Watkins Incorporated v. McCormick and Company, Incorporated
Filing
123
ORDER denying 118 Motion to Certify Interlocutory Appeal and for Stay. (Written Opinion) Signed by Judge David S. Doty on 1/13/2022. (DLO)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
CIVIL NO. 15-2688(DSD/BRT)
Watkins Incorporated,
Plaintiff,
ORDER
v.
McCormick and Company,
Incorporated,
Defendant.
This matter is before the court upon defendant McCormick &
Company, Inc.’s motion to certify the court’s December 7, 2021,
order for interlocutory appeal under 28 U.S.C. § 1292 and to stay
proceedings pending appeal. Based on a review of the file, record,
and proceedings herein, and for the following reasons, the motion
is denied.
BACKGROUND
The complete background of this case is fully set forth in
the court’s December 7, 2021, order, and will not be repeated here.
The court will only briefly summarize the history as relevant to
this
motion.
Plaintiff
Watkins
Incorporated
competes
with
McCormick in the consumer market for black pepper, and in 2015,
sued
McCormick
under
the
Lanham
Act.
Watkins
alleges
that
McCormick filled its tins with below-capacity amounts of ground
black pepper and thus deceived consumers about the comparative
prices
of
their
products.
Watkins
seeks
money
damages,
disgorgement of McCormick’s profits, and injunctive relief.
At
the
close
of
discovery,
McCormick
moved
for
summary
judgment and argued, in relevant part, that Watkins failed to
establish a causal connection between the challenged conduct and
the profits sought in its disgorgement claim.
More specifically,
McCormick argued that Watkins failed to show that McCormick’s
profits
were
attributable
to
the
challenged
conduct
or
were
diverted from Watkins’s sales. Watkins opposed the motion, arguing
that the Lanham Act does not require plaintiffs to establish either
attribution or diversion. The court agreed with Watkins and denied
the motion for summary judgment.
McCormick now moves to certify
this question – whether a Lanham Act disgorgement claim requires
proof of attribution and diversion – for interlocutory appeal.
DISCUSSION
I.
Standard of Review
Circuit courts of appeals have jurisdiction over “all final
decisions of the district courts.”
28 U.S.C. § 1291.
A district
court, however, may determine that an otherwise non-final order
may
be
certified
§ 1292(b).
for
interlocutory
appeal
under
28
U.S.C.
Interlocutory appeals should be granted only when such
an appeal (1) “involves a controlling question of law,” (2) “as to
which there is a substantial ground for difference of opinion,”
and (3) “that an immediate appeal from the order may materially
advance the ultimate termination of the litigation.”
28 U.S.C.
§ 1292(b); White v. Nix, 43 F.3d 374, 376 (8th Cir. 1994).
A motion to certify, however, “must be granted sparingly, and
the movant bears the heavy burden of demonstrating that the case
is an exceptional one in which immediate appeal is warranted.”
White, 43 F.3d at 376.
Section 1292 is “to be used only in
extraordinary cases where [a] decision ... might avoid protracted
and expensive litigation” and is “not intended merely to provide
review of difficult rulings in hard cases.”
Union Cty. v. Piper
Jaffray & Co., 525 F.3d 643, 646 (8th Cir. 2008) (citation and
internal quotation marks omitted).
Further, “it has ... long been
the policy of the courts to discourage piece-meal appeals because
most often such appeals result in additional burdens on both the
court and the litigants.”
White, 43 F.3d at 376 (citation and
internal quotation marks omitted).
II.
Interlocutory Appeal Requirements
First, the court finds that whether a Lanham Act disgorgement
claim requires attribution and diversion is a controlling question
of law.
A question of law “refers to a purely, abstract legal
question” and not to “the application of settled law to a specific
set of facts.”
Employers Reinsurance Corp. v. Mass. Mut. Life
Ins. Co., No. 06-188-CV-W-FJG, 2010 WL 2540097, at *2 (W.D. Mo.
June 16, 2010); McFarlin v. Conseco Servs., L.L.C., 381 F.3d 1251,
1258 (11th Cir. 2004).
“A question is ‘controlling’ if error in
its resolution would warrant reversal of a final judgment or
dismissal.”
Max Daetwyler Corp. v. Meyer, 575 F. Supp. 280, 282
(E.D.
1983),
Penn.
certified
question
answered
sub
nom.
Max
Daetwyler Corp. v. R. Meyer, 762 F.2d 290 (3d Cir. 1985).
Here, whether disgorgement requires proof of attribution and
diversion is a pure legal question.
Further, it is controlling.
Watkins offered no evidence of attribution or diversion, and its
disgorgement claim would fail if these elements are required.
Therefore, the court’s determination that a plaintiff need not
prove either presents a controlling question of law.
The second requirement is a closer question.
McCormick
maintains that there is a split in authority and that the split
creates
substantial
“Identification
contradictory
of
ground
a
opinions
disagreement.”
for
sufficient
would
difference
number
provide
White, 43 F.3d at 378.
of
of
opinion.
conflicting
substantial
ground
and
for
To be sure, the court
acknowledged in its order that there are conflicting approaches to
the issue.
As discussed extensively in the order, however, many
of the cases McCormick cites do not stand for the proposition
McCormick claims - that disgorgement requires attribution and
diversion.
Specifically, many of the cases address statutory
standing rather than causation.
Regardless, there is conflicting
case law in other jurisdictions and no controlling precedent within
the Eighth Circuit, so the second requirement may also be met.
McCormick has not established, however, that an interlocutory
appeal would materially advance the litigation.
“When litigation
will be conducted in substantially the same manner regardless of
[the Eighth Circuit’s] decision, the appeal cannot be said to
materially advance the ultimate termination of the litigation.”
White, 43 F.3d at 378-79 (citation omitted).
McCormick argues that resolution of the issue in its favor
will eliminate the need to try the disgorgement claim and will
avoid presentation of financial data and witnesses specific to
that claim at trial.
This argument, however, fails to carry the
heavy burden required for interlocutory appeal.
Even without the
disgorgement claim, the litigation would not terminate because
Watkins’s claims for money damages and injunctive relief would be
unaffected and continue to trial.
Although some evidence would be
eliminated, the litigation would be substantially the same.
Further, the benefit of avoiding unnecessary presentation of
evidence “must be weighed against the inefficiency of having the
Court of Appeals hear multiple appeals in the same case.”
SEC v.
Credit Bancorp, Ltd., 103 F. Supp. 2d 223, 226 (S.D.N.Y. 2000).
Permitting an interlocutory appeal imposes its own costs on the
judicial system, and the court finds that the benefits do not
outweigh the costs in this case.
Accordingly, the court finds that the action does not fall
within the exceptional circumstances required for certification of
interlocutory appeal under § 1292(b).
ORDER
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendant’s motion to certify interlocutory appeal and for stay
is denied.
Dated: January 13, 2022
s/David S. Doty
David S. Doty, Judge
United States District Court
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