Recent Appellate Decision Draws Attention to Key Steps to Enforcing Restrictive Covenants

The Pennsylvania Superior Court’s recent decision in Metalico Pittsburgh, Inc. v. Douglas Newman, et al., No. 354 WDA 2016, 2017 PA Super. 109 (Apr. 19, 2017), confirms the importance of careful contractual drafting in agreements containing non-compete clauses and other post-employment restrictive covenants.  In circumstances where an employee is hired for a term of employment but later becomes an at-will employee, that contractual language may determine the enforceability of the agreement’s non-compete and non-solicitation provisions.

Metalico entered into employment agreements with two employees in 2011. Each employment agreement had a three‑year term and a non‑solicitation provision prohibiting solicitation of employees and customers to join competitors during their employment and for a finite period thereafter. After the three‑year employment terms ended in 2014, both employees continued to work as at‑will employees for one year. Shortly thereafter, the two employees began working for a business competitor and allegedly began soliciting Metalico customers and employees to move to that competitor. Metalico sued to enforce the agreements’ non-solicitation provisions.

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How Long Will My Ninth Circuit Civil Appeal Take?

We hear that question frequently. Using the most recent statistics from the Administrative Office of the United States Courts published in its Judicial Business 2016 report for the fiscal year ending September 30, 2016, the median time from Appellee’s brief to oral argument in civil appeals terminated on the merits in the Ninth Circuit is 16.5 months, and from notice of appeal to decision is 25.5 months (and that is just the median time–half the appeals take longer.) (See Table B-4A.) This is the slowest of the circuits. The next slowest circuit—the DC Circuit—handles civil appeals in 3.8 months from Appellee’s brief to oral argument, and 11.7 months from notice of appeal to decision.

The Ninth Circuit is the largest circuit geographically, and it remains the busiest, with 13,152 cases pending as of December 31, 2016. The next busiest circuit—the Fifth—had 5,252 cases pending as of the same date.  But measured by matters terminated on the merits per active judge, the Ninth Circuit is very much in the middle of the circuits, with 488 merits-based terminations per judge through December 31, 2016. The circuit with the heaviest workload, using this same measurement, is the Eleventh Circuit, with 1,151 merits-based dispositions per judge. The lowest terminations per active judge is the DC Circuit, with 163.

Supreme Court to Review Limitations on Appellate Extensions

The U.S. Supreme Court has granted certiorari in a case that will provide much needed clarity about the ability of district courts to extend appeal deadlines. The case, Hamer v. Neighborhood Housing Services of Chicago (No. 16-658), involves the interplay between 28 U.S.C. § 2107(c) and Federal Rule of Appellate Procedure 4(a)(5)(C). The Court will hear the case during its October 2017 term.

Section 2107(c) provides that district courts may extend the deadline to appeal “upon motion filed not later than 30 days after the expiration of the time otherwise set for bringing appeal.” Rule 4(a)(5)(C), however, provides that no extension “may exceed 30 days after the prescribed time or 14 days after the date when the order granting the motion is entered, whichever is later.”

In Hamer, the Seventh Circuit held that the district court lacked authority to grant a 60-day extension of an appeal deadline in response to a motion that was timely filed under 28 U.S.C. § 2107(c). Relying on the Supreme Court’s decision in Bowles v. Russell, 551 U.S. 205 (2007), the Seventh Circuit held that “Rule 4(a)(5)(C) is the vehicle by which § 2107(c) is employed and it limits a district court’s authority to extend the notice of appeal filing deadline to no more than an additional 30 days.” Because the notice of appeal was filed after the 30-day limitation in Rule 4(a)(5)(C), the Seventh Circuit dismissed.

In reaching that conclusion, the Seventh Circuit sided with the Second, Fourth, and Tenth Circuits, which had split with the D.C. and Ninth Circuits on the issue. The Supreme Court’s decision in Hamer should resolve the split and provide the bench and bar with much needed certainty about deadlines to appeal.

Duane Morris Partner Paul Killion Appointed Chair of California State Bar’s Committee on Appellate Courts

Duane Morris partner Paul J. Killion of the firm’s San Francisco office has recently been appointed chair of the California State Bar’s Committee on Appellate Courts for the term commencing at the close of the 2015 State Bar Annual Meeting on October 11, 2015.

Killion is a Certified Appellate Specialist and practices in the area of complex civil litigation. He has argued or briefed over 100 appellate matters, including appeals, writs, petitions for review, merits briefing and amicus curiae briefing. He has handled a variety of litigation and appeals, including significant national experience in asbestos, pollution, toxic tort insurance coverage litigation and large personal injury claims. He has a broad range of appellate experience, with a particular focus on appeals from complex jury trials. Killion has appeared before all Districts of the California Courts of Appeal and before the California Supreme Court, as well as the Ninth and Tenth Circuits and the Supreme Courts of Washington and Oregon. He also represents clients as amici counsel in the California Supreme Court and Courts of Appeal.

Duane Morris Partner Robert M. Palumbos Appointed to the Pennsylvania Supreme Court’s Appellate Court Procedural Rules Committee

Duane Morris LLP is pleased to announce that Robert M. Palumbos, a partner in the firm’s Philadelphia office, has been appointed to serve on the Pennsylvania Supreme Court’s Appellate Court Procedural Rules Committee. Palumbos’ three-year term will commence on July 15, 2015. The committee’s principal function is to make recommendations to the state Supreme Court for refining and updating the rules of appellate procedure in light of experience, developing case law and new legislation.

To read the full text, please visit the Duane Morris website.

The Dangers of Relying on ECF Notices

Eighteen lawyers at two different law firms received ECF notifications of orders denying their client’s post-judgment motions. But the ECF notifications did not accurately describe the content of those orders. The attorneys relied on the incorrect descriptions in the ECF notifications and did not open the orders or realize that the post-judgment motions had been denied. As a result, they missed the 30-day deadline to appeal a $40 million judgment entered against their client. The Federal Circuit has now affirmed the trial court’s refusal to extend or reopen the deadline to appeal under Federal Rule of Appellate Procedure 4(a)(5) and (6).

This cautionary tale highlights a simple point: a lawyer should open and read every document received by ECF notification. Lawyers who rely on the clerk’s description in notifications do so at their own risk.

Duane Morris Attorney Thomas Newman Selected as the New York City “2013 Appellate Practice Lawyer of the Year”

Duane Morris congratulates Thomas R. Newman on being named the New York City “2013 Appellate Practice Lawyer of the Year” by Best Lawyers. Those honored as the “Lawyer of the Year” in their specialty have received impressive voting averages amongst their peers, and are a select group, with only a single lawyer in each practice area and metropolitan area being recognized as such. Mr. Newman has also been recognized by Best Lawyers in America for both Appellate Practice and Insurance Law since 2007, and is listed in Chambers USA: America’s Leading Lawyers for Business in Insurance: Dispute Resolution, both in New York and Nationwide.

“What Trial Lawyers Can Learn from Appellate Lawyers: Effective Appellate Advocacy Actually Begins at Trial”

Duane Morris partner Robert Byer will lead an ALI-CLE video webcast on the subject of “What Trial Lawyers Can Learn from Appellate Lawyers: Effective Appellate Advocacy Actually Begins at Trial” on Thursday, October 4, 2012.

Appellate advocacy and adjudication are fundamentally different from what transpires in trial courts. The failure to recognize critical differences, including how the perspective of an appellate judge differs from that of a trial judge, can result in the loss of an otherwise winnable appeal. This hour-long webcast examines those differences, and provides tips for how to prevent issues that may be critical in the appeals process. Click here to learn more about this seminar.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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