Digital Equipment Corporation v. Desktop Direct, Inc.

PETITIONER: Digital Equipment Corporation
RESPONDENT: Desktop Direct, Inc.
LOCATION: U.S. Penitentiary Terre Haute

DOCKET NO.: 93-405
DECIDED BY: Rehnquist Court (1993-1994)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 511 US 863 (1994)
ARGUED: Feb 22, 1994
DECIDED: Jun 06, 1994

Rex E. Lee - on behalf of the Respondent

Facts of the case

After Digital Equipment Corporation and Desktop Direct, Inc. arrived at a settlement agreement in a trademark infringement suit, the federal District Court dismissed the case. Several months later, after Desktop claimed that Digital had misrepresented important facts during the settlement negotiations, the Court reopened the case and cancelled the agreement. Digital appealed, but the Tenth Circuit Court of Appeals refused to hear the case, holding that it was not immediately appealable under the guidelines laid out by the Supreme Court in Coopers & Lybrand v. Livesay, 437 U.S. 463. The court held that the "right not to go to trial" claimed by Digital under the settlement was not sufficiently important to merit an immediate appeal and was different from immunity rooted in an explicit statutory or constitutional provision or compelling public policy rationale, the denial of which had been held immediately appealable.


Is the denial of a "right not to sue" established by a settlement agreement immediately appealable under the Supreme Court's decision in Coopers & Lybrand v. Livesay, 437 U.S. 463?

Media for Digital Equipment Corporation v. Desktop Direct, Inc.

Audio Transcription for Oral Argument - February 22, 1994 in Digital Equipment Corporation v. Desktop Direct, Inc.

Audio Transcription for Opinion Announcement - June 06, 1994 in Digital Equipment Corporation v. Desktop Direct, Inc.

David H. Souter:

The second of the two cases I have to announce is Digital Equipment versus Desktop Direct, No. 93-405.

This case comes to us on writ of certiorari to the Tenth Circuit.

In 1991, the petitioner in this case, Digital Equipment Corporation, began to market a service it called Desktop Direct from Digital.

The respondent, Desktop Direct, which is like petitioners in the computer business brought suit in Federal District Court claiming that Digital was infringing its trade name.

The parties then reached a confidential settlement agreement and, in accordance with its terms, Desktop dismissed its suit.

Several months later, Desktop asked the District Court to vacate its dismissal order and rescind the agreement.

Desktop contended that Digital had misrepresented material facts in the course of settlement negotiations.

The court granted Desktop's motion and when Digital sought an immediate appeal under 28 U.S. Code 1291, the Court of Appeals dismissed for lack of jurisdiction.

This case requires us to decide whether an order denying effect to a privately negotiated settlement agreement qualified such an immediately appealable collateral order as to allow appeal as requested by the petitioner in this case.

We affirm the judgment of the Court of Appeals for the Tenth Circuit that it does not.

In arguing that Section 1291 confers appellate jurisdiction, Digital relies on cases holding a party entitled to immediate appeal of the decision denying certain claimed rights not to stand trial.

We have previously held, for example, that a criminal defendant may take an immediate appeal from a District Court order denying a motion to dismiss on double jeopardy grounds, and that a government official claiming immunity from suit also may appeal an address decision on that point.

Our reasoning in each instance was similar.

The right not to stand trial could not be vindicated if the party claiming it was forced to endure a full trial before taking an appeal.

Digital claims that this case is indistinguishable and that its settlement agreement with Desktop gave it a freedom from suit no different from and no less than need of prompt vindication then those of criminal and governmental defendants.

But, we detect two telling differences: First, even if Desktop has given Digital the sort of immunity claimed, a point which Desktop by no means concedes, this sort of privately granted right cannot displace the strong statutory presumption against piecemeal appeals in the same manner as immunity is rooted in the Constitution or statute have been held to do.

Secondly, such private rights can be vindicated using other less disruptive means such as State Court contract actions to an extent that public law immunities may not.

Finally, claims of freedom from trial by private agreement are not significantly distinguishable from many others such as assertions that an appellant's action is barred by res judicata or limitation statute which have been held not to be appealable immediately.

To find jurisdiction only over appeals like Digital's would thus be arbitrary, but to allow these other comparable sorts to be entertained routinely would badly erode the safeguard against piecemeal litigation.

Our opinion in this case is unanimous.