The CAFC does the "collateral order" doctrine
The outcome:
Modern Font Applications LLC seeks an interlocutory appeal to challenge an order of the United States District Court for the District of Utah, which affirmed a magistrate judge’s decision deeming MFA’s in-house counsel a “competitive decisionmaker” and maintaining Alaska Airlines, Inc.’s Attorneys’ Eyes Only designations as to its source code. Mod. Font Applications v. Alaska Airlines, No. 19-cv00561, 2021 WL 364189, at *1 (D. Utah Feb. 3, 2021) (“Magistrate Decision”), aff’d sub nom. Mod. Font Applications LLC v. Alaska Airlines Inc., 2021 WL 3729382 (D. Utah Mar. 2, 2021) (“District Court Order”). Because we lack jurisdiction over MFA’s interlocutory appeal under the collateral order doctrine, we dismiss.
Of the doctrine
The collateral order doctrine is a practical construction of the final judgment rule that permits review of not only judgments that “terminate an action,” but also the “small class” of collateral rulings that are appropriately deemed “final.” Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 106 (2009) (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545–46 (1949)). Courts of appeals may allow interlocutory appeals of decisions that (1) are “conclusive;” (2) “resolve important questions separate from the merits;” and (3) are “effectively unreviewable on appeal from the final judgment in the underlying action.” Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995) (citing Cohen, 337 U.S. at 546).
Judge Newman said
The panel majority holds that we do not have jurisdiction to consider this appeal of the district court’s evidentiary ruling. However, our authority to review this ruling is not a matter of appellate jurisdiction, but of appellate discretion. A court’s jurisdiction is established by statute, and the question concerning this particular protective order is within our jurisdiction and subject to our discretion to review and resolve. I believe that in the circumstances hereof it is preferable to exercise this discretion and decide the question concerning this protective order. Nonetheless, the panel majority holds that we do not have jurisdiction, and relegates our decision of this aspect until after final judgment—thus creating inefficiency and possible injustice. I respectfully dissent.
Jurisdiction is a rigorous concept, for it establishes “a tribunal’s power to hear a case, a matter that can never be forfeited or waived.” Union Pac. R.R. Co. v. Brotherhood of Locomotive Eng’rs & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558 U.S. 67, 81 (2009) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)). The Supreme Court explained: Recognizing that the word “jurisdiction” has been used by courts, including this Court, to convey “many, too many, meanings,” Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 90 (1998), we have cautioned, in recent decisions, against profligate use of the term. Not all mandatory “prescriptions, however emphatic, are . . . properly typed jurisdictional,” we explained in Arbaugh v. Y & H Corp., 546 U.S. 500, 510. Id. (citations omitted). The Court has discussed the difference between subject matter jurisdiction and a claim-processing matter, see Kontrick v. Ryan, 540 U.S. 443, 456 (2004), and the distinction between a court’s jurisdiction founded on legislative action, and a court’s discretion to act on matters within its jurisdiction. See Bowles v. Russell, 551 U.S. 205, 211–12 (2007) (“This Court’s treatment of its certiorari jurisdiction also demonstrates the jurisdictional distinction between court-promulgated rules and limits enacted by Congress.”).
Appellate courts have jurisdiction to resolve issues that arise in cases within their appellate assignment. Appellate review is a matter of appellate discretion, as illustrated in Metlin v. Palastra, 729 F.2d 353, 355 (5th Cir. 1984) (“Our jurisdiction can, in the interest of judicial economy, extend as a matter of discretion to review of the closely related denial of qualified immunity.”). See also, e.g., Blackie v. Barrack, 524 F.2d 891, 900 (9th Cir. 1975) (“Because the record is hazy, because we have granted the extensions, and because the issues have now been briefed and argued and are ripe for decision, we think the preferable course is for us to decide the appeal and provide guidance to the trial court.”). In A. Olinick & Sons v. Dempster Bros., Inc., 365 F.2d 439 (2d Cir. 1966) the appellate court discussed its discretion to accept or reject a certified question and applicability of the writ of mandamus, and stated that “the Court of Appeals has total discretion—akin to that exercised by the Supreme Court on petitions for certiorari—in deciding whether or not to permit review.” Id. at 442. Protective orders concerning confidentiality and discovery have been reviewed, applying the standard of abuse of discretion. The court in SEC v. Merrill Scott & Assocs., Ltd., 600 F.3d 1262, 1271 (10th Cir. 2010) stated that “ordinarily requests to modify [a protective order] are directed to the district court’s discretion and subject to review only for abuse of discretion,” quoting 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 2044.1 at 575–76 (2d ed. 1994), and stating: “We conclude that we have jurisdiction to address the merits of the challenged order of the district court.” Id. at 1270. Other circuits have acted similarly. E.g., SEC v. TheStreet.Com, 273 F.3d 222, 228 (2d Cir. 2001) (concluding that the appellate court has jurisdiction to review modification of a protective order); Moorman v. UnumProvident Corp., 464 F.3d 1260, 1272 (11th Cir. 2006) (“Under § 1292(b), appellate review, even for certified questions, is discretionary . . . . By extension, review by appellate courts of noncertified questions is also discretionary.”). We discussed this discretion in In re Convertible Rowing Exerciser Patent Litig., 903 F.2d 822 (Fed. Cir. 1990): The granting of the appeal is also discretionary with the court of appeals which may refuse to entertain such an appeal in much the same manner that the Supreme Court today refuses to entertain applications for writs of certiorari. Id. at 822. We explained that appellate review of an interlocutory order is a matter of discretion: It should be made clear that if application for an appeal from an interlocutory order is filed with the court of appeals, the court of appeals may deny such application without specifying the grounds upon which such a denial is based. It could be based upon a view that the question involved was not a controlling issue. It could be denied on the basis that the docket of the circuit court of appeals was such that the appeal could not be entertained for too long a period of time. But, whatever the reason, the ultimate determination concerning the right of appeal is within the discretion of the appropriate circuit court of appeals. Id. (citing S. Rep. No. 2434 (1958), 85th Cong., 2d Sess. 3, 4, reprinted in 1958 U.S.C.C.A.N. 5255). We have applied these principles to discovery matters. In In re Deutsche Bank Trust Co. Americas, 605 F.3d 1373, 1377 (Fed. Cir. 2010), we recited that “[f]inal decisions concerning discovery matters are reviewed by this court under the abuse of discretion standard.” See also Baystate Technologies, Inc. v. Bowers, 283 F. App’x 808 (Fed. Cir. 2008) (per curiam) (reviewing denial of a motion to modify a protective order, applying the standard of abuse of discretion). The collateral order doctrine is a guide to discretion, not a rule of jurisdiction The collateral order doctrine, on which the panel majority relies, recites factors relevant to discretionary review of aspects within the court’s jurisdiction. See Kell v. Benzon, 925 F.3d 448, 453 (10th Cir. 2019) (“[T]he collateralorder doctrine would ordinarily apply only if an appellate court would probably not need to consider the merits a second time.”). Applying this guidance, in Board of Regents of the University of Texas System v. Boston Scientific Corp., 936 F.3d 1365 (Fed. Cir. 2019), we held that a transfer order was immediately appealable, rather than requiring the appellant to wait for final judgment. Id. at 1370. In Apple Inc. v. Samsung Electronics Co., 727 F.3d 1214 (Fed. Cir. 2013), we exercised our discretion and accepted immediate appeal concerning the unsealing of certain discovery documents, reasoning that the harm of erroneous unsealing could not be undone if appeal were delayed. Id. at 1220. The Supreme Court has explained that “[t]he collateral order doctrine is best understood not as an exception to the ‘final decision’ rule laid down by Congress in § 1291, but as a ‘practical construction’ of it.” Swint v. Chambers Cty. Comm’n, 514 U.S. 35, 41–42 (1995) (quoting Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994)); id. (“tentative, informal, or incomplete” rulings are not immediately appealable)) (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)). Imprecise usage of “jurisdiction” is not a new phenomenon, as the Court acknowledged in John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 134 (2008) (“As convenient shorthand, the Court has sometimes referred to the time limits in such statutes as ‘jurisdictional.’”). My colleagues appear to have adopted this convenient shorthand, for their holding that we do not have jurisdiction over this appeal is otherwise unsupported.
[As to source code]
With respect to MFA’s access to Alaska’s source code, the district court observed that the source code “contains both sensitive and valuable information,” id. at *4, and held that MFA had not adequately explained why it needs Alaska’s source code. It is well-recognized that source code may be a company’s “crown jewels,” Unwired Planet LLC v. Apple, Inc., 2013 WL 1501489, at *5 (D. Nev. Apr. 11, 2013), and “its secrecy is of enormous commercial value,” Viacom Int’l Inc. v. YouTube Inc., 253 F.R.D. 256, 259 (S.D.N.Y. 2008). In Deutsche Bank we stated: A determination of the risk of inadvertent disclosure or competitive use does not end the inquiry. Even if a district court is satisfied that such a risk exists, the district court must balance this risk against the potential harm to the opposing party from restrictions imposed on that party’s right to have the benefit of counsel of its choice. U.S. Steel, 730 F.2d at 1468; Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992). In balancing these conflicting interests the district court has broad discretion to decide what degree of protection is required. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984); Brown Bag Software, 960 F.2d at 1470. 605 F.3d at 1380. These principles, as applied by the district court, are appropriate for our review. The panel majority states its concern that “[permitting] MFA’s interlocutory appeal here would encourage parties to ‘unduly delay the resolution of district court litigation and needlessly burden’ this court by seeking appellate review of any pretrial discovery dispute in any patent case.” Maj. Op. at 10 (quoting Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 112 (2009)). This policy concern is not a criterion of appellate jurisdiction, but of appellate discretion as applied to an appeal of which we have subject matter jurisdiction. The panel majority, while denying this court’s appellate jurisdiction, discusses the merits of MFA’s argument but nonetheless declines to make a final decision, citing MFA’s ability to request “review[] after final judgment.” Maj. Op. at 7. In my view, the preferable path at this stage of this case is to exercise our discretion and finally resolve these confidentiality and protective order issues, for if MFA’s in-house counsel is indeed entitled to receive this information, the information should be available before, not after, trial. From the ruling that we do not have jurisdiction, I respectfully dissent.
Modern Font Applications LLC seeks an interlocutory appeal to challenge an order of the United States District Court for the District of Utah, which affirmed a magistrate judge’s decision deeming MFA’s in-house counsel a “competitive decisionmaker” and maintaining Alaska Airlines, Inc.’s Attorneys’ Eyes Only designations as to its source code. Mod. Font Applications v. Alaska Airlines, No. 19-cv00561, 2021 WL 364189, at *1 (D. Utah Feb. 3, 2021) (“Magistrate Decision”), aff’d sub nom. Mod. Font Applications LLC v. Alaska Airlines Inc., 2021 WL 3729382 (D. Utah Mar. 2, 2021) (“District Court Order”). Because we lack jurisdiction over MFA’s interlocutory appeal under the collateral order doctrine, we dismiss.
Of the doctrine
The collateral order doctrine is a practical construction of the final judgment rule that permits review of not only judgments that “terminate an action,” but also the “small class” of collateral rulings that are appropriately deemed “final.” Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 106 (2009) (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545–46 (1949)). Courts of appeals may allow interlocutory appeals of decisions that (1) are “conclusive;” (2) “resolve important questions separate from the merits;” and (3) are “effectively unreviewable on appeal from the final judgment in the underlying action.” Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995) (citing Cohen, 337 U.S. at 546).
Judge Newman said
The panel majority holds that we do not have jurisdiction to consider this appeal of the district court’s evidentiary ruling. However, our authority to review this ruling is not a matter of appellate jurisdiction, but of appellate discretion. A court’s jurisdiction is established by statute, and the question concerning this particular protective order is within our jurisdiction and subject to our discretion to review and resolve. I believe that in the circumstances hereof it is preferable to exercise this discretion and decide the question concerning this protective order. Nonetheless, the panel majority holds that we do not have jurisdiction, and relegates our decision of this aspect until after final judgment—thus creating inefficiency and possible injustice. I respectfully dissent.
Jurisdiction is a rigorous concept, for it establishes “a tribunal’s power to hear a case, a matter that can never be forfeited or waived.” Union Pac. R.R. Co. v. Brotherhood of Locomotive Eng’rs & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558 U.S. 67, 81 (2009) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)). The Supreme Court explained: Recognizing that the word “jurisdiction” has been used by courts, including this Court, to convey “many, too many, meanings,” Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 90 (1998), we have cautioned, in recent decisions, against profligate use of the term. Not all mandatory “prescriptions, however emphatic, are . . . properly typed jurisdictional,” we explained in Arbaugh v. Y & H Corp., 546 U.S. 500, 510. Id. (citations omitted). The Court has discussed the difference between subject matter jurisdiction and a claim-processing matter, see Kontrick v. Ryan, 540 U.S. 443, 456 (2004), and the distinction between a court’s jurisdiction founded on legislative action, and a court’s discretion to act on matters within its jurisdiction. See Bowles v. Russell, 551 U.S. 205, 211–12 (2007) (“This Court’s treatment of its certiorari jurisdiction also demonstrates the jurisdictional distinction between court-promulgated rules and limits enacted by Congress.”).
Appellate courts have jurisdiction to resolve issues that arise in cases within their appellate assignment. Appellate review is a matter of appellate discretion, as illustrated in Metlin v. Palastra, 729 F.2d 353, 355 (5th Cir. 1984) (“Our jurisdiction can, in the interest of judicial economy, extend as a matter of discretion to review of the closely related denial of qualified immunity.”). See also, e.g., Blackie v. Barrack, 524 F.2d 891, 900 (9th Cir. 1975) (“Because the record is hazy, because we have granted the extensions, and because the issues have now been briefed and argued and are ripe for decision, we think the preferable course is for us to decide the appeal and provide guidance to the trial court.”). In A. Olinick & Sons v. Dempster Bros., Inc., 365 F.2d 439 (2d Cir. 1966) the appellate court discussed its discretion to accept or reject a certified question and applicability of the writ of mandamus, and stated that “the Court of Appeals has total discretion—akin to that exercised by the Supreme Court on petitions for certiorari—in deciding whether or not to permit review.” Id. at 442. Protective orders concerning confidentiality and discovery have been reviewed, applying the standard of abuse of discretion. The court in SEC v. Merrill Scott & Assocs., Ltd., 600 F.3d 1262, 1271 (10th Cir. 2010) stated that “ordinarily requests to modify [a protective order] are directed to the district court’s discretion and subject to review only for abuse of discretion,” quoting 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 2044.1 at 575–76 (2d ed. 1994), and stating: “We conclude that we have jurisdiction to address the merits of the challenged order of the district court.” Id. at 1270. Other circuits have acted similarly. E.g., SEC v. TheStreet.Com, 273 F.3d 222, 228 (2d Cir. 2001) (concluding that the appellate court has jurisdiction to review modification of a protective order); Moorman v. UnumProvident Corp., 464 F.3d 1260, 1272 (11th Cir. 2006) (“Under § 1292(b), appellate review, even for certified questions, is discretionary . . . . By extension, review by appellate courts of noncertified questions is also discretionary.”). We discussed this discretion in In re Convertible Rowing Exerciser Patent Litig., 903 F.2d 822 (Fed. Cir. 1990): The granting of the appeal is also discretionary with the court of appeals which may refuse to entertain such an appeal in much the same manner that the Supreme Court today refuses to entertain applications for writs of certiorari. Id. at 822. We explained that appellate review of an interlocutory order is a matter of discretion: It should be made clear that if application for an appeal from an interlocutory order is filed with the court of appeals, the court of appeals may deny such application without specifying the grounds upon which such a denial is based. It could be based upon a view that the question involved was not a controlling issue. It could be denied on the basis that the docket of the circuit court of appeals was such that the appeal could not be entertained for too long a period of time. But, whatever the reason, the ultimate determination concerning the right of appeal is within the discretion of the appropriate circuit court of appeals. Id. (citing S. Rep. No. 2434 (1958), 85th Cong., 2d Sess. 3, 4, reprinted in 1958 U.S.C.C.A.N. 5255). We have applied these principles to discovery matters. In In re Deutsche Bank Trust Co. Americas, 605 F.3d 1373, 1377 (Fed. Cir. 2010), we recited that “[f]inal decisions concerning discovery matters are reviewed by this court under the abuse of discretion standard.” See also Baystate Technologies, Inc. v. Bowers, 283 F. App’x 808 (Fed. Cir. 2008) (per curiam) (reviewing denial of a motion to modify a protective order, applying the standard of abuse of discretion). The collateral order doctrine is a guide to discretion, not a rule of jurisdiction The collateral order doctrine, on which the panel majority relies, recites factors relevant to discretionary review of aspects within the court’s jurisdiction. See Kell v. Benzon, 925 F.3d 448, 453 (10th Cir. 2019) (“[T]he collateralorder doctrine would ordinarily apply only if an appellate court would probably not need to consider the merits a second time.”). Applying this guidance, in Board of Regents of the University of Texas System v. Boston Scientific Corp., 936 F.3d 1365 (Fed. Cir. 2019), we held that a transfer order was immediately appealable, rather than requiring the appellant to wait for final judgment. Id. at 1370. In Apple Inc. v. Samsung Electronics Co., 727 F.3d 1214 (Fed. Cir. 2013), we exercised our discretion and accepted immediate appeal concerning the unsealing of certain discovery documents, reasoning that the harm of erroneous unsealing could not be undone if appeal were delayed. Id. at 1220. The Supreme Court has explained that “[t]he collateral order doctrine is best understood not as an exception to the ‘final decision’ rule laid down by Congress in § 1291, but as a ‘practical construction’ of it.” Swint v. Chambers Cty. Comm’n, 514 U.S. 35, 41–42 (1995) (quoting Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994)); id. (“tentative, informal, or incomplete” rulings are not immediately appealable)) (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)). Imprecise usage of “jurisdiction” is not a new phenomenon, as the Court acknowledged in John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 134 (2008) (“As convenient shorthand, the Court has sometimes referred to the time limits in such statutes as ‘jurisdictional.’”). My colleagues appear to have adopted this convenient shorthand, for their holding that we do not have jurisdiction over this appeal is otherwise unsupported.
[As to source code]
With respect to MFA’s access to Alaska’s source code, the district court observed that the source code “contains both sensitive and valuable information,” id. at *4, and held that MFA had not adequately explained why it needs Alaska’s source code. It is well-recognized that source code may be a company’s “crown jewels,” Unwired Planet LLC v. Apple, Inc., 2013 WL 1501489, at *5 (D. Nev. Apr. 11, 2013), and “its secrecy is of enormous commercial value,” Viacom Int’l Inc. v. YouTube Inc., 253 F.R.D. 256, 259 (S.D.N.Y. 2008). In Deutsche Bank we stated: A determination of the risk of inadvertent disclosure or competitive use does not end the inquiry. Even if a district court is satisfied that such a risk exists, the district court must balance this risk against the potential harm to the opposing party from restrictions imposed on that party’s right to have the benefit of counsel of its choice. U.S. Steel, 730 F.2d at 1468; Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992). In balancing these conflicting interests the district court has broad discretion to decide what degree of protection is required. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984); Brown Bag Software, 960 F.2d at 1470. 605 F.3d at 1380. These principles, as applied by the district court, are appropriate for our review. The panel majority states its concern that “[permitting] MFA’s interlocutory appeal here would encourage parties to ‘unduly delay the resolution of district court litigation and needlessly burden’ this court by seeking appellate review of any pretrial discovery dispute in any patent case.” Maj. Op. at 10 (quoting Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 112 (2009)). This policy concern is not a criterion of appellate jurisdiction, but of appellate discretion as applied to an appeal of which we have subject matter jurisdiction. The panel majority, while denying this court’s appellate jurisdiction, discusses the merits of MFA’s argument but nonetheless declines to make a final decision, citing MFA’s ability to request “review[] after final judgment.” Maj. Op. at 7. In my view, the preferable path at this stage of this case is to exercise our discretion and finally resolve these confidentiality and protective order issues, for if MFA’s in-house counsel is indeed entitled to receive this information, the information should be available before, not after, trial. From the ruling that we do not have jurisdiction, I respectfully dissent.
posted by Lawrence B. Ebert at 3:03 PM
0 Comments:
Post a Comment
<< Home