Donovan v. Robbins

• Decision Date: 03 January 1985
• Docket Number: 84-1307 and 84-1313,Nos. 84-1287,s. 84-1287
• Citation: 752 F.2d 1170
• Parties: , 5 Employee Benefits Ca 2607 Raymond J. DONOVAN, Secretary of Labor, Plaintiff-Appellant, v. Loran W. ROBBINS, et al., Defendants, and Allen M. Dorfman, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1170

752 F.2d 1170

53 USLW 2362, 5 Employee Benefits Ca 2607

Raymond J. DONOVAN, Secretary of Labor, Plaintiff-Appellant, v. Loran W. ROBBINS, et al., Defendants, and Allen M. Dorfman, et al., Defendants-Appellees.

Nos. 84-1287, 84-1307 and 84-1313.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 2, 1984.

Decided Jan. 3, 1985.

Neil K. Quinn, Pretzel & Stouffer, Chtd., Chicago, Ill., Karen I. Ward, U.S. Dept. of Labor, Washington, D.C., for plaintiff-appellant.

Edward L. Foote, Winston & Strawn, Chicago, Ill., for defendants-appellees.

Before CUDAHY, POSNER, and COFFEY, Circuit Judges.

POSNER, Circuit Judge.

The Department of Labor sued the Central States, Southeast and Southwest Areas Health and Welfare Fund, an employee benefit fund sponsored by the Teamsters Union, along with current and former trustees of the fund, firms that had rendered services to the fund, and others, alleging violations of fiduciary obligations imposed by the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1001 et seq., and seeking both damages and injunctive relief. (The case has a lurid background, unnecessary to examine in this opinion, in the efforts of organized crime, acting through Allen Dorfman, to plunder the pension fund. Dorfman's estate, and the company he controlled, Amalgamated, which processed the claims of the Fund's beneficiaries, are among the other defendants in the case.) The Department negotiated a settlement with the Fund and its current trustees, and embodied it in a consent decree that the parties to the decree then submitted to Judge Will, presiding over the litigation, for his approval. Other defendants objected to the terms of the decree, the judge refused to approve it, and the Department and the settling defendants appeal from his refusal.

We have first to examine our appellate jurisdiction. The judge's action in refusing to approve the decree was not a final decision, appealable under 28 U.S.C. Sec. 1291. The suit in which the order was entered remains pending before him, and will soon be tried. It is as if he had denied a motion to dismiss the complaint; and such a denial is the classic example of a nonfinal order. Although 28 U.S.C. Sec. 1292(a)(1) authorizes immediate appeal of an interlocutory order denying (as well as one granting or modifying, etc.) an injunction, the consent decree that the Department of Labor and the settling defendants asked the judge to sign contains a permanent rather than a temporary injunction, intended to wind up the litigation between the parties to the decree rather than to provide interim relief. It might seem that this could make no difference. The statute speaks not of interlocutory injunctions but of interlocutory orders denying (or granting, etc.) injunctions. Judge Will's order refused an injunction, and was interlocutory--not only because the lawsuit is continuing against other defendants but also because the order did not finally deny the plaintiff's right to an injunction but merely deferred consideration to such later time as the parties submitted a revised decree. (For the sake of completeness we point out that an order granting a permanent injunction may be interlocutory too. The case may be continuing against other defendants; or the plaintiff may be seeking damages as well as an injunction, and the damages have yet to be assessed.) Thus it comes as no surprise that many cases, beginning with Smith v. Vulcan Iron Works, 165 U.S. 518, 17 S.Ct. 407, 41 L.Ed. 810 (1897) (construing section 7 of the Evarts Act, 26 Stat. 828--the original of 1292(a)(1)), hold or assume that interlocutory orders granting or denying permanent injunctions are indeed appealable under section 1292(a)(1). See 16 Wright, Miller, Cooper & Gressman, Federal Practice and Procedure Sec. 3924, at pp. 67-69 (1977); id., 1983 Pocket Part, Sec. 3924 (1984).

But this principle is qualified in an important line of cases led by Switzerland Cheese Ass'n, Inc. v. E. Horne's Market, Inc., 385 U.S. 23, 25, 87 S.Ct. 193, 195, 17 L.Ed.2d 23 (1966), where the Supreme Court held that the denial of the plaintiff's motion for summary judgment, which if granted would have resulted in the entry of a permanent injunction, was not appealable under section 1292(a)(1), the denial being "strictly a pretrial order that decides only one thing--that the case should go to trial." See also Plymouth County Nuclear Information Comm., Inc. v. Boston Edison Co., 655 F.2d 15, 17-18 (1st Cir.1981); Williams Electronics, Inc. v. Artic Int'l, Inc., 685 F.2d 870, 871 (3d Cir.1982). Behind these cases is the perceived lack of symmetry between an interlocutory order refusing to grant a permanent injunction and one refusing to grant a preliminary injunction. A request for a permanent injunction does not have the emergency character of a request for a preliminary injunction, which requires the plaintiff to show that he will suffer irreparable harm if the request is denied. See, e.g., American Can Co. v. Mansukhani, 742 F.2d 314, 325 (7th Cir.1984). Obviously, if the plaintiff does not get the preliminary injunction his need for an immediate appeal, to avert claimed irreparable harm, is urgent. Less obviously, if he does get the injunction the defendant's need for an immediate appeal is urgent. Not only might the defendant suffer irreparable harm from having to obey the injunction but the speed with which the district court has to act on a request for a preliminary injunction makes its decision less reliable--therefore more in need of appellate review--than a more considered decision. And appellate review of its decision must be immediate to be effective; if it is postponed to the end of the case, the question whether the district court should have granted a preliminary injunction will be mooted by the entry of final judgment. See Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir.1984).

The problem is to integrate this insight about the practical differences between interlocutory orders denying preliminary injunctions and interlocutory orders denying permanent injunctions with the language of section 1292(a)(1), which does not distinguish between the two types of order. The solution implied by Switzerland Cheese Ass'n is to distinguish "postponing" from "denying" a request for injunctive relief: if the request is merely postponed, as in Switzerland Cheese Ass'n, appeal is not automatically allowed. This distinction implies, and later cases confirm, that a definitive disposition of a request for a permanent injunction is appealable under section 1292(a)(1), consistently with the Smith v. Vulcan Iron Works line of cases. See, e.g., Milonas v. Williams, 648 F.2d 688 (10th Cir.1981) (per curiam); EEOC v. International Longshoremen's Ass'n, 511 F.2d 273, 276-77 (5th Cir.1975).

All this is by way of necessary background to the Supreme Court's decision in Carson v. American Brands, Inc., 450 U.S. 79, 83-84, 101 S.Ct. 993, 996-997, 67 L.Ed.2d 59 (1981), which allowed an appeal under section 1292(a)(1) from an order refusing to approve a consent decree that, as in the present case, included a permanent injunction. If Carson is read as conferring blanket permission to appeal under section 1292(a)(1) all refusals to approve consent decrees that have injunctive provisions (as all do, for reasons we shall explain--and not only because the term "decree" is itself equitable), any doubt about appealability in this case disappears. Such a reading is suggested, but without discussion of the point, in our decision in United States v. City of Chicago, 663 F.2d 1354, 1359 n. 15 (7th Cir.1981) (en banc); see also Williams v. City of New Orleans, 694 F.2d 987, 989 (5th Cir.1982), on rehearing, 729 F.2d 1554 (5th Cir.1984) (en banc); Gould v. Control Laser Corp., 650 F.2d 617, 621 (5th Cir.1981); United States v. City of Alexandria, 614 F.2d 1358, 1361 n. 5 (5th Cir.1980); Plummer v. Chemical Bank, 668 F.2d 654, 655 (2d Cir.1982). Other cases, however, suggest that the appellant must show that the refusal to approve the decree caused him irreparable harm. See New York v. Diarylea Coop. Inc., 698 F.2d 567, 570 (2d Cir.1983); In re Flight Transportation Corp. Securities Litigation, 730 F.2d 1128, 1133-34 (8th Cir.1984); Roberts v. St. Regis Paper Co., 653 F.2d 166, 170 (5th Cir.1981); cf. Plymouth County Nuclear Information Comm., Inc. v. Boston Edison Co., supra, 655 F.2d at 18.

The source of confusion is that Carson seems to be about two different things--the appealability of orders disapproving consent decrees that contain permanent injunctions, and the appealability of orders of any sort that have the same consequences as orders denying preliminary injunctions. See, e.g., South Bend Consumers Club, Inc. v. United Consumers Club, Inc., 742 F.2d 392, 393-94 (7th Cir.1984) (applying Carson to summary judgment that precluded injunctive relief as matter of law); Winterland Concessions Co. v. Trela, 735 F.2d 257, 261 (7th Cir.1984) (dismissal of counterclaim that sought injunction). The order in Carson partook of both types, since the proposed decree was not captioned "injunction" but did include a permanent injunction. Switzerland Cheese Ass'n had rejected the idea that every interlocutory order turning down a request for a permanent injunction is immediately appealable, but it did not say that no such orders were appealable, and indeed it implied (consistently with our suggested interpretation of it) that some were. See 385 U.S. at 25, 87 S.Ct. at 195. Carson interprets Switzerland Cheese Ass'n to hold that an interlocutory order refusing a permanent injunction is appealable immediately if but only if the order has the same effect ("serious, perhaps irreparable, consequence," in the language of an earlier case) as the denial of a preliminary injunction. See 450 U.S. at 84-85, 101 S.Ct. at 996-997. This test--which we take to be the heart of Carson--makes excellent sense when we consider...