In Marketing Displays Int’l v. Shaw, No. 23-1028 (6th Cir. Feb. 22, 2024), the Sixth Circuit dryly notes that counsel who were appealing a preliminary injunction allowed it to become moot, in part because they obtained multiple extensions on their briefing schedule.
“In life, sometimes it’s better to show up late than not at all. But in law, tardiness can be costly. Here, the parties’ counsel received several extensions of this court’s briefing deadlines. In the meantime, the clock struck midnight on the underlying issue. As a result, this appeal is now moot.”
Plaintiff Shaw “left her job at Marketing Displays International (MDI) and began working for another company. But MDI thought Shaw’s new employment violated her one-year noncompete agreement, so it sued. During the litigation, MDI sought a preliminary injunction, which the district court granted on December 14, 2022 . . . . Relevant here, the injunction prevented Shaw from working for her new employer for one year.”
“Shaw appealed in January 2023. After several months of mediation, the parties began filing their appellate briefs in June. But because of six deadline extensions—three requested by each party—the parties didn’t finish their briefing until January 2024.” Defendant Shaw appealed only that part of the injunction that prevented her from going to work at her new employer, but by the time the case was fully briefed, the one-year period in the injunction had expired.
The Sixth Circuit dismisses the appeal as moot. It rejects, first, the prospect of damages from the injunction that prevented the defendant from going to work. “Shaw can’t collect these damages until she acquires a final judgment in her favor. See Univ. of Tex. v. Camenisch, 451 U.S. 390, 396–97 (1981). And here, the district court hasn’t issued a final judgment on MDI’s breach-of-contract claim . . . . Thus, her possible recovery at the end of the case doesn’t save this appeal from mootness” [emphasis in original].
Likewise, the prospect of attorney’s fees (under a contractual fee-shifting provision) did not save the appeal from mootness. “MDI’s right to attorney fees doesn’t hinge on the validity of the preliminary injunction. Thus, attorney fees can’t resuscitate this appeal, either.”
Finally, there was the issue of whether the Sixth Circuit could vacate the now-moot part of the preliminary injunction that prevented defendant from working. The Sixth Circuit holds that because the preliminary injunction has no preclusive effect (as an interlocutory order), there is no advantage in vacating it.
The panel concedes that “in some extraordinary cases, a moot preliminary injunction can have a preclusive effect on future litigation.” Yet here, the “order’s factual findings and legal conclusions do not bind the final resolution of MDI’s breach-of-contract claim. And there’s no possibility that the order will have a preclusive effect on a future preliminary injunction, either. Shaw challenges only the portion of the order that enforced the one-year noncompete clause in her contract. That clause has since expired, so MDI can’t seek a similar preliminary injunction in the future.”
Moreover, even if vacatur were an option, the panel concludes that the defendant would not be equitably entitled to that remedy. “As an equitable remedy, vacatur is subject to equity’s ‘clean-hands’ requirement . . . . So we’re unlikely to vacate a moot order when the losing party contributed to the appeal’s mootness. . . . . Here, Shaw requested three deadline extensions while the injunction’s one-year timer was ticking down—albeit two in the pursuit of a settlement. Thus, Shaw contributed to this appeal’s mootness . . . . To be sure, MDI also bears its fair share of the blame. After all, MDI requested three extensions of its own. But absent any indication that MDI was seeking to run out the clock, we can’t say that Shaw was ‘frustrated by the vagaries of circumstance’ or that ‘mootness result[ed]’ from unilateral action of the party who prevailed below.”
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