Court Opinion

ID: 9399111
Source: CourtListenerOpinion
Date Created: 2023-06-01 21:00:57.98705+00
Date Added: 2024-06-11T17:19:38.890686
License: Public Domain

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                                            UNPUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                              No. 22-1290

        JULIE A. SU, Acting Secretary of Labor, United States Department of Labor,
                            Plaintiff – Appellee,
                     v.
        MEDICAL STAFFING OF AMERICA, LLC, d/b/a Steadfast Medical Staffing, a
        limited liability company; LISA ANN PITTS, individually and as owner and officer
        of the aforementioned company,
                            Defendants – Appellants.

        Appeal from the United States District Court for the Eastern District of Virginia, at
        Norfolk. Raymond A. Jackson, Senior District Judge. (2:18-cv-00226-RAJ-LRL)

        Argued: March 9, 2023                                             Decided: May 31, 2023

        Before KING and RICHARDSON, Circuit Judges, and Joseph DAWSON III, United
        States District Judge for the District of South Carolina, sitting by designation.

        Vacated and remanded by unpublished opinion. Judge King wrote the majority opinion,
        in which Judge Dawson joined. Judge Richardson wrote a dissenting opinion.

        ARGUED: Abram John Pafford, MCGUIREWOODS, LLP, Washington, D.C., for
        Appellants. Anne Warren King, UNITED STATES DEPARTMENT OF LABOR,
        Washington, D.C., for Appellee. ON BRIEF: Francis J. Aul, Washington, D.C., Matthew
        A. Fitzgerald, MCGUIREWOODS, LLP, Richmond, Virginia, for Appellants. Seema
        Nanda, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, Fair Labor Standards
        Division, Rachel Goldberg, Office of the Solicitor, UNITED STATES DEPARTMENT
        OF LABOR, Washington, D.C., for Appellee.

        Unpublished opinions are not binding precedent in this circuit.
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        KING, Circuit Judge:

              In this interlocutory appeal from the Eastern District of Virginia, defendants

        Medical Staffing of America, LLC, and the company’s CEO Lisa Pitts (collectively,

        “Steadfast”) 1 seek to challenge the permanent injunction entered by the district court on

        the request of the Secretary of Labor. See Walsh v. Med. Staffing of Am., No. 2:18-cv-

        00226 (E.D. Va. Jan. 14, 2022), ECF No. 324 (the “Order”). Because the injunctive

        provisions of the Order fail to comply with the requirements of Federal Rule of Civil

        Procedure 65(d), however, we vacate the injunction and remand for further proceedings.

                                                    I.

              Following a seven-day bench trial conducted in Norfolk in September 2021, the

        district court concluded in its Order of January 2022 that Steadfast had misclassified

        approximately 1100 nurses on its so-called “registry” as independent contractors, when the

        nurses were actually statutory employees within the meaning of the Fair Labor Standards

        Act of 1938 (the “FLSA”). The court ruled that Steadfast thereby violated overtime and

        recordkeeping provisions of the FLSA, and that the nurses were entitled to overtime

        backpay plus a commensurate award of liquated damages.

              Of importance here, the district court, in entering the Order, only briefly addressed

        the injunctive relief awarded.   Specifically, the court recognized that the “evidence

              1
                We refer herein to the defendants as “Steadfast” because they do business as
        “Steadfast Medical Staffing.”

                                                    2
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        demonstrates that [Steadfast] . . . never complied with the FLSA and will continue to

        violate the FLSA, rendering injunctive relief appropriate.” See Order 30. The court further

        observed that the “evidence supports [Steadfast’s] intent to continue misclassifying the

        nurses on [its] registry despite [its] familiarity with [Department of Labor] guidance and

        law to the contrary.” Id. The court thus concluded that the Secretary of Labor had “shown

        good cause for enjoining [Steadfast] from violating the FLSA’s overtime and

        recordkeeping provisions.” Id. Without any elaboration, the court then permanently

        enjoined Steadfast “from committing further violations of the FLSA.” Id.

               Steadfast timely noted this interlocutory appeal in March 2022, invoking appellate

        jurisdiction to review the injunction pursuant to 28 U.S.C. § 1292(a)(1) (authorizing

        jurisdiction over appeals from “[i]nterlocutory orders of the district courts . . . granting . . .

        injunctions”).   Additionally, Steadfast seeks our review of multiple related rulings

        contained in the Order. See Mayor of Balt. v. Azar, 973 F.3d 258, 275 n.7 (4th Cir. 2020)

        (en banc) (recognizing that “an appeal from an order granting . . . an injunction brings

        before the appellate court the entire order,” such that we may “consider and decide the

        merits of the case . . . to the extent they relate to the propriety of granting the injunctive

        relief” (internal quotation marks omitted)).

                                                       II.

               In the circumstances presented, we are obliged to vacate the injunction contained in

        the Order, in that it erroneously fails to comply with the mandatory requirements of Rule

        65(d) of the Federal Rules of Civil Procedure. That is, the Order does not adequately “state

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        the reasons why [the injunction] issued”; fails to “state its terms specifically”; and does not

        “describe in reasonable detail . . . the act or acts restrained or required.” See Fed. R. Civ.

        P. 65(d). 2

               Although the parties have not raised any issue as to the injunction’s procedural

        adequacy, our Court has long recognized that the requirements of Rule 65(d) “are

        mandatory and must be observed in every instance.” See Thomas v. Brock, 810 F.2d 448,

        450 (4th Cir. 1987) (internal quotation marks omitted).           Indeed, “[t]he specificity

        provisions of Rule 65(d) are no mere technical requirements,” as they are “designed to

        prevent uncertainty and confusion on the part of those faced with injunctive orders, and to

        avoid the possible founding of a contempt citation on a decree too vague to be understood.”

        See CPC Intern., Inc. v. Skippy Inc., 214 F.3d 456, 459 (4th Cir. 2000) (quoting Schmidt v.

        Lessard, 414 U.S. 473, 476 (1974)). Moreover, our Court has emphasized that, “without

        specificity, appellate review of an injunctive order is ‘greatly complicated, if not made

        impossible.’” Id. (quoting Schmidt, 414 U.S. at 477).

               2
                 We also observe that the Order fails to mention or address whether the Secretary
        of Labor — as the party seeking permanent injunctive relief — has satisfied the four-factor
        test specified by the Supreme Court in eBay Inc. v. MercExchange, LLC, 547 U.S. 388
        (2006). Pursuant to the eBay test, a plaintiff seeking such an injunction 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.

        Id. at 391.

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               That is not to say that the injunction’s failure to comply with Rule 65(d) deprives

        us of jurisdiction to review it. To be sure, “an injunction that fails to meet Rule 65(d)’s

        requirements is nevertheless an ‘injunction’ for purposes of determining appellate

        jurisdiction.” See Hatten-Gonzales v. Hyde, 579 F.3d 1159, 1169 (10th Cir. 2009) (citing

        Schmidt, 414 U.S. at 476). Rather, the procedural infirmities require us to vacate the

        injunction and remand for further proceedings, which we do without reviewing the

        injunction’s merits or any other aspects of the Order. 3

                                                     III.

               Finally, we observe that the entire premise of our dissenting colleague’s view rests

        upon an invocation of the so-called “principle of party presentation.” See post at 7 (quoting

        United States v. Sineneng-Smith, 140 S. Ct. 1575, 1578 (2020)). More specifically, the

        dissent recites that “appellate judges should not resolve an appeal on a theory [they] raised

        for the first time.” Id. The fault in the dissent’s logic, however, is that it misapprehends

        the issue that we are called — by the parties — to address in this § 1292(a)(1) interlocutory

        appeal: whether the district court’s permanent injunction is to be dissolved. Id. at 8 (dissent

        explicitly recognizing that Steadfast “ask[s] us to dissolve the injunction”). To reiterate,

        our Court has recognized — in no uncertain terms — that the requirements of Rule 65(d)

               3
                  During the pendency of this appeal, there have been ongoing proceedings in the
        district court. Those include disputes over the amount of overtime backpay and liquidated
        damages owed by Steadfast, as well as contempt proceedings regarding Steadfast’s alleged
        failure to comply with the injunction. We are hopeful that all issues in this matter will be
        resolved in the lower court before another appeal is pursued.

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        “are mandatory and must be observed in every instance.” See Thomas, 810 F.2d at 450

        (internal quotation marks omitted) (emphasis added). Seeking to distinguish the Thomas

        precedent, the dissent calls upon party presentation principles and maintains that we are

        not entitled to consider Rule 65(d) in these circumstances.

               Put simply, the dissent’s view of this interlocutory appeal is fatally flawed. As the

        Seventh Circuit has emphasized, “[a]n injunction imposes burdens on the court that issues

        it and potentially affects the rights of third parties,” such that “the [district] court has a duty

        independent of the desires of the parties to assure that the injunction is proper.” See

        Chicago & N. W. Transp. Co. v. Ry. Labor Exec. Ass’n, 908 F.2d 144, 149 (7th Cir. 1990).

        Consistent with that sound proposition — and abiding by the mandate of our Thomas

        decision — if a district court has the “duty independent of the desires of the parties” to

        ensure that an injunction complies with the mandatory requirements of Rule 65(d), we are

        satisfied that an appellate court possesses the same obligation, despite a party’s lack of

        attention to that issue. Id. And that is especially so when the party invoking our jurisdiction

        under § 1292(a)(1) is seeking dissolution of an injunction.

                                                       IV.

               Pursuant to the foregoing, we vacate the injunction and remand for such other and

        further proceedings as may be appropriate.

                                                                         VACATED AND REMANDED

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        RICHARDSON, Circuit Judge, dissenting:

               Ordinarily we do not raise new claims for litigants. Instead, we rely on “the

        principle of party presentation.” United States v. Sineneng-Smith, 140 S. Ct. 1575, 1578

        (2020). As the Supreme Court recently reminded us, appellate judges should not resolve

        an appeal on a theory we raised for the first time. See id. (vacating and remanding a

        decision “for an adjudication of the appeal attuned to the case shaped by the parties rather

        than the case designed by the appeals panel”). The majority disregards this principle,

        deciding this case based on a theory raised for the first time by the panel at oral argument

        and, even then, affirmatively rejected by the parties. 1 I would respect the adversarial

        process and address only the arguments raised. And even were I to address the newly

        raised question—whether the district court’s injunction violates the procedural mandates

        of Federal Rule of Civil Procedure Rule 65(d)—it sure seems that the Order below suffices.

        So I respectfully dissent.

               1
                 The majority claims the parties—and not the panel—in fact presented this theory.
        Maj. Op. at 5. According to the majority, simply asking an appellate court to undo a district
        court’s work is akin to presenting each error within that work. So a litigant who appeals
        from an unfavorable district court decision is raising all the errors that decision contains
        even if they do not—for lack of a better term—raise them.
               The implications of this approach are far reaching and would eviscerate the principle
        of party presentation. Luckily, the Supreme Court has affirmatively rejected it. In
        Sineneng-Smith, the defendant appealed asking the Ninth Circuit to set aside her conviction
        and declare the law she was prosecuted under unconstitutional. Sineneng-Smith, 140 S. Ct.
        at 1578. On the majority’s view, she thus called on the Ninth Circuit to address any error
        in her conviction. The Supreme Court did not see it quite the same way. In fact, it called
        the Ninth Circuit’s decision to seek out and address an unraised error an abuse of discretion.
        Id.
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               Until now, this case has boiled down to one question: does Steadfast have to classify

        its workers as “employees” within the meaning of the Fair Labor Standards Act? The

        Department of Labor thought so, suing Steadfast for its failure to treat its nurses as statutory

        employees. Steadfast disagreed, claiming the nurses were independent contractors. It took

        a week-long bench trial to sort this out. Steadfast lost. The district court determined that

        Steadfast was violating the Act by treating its nurses as independent contractors and

        enjoined Steadfast from continuing to do so. Steadfast appealed, arguing that the district

        court got it wrong and asking us to dissolve the injunction.

               Simple. Of course, the question presented is difficult. Deciding whether a worker

        is an employee or independent contractor is often hard—it requires an indeterminate, multi-

        factor balancing test. But everyone agreed that was the right question. What’s more,

        everyone agreed what Steadfast must do if it loses on that question: comply with the district

        court’s order to stop violating the Act by reclassifying its nurses as employees. So what is

        the majority talking about when it says we are obligated to sua sponte strike down the

        injunction for violating Rule 65(d) to “prevent” Steadfast from experiencing “uncertainty

        and confusion” and to ensure our own appellate review does not become “greatly

        complicated, if not . . . impossible”? Maj. Op. at 4 (quoting CPC Intern., Inc. v. Skippy

        Inc., 214 F.3d 456, 459 (4th Cir. 2000)).

               I’m not sure. The litigants were not uncertain or confused by the injunction. Both

        Steadfast and the Department of Labor confirmed at oral argument that they knew exactly

        what it required.    Oral Arg. 22:56–24:05, 52:05–58:34.          Their only confusion was

        seemingly directed at the panel’s suggestion that they should be confused. And the

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        injunction does not “greatly complicate” our review. Our task is obvious: decide whether

        Steadfast’s nurses are independent contractors or employees within the meaning of the Act.

        If they are independent contractors, vacate the injunction. If they are employees, affirm it.

        Nothing about conducting that review strikes me as “impossible.”

               But that doesn’t slow down the majority. Even while acknowledging “the parties

        have not raised any issue as to the injunction’s procedural adequacy,” the majority says we

        have to address it sua sponte because Rule 65(d)’s requirements are mandatory, i.e, they

        must be observed in every instance. Maj. Op. at 4. Unspoken is the majority’s apparent

        belief that if a rule’s requirements are mandatory, an appellate court must ensure they are

        met even if no party claims otherwise. In other words, mandatory rules operate like

        jurisdictional rules—we have a duty to assure ourselves that they have been followed no

        matter how the parties argue the case.

               But every rule is mandatory. That is why it is called a rule. If it were discretionary,

        we would call it a suggestion. Just because a rule is mandatory does not mean we, as

        appellate judges, must ensure it has not been violated.               Instead, absent unique

        circumstances, 2 we address only those violations the parties present to us.

               2
                 “The party presentation principle is supple, not ironclad.” Sineneng-Smith, 140 S.
        Ct. at 1579; see also id. at 1582 (addendum). Sometimes acting sua sponte is proper. We
        must do so for jurisdictional defects. Virginia Dep’t of Corr. v. Jordan, 921 F.3d 180, 187
        (4th Cir. 2019). We also may do so when there are substantial competing interests favoring
        such action like protecting a pro se litigant, Greenlaw v. United States, 554 U.S. 237, 243–
        44 (2008), or correcting “grossly prejudicial errors of law,” id. at 262 (Alito, J., dissenting).
        Of course, we are also able to raise our own reading of the law—even one not pressed by
        the parties—because we are not limited to the parties’ interpretations of the law. See
        Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 99 (1991) (“When an issue or claim is
        (Continued)
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               There is nothing strange about ignoring errors that parties do not brief. Courts

        ignore procedural errors like this one all the time when parties do not properly present

        them. Take the Supreme Court’s jurisprudence on claims-processing rules for example.

        Sometimes a statute requires litigants to take certain steps before suing in federal court.

        Those rules, the Court has said, are “mandatory.” Fort Bend County v. Davis, 139 S. Ct.

        1843, 1849 (2019). Litigants must comply with them in every instance. Yet, unless those

        steps are jurisdictional, courts must enforce compliance only “if a party properly raises it.”

        Id. (cleaned up). Likewise, we have said that Rule 65(d)’s procedural requirements are

        “mandatory.” Thomas v. Brock, 810 F.2d 448, 450 (4th Cir. 1987) (quoting Alberti v.

        Cruise, 383 F.2d 268, 272 (4th Cir. 1967)). District courts must comply with them in every

        instance. 3 But compliance with Rule 65(d)’s requirements is not jurisdictional. See Abbott

        properly before the court, the court is not limited to the particular legal theories advanced
        by the parties, but rather retains the independent power to identify and apply the proper
        construction of governing law.”); see also Richardson v. Kornegay, 3 F.4th 687, 701 n.9
        (4th Cir. 2021) (explaining a court applies the proper standard of review even if it is not
        properly raised). But the majority does not—and cannot—supply any such justification
        for its action.
               3
                To be clear, district courts must comply with them in every instance. Not appellate
        courts. The majority cites to a Seventh Circuit case for the proposition that district courts
        have an independent duty to ensure an injunction complies with Rule 65. Maj. Op. at 6
        (quoting Chicago & N. W. Transp. Co. v. Ry. Labor Exec. Ass’n, 908 F.2d 144, 149 (7th
        Cir. 1990)). No argument here. Yet it need not go so far west to find a citation for that
        proposition. It is self-evident: rules made for district courts generally must be followed
        by district courts even if no party asks them to. But, again, that is separate from the
        question of whether an appellate court must enforce compliance with that rule when no
        party asks it to.
               Thomas never suggested otherwise. There, we agreed with a party’s appellate
        contention that the district court violated Rule 65(d). Thomas, 810 F.2d at 449. So Thomas
        does not tell us a court must sua sponte address a Rule 65(d) violation, it was not even at
        (Continued)
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        v. Perez, 138 S. Ct. 2305, 2321 (2018). So we must enforce Rule 65(d) compliance only

        “if a party properly raises it.” See Fort Bend, 139 S. Ct. at 1849.

               Reluctance to decide cases based on procedural errors the parties never raised stems

        from the fundamental nature of the federal courts. See Sineneng-Smith, 140 S. Ct. at 1579;

        Greenlaw, 554 U.S. at 243–44. By reaching beyond the parties’ presentation to correct

        unraised procedural defects, we trade our role as neutral arbiter for one of advocacy,

        robbing the parties of their agency to shape the case in the process. See Greenlaw, 554

        U.S. at 243–44. We also risk making mistakes. Ronald J. Offenkrantz & Aaron S. Lichter,

        Sua Sponte Actions in the Appellate Courts: The “Gorilla Rule” Revisited, 17 J. App.

        Prac. & Process 113, 129 (2016) (“Appellate courts acting sua sponte and without the

        benefits of the adversarial system can and do make serious errors ….”). A dose of judicial

        humility requires acknowledging that even seemingly straightforward legal issues can have

        hidden wrinkles.

               This case exemplifies why it is important to let the parties, not judges, decide which

        issues to raise and brief before courts decide them. The majority appears to be making an

        unforced error that might have been avoided with the benefit of briefing. See id. Do not

        be deceived by its one-sentence declaration that the injunction did not comply with Rule

        65(d). This is a tricky question. Yet the majority glosses over it without pausing to give it

        issue in the case. Like the Seventh Circuit’s decision, Thomas simply stands for the point
        that the district court must follow the rule.
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        the serious consideration it deserves. Acknowledging that I too lack any briefing or party

        presentation, it sure seems to me that the majority gets it wrong. 4

                Rule 65(d) sets forth three requirements that “[e]very order granting an injunction”

        must meet. Fed. R. Civ. P. 65(d)(1). The rule’s phrasing is important. It sets the level of

        analysis on the order—the entire order—rather than any one subsection. So, in this case,

        we check the entirety of the district court’s thirty-page Order to see if Rule 65(d) is

        satisfied. 5

                When checking the entire Order, we ask if it does three things: “state the reasons

        why it was issued”; “state its terms specifically”; and “describe in reasonable detail . . . the

        act . . . required” without referring to any “other document.” Fed. R. Civ. P. 65(d)(1)(A)–

        (C). The majority, in one conclusory sentence, says the Order did none of these things.

        Maj. Op. at 3–4 (“[T]he Order does not adequately ‘state the reasons why [the injunction]

        issued’; fails to ‘state its terms specifically’; and does not ‘describe in reasonable detail . . .

        the act or acts restrained or required.’”). A closer look seems to tell a different story.

                4
                 When a party raises an error for the first time on appeal in a civil case, we apply a
        punishing “fundamental error” review. In re Under Seal, 749 F.3d 276, 285–86 (4th Cir.
        2014). But the majority—having raised this alleged error on its own and having had its
        argument expressly disclaimed by the parties—proceeds de novo as though it were a
        district court considering this matter in the first instance. Still, even under a de novo
        standard, I see no error.
                5
                 Thomas does not conflict with this conclusion. There, we held that a district court
        violated Rule 65(d)’s third requirement by referring to “findings of fact and conclusions of
        law” entered in “a separate document filed the same day as was the [injunctive] order.”
        Thomas, 810 F.2d at 450. Here, in contrast, the district court’s findings of fact and
        conclusions of law were contained in the same document ordering injunctive relief. So we
        can look to the entire memorandum opinion and order without violating Rule 65(d)(1)(C)’s
        prohibition on referencing other documents.
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               The Order “state[s] the reasons why it was issued.” See Fed. R. Civ. P. 65(d)(1)(A).

        The district court dedicated twenty-nine pages to explaining why and how Steadfast

        violated the Act by misclassifying its nurses. Then, under a heading entitled “Injunctive

        Relief,” the court said that such relief was “appropriate” because Steadfast had always

        misclassified its nurses and so never complied with the Act. J.A. 1199. The court also

        found that Steadfast intended to continue violating the Act in this way. It rounded out the

        section by determining that “[t]herefore, Plaintiff has shown good cause for enjoining”

        Steadfast from violating the Act. 6 J.A. 1199 (emphasis added). In doing so, this Order

        adequately stated its reasons.

               Although closer calls, the Order also satisfies the second and third requirements. It

        states the terms of the injunction “specifically.” Fed. R. Civ. P. 65(d)(1)(B). And it

        “describe[s] in reasonable detail” the act required without referring to any other document.

        Fed. R. Civ. P. 65(d)(1)(C). These requirements ensure that the order provides fair notice

        of what it requires from the enjoined party. See CPC Intern., 214 F.3d at 459. Whether an

        injunction gives fair notice is context specific. Reno Air Racing Ass’n, Inc. v. McCord,

        452 F.3d 1126, 1133 (9th Cir. 2006). So did this Order, in context, provide fair notice to

        Steadfast? It did. The Order enjoined Steadfast from “further violations” of the Act. J.A.

        1199. Further violations. In other words, a reasonable review of the Order indicates it

        means Steadfast is enjoined from continuing to violate the Act in ways Steadfast already

               6
                This language refers to the standard for ordering injunctive relief under the Act,
        which the district court addressed earlier in the Order. See 29 U.S.C. § 217 (“for cause
        shown”).
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        has. Could the order have been more clear? Sure. But that is always the case. Rule 65

        requires only “reasonable detail,” not hindsight perfection. In reviewing the work of our

        district-court colleagues, we should generally avoid nitpicking.

               And in what ways might Steadfast have already violated the Act, and how might it

        continue to do so absent an injunction? The Order tells us, again in the section entitled

        “Injunctive Relief.” J.A. 1199. The district court says that Steadfast has never complied

        with the Act and “will continue” to violate it because it “inten[ds] to continue

        misclassifying the nurses” as independent contractors. J.A. 1199. Not to mention, this

        section comes on the heels of nearly thirty pages explaining why Steadfast’s current

        classification is unlawful. So the Order makes it clear that the district court was ordering

        Steadfast to properly classify its nurses.

               By the time Steadfast finished reading the Order, it knew three things: it violated

        the Act by misclassifying its nurses, it had been enjoined because it misclassified its nurses,

        and to comply with the injunction it had to reclassify its nurses. Keep in mind, this is not

        just my take on what a reasonable reader could glean from the Order. It was Steadfast and

        the Department of Labor’s actual reading. They told us so at oral argument. See Oral Arg.

        22:56–24:05, 52:05–58:34. And they both knew all three things without referring to any

        other document. Rule 65(d)(1) requires no more.

                                        *             *              *

               The litigants will surely be surprised when they read the majority’s opinion. Not

        because either of them should have been confident they would win. But because they

        walked into our court seeking an answer to one question and are leaving with the answer

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        to another. They are also sure to be disappointed. They came to us for the resolution of

        their case. And, as the majority admits, we had the power to give them that. Indeed, as

        the majority ignores, we had an obligation to do so. Yet, instead, we disregarded their case

        and resolved our case; just so we could prolong this litigation and send it back for the

        district court to explain to the parties what they already know. After that, they can file this

        same appeal and then—hopefully—we will finally decide the case we were supposed to all

        along. It is hard to imagine what the majority thinks it is accomplishing today. It is even

        harder to imagine why it felt the need to accomplish it. I respectfully dissent.

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