The United States Court of Appeals for the 6th Circuit held in Innovation Ventures, LLC v Custom Nutrition Laboratories, LLC, Nos. 17-1734/1771/1911 (6th Cir. 2018), that a consent judgment signed by both parties did not preclude the parties from appealing.
After many lawsuits concerning the intellectual property and manufacture of the popular “5-hour energy” drink, the parties in Innovation Ventures submitted a proposed judgment awarding nominal damages of $1 to Innovation and making several agreed upon stipulations. Counsel for both parties signed the proposed judgment, indicating that it was “approved as to form only and preserving all rights of appeal.”
The Court relied on the Raceway standard which is an important exception to the rule prohibiting appeals from judgments to which the appellant consented. See Raceway Props., Inc. v. Emprise Corp., 613 F.2d 656 (6th Cir. 1980). Essentially, an appeal is permissible when “solicitation of the formal dismissal was designed only to expedite review of an order which had in effect dismissed appellants’ complaint. The Supreme Court has previously distinguished between consenting to the substance of a judgment and consenting to its form: “The plaintiffs did not consent to a judgment against them, but only that, if there was to be such a judgment, it should be final in form instead of interlocutory, so that they might come to this court without further delay.” Thomsen v. Cayser, 243 U.S. 66, 83 (1917). However, there are two important limits on the application of Raceway. First, parties may not appeal claims that were dismissed without prejudice. Second, if a party seeks to come within the Raceway exception, she should make her intention known to the court and opposing parties.
The Court in Innovation Ventures held that the appeal fit within the boundaries of Raceway and jurisdiction was proper.
A link to the Opinion can be found below:
https://law.justia.com/cases/federal/appellate-courts/ca6/17-1771/17-1771-2018-12-20.html
This article was written by Ryan Hansen, Law Clerk
