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Sixth Circuit Accepts Interlocutory Appeal Pursuant to 28 U.S.C. § 1292(b)

Posted in News and Analysis, Recent Cases

Interlocutory appeals under 28 U.S.C. § 1292(b) are granted “sparingly and only in exceptional cases.”  See e.g. In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002).  But this month the Sixth Circuit accepted just such an appeal.

In Community Trust Bancorp., Inc., v. Community Trust Financial Corporation, et al., No. 10-cv-00062.pdf, which is pending in the Eastern District of Kentucky, plaintiff Community Trust Bancorp, a Kentucky corporation, sued non-Kentucky Community Trust Financial Corporation and its wholly owned subsidiaries for trademark infringement under the Lanham Act.  Defendants moved to dismiss the complaint for lack of personal jurisdiction.  The Eastern District denied Defendants’ motion, holding that Defendants conducted sufficient activities in Kentucky to establish personal jurisdiction because Defendants “contract[ed] to supply services or goods in this Commonwealth,” most notably online banking services.

Defendants thereafter filed a motion with the Eastern District certifying an appeal to the Sixth Circuit from the Eastern District’s “Order finding that the Plaintiff had established a prima facie case of personal jurisdiction over the Defendant’s and denying the motion to dismiss for lack of personal jurisdiction.”  The Eastern District held that 28 U.S.C. 1292(b) grants the Court discretion to certify an appeal when certain conditions are met:  “(1) The question involved must be one of law; (2) it must be controlling; (3) there must be substantial ground for difference of opinion about it; and (4) an immediate appeal must materially advance the ultimate termination of the litigation.”  Concluding that each of these conditions were met in this case, the Eastern District granted Defendants’ motion to certify an appeal under § 1292(b).  Defendants then petitioned the Sixth Circuit for permission to appeal.

On September 2, 2011, the Sixth Circuit granted the petition.  The Court held that even though the case had been certified, Defendants “must still persuade us that exceptional circumstances justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.”  The particular issue, as framed in the district court, was whether the actions of Kentucky residents signing up for online banking accounts and Community Trust sending them, via the internet, passwords for those accounts “revealed a specific intention to interact with these customers, even after they became Kentucky residents.” Following the same factors set forth by the district court, the Sixth Circuit granted permission to appeal because the law in this area is unsettled and the question of personal jurisdiction arose early in the case and will recur throughout the proceedings. 

Given the rarity of § 1292(b) appeals, this case is important for defining § 1292(b) jurisprudence.  The Sixth Circuit appears willing to short-cut the final appeal rule in cases with a well-defined jurisdictional issue, which will ultimately need to be resolved on appeal anyway.