BROKER GENIUS INC v. LLC 4311 NE 68116 69 NJ 07726 LLC 7202 330 NE 68128 LLC 5706 NC 27602 (2019)

SUMMARY ORDER

Appellants Drew Gainor and Seat Scouts, LLC (collectively, “Seat Scouts”) appeal the district court's order preliminarily enjoining Seat Scouts from making its product Command Center available to the public. Seat Scouts also appeals from the district court's order finding it in contempt based on Seat Scouts's launch of its Event Watcher application. On February 7, 2019, the district court entered a permanent injunction, precluding Seat Scouts from making and distributing any application derived from Broker Genius's product AutoPricer. We assume the parties’ familiarity with the underlying facts, the procedural history, and the arguments presented on appeal, which we recite only as necessary to explain our decision.

A. Preliminary Injunction

Due to the district court's entry of a permanent injunction, Broker Genius asks us to dismiss Seat Scouts's appeal as moot. We agree. When a district court enters a permanent injunction, it renders an appeal from a preliminary injunction moot. See, e.g., Webb v. GAF Corp., 78 F.3d 53, 56 (2d Cir. 1996) (holding entry of a permanent injunction moots an appeal from a preliminary injunction), Town of W. Hartford v. Operation Rescue, 991 F.2d 1039, 1043 (2d Cir. 1993) (dismissing appeal from preliminary injunction upon entry of permanent injunction), Rosado v. Wyman, 437 F.2d 619, 624-25 (2d Cir. 1970) (concluding that the entry of a permanent injunction left the preliminary injunction “technically no longer operative” such that an appeal from the preliminary injunction was moot). The district court's February 7 entry of a permanent injunction has mooted Seat Scouts's appeal of the preliminary injunction.¹

B. Order of Contempt

Seat Scouts argues that the district court improperly extended the preliminary injunction in finding that the use of Event Watcher was barred by the injunction and, as a result, holding Seat Scouts in contempt. We do not have jurisdiction to review this argument because the order holding Seat Scouts in contempt, without also imposing sanctions, is not a final order. See Forschner Grp., Inc. v. Arrow Trading Co., Inc., 124 F.3d 402, 410 (2d Cir. 1997) (holding that “an order adjudging a party in contempt unaccompanied by sanctions is not final and therefore is not appealable”); see also In re Tronox Inc., 855 F.3d 84, 96-97 (2d Cir. 2017) (holding that an order entered by the district court in connection with a pending contempt motion but that made no contempt finding and awarded no contempt sanctions was not an appealable final order); cf. SEC v. Smith, 710 F.3d 87, 94 (2d Cir. 2013) (explaining that appellate courts have jurisdiction to review unappealable issues only when they are “inextricably bound up with” a preliminary injunction such that “review of the otherwise unappealable issue is necessary to ensure meaningful review of the appealable one” (internal quotation marks omitted) ).

Here, the district court stated:

[t]his Court has no evidence with respect to what damages Broker Genius has suffered as a result of defendants’ contempt. The parties may make additional submissions on that subject within 31 days or if they're able [to] reach an agreed-upon amount themselves, subject to approval by the Court obviously.

App. 105. The district court's statement clearly contemplates an assessment of damages that has yet to be made. We are therefore without jurisdiction to review the contempt order as it currently stands.

The appeal from the order dated May 14, 2018, entering the preliminary injunction, is DISMISSED as moot. We DISMISS for lack of jurisdiction the appeal from the order dated August 24, 2018 holding Seat Scouts in contempt.

FOOTNOTES

1.   Broker Genius also seeks a limited remand to the district court for the purpose of requesting that the district court reduce the security posted by Broker Genius in compliance with the district court's preliminary injunction. That motion is denied as moot, essentially for the same reasons that the appeal of the injunction is dismissed.