Trial Lawyers Coll. v. Gerry Spence Trial Lawyers Coll. at Thunderhead Ranch

• Decision Date: 27 January 2022
• Docket Number: No. 20-8038,20-8038
• Parties: The TRIAL LAWYERS COLLEGE, a nonprofit corporation, Plaintiff - Appellee, v. GERRY SPENCE TRIAL LAWYERS COLLEGE AT THUNDERHEAD RANCH, a nonprofit corporation; Gerry L. Spence ; John Zelbst; Rex Parris ; Joseph H. Low ; Kent Spence, Defendants - Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

23 F.4th 1262

The TRIAL LAWYERS COLLEGE, a nonprofit corporation, Plaintiff - Appellee,

v.GERRY SPENCE TRIAL LAWYERS COLLEGE AT THUNDERHEAD RANCH, a nonprofit corporation; Gerry L. Spence ; John Zelbst; Rex Parris ; Joseph H. Low ; Kent Spence, Defendants - Appellants.

No. 20-8038

United States Court of Appeals, Tenth Circuit.

FILED January 27, 2022

Timothy Getzoff, Holland & Hart LLP, Boulder, Colorado (Bradley T. Cave, P.C. and Jeffrey S. Pope, Holland & Hart LLP, Cheyenne, Wyoming, with him on the briefs), for Defendants-Appellants.

Christopher K. Ralston, Phelps Dunbar LLP, New Orleans, Louisiana (Lindsay Calhoun and James Gilbert with him on the briefs), for Plaintiff-Appellee.

Before BACHARACH, BRISCOE, and MURPHY, Circuit Judges.

BACHARACH, Circuit Judge.

This appeal grew out of a dispute over a program (called "The Trial Lawyers College") to train trial lawyers. The College's board of directors splintered into two factions, known as the "Spence Group" and the "Sloan Group." The two groups sued each other: The Spence Group sued in state court for dissolution of the College and a declaratory judgment recognizing the Spence Group's control of the Board; the Sloan Group then sued in federal court, claiming trademark infringement under the Lanham Act.

Both groups sought relief in the federal case. The Spence Group requested a stay, hoping to obtain a ruling in state court before the federal case proceeded. The Sloan Group requested a preliminary injunction.

The federal district court decided both requests in favor of the Sloan Group: The court denied the Spence Group's request for a stay and granted the Sloan Group's request for a preliminary injunction. The Spence Group appealed both rulings.

We lack jurisdiction to review the district court's denial of a stay. After the Spence Group appealed the federal district court's ruling, the state court resolved the dispute over Board control. So this part of the requested stay became moot. The remainder of the federal district court's ruling on a stay does not constitute a reviewable final order.

But we do have jurisdiction to review the grant of a preliminary injunction. In granting the preliminary injunction, the district court found irreparable injury, restricting what the Spence Group could say about its own training program and ordering removal of sculptures bearing the College's logo.

The Spence Group challenges the finding of irreparable harm, the scope of the preliminary injunction, and the consideration of additional evidence after the evidentiary hearing. In our view, the district court had the discretion to consider the new evidence and grant a preliminary injunction. But the court went too far by requiring the Spence Group to remove the sculptures.

I. We lack jurisdiction over the denial of a stay.

The Spence Group moved to stay the federal proceedings until the state court's issuance of a decision. The federal district court denied the motion, and the state court issued a partial decision. We lack jurisdiction to consider the federal district court's denial of a stay.

A. The state court resolved the issue of Board control, mooting this part of the appeal.

In the state-court action, the Spence Group requested the removal of two board members aligned with the Sloan Group. After making this request, the Spence Group asked the federal district court to postpone any substantive rulings until the state court decided who controlled the Board.

During the pendency of our appeal, the state court rejected the Spence Group's request for removal of the two board members, concluding that they had been validly elected. This conclusion effectively left the Sloan Group in control of the Board, mooting this part of the requested stay. See Rio Grande Silvery Minnow v. Bureau of Reclamation , 601 F.3d 1096, 1109–10 (10th Cir. 2010).¹

B. We also lack jurisdiction to consider the requested stay while the state court considers the Spence Group's request for dissolution.

In state court, the Spence Group also requested dissolution of the College, claiming misconduct, loss of assets, and inability to carry out the College's stated purposes. The state court has not ruled on the request for dissolution, so our appeal isn't moot for this part of the requested stay. We nonetheless lack jurisdiction in the absence of a final order.

We typically obtain appellate review by the entry of a final order. See 28 U.S.C. § 1291. An order is typically considered "final" if

• it ends the litigation on the merits and

• the court's only remaining obligation is to execute the judgment.

Gulfstream Aerospace Corp. v. Mayacamas Corp. , 485 U.S. 271, 275, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988). The denial of a stay would not end the litigation on the merits, so the ruling would not ordinarily be considered "final." Id. at 277–78, 108 S.Ct. 1133.

But when parts of the case would remain, we can consider some decisions "final" under the collateral-order doctrine and the practical construction rule. See Digit. Equip. Corp. v. Desktop Direct, Inc. , 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) (stating that under the collateral-order doctrine, a decision that doesn't terminate the action can be considered "final" when required by "the interest of ‘achieving a healthy legal system’ ") (quoting Cobbledick v. United States , 309 U.S. 323, 326, 60 S.Ct. 540, 84 L.Ed. 783 (1940) ); W. Energy All. v. Salazar , 709 F.3d 1040, 1049 (10th Cir. 2013) (stating that courts could alternatively construe a ruling as final based on practical considerations).

Under the collateral-order doctrine, rulings are deemed final if they

• are conclusive,

• resolve important questions completely separate from the merits, and

• are otherwise unreviewable after entry of a final judgment.

See Digital Equip. Corp. v. Desktop Direct, Inc. , 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994). The Spence Group invokes this doctrine, but it doesn't apply.

The Spence Group based its motion for a stay on Colorado River Water Conservation District v. United States , 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), which permits a federal court to stay its case while a parallel state case proceeds. Fox v. Maulding , 16 F.3d 1079, 1081 (10th Cir. 1994). But a stay of the federal case would not constitute a conclusive ruling. As a result, the Supreme Court has concluded that the denial of a stay under Colorado River is "inherently tentative" and not considered "final" for purposes of appellate review. Gulfstream Aerospace Corp. v. Mayacamas Corp. , 485 U.S. 271, 278, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988). The tentative nature of the district court's ruling prevents application of the collateral-order doctrine.

The Spence Group tries to distinguish this conclusion, arguing that the federal district court conclusively determined that the federal and state cases were not parallel. But we decide appealability based on the category of the order rather than the particular facts of the case. Los Lobos Renewable Power, LLC v. Americulture, Inc. , 885 F.3d 659, 664 (10th Cir. 2018). Because the Supreme Court categorically refused to apply the collateral-order doctrine to the denial of stays under Colorado River , the district court's ruling doesn't trigger the collateral-order doctrine.

Even when the collateral-order doctrine doesn't apply, the practical construction doctrine sometimes triggers appellate jurisdiction based on a practical construction of "finality." State of Utah ex rel Utah State Dep't of Health v. Kennecott Corp. , 14 F.3d 1489, 1495–96 (10th Cir. 1994). The Tenth Circuit has construed the doctrine narrowly, applying it "only in the most exceptional circumstances." Quinn v. CGR , 828 F.2d 1463, 1467 (10th Cir. 1987). To determine the applicability of the practical construction doctrine, we consider whether the issue is so "urgent" and "important" that "the danger of injustice by delaying appellate review outweighs the inconvenience and costs of piecemeal review." Bender v. Clark , 744 F.2d 1424, 1427 (10th Cir. 1984).

The denial of a stay does not trigger this narrow exception. Piecemeal litigation is unlikely because the state court has already decided the issue of Board control, and the Spence Group doesn't identify an unsettled issue of unique urgency. So appellate jurisdiction doesn't arise under the practical construction doctrine.

C. We can't exercise pendent appellate jurisdiction.

In rare circumstances, the doctrine of "pendent appellate jurisdiction" allows us to exercise jurisdiction over rulings that would ordinarily be unreviewable until the end of the case. Timpanogos Tribe v. Conway , 286 F.3d 1195, 1200 (10th Cir. 2002). We can exercise pendent appellate jurisdiction only when

• an unappealable decision is "inextricably intertwined" with an appealable ruling or

• "meaningful review of the appealable" decision would require review of the otherwise unappealable decision.

Id. (quoting Moore v. City of Wynnewood , 57 F.3d 924, 930 (10th Cir. 1995) ). The Spence Group argues that (1) appellate jurisdiction exists over the grant of a preliminary injunction and (2) the issues involving a stay and preliminary injunction are intertwined.

The Spence Group's first argument is correct, for we do have jurisdiction over the Spence Group's challenge to the grant of a preliminary injunction. 28 U.S.C. § 1292(a). But that ruling isn't inextricably intertwined with the denial of a stay.²

The district court's grant of a preliminary injunction turned on likelihood of success on the merits, existence of an irreparable injury, balancing of harms, and effect on the public interest. The Spence Group argues that the district court analyzed the likelihood of success by presuming the Sloan Group's control over the College and the trademarks, which were the issues to be decided by the state court. But this alleged presumption doesn't matter now: During the pendency of our appeal, the state court has decided control of the Board. So we can't...