Addressing the issue of the appealability of a sanction award without a fee award, the U.S. Court of Appeals for the Federal Circuit reiterated that an order for sanctions for attorneys’ fees is not appealable absent a final judgment awarding a fee amount. Orenshteyn v. Citrix Systems, Inc., Case No. 11-1308 (Fed. Cir., July 26, 2012) (Linn, J.) (Newman, J., dissenting on motion to dismiss).

Plaintiff-appellant Alexander Orenshteyn filed a complaint against Citrix Systems alleging patent infringement. The district court granted Citrix summary judgment of invalidity on the patent infringement allegations, as well as Citrix’s motion for sanctions against Orenshteyn and his (prior) counsel. The district court did not determine a fee amount under the rationale that the appeal may affect that determination, but Orenshteyn appealed the district court’s invalidity finding, as well as its sanctions order. Citrix opposed the appeal, arguing in part that the appeal of the sanctions order was premature because there had been no final determination of the amount of the attorneys’ fees.

The Federal Circuit first explained that it had jurisdiction over an appeal of a “final” decision of a district court under 28 U.S.C. § 1295(a)(1) or of an interlocutory order as specified in 28 U.S.C. § 1292. In this case the Court concluded that while the decision on the infringement issue was final, the sanctions order fit neither of the reviewable categories; noting it was not a “final” order since the award of attorneys’ fees were not compensation for the injury giving rise to the action. The Federal Circuit said that in rare circumstances pendent jurisdiction can be exercised over non-final orders, but such circumstances did not exist here. Such circumstances only exist if the non-final, interlocutory order is intertwined with the final order or if it is necessary to review both orders together.

The Federal Circuit noted that several circuits declined to exercise jurisdiction over unquantified attorneys’ fees when appealed with final decisions. The Federal Circuit also noted that the Supreme Court, in Swint v. Chambers County Comm’n. (1995), similarly limited pendent jurisdiction for two reasons—first, Congress specifically provided district courts the authority to certify an interlocutory order as appealable under 28 U.S.C. § 1292(b), and second, the Supreme Court has express rulemaking authority to expand the list of appealable interlocutory orders. The Court did note that there were rare and limited occasions in which an appellate court considered attorneys’ fees issues along with a final order. Here, the orders were not intertwined because invalidity has different legal basis and requires a different legal analysis than attorneys’ fees. The Court noted that Swint is widely considered to have thrown “cold water on pendent appellate jurisdiction” and noted that subsequent cases are typically consistent with Swint.

Lastly, the Federal Circuit noted that even if it were proper to use pendent jurisdiction, such an exercise would still be discretionary by the Federal Circuit, and the Court would decline to exercise such jurisdiction in this case. It would be inefficient for this Court to review a non-final sanctions order when it may be adjudicated separately from the merits and thus may be moot.

Judge Newman dissented, claiming that it would be judicially efficient and practical to resolve both orders at the same time since the invalidity order and attorneys’ fees order arose from the same factual and legal considerations.

Practice Note: Non-final sanctions orders for attorney’s fees are not appealable until there is a final order containing the fee amount, even if there is a final judgment on the merits of the case that is already appealable. On a related aspect of appellate jurisdiction, refer to the note in this issue of IP Update regarding Robert Bosch LLC v. Pylon Mfg. Corp.