In Re Lorillard Tobacco Company

CALLAHAN, Circuit Judge,

dissenting:

Convinced that this court has jurisdiction to hear Lorillard’s appeal, I respectfully dissent. With that said, the district court did not abuse its discretion or clearly err in denying Lorillard’s motion for an ex parte seizure order. Therefore, I would affirm.

I. BACKGROUND AND PROCEDURAL HISTORY1

Before 1984, peddlers of counterfeit merchandise were nearly immune to the then-conventional civil remedies available to victims of trademark infringement; indeed,”[t]he pirate ... who [was] served with a civil summons to appear at a hearing on a preliminary injunction [would] either disappear or quickly dispose of existing inventory.” 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 25:10, at 25-19 (4th ed. 2003) (“McCarthy”). Recognizing this problem, Congress passed special legislation in 1984, now codified at 15 U.S.C. § 1116(d), enabling judges to grant ex parte seizure orders to confíscate counterfeit goods without first providing notice to the purported bootlegger. 5 McCarthy, §§ 30:34 — 30:36, at 30-70 to 30-77.

Lorillard moved for just such an order to seize packages of cigarettes from Doe that allegedly bear a phony Newport trademark. In support of its motion, Lor-illard presented the sworn declaration of *990Curtis Hill, a regional sales manager who had been employed by the company for fifteen years. Having worked closely with Lorillard’s quality assurance programs, Hill stated that he had specialized knowledge of his employer’s packaging. He also attested that he had examined two packages of Newport cigarettes contained in cartons purchased from Doe and, based on certain measurements and other packaging traits,2 concluded that these packages were counterfeit.

The district court found Hill’s declaration inadequate for purposes of supporting an ex parte seizure order, and issued a written order stating:

Although Hill’s observations may be indicative of counterfeit products, they are not sufficient to satisfy the Court that the subject cigarettes are counterfeit. It does not appear that there has been any expert analysis conducted by anyone who is well qualified in packaging or quality control nor does it appear there has been any analysis performed upon the actual cigarettes that were contained within the three cartons acquired from the Defendant’s establishment. Given the nature of the extraordinary relief being requested from the Court, some greater expert opinion and analysis than the visual inspection of two packs of cigarettes by a sales manager will need to be presented.

Rather than deny Lorillard’s motion outright, however, the district court granted leave to supplement the evidence. One week later, Lorillard responded by submitting the declaration of Tom Moring, one of the company’s vice presidents who had been employed there for thirty-three years. Moring explained in his declaration that he had directed quality management and packaging for many years, and that he possessed “substantial knowledge of Loril-lard’s products, including the packaging.” Like Hill, Moring elaborated that he had inspected two packages of Newport cigarettes obtained from Doe, and he had noted the same discrepancies in measurements and other packaging traits. Moring added that “it would be virtually impossible for anyone to smuggle genuine Newport cigarettes out of the manufacturing plant.”

Seemingly unimpressed by Lorillard’s supplemental showing, the district court found:

The only real difference from the evidence which was earlier presented is the qualifications of the company official who inspected the two packages of cigarettes. There has still been nothing more than a visual inspection of two cigarette packs and there has been no inspection of the contents of any of the cigarette packs or cartons. It appears that there is a significant amount of evidence that has not been inspected which would include: the cigarettes themselves, including but not limited to, the tobacco within the cigarettes, the wrapping on the cigarettes, the filters of the cigarettes and any other packaging materials which would normally be found within a cigarette pack.

The district court went on to elaborate that Lorillard, despite having “the resources to conduct the kind of analysis that would reasonably establish that the cigarettes in question are counterfeit,” had made “only a superficial showing.” Ulti*991mately, the district court denied Loril-lard’s application for an ex parte seizure order and Lorillard timely filed a notice of appeal.

II. DISCUSSION

Following the Third Circuit’s reasoning in Vuitton v. White, 945 F.2d 569, 571 (3d Cir.1991) (hereinafter, “Vuitton”), this court would have appellate jurisdiction to reach the merits of Lorillard’s appeal. Nevertheless, for reasons explained below, Lorillard has failed to demonstrate that the district court abused its discretion or based its decision on a clear error of law. See id. at 574.

A. APPELLATE JURISDICTION IS NOT LACKING

Concluding that this court lacks jurisdiction to review the denial of a request for an ex parte seizure order, the majority opinion accurately describes distinctions between familiar trees but fails to perceive the forest. I agree with the majority “that Congress intended to create something sui generis ... when it enacted 15 U.S.C. § 1116(d).” Speaking metaphorically, however, the majority’s examination focuses too much on the degree to which the leafs on ex parte seizure orders differ from the foliage found on injunctions. See, e.g., Sims v. Greene, 160 F.2d 512, 517 (3d Cir.1947) (disregarding terminology and treating temporary restraining order as a preliminary injunction for purposes of securing appellate jurisdiction).

The majority’s analysis also overlooks whether the forest’s ecological well-being is served by preventing certain trees from growing toward the sun of appellate review. Specifically, the opinion loses sight of pertinent factors indicating Congressional intent to permit immediate appeals in these instances, and it discounts too drastically the substantial impact that stems from being deprived of the relief afforded by 15 U.S.C. § 1116(d). See 5 McCarthy, § 30:36, at 30-77 (quoting from Senate-House Joint Explanatory Statement on Trademark Counterfeiting Legislation). Additionally, the majority opinion overestimates the quantity of appellate resources that will be conserved by its holding.

1. CONGRESS PRESUMABLY INTENDED A DIRECT APPEAL

As noted by the majority, the Third Circuit has held that the denial of a motion for relief under 15 U.S.C. § 1116(d) is a decision that is immediately appealable per 28 U.S.C. § 1292(a)(1). Vuitton, 945 F.2d at 571-74. The Sixth Circuit subsequently reached basically the same conclusion. First Tech. Safety Systems, Inc. v. Depinet, 11 F.3d 641, 647 (6th Cir.1993) (hereinafter, “Depinet ”).

Dwelling on certain technical differences between injunctions and ex parte seizure orders, the majority does not find the reasoning of the Third and Sixth Circuits persuasive. On this point we disagree. The Third Circuit rationally surmised that denying a motion for an ex parte seizure order is akin, albeit not identical, to refusing to grant an injunction, and the Sixth Circuit correctly followed that holding. It is true that the denial of a motion for an ex parte seizure order differs in some ways from the denial of a traditional injunction, but the result is just as much a definitive defeat to the moving party.

Beyond whatever opinions circuit judges may hold about the similarities between injunctive relief and that afforded by 15 U.S.C. § 1116(d), the paramount consideration here is Congressional intent. See, e.g., Price v. PSA, Inc., 829 F.2d 871, 874 (9th Cir.1987) (“Such appeals are appropriate because Congress did not intend to preclude review....”). There is a suffi-*992dent basis to find that Congress meant to allow a direct appeal from the denial of a motion for an ex parte seizure order, even if it did not precisely label 15 U.S.C. § 1116(d) as injunctive relief.

Since our sister circuits published their respective decisions in Vuitton and Depinet, Congress has twice amended 15 U.S.C. § 1116(d) in ways that did not alter the holding of those opinions. See Pub.L. No. 105-225, § 5(b), 112 Stat. 1499 (Aug. 12, 1998); Pub.L. 107-273, § 13207(b); 116 Stat.1908 (Nov. 2, 2002). Likewise, in 1992, Congress amended 28 U.S.C. § 1292 to enlarge, rather than reduce, the list of non-final decisions that could be appealed — and it did so without questioning Vuitton’s analysis or determination. See H.R.Rep. No. 102-1006, pt. 1 at p. 18 (Oct. 3, 1992) (stating that the purpose of the amendment was “to expand the appealability of interlocutory determinations”). Consequently, we may presume that Congress was aware of and intended to adopt the Vuitton court’s interpretation. See Lindahl v. Office of Pers. Mgmt., 470 U.S. 768, 782-83 and n. 15, 105 S.Ct. 1620, 84 L.Ed.2d 674 (1985) (discussing presumptions of Congressional intent in finding jurisdiction); Palila v. Hawaii Dep’t. of Land & Natural Res., 852 F.2d 1106, 1109 n. 6 (9th Cir.1988) (same).

2. THE COLLATERAL ORDER DOCTRINE AND THE DEATH KNELL DOCTRINE SUPPORT A DIRECT APPEAL IN THIS CASE

Despite the Third Circuit’s conclusion, without analysis or explanation, that refusing to grant an ex parte seizure order is not a final order, see Vuitton, 945 F.2d at 571, reasonable arguments can be made that such decisions are appealable under 28 U.S.C. § 1291. For example, according to the collateral order doctrine, some decisions that do not terminate the litigation are nonetheless directly appealable as final orders — if they are conclusive, resolve important questions separate from the merits, and cannot be reviewed effectively from the final judgment. See Cunningham v. Hamilton County, 527 U.S. 198, 204, 119 S.Ct. 1915, 144 L.Ed.2d 184 (1999).

The district court’s decision to deny Lor-illard relief under 15 U.S.C. § 1116(d) is conclusive insofar as it chops down Lorillard’s ability to seize the allegedly counterfeit goods. See Matter of Vuitton et Fils, S.A., 606 F.2d 1, 2 and 5 (2d Cir.1979) (describing how notice to counterfeiters frustrates the processes of justice).3 The denial of an otherwise appropriate ex parte seizure order is a vital question séparate from the merits4 because, absent such an order, the merits of the case are not likely *993to be reached at all. See id. By the same token, denying 15 U.S.C. § 1116(d) relief precludes effective review after a final judgment.

Moreover, by enacting 15 U.S.C. § 1116(d), Congress created a judicial remedy. The denial of Lorillard’s motion effectively terminated its request for judicial relief and left Lorillard without any adequate recourse other than appellate review. To the extent that denying a motion for an ex parte seizure order puts the proverbial final-swing of the ax to an action for trademark infringement, such a decision should be appealable immediately under the death knell doctrine. See 19 James Wm. Moore et al., Moore’s Federal Practice § 202.09, at 202-40.10 to 202-40.12 (3d ed.2003).

3. TREATING THE APPEAL AS A PETITION FOR A WRIT OF MANDAMUS

Another avenue toward finding jurisdic-tio'n would be to exercise our discretion, under 28 U.S.C. § 1651, to treat Loril-lard’s appeal as a petition for a writ of mandamus. Cf. Cordoza v. Pacific States Steel Corp., 320 F.3d 989, 994 (9th Cir.2003) (acknowledging but declining to exercise discretion). This path is permissible where a direct appeal is not available, a subsequent appeal would provide an inadequate remedy, and the district court’s order is clearly erroneous. Id. at 998; see also Matter of Vuitton et Fils, S.A., 606 F.2d at 4-5 (granting a mandamus petition and directing the equivalent of an ex parte seizure order to be issued in a trademark case).

As explained below, the district court did not commit a clear error in this case— so Lorillard would not have found more success taking the mandamus route. The point, however, is that deciding whether to issue a writ of mandamus in cases like this — where a direct appeal now is not available in this circuit, and the prospect of a subsequent appeal was never realistic' — • requires an evaluation of the merits. Ergo, holding that jurisdiction does not exist under 28 U.S.C. §§ 1291 and 1292(a)(1) only forces plaintiffs like Loril-lard to file mandamus petitions — which will require us to reach the merits in any event. Obviously, such an outcome will not preserve our valuable appellate resources.5

In sum, while granting a request for an ex parte seizure order may not provide substantive relief to the parties, the majority underestimates the gravity of denying such a request — which is tantamount to clear-Cutting the prospect of ever obtaining any relief. A secondary but still significant consideration is the reality that, by declining to review these matters via regular appellate processes, our appellate resources will not be spared but consumed analyzing the merits of petitions for writs of mandamus. Hence, the better approach is to hold that appellate jurisdiction exists to reach the merits of this appeal.

B. THE DISTRICT COURT DID NOT ERR OR ABUSE ITS DISCRETION

Generally, the Ninth Circuit reviews a district court’s order on a preliminary in*994junction for abuse of discretion, unless it is alleged that the order rests on a faulty legal premise, in which case de novo review is warranted. Rucker v. Davis, 237 F.3d 1113, 1118 (9th Cir.2001) (en banc), rev’d on other grounds, Dep’t of Hous. and Urban Dev. v. Rucker, 535 U.S. 125, 130, 122 S.Ct. 1230, 152 L.Ed.2d 258 (2002). That standard should also apply to the review of denials of ex parte seizure orders. See Vuitton, 945 F.2d at 574. Here, de novo review is triggered by Lorillard’s claim that the district court interpreted the applicable law in a clearly erroneous fashion.

As Lorillard sees it, the district court refused to grant an ex parte seizure order because there was no evidence that the cigarettes themselves were imitations, regardless of whether the packages in which they came were inauthentic. If Lorillard’s construction of the district court’s rationale were sound, denial of the motion would have been based on a clear legal error. See Enesco Corp. v. Price/Costco Inc., 146 F.3d 1083, 1085-86 (9th Cir.1998) (noting that repackaged goods must clearly reveal the repackaging on the label in order to use manufacturer’s trademark legitimately). The district court, however, did not proclaim that expert opinion was necessary or that evidence was required to show that the cigarettes themselves were counterfeit.

Rather, the district court merely found that declarations from two individuals who visually inspected the exterior materials of only two packs of cigarettes were insufficient to warrant the extraordinary relief contemplated by 15 U.S.C. § 1116(d). The district court’s language denying Loril-lard’s motion simply suggests other possible indications of counterfeiting that could have been analyzed and offered to cure the shortcoming; i.e., “expert analysis conducted by[someone] well qualified in packaging or quality control,” or “the contents of any of the cigarette ... cartons,” or “the cigarettes themselves,” or “any other packaging materials which would normally be found within a cigarette pack.”

In that the district court reached its decision based on the weight of the evidence, there was no abuse of discretion, never mind a clearly erroneous interpretation of the applicable law. See Cordoza, 320 F.3d at 998 (explaining that clear error is something more than an abuse of discretion).

III. CONCLUSION

For the foregoing reasons, I respectfully disagree with the majority that we lack jurisdiction to hear this appeal, and I would reach the merits. In so doing, I would find no abuse of discretion or clear error and, thus, would affirm the district court’s order denying Lorillard’s motion.

. Whereas the majority opinion does not reach the merits of the appeal, I must conduct an independent analysis, including - a thorough review of the background and procedural history.

. Hill’s declaration provided a more detailed account of the measurements and packaging traits, as did other papers filed by Lorillard in support of its motion, but these materials were filed under seal. Accordingly, the specifics are not divulged here. To do otherwise may prejudice Lorillard's case by suggesting methods by which alleged counterfeiters could improve their efforts to elude detection or thwart prosecution.

. While ordering the seizure of property is a somewhat drastic step, especially when no prior notice is given to the party from whom the property is confiscated, there are built-in protections to curb abuse and remedy the harm when such actions turn out to be unjust. See 15 U.S.C. § 1116(d)(4)(A) (requiring parties seeking ex parte seizure orders to first post adequate security for the payment of any damages that may result from a wrongful seizure, be it merely attempted or actually executed).

. Admittedly, there is overlap between the merits of a request for an ex parte seizure order and the merits of an overall action for trademark infringement; to wit, both processes weigh the likelihood of the goods or packaging in question being counterfeit. But whether relief under 15 U.S.C. § 1116(d) is warranted is less like ultimately determining whether infringement has occurred, and more like deciding whether a party is entitled to proceed in the action without sacrificing some crucial right. Cf. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949) (holding that the denial of a motion to require the plaintiff to post a security bond before proceeding with litigation is appealable under the collateral order doctrine); FDIC v. Ogden Corp., 202 F.3d 454, 459-60 (1st Cir.2000) (holding *993that the collateral order doctrine allows direct appeal from a discovery order compelling production of allegedly privileged materials).

. This is not to imply that we could find appellate jurisdiction under 28 U.S.C. §§ 1291 or 1292(a)(1) wherever it is possible to challenge a district court’s decision in a petition for a writ of mandamus, nor do I suggest that we treat Lorillard’s appeal as a mandamus petition. On the contrary, I merely note that the majority's holding undermines its stated goal of conserving appellate resources.