United States v. Philip Morris USA Inc. , 686 F.3d 839 ( 2012 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 20, 2012 Decided July 27, 2012
No. 11-5146
UNITED STATES OF AMERICA, UNITED STATES DEPARTMENT
OF JUSTICE, ET AL.,
APPELLEES
v.
PHILIP MORRIS USA INC., FORMERLY KNOWN AS PHILIP
MORRIS INCORPORATED, ET AL.,
APPELLANTS
AMERICAN TOBACCO COMPANY, DIRECTLY AND AS
SUCCESSOR TO THE TOBACCO INTEREST OF AMERICAN
BRANDS, INC., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:99-cv-02496)
Noel J. Francisco argued the cause for appellants. With
him on the briefs were Robert F. McDermott, Peter J.
Biersteker, Miguel A. Estrada, Amir C. Tayrani, Michael B.
Minton, Bruce D. Ryder, and A. Elizabeth Blackwell. Dace C.
Martinez entered an appearance.
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Sarang Vijay Damle, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief were
Michael F. Hertz, Deputy Assistant Attorney General, and Mark
B. Stern and Alisa B. Klein, Attorneys. R. Craig Lawrence,
Assistant U.S. Attorney, entered an appearance.
Howard M. Crystal and Katherine A. Meyer were on the
brief for appellees Tobacco-Free Kids Action Fund, et al.
Before: SENTELLE, Chief Judge, BROWN, Circuit Judge, and
SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge SENTELLE.
SENTELLE, Chief Judge: Appellant tobacco companies seek
review of a district court order clarifying an injunction requiring
appellants to disclose marketing data to the government.
Appellants claim that the clarification of the injunction actually
effects a modification of the requirements. Our jurisdiction over
this interlocutory appeal is dependent on the district court
having modified the injunction. Because we conclude that it did
not, we dismiss the appeal for lack of jurisdiction.
I.
In 1999, the United States brought a civil action against
appellants under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968.
Alleging that the tobacco companies had engaged in a decades-
long conspiracy to “deceive the American public about the
health effects of smoking,” the government sought disgorgement
of profits and injunctive relief under 18 U.S.C. § 1964. First
Am. Compl. at ¶ 3, United States v. Philip Morris USA, Inc.,
449 F. Supp. 2d 1 (D.D.C. 2006) (No. 99-cv-2496, ECF No.
274). In 2006, after this Court ruled that disgorgement was not
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an available remedy under the statute, see United States v. Philip
Morris USA, Inc., 396 F.3d 1190 (D.C. Cir. 2005), the district
court issued Order #1015, which granted injunctive relief
against the tobacco companies in order to prevent future RICO
violations. See United States v. Philip Morris USA, Inc., 449 F.
Supp. 2d 1 (D.D.C. 2006) (Order #1015). On appeal, we largely
affirmed the district court’s decision, vacating and remanding
only with regard to a handful of peripheral issues not relevant to
this appeal. See United States v. Philip Morris USA, Inc., 566
F.3d 1095, 1150 (D.C. Cir. 2009). Some of those issues are still
before the district court on remand.
The injunction included provisions requiring appellants to
make disclosure to the government of various marketing data:
16. Each Defendant shall be required to disclose all
disaggregated marketing data to the Government in the
same form and on the same schedule which Defendants
now follow in disclosing disaggregated marketing data
to the Federal Trade Commission. Defendants must
disclose such data to the Government for a period of
ten years from the date of this Final Judgment and
Remedial Order.
17. Disaggregated Marketing Data shall be maintained in
the databases and formats maintained by Defendants,
and all reports generated from such Disaggregated
Marketing Data shall be made available to the
Government.
18. In addition, each year's Disaggregated Marketing Data
shall be separately maintained in a format suitable for
downloading (e.g., comma separated value (CSV) file,
compressed in a ZIP or similar format). All data fields
shall be specified.
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19. All Disaggregated Marketing Data shall be deemed
“confidential” and “highly sensitive trade secret
information,” as defined in Orders # 7 and # 36, and
shall be subject to the provisions of those Orders.
Philip Morris, 449 F. Supp. 2d at 944–45 (Order #1015).
Neither appellants nor the government sought reconsideration or
appellate review of the data-disclosure requirement during the
original litigation; therefore, these paragraphs were not
considered by this Court in the prior appeal of Order #1015.
After remand, the parties disagreed as to the meaning of
“disaggregated marketing data.” Appellants asserted that they
were only required to disclose the same disaggregated marketing
data that they already disclose to the Federal Trade Commission
(“FTC”). The data appellants currently provide to the FTC
include the total number of cigarettes sold and given away in the
United States, and the yearly amount spent on advertising in
categories such as newspapers, magazines, and point-of-sale
advertisements. However, the district court had defined the term
“Disaggregated Marketing Data” in a glossary appended to its
remedial order. That definition reads:
Data that has been broken down by type of marketing
(including sales data), brand, geographical region (to the
smallest level of geographic specificity maintained by each
Defendant), type of promotion or marketing used, number
of cigarettes sold, advertising in stores and any other
category of data collected and/or maintained by or on behalf
of each Defendant. This breakdown of marketing data is
required by the FTC but kept confidential. The FTC only
publishes only the aggregated data.
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Philip Morris, 449 F. Supp. 2d at 946–47. Appellants also
argued that they were only required to submit the data to the
Department of Justice (“DOJ”), and that the DOJ could not
share it any further under the confidentiality requirements in
Paragraph 19. The government contended that it should be
allowed to share data obtained from appellants under the final
order with “other appropriate Executive Branch agencies,”
subject to the confidentiality orders listed in Paragraph 19.
Given the inability of the parties to agree on the parameters
of the disclosure requirement, the government filed a motion for
clarification with the district court. The district court agreed
with the government’s understanding of the disclosure
requirement, reasoning that the term “Disaggregated Marketing
Data” must be read in conjunction with the definition in the
glossary and a similar definition found in the text of the prior
opinion. United States v. Philip Morris USA Inc., 778 F. Supp.
2d 8, 11 (D.D.C. 2011). In addition, the court concluded that the
narrow reading of the confidentiality provision requested by
appellants would undermine the explicit transparency objective
of Order #1015 and “preclude the Government from sharing
such information with experts whose opinion they were seeking,
as well as with other Government entities with an obvious
interest in the data,” such as law enforcement and experts in the
fields of marketing and statistics. Id.After considering the motion, the response of the tobacco
companies, and the entire record, the district court entered Order
#20-Remand, which granted the government’s motion. More
specifically, the order explicitly provided that the term
“Disaggregated Marketing Data” was as defined in the glossary
attached to the court’s original opinion. This had the effect of
requiring the companies to furnish the full range of
disaggregated marketing data sought by the government under
its understanding of the injunction. Finally, the new order
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explicitly provided that the government could disclose the data
to other governmental entities, subject to the confidentiality
provisions of the final order. The tobacco companies filed the
present appeal, seeking reversal of the district court’s Order #20-
Remand and arguing that it was an unlawful modification of the
existing injunction beyond the jurisdiction of the district court
at this stage of the proceedings.
II.
A.
Appellants contend that the order under review constitutes
a modification of the injunction beyond the jurisdiction of the
district court. Appellants contend that the new order
“completely rewrites” the data-disclosure requirements of the
original injunction. They rely specifically on the language of
Paragraph 16, which required the companies to “disclose all
disaggregated marketing data to the Government in the same
form and on the same schedule which Defendants now follow in
disclosing disaggregated marketing data to the Federal Trade
Commission.” Philip Morris, 449 F. Supp. 2d at 944 (Order
#1015). Under Order #20-Remand, appellants must disclose
all marketing data broken down by type of marketing or
promotion use[d] (including sales data), geographical
region (to the smallest level of geographic specificity
maintained by each Defendant), number of cigarettes sold,
advertising in stores, and any other category of data
collected and/or maintained by or on behalf of each
Defendant.
Philip Morris, 778 F. Supp. 2d at 12 (Order #20-Remand).
Under the new requirements, appellants argue, a significantly
larger amount of data must be disclosed. They contend that the
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original language is clear: it requires the tobacco companies to
disclose disaggregated marketing data “in the same form” and
“on the same schedule” as the data provided to the FTC. Data
provided “in the same form,” they contend, must be the same
data.
In support of their interpretation of the original language,
appellants point to the district court’s explanation in the original
opinion, which stated that the requirement was for appellants to
“provide their disaggregated marketing data to the Government
according to the same schedule on which they provide it to the
FTC.” Philip Morris, 449 F. Supp. 2d at 932 (emphasis added).
They reason that the word “it” in that sentence can only refer to
the data provided to the FTC, showing that the data provided to
the DOJ is to be the same. Appellants suggest that the revision
to the confidentiality provision effects a change as well: the
opinion stated that the data “will be disclosed only to the
Department of Justice,” id. at 932 (Order #1015), but now the
court states that there are no “Court-imposed restrictions on the
dissemination of [the] data,” other than the confidentiality
provisions provided for in earlier orders. Philip Morris, 778 F.
Supp. 2d at 13 (Order #20-Remand). Appellants note that the
government sought a broad disclosure requirement during the
original litigation, but the district court instead adopted the
language used in the injunction. The government cannot now
attain the broader disclosure, appellants argue.
Appellants’ argument in support of this position begins with
the proposition that this court in our prior comprehensive review
of the original injunction in this case upheld the injunction, save
some minor terms not at issue in the current controversy.
Therefore, they contend, the district court was without authority
to modify any other terms of the injunction. As they view it,
any possible authority to make such modification must emanate
from either Rule 59 or 60 of the Federal Rules of Civil
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Procedure. They assert that the court could not have been acting
under Rule 59(e), titled “Motion to Alter or Amend a
Judgment,” because that subsection requires filing no later than
28 days after the entry of the judgment—a period well over in
this case. As to Rule 60, Relief From a Final Judgment or
Order, that rule sets forth a litany of grounds establishing a high
bar for modification. The companies contend that none of those
enumerated grounds exist in this case. The government’s
response is simple: This is not a modification; it is a
clarification of the existing duties under the original injunction.
B.
Before we address the merits of the companies’ appeal, we
must first determine whether we have jurisdiction over the case.
See, e.g., Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83(1998). As a general norm, courts of appeal have jurisdiction to
review “final decisions of the district courts of the United
States.” 28 U.S.C. § 1291. While making an alternate argument
that Order #20-Remand constitutes such a final decision,
appellants’ primary jurisdictional proposition is that this order
comes within the exception created by 28 U.S.C. § 1292(a).
That section provides for jurisdiction over “[i]nterlocutory
orders . . . granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify
injunctions.” The exception to the normal finality requirement
created by that section “is a limited one, and the Supreme Court
has ‘construed [it] narrowly.’” Salazar ex rel. Salazar v.
District of Columbia, 671 F.3d 1258, 1261 (D.C. Cir. 2012)
(quoting Carson v. Am. Brands, Inc., 450 U.S. 79, 84 (1981)
(brackets in Salazar)). As we observed in Salazar, the scope of
the exception “is now relatively clear.” Id. Briefly put, if the
interlocutory order at issue clearly grants or denies a specific
request for injunctive relief, it is appealable without further
showing. See id. at 1264 (collecting cases). If the order does
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not grant or deny a request to dissolve an injunction, it may still
be appealable “if it has the ‘practical effect’ of doing so.” Id. at
1262 (quoting Carson, 450 U.S. at 83). Generally, a “practical
effects” order is within the jurisdiction of the court for
interlocutory review only if the appellant can show (1) that the
order “might have a ‘serious, perhaps irreparable,
consequence,’” and (2) “that the order can be ‘effectually
challenged’ only by immediate appeal.” Id. (quoting Carson,
450 U.S. at 84). The difficulty in applying these relatively
straightforward requirements occurs in a case such as this where
the district court has entered an order having some possible
practical effect on the existing injunction, but where the district
court’s action causing such an effect may not be a modification
of the existing order, but rather is, at least arguably, only a
clarification in different language of the obligations theretofore
imposed.
While we do not have precedent directly parallel to the case
before us, other circuits have approached the question with the
same caution employed in the Carson analysis. With specific
relevance to the modification-or-clarification question, some
have noted the danger that plunging into the details of the
disputed district court action “would collapse the jurisdictional
inquiry into a decision on the merits.” Birmingham Fire
Fighters Ass’n 117 v. Jefferson Cty., 280 F.3d 1289, 1293 (11th
Cir. 2002); see also Pimentel & Sons Guitar Makers, Inc. v.
Pimentel, 477 F.3d 1151, 1154–55 (10th Cir. 2007). As those
circuits have reasoned, to do otherwise would “thwart[] the
purpose of § 1292(a)(1),” which is “deliberately careful in
limiting the availability of interlocutory review of orders
concerning injunctions.” Birmingham Fire Fighters Ass’n, 280
F.3d at 1293. We agree.
Although we further recognize, as have other circuits, that
“we are not governed by the district court’s own characterization
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of the order as an ‘interpretation’ or ‘clarification,’ as
distinguished from a ‘modification,’” we also agree with their
narrow and careful approach to the making of a distinction as
mandated by the language and purpose of § 1292(a)(1). Id. at
1292 (citing Gautreaux v. Chicago Hous. Auth., 178 F.3d 951,
956–57 (7th Cir. 1999)). Like the other circuits, we recognize
that the scope of the injunction is to be “determined by the
independent judgment of this Court,” Int’l Ass’n of Machinists
& Aero. Workers v. E. Air Lines, Inc., 849 F.2d 1481, 1485
(D.C. Cir. 1988). Nonetheless, we must approach the question
with the purpose of fulfilling the statutory goal of not “letting
piecemeal appeals, cloaked in the guise of jurisdictional
inquiries, come in through the back door,” Birmingham Fire
Fighters Ass’n, 280 F.3d at 1293. The functional approach
followed by, inter alia, the Eleventh Circuit, is to look “not to
the form of the district court’s order but to its actual effect.” Id.(quoting Sierra Club v. Marsh, 907 F.2d 210, 213 (1st Cir.
1990)). Again consistent with the other circuits, we conclude
that “an order modifies the original decree when it actually
changes the legal relationship of the parties to the decree.” Id.The order before us has not done so. As with the orders before
the Birmingham Fire Fighters and Gautreaux courts, this order
makes no actual change in the legal relation of the parties to the
decree, and for jurisdictional purposes, we conclude that it is a
clarification, not a modification.
We recognize, as did the Birmingham Fire Fighters court,
that a district court’s interpretation of an injunction could
conceivably be so “blatantly or obviously wrong” that it
amounts to a modification. Id. But we further agree with the
Birmingham Fire Fighters and Gautreaux courts that if the order
does not either by its terms or by the court’s blatant or obvious
misinterpretation of the injunction effect such a change in
relationship, then it is not a modification, and we do not have
jurisdiction over the attempted interlocutory appeal.
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This approach, beyond its consistency with other circuits,
is also one dictated by logic. Because a district court in many
cases—as in this one—must retain jurisdiction over an
injunction for the purpose of ensuring compliance for some
extended period of time, the chances are not only real but
overwhelming that the parties will differ at times on their
interpretation of the original injunction. It would seem
inescapable that in an injunction of the scope and length of the
one before the district court in this case, the parties will at least
be able to tease out some ambiguity. As we have observed with
ironic applicability to the case before us, “some will find
ambiguity even in a ‘No Smoking’ sign.” Int’l Union v. Gen.
Dynamics, 815 F.2d 1570, 1575 (D.C. Cir. 1985). Given the
length and breadth of the injunction in the present case, were we
to hold that Order #20-Remand worked a modification
activating interlocutory appealability, we might well expect a
regular pummeling of our docket with other supposed
modifications.
The district court’s interpretation of the data-disclosure
requirement does not change the terms or force of Order #1015,
and it is certainly not “obviously wrong.” Appellants cannot
credibly dispute the proposition that the disputed language in
Order #1015 used a term, “Disaggregated Marketing Data,” that
the district court explicitly defined in the glossary using the
same language it added to the injunction itself in Order #20-
Remand. See Philip Morris, 449 F. Supp. 2d at 944. Adding to
the order the full definition of a term already defined in the
glossary does not “substantially change[] the terms and force of
the injunction,” Pimentel, 477 F.3d at 1154, and the district
court’s refusal to render superfluous that glossary definition is
far from a blatant misinterpretation.
Appellants’ confidentiality argument fares no better: the
original text of Order #1015 did not limit the data to only being
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viewed by the DOJ. Appellants cite language in the opinion
stating that the data “will be disclosed only to the Department of
Justice,” but that language, in context, deals with whether the
data would be made public or not—and that same portion of the
opinion states, as does Order #20-Remand, that the data is
subject to the appropriate protective orders. See Philip Morris,
449 F. Supp. 2d. at 932. Limiting appellants’ disclosure
obligation to the DOJ is not the same as limiting what DOJ can
then do with the disclosed data once it is disclosed to it.
We could continue to play semantics with appellants
regarding the meaning of the word “it.” We might possibly even
play the same game with the questionable proposition that
requiring disclosure of data in the same “form” as the FTC data
is the same as requiring disclosure of the same “scope.” But no
matter how the language is parsed, it could not compel the
conclusion that the district court blatantly misinterpreted the
injunction.
As an alternative jurisdictional basis, appellants suggest that
Order #20-Remand constitutes a final order under 28 U.S.C.
§ 1291, which provides for jurisdiction of the courts of appeal
over “final decisions of the district courts of the United States.”
This statute is plainly inapplicable. It is well established that “a
decree is final, for the purposes of an appeal . . . , when it
terminates the litigation between the parties on the merits of the
case, and leaves nothing to be done but to enforce by execution
what has been determined.” St. Louis, IM&S Ry. Co. v.
Southern Express Co., 108 U.S. 24, 28–29 (1883). Order #20-
Remand does no such thing. It only elaborates on the meaning
of preexisting injunctive provisions; it does not purport to take
any action against a party or enforce any new legal
consequences. The basic nature of an order purporting to clarify
an existing injunction is inconsistent with that description of a
final decree. The order purporting to modify does not terminate
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litigation or fix the obligations of the parties, or for that matter,
impose sanctions for some violation. It simply makes clear in
different language what has been previously been said. It is only
if the purported clarification becomes such a modification as to
create new rights or obligations that we have jurisdiction. See,
e.g., Thomas v. Blue Cross and Blue Shield Ass’n, 594 F.3d 823,
830 (11th Cir. 2010); Major v. Orthopedic Equip. Co., 561 F.2d
1112, 1115 (4th Cir. 1977). This is not because such a
modification would necessarily create finality in itself, but
because it falls within a statutory exception rendering it
unnecessary to make that determination. Perhaps it might be
possible for an order that actually worked some modification to
be final in the sense required for jurisdiction under § 1291, but
this order works no such modification, and we have no
jurisdiction.
* * *
Our jurisdiction over this interlocutory appeal is properly
examined under 28 U.S.C. § 1292(a)(1). Because Order #20-
Remand does not “grant[], continu[e], modify[], refus[e] or
dissolve[] injunctions, or refus[e] to dissolve or modify
injunctions,” 28 U.S.C. § 1292(a)(1), we dismiss the appeal for
want of jurisdiction.
So ordered.