Nissim Corp. v. ClearPlay, Inc.

In a non-precedential opinion addressing the issue of appellate jurisdiction, the U.S. Court of Appeals for the Federal Circuit dismissed an appeal of a lower court’s denial of two of plaintiff’s motions for summary judgment, finding that a denial of summary judgment is not a final judgment.  Nissim Corp. v. ClearPlay, Inc., Case No. 13-1429 (Fed. Cir., Mar. 14, 2014) (Hughes, J.).

The plaintiff, Nissim, sued ClearPlay and its founders for patent infringement, trade secret misappropriation and breach of contract.  The parties settled just before trial.  The court dismissed the suit with prejudice, retaining jurisdiction solely to enforce the terms of the settlement agreement.  Later, Nissim returned to court, seeking to enjoin ClearPlay from engaging in activities allegedly outside the scope of the settlement agreement.

The district court ultimately withdrew its discretionary jurisdiction over the settlement agreement without ruling on any substantive issues in the case.  Prior to withdrawing, however, the court issued two rulings denying Nissim’s motions for summary judgment.

Nissim appealed the two summary judgment rulings only and not the district court’s decision to withdraw jurisdiction.

The Federal Circuit explained that the orders denying summary judgment were not appealable.  The Federal Circuit stated that its appellate jurisdiction is limited to final judgments that end litigation on the merits and leave nothing for the court to do but execute the judgment.  Relying on Supreme Court precedent, the Federal Circuit panel explained that the denial of a motion for a summary judgment based on disputed material issues of fact does not settle or even tentatively decide anything about the merits of the claim.  According to the Court, such a ruling only decides that the case should go to trial.

Nissim argued that the two non-final orders denying summary judgment were appealable because those rulings would trigger collateral estoppel.  The Federal Circuit noted that the interlocutory rulings should not be the basis for collateral estoppel for at least three reasons.  First, the Court stated that ClearPlay’s counsel conceded during oral argument that collateral estoppel would not apply in a related case.  Second it seemed unlikely to the Court that a district court would find the prerequisites for collateral estoppel satisfied under the predicate circumstances given that the subject of the interlocutory rulings were not necessary to the outcome of the suit.  Third, the determination on the appeal that the orders denying summary judgment are unreviewable on appeal should act to preclude the application of collateral estoppel.

Although not part of the appeal, the Federal Circuit stated that the district court’s decision to withdraw discretionary jurisdiction is a final judgment, and reviewable for possible abuse of discretion.  However, as the Court pointed out, Nissim waived its right to challenge the district court’s withdrawal of jurisdiction by stating on appeal that was not appealing that aspect of the district court’s order.