987 F.3d 138
5th Cir.2021Background
- Dr. Kenneth Reed (Reed Migraine Centers / Neuro Stim) developed a neurostimulation migraine procedure; former partner Dr. Jack Chapman marketed a competing, allegedly identical procedure. Reed sued Chapman for false advertising, unfair competition, tortious interference, and conspiracy.
- Reed and Chapman settled; Reed’s former counsel Mark Ticer claimed an interest in the settlement proceeds. Chapman interpleaded the disputed settlement funds to the district court under Rule 22.
- Reed and Chapman dismissed claims against each other, leaving only Reed v. Ticer over entitlement to the interpleaded funds. The district court entered judgment and later stayed disbursement pending state-court proceedings.
- The state trial court granted summary judgment to Reed and the district court ordered disbursement to Reed in April 2018. The state appellate court reversed that summary judgment on December 4, 2018, and issued mandate April 26, 2019.
- Ticer moved under Rule 60(b)(5) to relieve the district court’s prior disbursement order; on January 7, 2020, the district court granted relief and ordered Reed to return the funds to the registry. Reed appealed; the Fifth Circuit panel denied a stay and later dismissed the appeal for lack of jurisdiction. The district court denied a contempt motion after finding Reed was factually unable to comply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court's Rule 60(b)(5) order directing return of interpleaded funds is a final, appealable order under 28 U.S.C. § 1291 | Reed: Order is final and appealable because it divests Reed of present ownership/use of the funds and resolves all issues raised in the Rule 60(b) motion | Ticer: Granting Rule 60(b) vacated the prior final judgment and left the dispute unresolved; such orders are interlocutory and nonappealable (Parks/Carter) | Court: Dismissed appeal for lack of jurisdiction; order not a final determination of entitlement to funds |
| Whether the order is appealable because it has the practical effect of an injunction | Reed: The return-to-registry order functions like an injunction and should be immediately appealable | Ticer: The order neither grants nor denies an injunction, and it carries no irreparable consequences warranting immediate appeal | Court: Order does not have practical effect of an injunction and is not appealable on that ground |
| Applicability of Muncy (post-judgment registry disbursement) to support appealability | Reed: Relies on Muncy to argue some registry disbursement orders are final and appealable | Ticer: Muncy is fact-specific; it involved a final determination of status of checks—unlike here where the final judgment was set aside and entitlement unresolved | Court: Distinguished Muncy and followed Parks; jurisdiction lacking |
Key Cases Cited
- Muncy v. City of Dallas, [citation="123 F. App'x 601"] (5th Cir. 2005) (post-judgment registry disbursement may be final in particular circumstances)
- Parks v. Collins, 761 F.2d 1101 (5th Cir. 1985) (order granting Rule 60(b) that vacates judgment is interlocutory and nonappealable)
- Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271 (1988) (orders with practical effect of injunctions may be immediately appealable under §1292(a)(1))
- Korea Shipping Corp. v. N.Y. Shipping Ass'n, 811 F.2d 124 (2d Cir. 1987) (escrow/escrowing disputed payments during litigation not appealable as injunction without irreparable harm)
- In re Farmers' Loan & Trust Co., 129 U.S. 206 (1889) (mandamus concerning bond/appeal procedures; court found it inapposite here)