Gross v. Keen Group Solutions
18f4th836
| 5th Cir. | 2021Background
- BillCutterz and Keen Group Solutions (KGS) entered a license agreement (2015) allowing KGS to sell BillCutterz’s services; the agreement required arbitration and provided for royalties/commissions and automatic five‑year renewals unless terminated for enumerated "cause."
- An arbitration award required KGS to pay unpaid royalties/commissions through Dec. 31, 2017 (retrospective) and to pay royalties prospectively from Jan. 1, 2018 “for the duration of the License Agreement.”
- District court confirmed the arbitration award; KGS unsuccessfully sought relief and ultimately paid the retrospective award and partial prospective amounts (through Dec. 6, 2018).
- KGS filed a Rule 60(b)(5) motion asserting the judgment was satisfied because it ceased operations and terminated the license; it also sought protection from post‑judgment discovery. BillCutterz opposed and moved to compel discovery into whether KGS continued operating or diverted assets.
- The district court denied KGS’s Rule 60(b)(5) motion and granted BillCutterz’s motion to compel post‑judgment discovery; KGS appealed the denial.
Issues
| Issue | Plaintiff's Argument (BillCutterz) | Defendant's Argument (KGS) | Held |
|---|---|---|---|
| Whether the district court’s order denying Rule 60(b)(5) relief and ordering discovery is a final, appealable decision under 28 U.S.C. § 1291 | The order is final because the district court effectively determined KGS had not satisfied the judgment | The order is final; KGS contends it satisfied the judgment and thus the denial is immediately appealable | Not final; appeal dismissed for lack of appellate jurisdiction because unresolved post‑judgment matters remain |
| Whether the district court erred in refusing to treat KGS’s assertions (ceasing operations, termination) as conclusive evidence of satisfaction | BillCutterz argued the record shows no satisfaction and that discovery is warranted | KGS argued its assertions alone establish satisfaction and preclude discovery | Court rejected KGS’s request to foreclose discovery and refused to find facts on appeal |
| Whether administrative closure of the district court case makes the order appealable | BillCutterz previously suggested arbitration; neither party successfully contended closure made the decision final | KGS pointed to district court’s administrative closure as evidence the case was final | Administrative closure does not create finality; it’s like a stay and is nonfinal |
| Whether appellate court should decide factual disputes on the existing record | BillCutterz maintained disputes require discovery | KGS urged appellate resolution without further factfinding | Court held it cannot find facts on appeal and must leave factual disputes to district court proceedings |
Key Cases Cited
- FW/PBS, Inc. v. City of Dallas, 493 U.S. 215 (1990) (appellate courts have independent duty to evaluate jurisdiction)
- Cook v. City of Tyler, Texas, 974 F.3d 537 (5th Cir. 2020) (finality requires ending the litigation on the merits)
- Sealed Appellant 1 v. Sealed Appellee, 199 F.3d 276 (5th Cir. 2000) (same finality principle)
- Kerwit Med. Prod., Inc. v. N. & H. Instruments, Inc., 616 F.2d 833 (5th Cir. 1980) (denial of Rule 60(b) nonfinal when underlying proceedings remain pending)
- Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009) (piecemeal appeals undermine judicial administration)
- Psara Energy, Ltd. v. Advantage Arrow Shipping, L.L.C., 946 F.3d 803 (5th Cir. 2020) (administrative closure is nonfinal and akin to a stay)