Opinion ID: 210050
Heading Depth: 3
Heading Rank: 2

Heading: Dissolution of the Permanent Injunction

Text: Following the Supreme Court's denial of certiorari, Microsoft moved for dissolution of the permanent injunction. It argued that the Supreme Court's recent decision in eBay made the grant of the injunction inappropriate. The district court agreed and granted the motion. See generally Escrow/Injunction Order at 20. It observed that its initial decision to grant the injunction was influenced by the controlling Federal Circuit law at the time, which required a case to be `exceptional to justify the denial of a permanent injunction.' Id. at 16-17 (citing MercExchange LLC v. eBay, Inc., 401 F.3d 1323, 1339 (Fed.Cir. 2005), overruled by eBay, Inc. v. MercExchange LLC, 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006)). In light of eBay, the district court reapplied the traditional four-factor test for establishing entitlement to injunctive relief. See eBay, 126 S.Ct. at 1839 (A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. (citation omitted)). Finding both an absence of irreparable harm [1] and that the public interest would be disserved by granting an injunction, the district court prospectively dissolved the injunction. Escrow/Injunction Order at 19-20. Amado argues that because the eBay decision was handed down before our decision in Amado I, albeit after the completion of briefing, and because the permanent injunction was included within our mandate in Amado I, the mandate rule foreclosed Microsoft from challenging the injunction or the district court from modifying it. Microsoft argues that the propriety of the permanent injunction was not at issue in the first appeal, and thus was outside the scope of the mandate. Alternatively, it argues that eBay is an intervening decision and is thus an exception to the mandate rule. A decision is generally considered to be intervening when it comes between an appellate decision and the proceedings on remand. A decision is not intervening, however, if the parties have a reasonable opportunity to raise an issue with respect to that decision prior to issuance of the appellate mandate. Cf. Pediatric Specialty Care, Inc. v. Ark. Dep't of Human Servs., 443 F.3d 1005, 1014 (8th Cir.2006), vacated in part on other grounds, ___ U.S. ___, 127 S.Ct. 3000, 168 L.Ed.2d 724 (2007) (determining that Supreme Court decision handed down prior to mandate was not intervening). Thus, whether eBay constitutes an intervening decision, and forecloses application of the mandate rule, turns on whether Microsoft had a reasonable opportunity to claim the decision's benefit prior to our issuance of the Amado I mandate. The Supreme Court's decision in eBay was handed down on May 15, 2006  after the completion of briefing but prior to oral argument in Amado I. Following issuance of the decision, it was incumbent upon Microsoft, if it desired to do so, either to alert this court that the recently-decided case affected its position on appeal or to explicitly reserve the right to seek retrospective relief from the injunction on remand. Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383 (Fed.Cir.1999). This it did not do, even when questioned as to its position at oral argument. Amado I, 185 Fed.Appx. 953 (Fed.Cir.2006), Appeal Nos. 2005-1531, -1581, Oral Arg. at 5:57-06:13, available at http://www.cafc. uscourts.gov/oralarguments/mp3/XXXX-XXXX.mp3 Because Microsoft had a reasonable opportunity to raise an issue with respect to eBay prior to issuance of our mandate, and, indeed, expressly declined that opportunity, eBay is not an intervening decision and thus does not preclude application of the mandate rule. The mandate rule provides that issues actually decided [on appeal]  those within the scope of the judgment appealed from, minus those explicitly reserved or remanded by the court  are foreclosed from further consideration. Engel Indus., 166 F.3d at 1383. Thus, [a]n issue that falls within the scope of the judgment appealed from but is not raised by the appellant in its opening brief on appeal is necessarily waived. Id. Neither party raised the propriety of the permanent injunction in Amado I. However, because the mandate rule precludes reconsideration of any issue within the scope of the judgment appealed from  not merely those issues actually raised  the proper inquiry is whether the district court's grant of the permanent injunction was within the scope of the judgment appealed from in Amado I. Microsoft and Amado both appealed from the amended judgment entered on August 2, 2005, which expressly noted that a permanent injunction and stay had been entered. Amado v. Microsoft Corp., No. 8:03-CV-242, slip op. at 2 (C.D.Cal. Aug. 2, 2005). Thus, there can be no question that the grant of the permanent injunction was within the scope of the Amado I mandate. Because Microsoft failed to challenge that grant, it became a part of our mandate. Accordingly, the mandate rule operates as a bar to the district court's reconsideration of the initial issuance of the injunction. There is a fundamental difference, however, between the granting of retrospective relief and the granting of prospective relief. While the mandate rule would prevent the district court from dissolving the injunction ab initio, it does not preclude the district court from modifying, or dissolving, the injunction if it determines that it is no longer equitable. This principle is made explicit in Rule 60(b), which provides that [o]n motion and just terms, the court may relieve a party . . . from a final judgment, order, or proceeding . . . [if] applying it prospectively is no longer equitable. . . . Fed.R.Civ.P. 60(b)(5) (emphasis added). Due to the equitable nature of injunctive relief, district courts have wide discretion to determine under what circumstances the grant of injunctive relief is appropriate, eBay, 126 S.Ct. at 1841 ([T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts.), and under what circumstances the modification or dissolution of that injunction is warranted, See Sys. Fed'n No. 91 v. Wright, 364 U.S. 642, 647-48, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961). We conclude that the district court was well within its discretion in this case to reconsider the prospective application of the permanent injunction on remand in light of the Supreme Court's decision in eBay. We also conclude that the district court's ultimate decision to dissolve the injunction was not an abuse of discretion, when, after applying the traditional four-factor test, it determined that an injunction was no longer equitable under the circumstances.