Shelby v. Superformance International Inc.

United States Court of Appeals
For the First Circuit

No. 05-1307

CARROLL SHELBY ET AL.,

Plaintiffs, Appellants,

v.

SUPERFORMANCE INTERNATIONAL, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

Selya, Lipez and Howard, Circuit Judges.

R. David Hosp, with whom R. Todd Cronan, Mark S. Puzella, and
Goodwin Procter LLP were on brief, for appellants.
Steven E. Snow, with whom Randall T. Weeks, Jr., Robert K.
Taylor, and Partridge Snow & Hahn LLP were on brief, for Shell
Valley Companies, Inc., International Automobile Enterprises, Inc.,
B & B Manufacturing, Inc., Backdraft Racing, Inc., and Unique
Motorcars, L.L.C., amici curiae.

January 18, 2006
 SELYA, Circuit Judge. The appellants, Carroll Shelby,

Shelby American, Inc., and Carroll Shelby Licensing, Inc.

(collectively, Shelby), cloak this appeal in the raiment of trade-

dress law. That masquerade ignores the central question of

mootness (an issue that Shelby attempted to obscure in its

appellate filings). For the reasons that follow, we conclude that

Shelby's appeal must be dismissed and that vacation of the decision

below is unwarranted.

The predicate facts are straightforward. In the 1960s,

Shelby manufactured and sold the Shelby Cobra 427 S/C. After the

initial commercial production of the automobile had run its course,

a Cobra replica industry emerged. Defendant-appellee Superformance

International, Inc. is a player in that industry. It markets,

imports, and sells the Superformance 427 S/C — a rolling chassis

identical in design to the Shelby Cobra 427 S/C.1 Superformance

uses the same mark (427 S/C) and emblem badges (Cobra) on its

replicas as Shelby used on the originals.

In late 2000, Shelby commenced a civil action against

Superformance in the United States District Court for the District

of Massachusetts. Its complaint contained a host of trademark- and

trade-dress-based claims premised on theories of infringement,

1
A rolling chassis is essentially a car body without an engine
or a transmission.

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counterfeiting, dilution, unfair competition, and the like.2

Superformance answered the complaint and filed counterclaims.

After a great deal of skirmishing, not relevant here, the district

court granted Superformance's motion for partial summary judgment

on Shelby's trade-dress claims (comprising parts of five of the

seven counts contained in Shelby's amended complaint). Carroll

Shelby Licensing, Inc. v. Superformance Int'l, Inc., 251 F. Supp.

2d 983, 988 (D. Mass. 2002).

The court's decision focused on the issue of secondary

meaning — a showing necessary to Shelby's success on the trade-

dress-related claims. See id. at 986. Although Shelby submitted

survey evidence of secondary meaning, the district court deemed

that evidence "insufficient to support a reasonable jury finding in

Shelby's favor on the issue." Id. Since the court also determined

that the proffered circumstantial evidence was "equally unavailing"

to show secondary meaning, it entered summary judgment in favor of

Superformance. Id. at 987. That was not a final order, however,

as district court proceedings continued on the remaining trademark

claims and on Superformance's counterclaims.

On December 17, 2004, Shelby moved for final judgment by

consent, a permanent injunction, and vacation of the partial

2
Ford Motor Co., which had partnered with Shelby in the
original venture, later intervened as a plaintiff in this action,
alleging its own trademark claims against Superformance. Since
Ford is not a party to this appeal, the evolution of those claims
need not be traced here.

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summary judgment order. Shelby informed the district court that

the consent judgment was "an integral part of a global settlement

of all matters in dispute between the parties" and represented

that it had entered into a license agreement with Superformance for

the trade-dress rights associated with the Shelby Cobra 427 S/C.

Importuning the court to vacate its earlier decree, Shelby

explained that the consent judgment would "facilitate a new

business relationship between the parties, which now encompasses

the trade dress issues that [were] the subject of the [summary

judgment] order."

The district court entered the proffered consent judgment

and permanent injunction. At the same time, the court denied

Shelby's motion to vacate the summary judgment order. Shelby filed

a timely appeal "from the final judgment entered in this action."

Its notice of appeal singled out the summary judgment order, but

did not mention the denial of the motion to vacate.

In its appellate brief, Shelby followed the same path.

It frontally challenged the merits of the summary judgment order,

arguing that the district court erred by (i) not conducting an

analysis of indirect evidence of secondary meaning (which, if

properly evaluated, would have raised a genuine issue of material

fact as to secondary meaning) and (ii) rejecting the survey

evidence (which, if properly evaluated, also would have sufficed to

raise a genuine issue of material fact as to secondary meaning).

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Shelby made a passing reference to the consent judgment in its

jurisdictional statement but did not mention its settlement with

Superformance in either its statement of facts or in the argument

section of its brief. It made no allusion whatever to the denial

of its motion to vacate the partial summary judgment order.

Superformance elected not to file a brief. Fortunately,

however, several manufacturers and sellers of kit cars sought leave

to file an amicus brief. We allowed their motion on August 26,

2005, and subsequently granted them permission to argue orally.

The amicus brief brought the parties' settlement and the

denial of the motion to vacate to the forefront for the first time.

The amici suggested that we should dismiss the appeal as moot and

that, notwithstanding the dismissal, the summary judgment order

should remain intact. Despite the fact that the amicus brief was

filed well in advance of oral argument, Shelby eschewed the filing

of a reply brief and did not address the issue of mootness until

the panel began asking questions about it at oral argument. As we

explain below, that was too little and too late.

At the risk of belaboring the obvious, we begin our

discussion of the issues by noting that all of Shelby's arguments

concerning mootness and its effects seem to have been waived. A

notice of appeal must specify the order appealed from. See Fed. R.

App. P. 3(c)(1)(B) (requiring that a notice of appeal "designate

the judgment, order, or part thereof being appealed"). Here, even

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though the district court explicitly denied a motion to vacate the

partial summary judgment, Shelby did not frame its appeal as a

challenge, in whole or in part, to that order. A party's failure

to designate a particular order for appeal ordinarily defeats a

later attempt to dispute that order in the court of appeals. See,

e.g., Smith v. Barry, 502 U.S. 244, 248 (1992); Lehman v.

Revolution Portfolio, LLC, 166 F.3d 389, 395 (1st Cir. 1999).

Shelby offers no plausible reason why we should not apply that

principle here.3

Even had Shelby forthrightly addressed the point, we

nevertheless would dismiss this appeal as moot and decline to

direct the lower court to vacate its summary judgment order. We

explain briefly.

A federal court's jurisdiction is constitutionally

restricted to the resolution of actual cases or controversies. See

U.S. Const. art. III, § 2, cl. 1; see also Lewis v. Cont'l Bank

Corp., 494 U.S. 472, 477 (1990); Cruz v. Farquharson, 252 F.3d 530,

533 (1st Cir. 2001). "A case generally becomes moot when the

controversy is no longer 'live' or the parties 'lack a legal[ly]

3
Shelby's appellate brief contains nary a syllable about the
district court's denial of the motion to vacate, nor does it
confront the issue of mootness. It took direct questioning by this
court to elicit Shelby's views about mootness and the related issue
of vacatur. That will not do: on appeal, "a litigant has an
obligation to spell out its arguments squarely and distinctly, or
else forever hold its peace." United States v. Zannino, 895 F.2d
1, 17 (1st Cir. 1990) (citations and internal quotation marks
omitted).

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cognizable interest in the outcome.'" Ortiz-Gonzalez v. Fonovisa,

277 F.3d 59, 64 (1st Cir. 2002) (quoting Murphy v. Hunt, 455 U.S.

478, 481 (1982) (per curiam)). It is, therefore, clear beyond hope

of contradiction that a global settlement moots an action between

the settling parties arising out of the same subject matter. See,

e.g., Lake Coal Co. v. Roberts & Schaefer Co., 474 U.S. 120, 120

(1985) (per curiam); Horizon Bank & Trust Co. v. Massachusetts, 391

F.3d 48, 53 (1st Cir. 2004).

Shelby contests the applicability of this abecedarian

tenet on the ground that its settlement with Superformance

addressed only trademark issues and, thus, left extant a live

controversy as to trade dress. Shelby's representations to the

district court belie that contention.

In its motion for entry of judgment by consent, Shelby

described a "global settlement of all matters in dispute" and

acknowledged that it had granted a license to Superformance that

"include[d] the trade dress rights in the Shelby Cobra 427 S/C

automobile." Based on these unequivocal statements — the

settlement agreement itself is not part of the record — we have no

reason to doubt that there has been a resolution of all the

controverted issues between the parties. Not only are the parties

no longer adversaries in this case, but their interests are now

fully aligned: Superformance, as the licensee of Shelby's trade-

dress rights, has as much interest in protecting those rights as

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does Shelby itself. It comes as no surprise, therefore, that

Superformance elected not to defend the summary judgment order

before this court. By any measure, this appeal is moot. See Aqua

Marine Supply v. AIM Machining, Inc., 247 F.3d 1216, 1219-20 (Fed.

Cir. 2001) (concluding that in a patent infringement action an

appeal is moot when the appellee no longer has an interest in

defending the judgment of invalidity that it obtained below).

That is not the end of the matter. Shelby seeks vacation

of the partial summary judgment order and, even though we must

dismiss this appeal as moot, we retain jurisdiction to decide the

question of vacatur. U.S. Bancorp Mortg. Co. v. Bonner Mall

P'ship, 513 U.S. 18, 21 (1994). We turn to that question.

The "principal condition" to which courts look when

engaging the vacatur calculus is "whether the party seeking relief

from the judgment below caused the mootness by voluntary action."

Id. at 24. Vacatur is ordinarily appropriate when mootness results

from vagarious circumstance or the unilateral act of the prevailing

party. Id. at 25. When mootness stems from a settlement, however,

the presumption is different. In that situation, "the losing party

has . . . surrender[ed its] claim to the equitable remedy of

vacatur. The judgment is not unreviewable, but simply unreviewed

by [the losing party's] own choice." Id. The presumption,

therefore, is that the judgment previously obtained should remain

intact. See id.

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 That presumption comes into play here. By entering a

global settlement with Superformance, Shelby (the summary judgment

loser) relinquished any claim to vacatur as of right.

Of course, the U.S. Bancorp presumptions are not

ironclad, and exceptional circumstances may justify different

results. See id. at 29. In this instance, Shelby maintains that

the presumption against vacatur is rebutted by the equities. In

elaboration, it first contends that allowing the summary judgment

to stand will have an institutionally detrimental impact because

the district court's holding is in conflict with trade-dress law.

That is resupinate reasoning. It invites us to reach the

merits of the order in question and adopt the settling party's

unopposed view of them. That disingenuous invitation seriously

distorts the U.S. Bancorp standard, and we decline to accept it.

See Aqua Marine, 247 F.3d at 1221.

Shelby also argues that the terms of the settlement

agreement preserve its right to appeal from the district court's

summary judgment order. Because Shelby has not produced the

settlement agreement, that argument asks us to take on faith a

matter dehors the record. In all events, even if Shelby's

depiction of the settlement is accurate, the reservation of a right

of appeal does not constitute an exceptional circumstance

sufficient to justify vacation of an underlying judgment. After

all, if the "fact that the settlement agreement provides for

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vacatur" does not constitute an exceptional circumstance, U.S.

Bancorp, 513 U.S. at 29, the fact that the agreement includes a

right of appeal cannot conceivably be entitled to greater

deference.

If more were needed — and we are confident that it is not

— we emphasize that vacatur is an equitable remedy. See, e.g., id.

at 25. In constructing that balance, Shelby's actions weigh

heavily against it. As recounted above, Shelby omitted any mention

of its unsuccessful motion to vacate the summary judgment order in

its appellate filings, effectively obscured the import of the

settlement agreement in those filings, and never acknowledged that

the issue of mootness hovered like a dark cloud over this appeal.

Courts ought not to reward a party's evasiveness by granting it

relief that it does not deserve. We will not do so here.

We need go no further.4 For the reasons elucidated

above, we dismiss this appeal as moot and leave intact the district

court's partial summary judgment order.

Dismissed.

4
We wish to thank the amici and their counsel for their
helpful participation in these proceedings.

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