. 93-4024

Page 755

993 F.2d 755
DESKTOP DIRECT, INC., a Utah corporation, Plaintiff-Appellee,
v.
DIGITAL EQUIPMENT CORPORATION, a Massachusetts corporation,
Defendant-Appellant.
No. 93-4024.
United States Court of Appeals,
Tenth Circuit.
May 17, 1993.

Page 756

Laurence R. Hefter and David M. Kelly of Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, and David K. Isom and J. Preston Stieff of David K. Isom & Associates, Salt Lake City, UT, for defendant-appellant.

H. Ross Workman and Larry R. Laycock of Workman, Nydegger & Jensen, and John Paul Kennedy, Salt Lake City, UT, for plaintiff-appellee.

Before LOGAN, ANDERSON and TACHA, Circuit Judges.

LOGAN, Circuit Judge.

This matter is before us on defendant Digital Equipment Corporation's motion for a stay of the district court's order entered January 5, 1993. We have considered the motion, the brief in support thereof, plaintiff Desktop Direct, Inc.'s response, and defendant's reply memorandum, which we grant leave to be filed.

I

Plaintiff filed suit in district court alleging trademark infringement and unfair competition by defendant. The parties agreed on a settlement before trial, and plaintiff consequently sought and received a voluntary dismissal of the suit. Subsequently, however, plaintiff moved to vacate the dismissal and rescind the settlement agreement, contending that defendant had procured the agreement by fraud and misrepresentation. The district court granted the motion on January 5, 1993, finding that "a fact finder could determine that defendant failed to disclose material facts to plaintiff during settlement negotiations which would have resulted in rejection of the settlement offer by the plaintiff." Plaintiff's notice of dismissal was therefore permitted to be withdrawn, and the settlement agreement rescinded. The district court denied defendant's later motion to reconsider and for a stay pending appeal.

Before addressing the merits of defendant's stay motion addressed to this court, as

Page 757

a threshold matter we must consider whether we have jurisdiction to consider an appeal from the district court's order.
II

Under 28 U.S.C. § 1291, this court has "jurisdiction of appeals from all final decisions of the district courts of the United States." A final decision is "a decision by the district court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 497, 109 S.Ct. 1976, 1977, 104 L.Ed.2d 548 (1989) (quotations omitted). Here, because the district court's order not only set aside the settlement but also permitted withdrawal of the notice of dismissal, the case is now set for trial, and "the order ensures that litigation will continue in the District Court." Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275, 108 S.Ct. 1133, 1136, 99 L.Ed.2d 296 (1988). The order is therefore not final for purposes of § 1291.

This much defendant concedes, but it argues that the case falls within the long-recognized "collateral order" exception to the final judgment requirement. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). "[T]o fall within the Cohen exception, an order must satisfy at least three conditions: It must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Lauro Lines, 490 U.S. at 498, 109 S.Ct. at 1978 (quotations omitted). Defendant argues that this district court order satisfies each of these criteria for appealability, citing cases from the Eleventh, Fifth, and Second Circuits that so hold. 1 With due respect to our sister circuits, we disagree.

A

The first requirement is that the order conclusively determine the validity and enforceability of the settlement agreement. The language of the district court is somewhat cryptic, ruling only that a fact-finder "could" have a basis for finding misrepresentation. From that we are unsure whether the district court contemplates submitting this issue to a jury. But we conclude that it does not because its order specifically grants plaintiff's motion to rescind the agreement, and it reinstates the suit against defendant. We consider the district court's decision therefore as "the final word on the subject addressed," Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12-13 n. 14, 103 S.Ct. 927, 935 n. 14, 74 L.Ed.2d 765 (1983), thus satisfying the first requirement for appealability.

B

The second element of the test for appealability has two parts: The issue must be "important," and "completely separate from the merits of the action." Considering separateness first, in Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985), the Court held that the question of a defendant's qualified immunity was "conceptually distinct from the merits of the plaintiff's claim," id. at 527, 105 S.Ct. at 2816, notwithstanding the fact that "the resolution of these legal issues will entail consideration of the factual allegations that make up the plaintiff's claim for relief," id. at 528, 105 S.Ct. at 2816. The same is true in this case. Plaintiff alleges that during settlement negotiations defendant misrepresented the date it acquired knowledge of plaintiff's trademark. Although these contentions may have some relevance to the underlying claim, the complaint of misrepresentation during settlement negotiations is "conceptually distinct" from the trademark violation charges.

C

The question of the "importance" of the issue is more difficult. It is also intertwined

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with the third Cohen requirement that the issue be effectively unreviewable on appeal from a final judgment. The district court's decision setting aside the settlement agreement could be reviewed on appeal after trial. We could set aside a decision on the merits in plaintiff's favor on the basis that the settlement agreement was valid and enforceable against plaintiff. Only by characterizing plaintiff's expectation that no trial will occur after entering a settlement agreement as "a right not to be tried" can we say it is unreviewable after a final judgment. Thus, we must determine whether this expectation contemplated in the settlement agreement is important enough--a matter of such independent significance--that it must be vindicated by allowing an interlocutory appeal absent a constitutional or statutory basis. Here we part company with our sister circuits, and agree with the position of Judge Cox, dissenting in Forbus v. Sears, Roebuck & Co., 958 F.2d 1036 (11th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 412, 121 L.Ed.2d 336 (1992).

In Janneh v. GAF Corp., 887 F.2d 432 (2d Cir.1989), cert. denied, 498 U.S. 865, 111 S.Ct. 177, 112 L.Ed.2d 141 (1990), the Second...

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23 practice notes
  • Mcclendon v. City of Albuquerque, No. 09–2095.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 12, 2011
    ...Neither can our conclusion on this score come as a surprise. We said as much long ago, in Desktop Direct, Inc. v. Digital Equipment Corp., 993 F.2d 755 (10th Cir.1993). There, a party attempted to appeal a district court's post-judgment order rescinding a final judgment that was predicated ......
  • State of Utah By and Through Utah State Dept. of Health v. Kennecott Corp., Nos. 92-4173
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 31, 1994
    ...grounds for immediate appeal, Appellants fail to satisfy the second Cohen requirement. See Desktop Direct, Inc. v. Digital Equip. Corp., 993 F.2d 755 (10th Cir.), cert. granted, --- U.S. ----, 114 S.Ct. 379, 126 L.Ed.2d 329 (1993). 6 Although Utah and Kennecott contend the lost right to set......
  • Transtech Industries, Inc. v. A & Z Septic Clean, No. 92-5636
    • United States
    • U.S. Court of Appeals — Third Circuit
    • August 20, 1993
    ...expand the immunity concept beyond that which the Supreme Court has approved. In our view, Desktop Direct, Inc. v. Digital Equip. Corp., 993 F.2d 755 (10th Cir.1993), more closely conforms to the Supreme Court's Page 58 In Midland Asphalt Corp. v. United States, 489 U.S. 794, 109 S.Ct. 1494......
  • Farmland Partners, Inc. v. Fortunae, No. 19-1011
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 6, 2021
    ...any "final word on the subject addressed." Digital Equip. Corp., 511 U.S. at 868 (quoting Desktop Direct, Inc. v. Digital Equip. Corp., 993 F.2d 755, 757 (10th Cir. 1993). Indeed, RF was not precluded from renewing its TCPA motion in August 2020, after the court determined that it had subje......
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23 cases
  • Mcclendon v. City of Albuquerque, No. 09–2095.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 12, 2011
    ...Neither can our conclusion on this score come as a surprise. We said as much long ago, in Desktop Direct, Inc. v. Digital Equipment Corp., 993 F.2d 755 (10th Cir.1993). There, a party attempted to appeal a district court's post-judgment order rescinding a final judgment that was predicated ......
  • State of Utah By and Through Utah State Dept. of Health v. Kennecott Corp., Nos. 92-4173
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 31, 1994
    ...grounds for immediate appeal, Appellants fail to satisfy the second Cohen requirement. See Desktop Direct, Inc. v. Digital Equip. Corp., 993 F.2d 755 (10th Cir.), cert. granted, --- U.S. ----, 114 S.Ct. 379, 126 L.Ed.2d 329 (1993). 6 Although Utah and Kennecott contend the lost right to set......
  • Transtech Industries, Inc. v. A & Z Septic Clean, No. 92-5636
    • United States
    • U.S. Court of Appeals — Third Circuit
    • August 20, 1993
    ...expand the immunity concept beyond that which the Supreme Court has approved. In our view, Desktop Direct, Inc. v. Digital Equip. Corp., 993 F.2d 755 (10th Cir.1993), more closely conforms to the Supreme Court's Page 58 In Midland Asphalt Corp. v. United States, 489 U.S. 794, 109 S.Ct. 1494......
  • Digital Equipment Corp. v. Desktop Direct, Inc., No. 93-405.
    • United States
    • United States Supreme Court
    • June 6, 1994
    ...on the merits" nor "fell within the long-recognized `collateral order' exception to the final judgment requirement." 993 F. 2d 755, 757 (1993). Applying the three-pronged test for determining when "collateral order" appeal is allowed, see Cohen, supra; Coopers &......
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