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Order Enforcing Settlement Not a Specific Performance Order

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By Robyn Hagan Cain on August 08, 2012 4:02 PM

Jurisdiction may not be the most interesting topic an attorney encounters, but it's at the heart of most of our work.

Tuesday, the Eleventh Circuit Court of Appeals decided that a district court's order that a defendant pay $5 million to a plaintiff pursuant to a settlement agreement was not appealable.

The appellate court noted in the opinion that it lacked jurisdiction to hear the appeal.

Why, you ask?

Federal appellate courts have jurisdiction over district courts' final decisions. An order adjudicating fewer than all the claims in a suit, or addressing the rights and liabilities of only some of the parties, is not a final judgment subject to appeal unless the district court properly certifies it as final under FRCP 54(b).

In this case, Supreme Fuels sued four defendants, including the appellant, International Oil Trading Company, LLC (IOTC). The district court granted Supreme Fuel's motion to enforce a settlement agreement and imposed a $5 million judgment solely on IOTC. The appeal before the Eleventh Circuit only challenged that order. Since there hadn't been any movement on the 54(b) front, it wasn't a final order, and the Eleventh Circuit dismissed the appeal for lack of jurisdiction.

There is still a caveat that can pave the path to a valid appeal: An order of specific performance can be appealable if there's evidence that the district court intended for the order to be an injunction.

The appellate courts have jurisdiction over appeals from interlocutory orders granting injunctions. In a concurring opinion, Judge William Pryor explained that, if a specific performance order is "injunctive in character," there is little doubt that the order is immediately appealable as an injunction.

But that wasn't the case here.

There were several indications that the district court didn't intend for its order to be an injunction. First, it didn't use the magic word "injunction," (though Judge Pryor was quick to point out that the exact word isn't necessary.) Second, the district court didn't comply with the FRCP 65 provisions regarding injunctions. (Even without the word "injunction," the Eleventh Circuit will interpret an order that otherwise tracks Rule 65 as appealable.)

Judge Pryor noted that the district court could have crafted its order in a way that allowed appellate review, but it chose not to do so.

If you're one among many defendants in a lawsuit, and you want to appeal an order pursuant to a settlement agreement, consider whether the Eleventh Circuit would classify the order as a specific performance order, and whether it's appealable under either Rule 54(b) or Rule 65.

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