
The Sixth Circuit recently remarked that a federal court of appeals has jurisdiction over “a final order in a severed action, even if there is no final order in the action from which it was severed.” But when you have a single legal dispute that’s moving along under two case dockets, when does an order in one of those count as “a final order in a severed action”?
In 2003, U.S. Filter, a manufacturer of wastewater-treatment equipment, sued competitor M.W. Watermark for intellectual property violations. The lawsuit ended with a consent decree that enjoined Watermark and its successors from any further wrongdoing.
But by 2016, U.S. Filter’s intellectual property was owned by a different company, Evoqua, and Evoqua sued Watermark for violating the consent decree. The Western District of Michigan held Watermark in contempt of the consent decree but the judge assigned to the case retired before issuing a damages award. The case was reassigned. Watermark moved for an order dissolving the injunction, arguing that Evoqua was not the successor-in-interest to the consent decree. The new judge ordered the parties to file their briefs in both the 2016 case and the long-closed 2003 case, explaining that filing in the 2003 case would give notice to any other interested party.
Ultimately the district court vacated the contempt order and dismissed Evoqua’s contempt claim in the 2003 case. Evoqua appealed while the 2016 case was still with the district court.
The Sixth Circuit dismissed for lack of jurisdiction. Evoqua argued that the district court’s decision vacating the contempt finding “was a final decision in the 2003 Litigation because the district court ‘effectively’ severed the contempt claim from the 2016 Litigation.” The Sixth Circuit rejected this argument, noting that Evoqua “does not cite any law explaining when we should recognize an ‘effective’ severance if the district court did not state that it was severing a claim . . . .”
What’s more, the district court judge “explained that he only caused the contempt issue to appear in the 2003 Litigation because he wanted all interested parties to receive notice. . . . Causing the contempt issue to appear in the 2003 Litigation accomplishes the goal of providing notice; taking the extra step of severing the contempt issue does not advance that goal any further.” Because the order that Evoqua was trying to appeal was not a final order severing the two cases, the court of appeals did not have jurisdiction.
Read the Sixth Circuit’s decision here.