In re Lorillard Tobacco Co.

• Decision Date: 07 June 2004
• Docket Number: No. 03-16553.,03-16553.
• Citation: 370 F.3d 982
• Parties: In re LORILLARD TOBACCO COMPANY, Plaintiff-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

370 F.3d 982

In re LORILLARD TOBACCO COMPANY, Plaintiff-Appellant.

No. 03-16553.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 15, 2004.

Filed June 7, 2004.

John R. Bailey, David J. Merrill, and Joshua M. Dickey, Law Offices of John R. Bailey, Las Vegas, NV, for the plaintiff-appellant.

Appeal from the United States District Court for the District of Nevada; Larry R. Hicks, District Judge, Presiding. D.C. No. CV-03-00775-LRH/PAL.

Before: WALLACE, McKEOWN, and CALLAHAN, Circuit Judges.

McKEOWN, Circuit Judge:

This case arises from the district court's denial of Lorillard Tobacco Company's application for an ex parte order to seize purportedly counterfeit cigarettes. Upon Lorillard's timely appeal, we find ourselves confronted with a novel issue of appellate jurisdiction. To date, only one court has faced the question whether a seizure order authorized under the trademark law, 15 U.S.C. § 1116(d), is an injunction, and whether an interlocutory order denying seizure is thus appealable under 28 U.S.C. § 1292(a)(1). See Vuitton v. White, 945 F.2d 569, 572 (3d Cir.1991) (holding appellate jurisdiction proper). Careful analysis of the language and legislative history of the statute that authorizes seizure leads us to the opposite conclusion. Because the district court's denial of a motion for an ex parte seizure order is neither an automatically appealable literal refusal of an injunction nor a practical denial of ultimate injunctive relief, see Carson v. American Brands, Inc., 450 U.S. 79, 83-84, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981), we lack jurisdiction to consider Lorillard's appeal.

I. BACKGROUND

Lorillard Tobacco Company manufactures and holds several registered trademarks associated with Newport cigarettes. Lorillard sued John Doe,¹ the operator of a Nevada retail store, for federal trademark violations under 15 U.S.C. §§ 1114 and 1125, alleging that Doe sold cigarettes bearing counterfeit Newport trademarks. Lorillard sought an ex parte order pursuant to 15 U.S.C. § 1116(d)(1) to seize and impound cigarette packages and other evidence of counterfeiting believed to be in Doe's possession. The district court denied the motion.

II. APPELLATE JURISDICTION

Before we entertain Lorillard's arguments on the merits, we must have jurisdiction over the appeal. As a general rule, appellate jurisdiction is limited to "final decisions of the district courts of the United States." 28 U.S.C. § 1291. Recognizing that this is not a case where the district court's ruling "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment," Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945), Lorillard argues that 28 U.S.C. § 1292(a)(1) allows us to decide its appeal from the district court's order. We disagree.

Section 1292(a)(1) vests the courts of appeals with jurisdiction over "appeals from ... [i]nterlocutory orders of the district courts of the United States ... granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions." The touchstone of § 1292(a)(1) is an injunction order. If the § 1116(d) ex parte seizure order is an "injunction," the district court's denial of Lorillard's motion falls under the umbrella of this statute, and thus is appealable as of right. See Shee Atika v. Sealaska Corp., 39 F.3d 247, 249 (9th Cir.1994) (holding that an order denying a request for an injunction is reviewable on appeal, and declining to impose any further test for appealability). We must "therefore look to the statute before us and ask [whether] Congress intended" the ex parte seizure order to be an injunction. Almendarez-Torres v. United States, 523 U.S. 224, 228, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998).

A. THE EX PARTE SEIZURE STATUTE

We begin our analysis with the text of 15 U.S.C. § 1116(d)(1)(A),² the statute that authorizes federal courts to grant ex parte seizure orders:³

In the case of a civil action arising under [15 U.S.C. § 1114(1)(a) (creating a right to civil remedies for trademark infringement)] ... with respect to a violation that consists of using a counterfeit mark ..., the court may, upon ex parte application, grant an order under subsection (a) of this section pursuant to this subsection providing for the seizure of goods and counterfeit marks involved in [a violation involving use of counterfeit marks] and the means of making such marks, and records documenting the manufacture, sale, or receipt of things involved in such violation.

15 U.S.C. § 1116(d)(1)(A). Under this provision, a district court may issue an ex parte seizure order in civil actions alleging a trademark infringement that involves the use of a counterfeit mark. See 15 U.S.C. § 1114("Any person who shall ... use in commerce any ... counterfeit ... of a registered mark ... shall be liable in a civil action by the registrant for the remedies hereinafter provided.").

The statutory reference to "grant[ing] an order under subsection (a) of this section" refers to 15 U.S.C. § 1116(a). Section 1116(a) vests federal district courts with the "power to grant injunctions" and the power to enforce" [a]ny such injunction granted upon hearing, after notice to the defendant." 15 U.S.C. § 1116(a) (emphasis added). The "injunction" language in subsection (a) is the only possible source of support in the statute for the argument that the subsection (d) seizure order is an injunction.⁴ See Vuitton, 945 F.2d at 572 (reasoning that because § 1116(d) states that a court may "grant an [ex parte seizure] order under subsection (a)," the power to do so must arise from subsection (a) (emphasis added)).

In our view, subsection (d) itself creates the power of the court to grant an ex parte seizure order. The words "under subsection (a)" were included simply to specify that this power is intended to apply to civil proceedings in equity for trademark violations — and that § 1116(d) was not meant to enable the court to grant an ex parte seizure order under other circumstances. After careful consideration of the relationship between subsections (a) and (d), we are not persuaded that this single statutory cross-reference can transform an ex parte order into an appealable injunction.

Although there may be some superficial appeal to the Vuitton court's interpretation, its approach yields awkward results. Subsection (a) authorizes enforcement only of injunctions issued following notice and a hearing — which, by definition, excludes ex parte seizure orders. Thus, in order to conclude that the seizure order is a subsection (a) injunction, we would have to attribute to Congress the illogical intent to empower courts to grant unenforceable injunctions. Because we decline to take such a dim view of the legislative endeavor, we conclude that the plain language of § 1116 does not support Lorillard's argument that an ex parte seizure order is an injunction.

B. LEGISLATIVE HISTORY

Even if we viewed the cross-reference to subsection (a) as introducing an element of ambiguity into the statute, which we doubt, the legislative history of 15 U.S.C. § 1116(d) clarifies that Congress did not intend to create an injunction.⁵ The House Report on the Trademark Counterfeiting Act of 1984 is explicit: "A seizure is not the same as an injunction, which generally restrains the defendant from acting in a certain way." H.R.Rep. No. 98-997, at 15 (1984).⁶

The Senate Report is in accord, explaining that "at the hearing held after the seizure, ... the court may retain custody of the [seized] goods, even if the plaintiff fails to meet some other requirement for issuance of an injunction ...." S.Rep. No. 98-526, at 17 (1984), U.S. Code Cong. & Admin.News at 3627, 3643 (emphasis added). The report pointedly distinguishes between the seizure order and the injunction, and contemplates that the seizure order issues before the court decides whether an injunction is proper. If the seizure order were itself an injunction, the italicized language would make little sense.

Finally, although the legislative history also reveals that the procedures for ex parte orders "are largely derived from the existing requirements of rule 65 of the Federal Rules of Civil Procedure," Joint Statement on Trademark Counterfeiting Legislation, 130 Cong. Rec. H12,076, H12,080 (1984), this characteristic is, at best, neutral in divining congressional intent. Rule 65 governs both preliminary injunctions and temporary restraining orders, and the latter are generally not appealable as of right. Fed.R.Civ.P. 65(b); Religious Tech. Ctr. v. Scott, 869 F.2d 1306, 1308 (9th Cir.1989). Adaptation of Rule 65's procedures does not somehow transform the ex parte order into an appealable injunction.

Taken together, the House and Senate Reports indicate that Congress intended to create something sui generis — and not an injunction — when it enacted 15 U.S.C. § 1116(d).

C. THE NATURE OF AN "INJUNCTION"

Although the language of 15 U.S.C. § 1116 and its legislative history plainly show that Congress intended to distinguish the ex parte seizure order from an injunction, it is useful to consider whether the seizure order nevertheless bears the indicia of an injunction. The target of our inquiry is well-defined by this circuit's case law. "The three fundamental characteristics of an injunction are that it is (1)'directed to a party,' (2) `enforceable by contempt,' and (3)'designed to accord or protect some or all of the substantive relief sought by a complaint in more than [temporary] fashion." Orange County, Cal. Airport Hotel Assocs. v. Hongkong & Shanghai Banking Corp., 52 F.3d 821, 825 (9th Cir.1995) (quoting 16 Charles Alan Wright et al., Federal Practice and Procedure § 3922, at 29 (1977)) (bracketed word changed from "preliminary" to "temporary" to reflect the 1996 edition of Federal Practice and Procedure; internal quotation marks omitted); see also Gon v. First State Ins. Co., 871 F.2d...