Pimentel & Sons Guitar Makers, Inc. v. Pimentel

• Decision Date: 16 February 2007
• Docket Number: No. 05-2336.,05-2336.
• Parties: PIMENTEL & SONS GUITAR MAKERS, INC., a New Mexico Corporation, Plaintiff-Appellee, v. Hector PIMENTEL, individually, Danette I.L. Hinkle Pimentel, individually; Danette I. Lovato-pimentel Music Enterprises, Inc., a New Mexico corporation; Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

477 F.3d 1151

PIMENTEL & SONS GUITAR MAKERS, INC., a New Mexico Corporation, Plaintiff-Appellee, v. Hector PIMENTEL, individually, Danette I.L. Hinkle Pimentel, individually; Danette I. Lovato-pimentel Music Enterprises, Inc., a New Mexico corporation; Defendants-Appellants.

No. 05-2336.

United States Court of Appeals, Tenth Circuit.

February 16, 2007.

Submitted on the briefs:^* Kevin Lynn Wildenstein, SW Intellectual Property Services,

LLC, Albuquerque, NM, and Jerry A. Walz and Andrew Knight, Walz & Associates, Cedar Crest, NM, for Defendants-Appellants.

Dennis F. Armijo, Esq., Dennis F. Armijo, P.C., Albuquerque, NM, and Judd C. West, Esq., Doughty & West, PA, Albuquerque, NM, for Plaintiff-Appellee.

Before TACHA, Chief Circuit Judge, TYMKOVICH, and GORSUCH, Circuit Judges.

TACHA, Chief Circuit Judge.

The Defendants-Appellants seek to appeal an interlocutory order of the District Court granting a request for an injunction. We dismiss for lack of jurisdiction.

I. BACKGROUND

Pimentel & Sons Guitar Makers, Inc. ("Guitar Makers") is a family business that produces and sells handcrafted instruments. Lorenzo Pimentel and his two sons, Roberto and Ricardo Pimentel, operate the business. Guitar Makers has owned the federally registered trademark "PIMENTEL" since 1963. Hector Pimentel, also the son of Lorenzo Pimentel, is a professional guitarist and guitar instructor. In 1987, Hector began to manufacture, sell, and repair guitars.

In 1988, Lorenzo Pimentel & Sons Limited Partnership (Guitar Makers' predecessor) filed a complaint against Hector for use of the business name, trade name, and trademark "PIMENTEL" (the "1988 litigation"). The parties to that litigation entered into a settlement resulting in an injunctive order and judgment from the Federal District Court for the District of New Mexico on September 26, 1989 (the "1989 injunction"). Among other things, the order required Hector to use a disclaimer in conjunction with his use of the name "Pimentel" in certain situations. The injunction is still in place today.

In 1994, Danette Pimentel¹ began working with Hector to promote and sell his goods and entertainment services. Danette registered the corporation "Danette I. Lovato-Pimentel Music Enterprises, Inc." with the State of New Mexico. Danette conducts business on behalf of Hector, who contracts with her as a "musician and artist." Danette and her corporation used the name Pimentel in several ways to promote Hector.

In April 2004, Guitar Makers filed suit against Hector, Danette, and Danette I. Lovato-Pimentel Music Enterprises, Inc. for alleged violations of the 1989 injunction, the federal Lanham Act, and the New Mexico Unfair Practices Act. Guitar Makers filed a motion for a preliminary injunction requesting that the District Court enjoin the alleged violations. The District Court issued a preliminary injunction based solely on the 1989 injunction, finding that the injunction required Hector to use a disclaimer whenever he used the word "Pimentel" in a business name and that Hector had used the name several times in the preceding years without doing so. The District Court also enjoined Danette and Danette I. Lovato-Pimentel Music Enterprises, Inc. from further violations of the 1989 injunction after finding that they promoted Hector's goods and services under trade names containing the word "Pimentel" without using the disclaimer. The Defendants appealed. Subsequently, Hector and Guitar Makers entered into a settlement agreement, and the District Court entered an order dismissing the suit against Hector with prejudice. Neither Danette nor her company has settled with Guitar Makers, but the District Court has dismissed all but the Lanham Act claim against them.

II. DISCUSSION

As a general rule, only final decisions of the district court are appealable. 28 U.S.C. § 1291. Section 1292(a)(1) sets forth an exception to the general rule for interlocutory orders "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions." 28 U.S.C. § 1292(a)(1). We have noted that "an interlocutory order expressly granting or denying injunctive relief fits squarely within the plain language of section 1292(a)(1)." Tri-State Generation & Transmission Assoc. v. Shoshone River Power, Inc., 874 F.2d 1346, 1351 (10th Cir.1989); see also MAI Basic Four, Inc. v. Basis, Inc., 962 F.2d 978, 981 (10th Cir.1992) ("[B]y the plain terms of § 1292(a)(1), interlocutory orders granting `injunctions' are appealable."). Here, the District Court's decision explicitly "granting" Guitar Makers' motion for a preliminary injunction would seem to give us jurisdiction over this interlocutory appeal under the plain language of § 1292(a)(1). Such a superficial analysis of this Court's appellate jurisdiction, however, is insufficient. The purpose of § 1292(a)(1) counsels a closer look at the District Court's action and ultimately leads us to conclude that we do not have jurisdiction over this appeal.

Section 1292(a) was intended to carve out only a limited exception to the final-judgment rule of 28 U.S.C. § 1291 and the "long-established policy against piecemeal appeals." Gardner v. Westinghouse Broad. Co., 437 U.S. 478, 480, 98 S.Ct. 2451, 57 L.Ed.2d 364 (1978). Consequently, the Supreme Court has cautioned that the statute should be narrowly construed to "ensure that appeal as of right under § 1292(a)(1) will be available only in [limited] circumstances." Carson v. Am. Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981); see also Kershner v. Mazurkiewicz, 670 F.2d 440, 447 (3rd Cir.1982) ("Because § 1292(a)(1) is an exception to an otherwise fundamental rule of federal appellate jurisdiction, we must construe the scope of the provision with great care and circumspection.").

Due to this narrow construction mandate, courts of appeals insist on looking beyond the captions and vocabulary attached to district court orders to determine the actual, practical effect of an order before exercising appellate jurisdiction under § 1292(a)(1). See, e.g., Birmingham Fire Fighters Ass'n 117 v. Jefferson County, 280 F.3d 1289, 1292-93 (11th Cir.2002); United States Fire Ins. Co. v. Asbestospray, Inc., 182 F.3d 201, 207 (3d Cir.1999); Mikel v. Gourley, 951 F.2d 166, 169 (8th Cir.1991); Motorola, Inc. v. Computer Displays Int'l, Inc., 739 F.2d 1149, 1155 (7th Cir.1984); Major v. Orthopedic Equip. Co., 561 F.2d 1112, 1115 (4th Cir. 1977). The cases cited address district court orders purporting to "modify" a prior injunction or order. In resolving their appellate jurisdiction, the circuit courts have looked behind the terminology used by the parties and the district court to prevent litigants from "circumvent[ing] by the filing of repetitive motions the time limitation for taking appeals." Buckhanon v. Percy, 708 F.2d 1209, 1212 (7th Cir. 1983); see also Birmingham Fire Fighters Ass'n, 280 F.3d at 1293 (noting that Congress did not intend § 1292(a)(1) to open the floodgates to litigation of injunctions). Although none of these cases dealt with a district court expressly "granting" a new injunction, the courts' reasoning is no less applicable to such a situation.

In short, in deciding whether a district court order "granting" an injunction is appealable under § 1292(a)(1), we consider the substance rather than the form of the motion and caption of the order. See Sierra Club v. Marsh, 907 F.2d 210, 213 (1st Cir.1990) (the court looks "not to the form of the district court's order but to its actual effect"). In so holding, we join the Seventh Circuit's well-reasoned approach in Gautreaux v. Chicago Housing Authority, 178 F.3d 951 (7th Cir.1999). In that case, a party sought to compel compliance with an existing injunction, and in response, the district court "enjoined" the respondent from taking certain action. Id. at 954. The Seventh Circuit held that when a district court's order, explicitly labeled an "injunction," does "nothing more than reassert the court's prior orders," it is not a "fresh injunction." Id. at 958. Relying on its own precedent, the court held that unless a district court order addressing an existing injunction "substantially and obviously alters the parties' preexisting legal relationship," as set forth in the existing injunction, the order is an unappealable interpretation or clarification of the prior order. Id.

Because the District Court's order here was based solely on its interpretation of the 1989 permanent injunction, the proper question is whether the court's order actually modified the existing injunction or instead, as in Gautreaux, merely clarified or interpreted the prior injunction. Appellate courts do not have jurisdiction to review a district court order that merely interprets or clarifies, without modifying, an existing injunction. See, e.g., Motorola, Inc., 739 F.2d at 1155; Major, 561 F.2d at 1115.

Danette argues that the District Court modified the 1989 injunction because (1) it grossly misinterpreted the injunction and (2) it extended its application to Danette and her corporation, even though they were not parties to the 1988 litigation and were not named in the 1989 injunction. We reject both arguments.

Whether an order interprets or modifies an injunction is determined by its actual, practical effect. See Carson, 450 U.S. at 83, 101 S.Ct. 993; Motorola, 739 F.2d at 1155. An interpretation or clarification does not alter the status of the parties, "but merely restates that relationship in new terms," Motorola, 739 F.2d at 1155, while a modification either "alters the legal relationship between the parties or substantially changes the terms and force of the injunction," Mikel, 951 F.2d at 168-69 (internal quotation marks, citation, and alteration omitted). To change the legal relationship of the parties, the order must "change the command of the earlier injunction, relax its prohibitions, or release any respondent from its grip."...