The Second Circuit has conclusively ruled that you cannot appeal an order denying summary judgment when the case proceeds to trial. This issue may be of no interest to lawyers, but federal practitioners will take note the summary judgment denials are mere interlocutory orders for which a subsequent appeal is improper.
The case is Omega SA v. 375 Canal, LLC, issued on January 6. This a trademark infringement case in which a $1.1 judgment was entered following trial, after the jury found that counterfeit watches were being sold at defendant's property. Prior to trial, defendant moved for summary judgment, claiming the evidence did not support the plaintiff's claim as a matter of law. That motion was denied, and the case proceeded to trial. Post trial, defendant argues in part that the case never should have gone to trial because it was entitled to summary judgment.
This issue would never arise in state court, because under the state system, you can appeal any ruling by a judge at the time she issues the ruling. So you can have multiple appeals at the same time in the same case. This is one reason why the state appellate courts have a huge backlog. But in federal court, there is only one appeal per case, when the judgment is entered. That appeal can encompass issues that the district court resolved prior to entry of judgment, such as when a few claims are dismissed on the summary judgment motion and the case proceeds to trial on the remaining issues. In that scenario, the plaintiff can appeal the summary judgment order that dismissed the claims, even if that order issued a year ago.
Defendant in this case wants to appeal the district court's order denying summary judgment on the case. That procedural tactic was foreclosed by the Supreme Court in Ortiz v. Jordan, 562 U.S. 180 (2011), the Second Circuit (Menashi, Raggi and Lohier) says. In Ortiz, the Court said a party cannot "appeal an order denying summary judgment after a full trial on the merits." Such an order, Ortiz said, "retains its interlocutory character," which in plain English means it cannot be appealed because no final judgment has entered on that order.
The Second Circuit explains that "a motion for summary judgment does not preserve an issue for appellate review of a final judgment entered after trial because 'once the case proceeds to trial, the full record developed in court supersedes the record existing at the time of the summary judgment motion.'" That language derives from Ortiz. An exception to this rule is when the issue decided on the summary judgment is a purely legal issue, but even then, a post-trial appeal is not proper if (1) the party had the opportunity to petition the trial court for permission to take an immediate appeal under 28 U.S.C. 1292(b), or (2) the party can file a motion during trial under Rule 50(a) for judgment as a matter of law and appeal the district court's denial of that motion. Since litigants nearly always file Rule 50(a) motions during trial, this reasoning forecloses most post-trial appeals from the denial of a summary judgment motion.
Judge Lohier dissents from the summary judgment appealability issue, stating that the Second Circuit held in Rothstein v. Carriere, 373 F.3d 275 (2d Cir. 2004), that "where the trial court's denial of a summary judgment motion is not based on the sufficiency of the evidence, but on a question of law, the rationale behind Rule 50 does not apply, and the need for such an objection is absent." Judge Lohier writes,
Until now, we have never deviated from this easily administered rule: "In general, where summary judgment is denied and the movant subsequently loses after a full trial on the merits, the denial of summary judgment may not be appealed . . . . We have recognized an exception to this rule and permitted appeals from the denial of summary judgment after a full trial on the merits where the district court's error was purely one of law." Period. We have never suggested, as the majority opinion does today, that the "pure issue of law" exception is confined to cases where the "two alternative paths to review"—interlocutory appeal and a Rule 50 motion—"[are not] available."
In fact, in Rothstein, we held the opposite. So even if the majority were right that requiring appellants to appeal a Rule 50 motion is more "desirable" than permitting parties to appeal a denial of summary judgment after trial where the purported error is one of law, "[w]e cannot steer around binding precedent even were we not to agree with it."Only our Court sitting in banc, not a three-judge panel, can do that. By ignoring this important restriction and barreling forward with a decision that contradicts binding precedent, my colleagues in the majority have created an intra-circuit split that will ultimately need to be resolved. See Fed. R. App. P. 35(a)(1).
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