Commercial Litigation and Arbitration

Distinguishing an Appealable Modification of an Injunction from a Non-Appealable Clarification — Practical Effects Doctrine — The Legal Relationship of the Parties to the Decree Must Change

United States v. Philip Morris USA Inc., 2012 U.S. App. LEXIS 15528 (D.C. Cir July 27, 2012):

Appellant tobacco companies seek review of a district court order clarifying an injunction requiring appellants to disclose marketing data to the government. Appellants claim that the clarification of the injunction actually effects a modification of the requirements. Our jurisdiction over this interlocutory appeal is dependent on the district court having modified the injunction. Because we conclude that it did not, we dismiss the appeal for lack of jurisdiction.***

Appellants contend that the order under review constitutes a modification of the injunction beyond the jurisdiction of the district court. Appellants contend that the new order "completely rewrites" the data-disclosure requirements of the original injunction. They rely specifically on the language of Paragraph 16, which required the companies to "disclose all disaggregated marketing data to the Government in the same form and on the same schedule which Defendants now follow in disclosing disaggregated marketing data to the Federal Trade Commission." Philip Morris, 449 F. Supp. 2d at 944 (Order #1015). Under Order #20-Remand, appellants must disclose

all marketing data broken down by type of marketing or promotion use[d] (including sales data), geographical region (to the smallest level of geographic specificity maintained by each Defendant), number of cigarettes sold, advertising in stores, and any other category of data collected and/or maintained by or on behalf of each Defendant.

Philip Morris, 778 F. Supp. 2d at 12 (Order #20-Remand). Under the new requirements, appellants argue, a significantly larger amount of data must be disclosed. They contend that the original language is clear: it requires the tobacco companies to disclose disaggregated marketing data "in the same form" and "on the same schedule" as the data provided to the FTC. Data provided "in the same form," they contend, must be the same data.***

Before we address the merits of the companies' appeal, we must first determine whether we have jurisdiction over the case. See, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83 (1998). As a general norm, courts of appeal have jurisdiction to review "final decisions of the district courts of the United States." 28 U.S.C. § 1291. While making an alternate argument that Order #20-Remand constitutes such a final decision, appellants' primary jurisdictional proposition is that this order comes within the exception created by 28 U.S.C. § 1292(a). That section provides for jurisdiction over "[i]nterlocutory orders . . . granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions." The exception to the normal finality requirement created by that section "is a limited one, and the Supreme Court has 'construed [it] narrowly.'" Salazar ex rel. Salazar v. District of Columbia, 671 F.3d 1258, 1261 (D.C. Cir. 2012) (quoting Carson v. Am. Brands, Inc., 450 U.S. 79, 84 (1981) (brackets in Salazar)). As we observed in Salazar, the scope of the exception "is now relatively clear." Id. Briefly put, if the interlocutory order at issue clearly grants or denies a specific request for injunctive relief, it is appealable without further showing.... If the order does not grant or deny a request to dissolve an injunction, it may still be appealable "if it has the 'practical effect' of doing so." ... Generally, a "practical effects" order is within the jurisdiction of the court for interlocutory review only if the appellant can show (1) that the order "might have a 'serious, perhaps irreparable, consequence,'" and (2) "that the order can be 'effectually challenged' only by immediate appeal." ... The difficulty in applying these relatively straightforward requirements occurs in a case such as this where the district court has entered an order having some possible practical effect on the existing injunction, but where the district court's action causing such an effect may not be a modification of the existing order, but rather is, at least arguably, only a clarification in different language of the obligations theretofore imposed.

While we do not have precedent directly parallel to the case before us, other circuits have approached the question with the same caution employed in the Carson analysis. With specific relevance to the modification-or-clarification question, some have noted the danger that plunging into the details of the disputed district court action "would collapse the jurisdictional inquiry into a decision on the merits." Birmingham Fire Fighters Ass'n 117 v. Jefferson Cty., 280 F.3d 1289, 1293 (11th Cir. 2002); see also Pimentel & Sons Guitar Makers, Inc. v. Pimentel, 477 F.3d 1151, 1154-55 (10th Cir. 2007). As those circuits have reasoned, to do otherwise would "thwart[] the purpose of § 1292(a)(1)," which is "deliberately careful in limiting the availability of interlocutory review of orders concerning injunctions." Birmingham Fire Fighters Ass'n, 280 F.3d at 1293. We agree.

Although we further recognize, as have other circuits, that "we are not governed by the district court's own characterization of the order as an 'interpretation' or 'clarification,' as distinguished from a 'modification,'" we also agree with their narrow and careful approach to the making of a distinction as mandated by the language and purpose of § 1292(a)(1). Id. at 1292 (citing Gautreaux v. Chicago Hous. Auth., 178 F.3d 951, 956-57 (7th Cir. 1999)). Like the other circuits, we recognize that the scope of the injunction is to be "determined by the independent judgment of this Court," Int'l Ass'n of Machinists & Aero. Workers v. E. Air Lines, Inc., 849 F.2d 1481, 1485 (D.C. Cir. 1988). Nonetheless, we must approach the question with the purpose of fulfilling the statutory goal of not "letting piecemeal appeals, cloaked in the guise of jurisdictional inquiries, come in through the back door," Birmingham Fire Fighters Ass'n, 280 F.3d at 1293. The functional approach followed by, inter alia, the Eleventh Circuit, is to look "not to the form of the district court's order but to its actual effect." Id. (quoting Sierra Club v. Marsh, 907 F.2d 210, 213 (1st Cir. 1990)). Again consistent with the other circuits, we conclude that "an order modifies the original decree when it actually changes the legal relationship of the parties to the decree." Id. The order before us has not done so. As with the orders before the Birmingham Fire Fighters and Gautreaux courts, this order makes no actual change in the legal relation of the parties to the decree, and for jurisdictional purposes, we conclude that it is a clarification, not a modification.

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