Court Opinion

ID: 806614
Source: CourtListenerOpinion
Date Created: 2012-08-14 18:48:29+00
Date Added: 2024-06-11T15:47:43.855498
License: Public Domain

NOTE: This order is nonprecedential

United States Court of Appeals
for the Federal Circuit

SQUARE, INC. AND
JAMES MCKELVEY,
Plaintiffs-Appellees,

V.

REM HOLDINGS 3, LLC,
Defendant,

AND

DAVID H. CHERVITZ, `
Sanctioned Party-Appellant.

2011-1529

Appeal from the United States District Court for the
Eastern District of Missouri in case no. 10-CV-2243,
Judge Stephen N. Limbaugh, Jr.

ON MOTION

Before P_RosT, MAYER, and REYNA, Circuit Judges.
PROST, C'ircuit Judge.
0 R D E R

SQUARE V. REM HOLDINGS 2

Square Inc. and James McKelvey (Square) move to
dismiss this appeal for lack of jurisdiction. David H.
Chervitz opposes the motion.

Square brought the underlying suit in the United
States District Court for the Eastern District of Missouri
against REM Holdings 3, LLC (REM), seeking a correc-
tion of inventorship with regard to U.S. Patent No.
7,810,729 ( the ’729 Patent).

Square moved to disqualify REM’s counsel, David H.
Chervitz, on the ground that Chervitz had previously
represented Square in connection with the preparation of
their application for the ’729 Patent. The district court
granted the raotion. The court also awarded Square
$15,000 for attorney’s fees and costs under the court’s
inherent authority to sanction a party, noting that the
purpose of the sanctions were to reimburse Square for the
expense of having to prosecute a motion that was de-
fended in bad faith.

Chervitz subsequently asked the district court to clar-
ify whether the monetary sanction was against him
personally, and if so, asked the court to designate the
order as a final judgment pursuant to Fed. R. Civ. P.
54(b). In response, the district court issued an order
granting stating that “the sanctions . . . are awarded
against counsel David Chervitz, rather than defendant,
and that the imposition of sanctions is designated a final
judgment as to all claims between plaintiffs and Cher-
Vitz." Chervitz then filed this appeal, seeking review of
the sanctions.

Ordinarily, only a final decision of a district court may
be appealed, i.e., one that “ends the litigation on the
merits and leaves nothing for the court to do but execute
the judgment.” Catlin v. Um`ted States, 324 U.S. 229, 233
(1945); see 28 U.S.C. §§ 1291, 1295(a). The final judgment
rule, however, has been construed under the so-called

3 SQUARE v. REM HoLDINGS

“collateral order doctrine" to permit jurisdiction over a
small category of orders that conclusively resolve impor-
tant questions separate from the merits that are effec-
tively unreviewable on appeal from the final judgment in
the underlying action. See Cohen u. Benficial In,dustrial
Locm Corp, 337 U.S. 541, 546 (1949).

Chervitz contends that the sanctions order is immedi-
ately appealable because there is nothing about the
pending litigation that is intertwined with, connected to,
or dependent upon the sanctions order. The problem with
this argument is that even if the pending litigation is
completely divorced from the sanctions issue, the collat-
eral order doctrine would not authorize an immediate
appeal here because the order imposing sanctions is
reviewable on appeal from final judgment. See Cun,ning-
ham v. Hamilton Cnty., 527 U.S. 198, 204 (1999) (holding
that a sanction imposed under Fed. R. Civ. P. 37 against
an attorney that was no longer participating iii' the case
could be appealed, but not until after entry of final judg-
ment); see also Sanders Assocs., Inc. u. Summagraphrlcs
Corp., 2 F.Sd 394, 395-98 (Fed. Cir. 1993) (sanction
against an attorney is not reviewable until final judgment
is entered on the underlying action, even though the
amount of that sanction has already been determined).

In opposing the motion to dismiss, Chervitz relies on
Precision Specialty Metals, Inc. v. United States, 315 F.3d
1346 (Fed. Cir. 2003), but that case is of no help in seek-
ing an immediate appeal here. In Precision Specialty, the
United States Court of International Trade issued an
opinion holding a government attorney in violation of
Rule 11 of the court’s rules and formally reprimanded her
for intentionally or negligently misleading the court. This
court permitted the attorney to appeal under the circum-
stances because such a reprimand was likely to have a
serious adverse impact upon the attorney’s professional
reputation and career. There is no similar formal repri-

SQUA.RE V. REM HOLDINGS 4

mand here; the sanctions imposed against Chervitz were
to reimburse Square to defend a motion the court found to
be an obvious conflict of interest that could only be op-
posed in bad faith. Because an attorney can ordinarily
not appeal such orders until after entry of final judgment,
Chervitz’s appeal was premature. See Stanley u. Wood-
ford, 449 F.Sd 1060, 1062 (9th Cir. 2006) (order imposing
sanctions under court’s inherent powers is not appealable
until after entry of final judgment); Williams 1). Miclwest
Employers Cas. Co., 243 F.3d 208, 208-09 (5th Cir. 2001).

Finally, the district court did not provide any reason
for why there was no just reason for delay in entry of
judgment here. Thus, there is no merit to Chervitz’s
contention that this court has jurisdiction pursuant to
Rule 54(b) of the Federal Rules of Civil Procedure. See
iLOR, LLC v. Google, Inc., 550 F.3d 1067, 1072 (Fed. Cir.
2008) ("[T]he bare recitation of the ‘no just reason for
delay’ standard of Rule 54(b) is not sufficient, by itself, to
properly certify an issue for immediate appeal.").

Accordingly,

I'r Is ORDERED THAT:

(1) The motion to dismiss is granted.
(2) Each side shall bear its own costs.

FoR THE CoURT

AUG T 4 2012

/s/ J an Horbaly
Date J an Horbaly
C1erk
cc: Erica D. Wilson, Esq.
Michael H. Musich, Esq.
s20
Issued As A Mandate:  1 4 

u.a counf m

mt FEoEnAL cream
AUG 14 2012
JAN HOBBA|.Y
CLERK