Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Tronox Inc.

United States Court of Appeals, Second Circuit

April 20, 2017

In re Tronox Inc. Tronox Inc., Tronox Worldwide LLC, f/k/a Kerr-McGee Chemical Worldwide LLC, Tronox LLC, The Anadarko Litigation Trust, Plaintiffs,
Kerr-McGee Corp., Defendant-Appellee, United States of America, Intervenor Plaintiff Avoca Plaintiffs, Respondents-Appellants, Kerr-McGee Oil & Gas Corp., Kerr-McGee Worldwide Corp., Kerr-McGee Investment Corp., Kerr-McGeeCredit LLC, Kerr-McGee Shared Services Company LLC, Kerr-McGee Stored Power Company LLC, Anadarko Petroleum Corp., Defendants

          Argued: November 16, 2016

         Appeal from a February 1, 2016 decision of the United States District Court for the Southern District of New York (Forrest, J.) granting the motion of Defendant- Appellee Kerr-McGee Corporation and ordering Respondents-Appellants Avoca Plaintiffs to dismiss with prejudice their actions in Pennsylvania state court because their claims were derivative and duplicative of claims that were part of a $5.15 billion bankruptcy settlement and therefore barred by the post-settlement, permanent anti-suit injunction. Appellants challenge the merits of the District Court's ruling and contend that it is appealable as a final order under 28 U.S.C. § 1291 or 28 U.S.C. § 158(d), or as a modification or continuation of an injunction under 28 U.S.C. § 1292(a)(1). We hold that the order is not "final" because it neither found contempt nor imposed sanctions as required by § 1291, nor was it a decision by the District Court on review of a bankruptcy court order as required by § 158(d). We further hold that the District Court did not modify or continue the injunction for purposes of § 1292(a)(1). Because neither those nor any other bases for jurisdiction are present, we DISMISS the appeal for lack of jurisdiction.

          Luke A. McGrath, Dunnington, Bartholow & Miller LLP, New York, NY (Alani Golanski, Jerry Kristal, Weitz & Luxenberg, P.C., New York, NY, on the brief), for Respondents-Appellants.

          Bryan M. Killian, Morgan, Lewis & Bockius LLP, Washington, DC (Kenneth N. Klee, David M. Stern, Klee, Tuchin, Bogdanoff & Stern LLP, Los Angeles, CA; Thomas R. Lotterman, Duke K. McCall, III, Morgan, Lewis & Bockius LLP, Washington, DC, on the brief), for Defendant- Appellee.

          Before: Kearse, Wesley, and Droney, Circuit Judges.

          Wesley, Circuit Judge:

         This is an appeal from an order of the U.S. District Court for the Southern District of New York (Forrest, J.) enforcing a permanent anti-suit injunction issued after a bankruptcy settlement. The tortured corporate histories and shifting legal theories involved make it a messy case to distill. At its core, it is about more than 4, 300 individuals (the "Avoca Plaintiffs") who allege significant injuries from the operation of a wood-treatment plant in Avoca, Pennsylvania (the "Avoca Plant") between 1956 and 1996. They originally brought their toxic-tort claims in Pennsylvania state court (the "PA State Action") against several entities including Kerr-McGee Corporation ("New Kerr-McGee"), but their suits were stayed when two of those entities, the owners/operators of the Avoca Plant (the "Tronox debtors" or "the debtors"), filed for bankruptcy in the Southern District of New York. The bankruptcy proceeding revealed a series of corporate transformations that ultimately yielded New Kerr-McGee. After the spinoff, New Kerr-McGee maintained control of the more lucrative oil and gas businesses and left the Tronox debtors with the immense environmental and tort liabilities arising from the previous operation of the Avoca Plant. These transactions were, as the bankruptcy court concluded, essentially fraudulent conveyances designed to place assets beyond the reach of the Tronox entities' creditors.

         In the course of the bankruptcy proceeding, the Tronox debtors instituted an adversary proceeding against New Kerr-McGee for fraudulent conveyance to recover assets that would satisfy the debtors' liabilities. Ultimately, New Kerr-McGee settled with the Tronox debtors for over $5 billion; of that sum, more than $600 million was designated for beneficiaries of the Tort Claims Trust, including the Avoca Plaintiffs. New Kerr-McGee sought peace with that payment and required as part of the settlement that the District Court-the court tasked with approving the bankruptcy settlement-would issue an injunction barring the litigation of claims that are derivative or duplicative of the Tronox debtors' claims against New Kerr-McGee (the "Injunction").

         After the District Court approved the settlement and issued the Injunction, the Avoca Plaintiffs sought to revive their toxic-tort claims in Pennsylvania state court, again naming New Kerr-McGee as a defendant. The Avoca Plaintiffs did not, however, alter their state-court complaint to allege direct claims against New Kerr-McGee to hold it responsible for its own alleged wrongdoing. Instead, they advanced indirect alter-ego and veil-piercing theories to hold New Kerr-McGee responsible for the conduct of the Tronox debtors. New Kerr-McGee moved in the District Court for an order enforcing the Injunction and for sanctions, asserting that the Injunction forecloses claims that arise from liabilities derived from or through the Tronox debtors that are also generalized and common to all creditors.

         The District Court concluded that the claims are barred by the Injunction and, without imposing sanctions or finding contempt, ordered the Avoca Plaintiffs to dismiss with prejudice their state-court complaints. The Avoca Plaintiffs appealed and sought a stay pending appeal, which we granted.

         The Avoca Plaintiffs assert three bases for appellate jurisdiction-28 U.S.C. §§ 1291, 158(d), and 1292(a)(1)- none of which persuade us. First, the District Court's order is not "final" for purposes of 28 U.S.C. § 1291, because it neither found contempt nor imposed sanctions. Second, the order is not a decision by the District Court on review of a bankruptcy court order, as required by § 158(d). Third, after an appropriate, under the circumstances, discussion of the merits, we conclude that we lack jurisdiction under § 1292(a)(1) because the District Court properly construed (and neither modified nor continued) the Injunction. In confirming the District Court's construction of the Injunction, we hold that the Avoca Plaintiffs' personal injury claims based on conduct of the Tronox debtors, and asserted against New Kerr-McGee on a variety of state-law indirect-liability theories, are generalized "derivative" claims that fall within the property of the bankruptcy estate. Accordingly, we lift the stay and DISMISS the appeal for lack of jurisdiction.


         I. Corporate History of the Relevant Entities

         Critical to the District Court's decision below and ours here is the role and relationship of the relevant defendants in the PA State Action-"Kerr-McGee Chemical, " "Old Kerr-McGee, " and "New Kerr-McGee"- and the allegations against them. It gets confusing because both Old Kerr-McGee and New Kerr-McGee, at different times, have operated under the name "Kerr-McGee Corporation." The critical takeaway is that Kerr-McGee Chemical, [2] the previous operator of the Avoca Plant, and its former parent, Old Kerr-McGee, [3] ultimately became the Tronox debtors (Tronox LLC and Tronox Worldwide LLC, respectively). New Kerr-McGee, [4] a later corporate spinoff of Kerr-McGee Chemical and Old Kerr-McGee, did not exist until 2001 and was not a Tronox debtor.[5]

         The reason for the confusing history of corporate restructurings and name changes is that, starting in 2002, New Kerr-McGee began to sever its chemical business- which included the Avoca Plant and was riddled with legacy tort and environmental liabilities-from its more profitable oil and gas business. See Tronox Inc. v. Kerr McGee Corp. (In re Tronox), 503 B.R. 239, 252-55, 259, 266 (Bankr. S.D.N.Y. 2013). Upon completion of the spinoff in 2006, New Kerr-McGee was separated from the Tronox entities, including what were formerly Kerr-McGee Chemical and Old Kerr-McGee. This spinoff in essence allocated substantially all of the former companies' valuable assets to New Kerr-McGee and substantially all of the companies' costly liabilities to the Tronox debtors, which the debtors claimed left them severely undercapitalized and became the basis of their fraudulent-conveyance claims in the adversary proceeding against New Kerr-McGee in the bankruptcy. Id. More on that later.

         II. The PA State Action

         In 2005, the Avoca Plaintiffs sued Kerr-McGee Chemical, Old Kerr-McGee, and New Kerr-McGee[6] in Pennsylvania state court asserting toxic-tort claims for hundreds of millions of dollars based on the operation of the Avoca Plant. A consolidated "Master Complaint"[7]alleged that, from 1956 through 1996, operations at the Avoca Plant led to the "intentional, negligent[, ] and otherwise tortious release of dangerous chemicals" into the environment, causing the Avoca Plaintiffs cancer and other illnesses.

         The Master Complaint alleged no direct liability of New Kerr-McGee; it failed to identify any act by New Kerr- McGee that contributed to the injuries of the Avoca Plaintiffs after its creation in 2001.[8] Instead, it alleged the direct liability of only Old Kerr-McGee for its actions as parent of Kerr-McGee Chemical during that entity's operation of the plant. The Master Complaint sought to impute the acts of the plant's prior corporate owners/operators to New Kerr-McGee based on various indirect-liability alter-ego/veil-piercing and successor- liability theories.[9] Specifically, the Master Complaint alleged that Old Kerr-McGee

provided environmental policies, legal counsel, hydrological services and laboratory technical services in connection with the operation of the wood treatment plant [the Avoca Plant]. Furthermore, [Old Kerr-McGee] communicated with environmental agencies and approved and controlled environmental budgets and expenditures in connection with the wood treatment plant. [Old Kerr-McGee] controlled the wood treatment plant's facility's environmental changes and monitoring and also directed the Plaintiffs' managers as to environmental policies and decisions, including emission controls, regulatory compliance issues, regulatory reporting and toxic waste handling.

J.A. 504-05 (Master Compl. ¶ 21); see also Appellants' Br. 9 (explaining that paragraph 21 refers to the conduct of Old Kerr-McGee).

         III. The Tronox Bankruptcy and the Adversary Proceeding

         In 2009, the Tronox debtors, Tronox LLC and Tronox Worldwide LLC (f/k/a Kerr-McGee Chemical and Kerr- McGee Operating Corp. (i.e., Old Kerr-McGee), respectively), filed for Chapter 11 bankruptcy in the Southern District of New York. Because the principal defendants in the PA State Action-Kerr-McGee Chemical and Old Kerr-McGee-were debtors in the Tronox bankruptcy, the PA State Action was stayed and remains stayed.

         In the bankruptcy proceeding, each of the Avoca Plaintiffs, as claimant creditors, filed a proof of claim seeking compensation for the toxic torts at the heart of the PA State Action and reserving any claims against non- debtors. The United States, as a major creditor of the Tronox debtors, subsequently intervened. Tronox Inc. v. Anadarko Petroleum Corp. (In re Tronox Inc.) ("Anadarko"), No. 14-cv-5495, 2014 WL 5825308, at *2 (S.D.N.Y. Nov. 10, 2014).

         In May 2009, the Tronox debtors initiated an adversary proceeding in the bankruptcy court against New Kerr-McGee, asserting fraudulent-transfer claims (the "Adversary Proceeding").[10] In 2010, with the Adversary Proceeding still pending, the bankruptcy court approved the Tronox bankruptcy plan (the "Plan"). Because the potential recovery from that proceeding was an important estate asset, as part of the Plan, the Tronox debtors transferred their interest in the Adversary Proceeding to a specially formed "Anadarko Litigation Trust" (also referred to as the "Litigation Trust"). See J.A. 49 (Plan), 448-80 (Litigation Trust Agreement). The Plan made the Avoca Plaintiffs (among other claimants) beneficiaries of a "Tort Claims Trust, " which would receive a specified share (12%) of any recovery from the Adversary Proceeding. See J.A. 48 (Plan), 272 (Tort Claims Trust Agreement). In return, the Avoca Plaintiffs (and the other claimants) agreed to release their creditor claims against the Tronox debtors and to be enjoined from pursuing certain claims against the Tronox debtors and other released parties, including New Kerr- McGee. See J.A. 48 (Plan), 68-69 (release and injunction), 89 ¶ 1.9 (definition of the "Anadarko Released Parties").

         The Adversary Proceeding continued for years. The Anadarko Litigation Trust and the United States jointly pursued the Adversary Proceeding against New Kerr- McGee and its parent, Anadarko. The Avoca Plaintiffs were not silent partners in this endeavor. The Plan provided that "representatives of the holders of Tort Claims will have certain agreed rights concerning the pursuit" of the Adversary Proceeding. J.A. 49. And participate the Avoca Plaintiffs did: among other things, two of their lawyers sat on the Tort Claims Trust's Advisory Committee.

         In December 2013, after trial over a four-month period, Bankruptcy Judge Gropper issued an opinion holding, inter alia, that New Kerr-McGee had "acted with intent to 'hinder and delay' [the Tronox debtors'] creditors when they transferred out and then spun off the oil and gas assets, and that the [spinoff] transaction, which left the Debtors insolvent and undercapitalized, was not made for reasonably equivalent value." In re Tronox, 503 B.R. at 249. However, Judge Gropper reserved decision and final judgment on damages, which he indicated would be between $5.15 billion and $14.16 billion. See id. at 336-37, 347.

         In April 2014, before a final judgment was entered, the parties settled the Adversary Proceeding for $5.15 billion (the "Settlement Agreement").[11] See J.A. 81-139. The Tort Claims Trust's share was more than $600 million.[12]Because no judgment had ever issued, Judge Gropper's liability findings never became final and binding.

         IV. The Injunction

         In exchange for New Kerr-McGee's payment of $5.15 billion, the parties agreed to a permanent injunction to insulate New Kerr-McGee from claims related to those the Adversary Proceeding's settlement extinguished. The District Court agreed and entered the following Injunction:

(i) [A]ny Debtor(s), (ii) any creditor of any Debtor who filed or could have filed a claim in the Chapter 11 Cases, (iii) any other Person whose claim (A) in any way arises from or is related to the Adversary Proceeding, (B) is a Trust Derivative Claim, or (C) is duplicative of a Trust Derivative Claim, and (iv) any Person acting or purporting to act as an attorney for any of the preceding is hereby permanently enjoined from asserting against any Anadarko Released Party (I) any Trust Derivative Claims or (II) any claims that are duplicative of Trust Derivative Claims, whether or not held or controlled by the Litigation Trust, or whether or not the Litigation Trust could have asserted such claims against any Anadarko Released Party.
The injunction herein shall not apply to or bar [eight classes of claims, including] . . . any liability that an Anadarko Released Party might have that does not arise from or through a liability of a Debtor . . . .

Anadarko, 2014 WL 5825308, at *10 (emphasis added); see also J.A. 223-24.[13]

         The Avoca Plaintiffs did not comment on or object to the proposed order. No one appealed the Injunction; it became final in early 2015.

         V. Post-Injunction Litigation

         In September 2015, the Avoca Plaintiffs filed a motion in Pennsylvania state court to restore their toxic-tort case to the calendar (the "Avoca Motion" or the "Motion"). J.A. 231-56. Despite detailing the history of the PA State Action, the Tronox bankruptcy, and the Adversary Proceeding, the Avoca Motion says nothing as to the effect, if any, of those proceedings and the resulting Settlement Agreement and Injunction on their state-court claims. In fact, the Avoca Motion curiously neither mentions the Injunction nor seeks to amend the Master Complaint. It simply asks the Pennsylvania court to reactivate the state proceedings in light of the termination of the bankruptcy stay following the Adversary Proceeding.

         The Avoca Plaintiffs' assertions against New Kerr- McGee-derived primarily from Judge Gropper's pre- judgment findings[14]-mimic the legal theories employed by the Litigation Trust in the Adversary Proceeding. The Motion argues that the Avoca Plaintiffs seek to hold New Kerr-McGee liable "under numerous theories including, but not limited to, alter ego/piercing of the corporate veil and successor liability." J.A. 243 ¶ 59. There are no claims or allegations that New Kerr-McGee itself engaged in wrongful conduct that directly harmed the Avoca Plaintiffs.

         New Kerr-McGee subsequently moved in the District Court to enforce the Injunction. The District Court granted New Kerr-McGee's motion, ordering the Avoca Plaintiffs to dismiss with prejudice their state-court action. In re Tronox Inc., 549 B.R. 21 (S.D.N.Y. 2016).

         It is clear from the District Court's detailed decision that its job was not made any easier by the efforts of the Avoca Plaintiffs' counsel. As the District Court explained:

[T]he Avoca Plaintiffs' position as to which slices of their claims remain has been a moving target, as they have revised their theories at each opportunity. Although oral argument helped clarify their most recent position, the Avoca Plaintiffs did not clearly articulate which, if any, of the potential bases for holding [New Kerr-McGee] liable they agree are no longer tenable as a result of the release obtained as part of Tronox's bankruptcy.

Id. at 46.

         Ultimately, the court made two rulings: (1) the Avoca Plaintiffs' claims were extinguished by the Settlement Agreement; and (2) even if they were not, the claims are barred by the Injunction. The District Court and New Kerr- McGee characterize the rulings as alternative holdings, in that they equally resolve that all claims are somehow barred. See id. at 50 ("Even if the Avoca Plaintiffs' claims were not otherwise unavailable as a matter of law, the Injunction separately bars any claim against the movant herein that they seek to assert."); Appellees' Br. 47-48 (urging us to affirm based on the District Court's "alternative holding" that the claims were extinguished by the Avoca Plaintiffs' assent to and recovery from the settlement). In our view, however, our job on appeal is to first determine the reach of the Injunction.

         Relying on the Injunction's plain language and fundamental principles of bankruptcy law, the District Court interpreted the Injunction-particularly the term "Trust Derivative Claims"-to cover "action[s] . . . intended to increase the basket of assets for creditors regarding[ inter alia, the Avoca Plant], or based on prior ownership of a debtor . . . ." In re Tronox Inc., 549 B.R. at 51. In other words, the District Court read the Injunction to bar "claims that were or could have been part of an adversary proceeding by [the Tronox debtors] against [New] Kerr-McGee." Id. Judge Forrest then concluded that the claims the Avoca Plaintiffs currently allege in state court fall squarely within that definition.

         Specifically, she reasoned that (a) the Avoca Plaintiffs could not assert any direct-liability claims against New Kerr-McGee for conduct during the Avoca Plant's operations from 1956 to 1996, since New Kerr-McGee did not exist until 2001, and (b) the Avoca Plaintiffs had not asserted any direct-liability claims against New Kerr- McGee for conduct after 2001. Thus, the only claims the Avoca Plaintiffs raised were indirect-liability claims based on alter-ego/veil-piercing theories-attempts to impute to New Kerr-McGee the conduct of Old Kerr-McGee and Kerr- McGee Chemical. Read that way, the District Court found that the Avoca Plaintiffs' claims were "generalized to all creditors because they could be equally asserted (if they were not barred by the release) by any creditor of the Tronox debtor[s] . . . whose claim has been left partially unsatisfied by recovery efforts from the Tronox debtors themselves." Id. at 53. For that reason, the claims were derivative and therefore property of the Tronox estate. Id. at 54. Concluding that the term "Trust Derivative Claims, " as defined in the Injunction, was coextensive with the meaning of derivative claims in the bankruptcy context, the District Court held that the Avoca Plaintiffs' claims were barred by the Injunction. Id.

         The District Court finally concluded that it was within its discretion and power to enforce the Injunction, and enforcement served the interest of "preventing litigation the pursuit of which is violative of an injunction previously issued by this Court." Id. at 55. In rejecting the Avoca Plaintiffs' request for the opportunity to replead in state court, the District Court noted that the Avoca Plaintiffs "had ample opportunity to work out their theories and present their strongest possible claims, " yet "have provided no fact that would save their claims." Id. at 55-56. The District Court also noted concern that the Avoca Plaintiffs' request to allow them to seek leave to amend in state court was "in all events gamesmanship." Id. at 56. That view was "bolstered by the recent refusal of the Avoca Plaintiffs to dismiss their claims against the Tronox debtors-parties as to whom they have no credible arguments that any claim survives." Id.

         Thus, the District Court ordered the Avoca Plaintiffs to dismiss with prejudice the PA State Action within seven days and to make no attempt to file any action alleging similar claims against New Kerr-McGee or any Tronox debtor in any other forum. Id. Although New Kerr-McGee had initially sought an order to show cause why the Avoca Plaintiffs and their counsel should not be held in contempt for violating the Injunction, the District Court deemed that request abandoned because, in part, New Kerr-McGee did not renew it in its reply brief or at oral argument. Id. at 38 n.11.

         VI. Proceedings in this Court

         Three days prior to the District Court's deadline for dismissal of the PA State Action, the Avoca Plaintiffs moved for an emergency stay in this Court. In its opposing papers, New Kerr-McGee did not move to dismiss, but argued that the Avoca Plaintiffs were unlikely to prevail on the merits of the appeal because we lack appellate jurisdiction. A judge of this Court granted a temporary stay pending conclusive disposition of the emergency motion by a motions panel, and directed the Avoca Plaintiffs to file a reply to New Kerr-McGee's jurisdictional argument. After the Avoca Plaintiffs filed a reply, a full motions panel granted the stay pending appeal, referring "the question of whether this Court has proper jurisdiction over this matter . . . to the merits panel." 2d Cir. Dkt. 64 (order granting stay pending appeal).


         Although New Kerr-McGee has yet to move to dismiss, it continues to argue that there is no jurisdictional hook for this appeal. Federal courts at all levels always begin their work with a simple question: Has Congress given us authority to hear and decide this matter? Statutory jurisdiction goes to the heart of a federal court's power, and federal courts have an "independent obligation to consider the presence or absence of subject matter jurisdiction sua sponte." Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir. 2006) (citing Travelers Ins. Co. v. Carpenter, 411 F.3d 323, 328 (2d Cir. 2005)). We therefore must conduct a jurisdictional inquiry notwithstanding New Kerr-McGee's curious reluctance to move to dismiss on jurisdictional grounds while continuing to point out the flimsiness of the Avoca Plaintiffs' jurisdictional predicate.

         There are a couple relevant avenues to appellate jurisdiction here: 28 U.S.C. § 1291 (conferring appellate jurisdiction over "final decisions" of district courts) and 28 U.S.C. § 1292 (conferring appellate jurisdiction over, inter alia, orders "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions"). New Kerr-McGee argues that neither section confers appellate jurisdiction over post-judgment orders that do nothing more than interpret and enforce a final injunction. It would be different, New Kerr-McGee urges, if the District Court had found contempt, imposed sanctions, or created new duties under the Injunction. Instead, New Kerr-McGee asserts, the District Court merely "reiterated the plain meaning of the Injunction and gave the Avoca Plaintiffs a grace period to comply." Appellees' Br. 18.

         The Avoca Plaintiffs counter that we have § 1291 jurisdiction because the District Court's order "finally determines the rights of the Avoca Plaintiffs, " and "[t]here was nothing left to be determined." Appellants' Reply Br. 3- 4.[15] Even if the order fails on finality, the Avoca Plaintiffs contend we still have jurisdiction under § 1292 because the District Court's order modified the Injunction by expanding the definition of "Trust Derivative Claims" in the Injunction to mean "all derivative claims."[16] Appellants' Reply Br. 7-8 (emphasis omitted).

         New Kerr-McGee has it right. We lack jurisdiction because the order did not find contempt, issue sanctions, or modify the injunction.

         I. The District Court's Order Is Not "Final" for Purposes of 28 U.S.C. § 1291

         "It is a well-established rule of appellate jurisdiction that 'a final order is one that conclusively determines the rights of the parties to the litigation, leaving nothing for the district court to do but execute the order.'" Forschner Grp., Inc. v. Arrow Trading Co., 124 F.3d 402, 410 (2d Cir. 1997) (quoting In re Fugazy Express, Inc., 982 F.2d 769, 775 (2d Cir. 1992)). Generally, orders finding a party in contempt but not imposing sanctions are not immediately appealable. See id. ("[A]n order adjudging a party in contempt unaccompanied by sanctions is not final and therefore is not appealable.").

         Our decision in Wilder v. Bernstein, 49 F.3d 69 (2d Cir. 1995), and the Eleventh Circuit's decision in Thomas v. Blue Cross & Blue Shield Ass'n, 594 F.3d 814 (11th Cir. 2010), are instructive. In both, the district court interpreted the meaning of and directed compliance with its final order (a consent decree in Wilder and an anti-suit injunction in Thomas), but did not find contempt or impose sanctions. Specifically, in Wilder, the plaintiffs sued New York City asserting racial discrimination in foster-care policies. The parties entered into a consent decree in which the City agreed to certain changes in its practices. 49 F.3d at 70-71. The plaintiffs later sought contempt sanctions against the City based on its alleged failure to comply. The district court did not find the City in contempt or impose sanctions, but directed it to take "all appropriate steps" to implement the consent decree. Id. at 71-72 (quoting Wilder v. Bernstein, 153 F.R.D. 524, 535 (S.D.N.Y. 1994)). We dismissed the appeal for lack of jurisdiction, ruling that because "there ha[d] not been a finding of contempt, much less an assessment of sanctions, the order [was] not 'final.'" Id. at 72 (citing Dove v. Atl. Capital Corp., 963 F.2d 15, 17-18 (2d Cir. 1992)). The Eleventh Circuit did the same in Thomas, raising the issue of jurisdiction sua sponte and concluding that the district court's order directing the plaintiff to withdraw his breach-of-contract complaint within twenty days was not final under § 1291, did not fall within the collateral order doctrine, [17] and did not grant or modify an injunction under § 1292(a)(1). See Thomas, 594 F.3d at 818-20.

         Here, as in Wilder, the District Court's order was issued in the context of a pending contempt motion but made no contempt finding, "much less an assessment of sanctions." See Wilder, 49 F.3d at 72. Therefore, it is not "final" as contemplated by § 1291. The District Court proceedings concerning compliance with the Injunction will not reach final adjudication until such time as the contempt issue is fully resolved. For present purposes, that will occur if the Avoca Plaintiffs refuse to comply and are sanctioned.

         The only potential, yet ultimately inconsequential, distinction that the Avoca Plaintiffs raise between this case and Wilder and Thomas is that New Kerr-McGee somehow "abandoned" its request for a contempt finding or sanctions. Appellants' Stay Reply Br. 4 (citing In re Tronox Inc., 549 B.R. at 38 n.11). In Thomas, they claim, the order was not final because "it [did] not dispose of all of the issues raised in the motion. . . . The order expressly contemplated further action in the event that [the plaintiff] failed to withdraw his claim within 20 days. It stated . . . 'the contempt motion shall be revisited by this Court.'" Id. (quoting Thomas, 594 F.3d at 819). By contrast, here, the Avoca Plaintiffs argue, "the present Order expressly contemplates that it has finally adjudicated the Avoca Plaintiffs' rights, and that the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.