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June 29, 1999


The opinion of the court was delivered by: Cote, District Judge.


On December 23, 1998, plaintiff SATCOM International Group PLC ("SATCOM") filed this action seeking damages and a permanent injunction as well as interim injunctive relief against defendant ORBCOMM International Partners, L.P. ("ORBCOMM"). On March 18, 1999, the Court issued an Order denying the motion for a preliminary injunction. On April 20, 1999, SATCOM filed a notice of appeal from this Court's March 18, 1999 Order, which notice was subsequently withdrawn.

On May 27, 1999, the Court issued an Opinion and Order denying plaintiff's motion to stay proceedings before this Court pending arbitration and granting defendant's cross motion to stay arbitration and to enjoin plaintiff from further proceeding in arbitration. The next day plaintiff filed a notice of appeal from that Opinion and Order and filed a motion before this Court "for an order enjoining any further prosecution of this action during the pendency of plaintiff's appeal" until the issuance of the mandate of the court of appeals. On the same day, the Court declined to decide plaintiff's motion on ripeness grounds since the defendant had not yet indicated an intent to proceed with active litigation before this Court during the pendency of the appeal. On June 4, 1999, defendant wrote the Court indicating its intent to proceed before this Court by filing a motion for summary judgment. Plaintiff's motion is therefore ripe for adjudication.*fn1

In general,

  "[t]he filing of a notice of appeal is an event of
  jurisdictional significance — it confers jurisdiction
  on the court of appeals and divests the district
  court of its control over those aspects of the case
  involved in the appeal."

United States v. Rodgers, 101 F.3d 247, 251 (2d Cir. 1996) (quoting Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982)). The district court does not regain jurisdiction until issuance of the mandate by the court of appeals. Id. The divestiture of jurisdiction, however, is not "automatic" and instead is "guided by concerns of efficiency. . . ." Id. "`[I]t is a judge made rule originally devised in the context of civil appeals to avoid confusion or waste of time resulting from having the same issues before two courts at the same time.'" United States v. Salerno, 868 F.2d 524, 540 (2d Cir. 1989), (quoting United States v. Claiborne, 727 F.2d 842, 850 (9th Cir. 1984)). As noted by the Second Circuit:

  Whatever the superficial attractiveness of a per se
  rule that filing of a notice of appeal automatically
  divests the district court of jurisdiction as to
  matters covered by the notice, such a rule is subject
  to abuse, and our application of the divestiture rule
  must be faithful to the principle of judicial economy
  from which it springs.

Rodgers, 101 F.3d at 251. Thus, in appropriate circumstances, the filing of an appeal does not divest the district court of jurisdiction. For example, the district court retains jurisdiction if the filing of the notice of appeal was from a non-appealable order. See Rodgers, 101 F.3d at 252; Burger King Corp. v. Horn & Hardart Co., 893 F.2d 525, 527 (2d Cir. 1990); SEC v. America Bd. of Trade, Inc., 829 F.2d 341, 344 (2d Cir. 1987); Leonhard v. United States, 633 F.2d 599, 610 (2d Cir. 1980).

Appellate jurisdiction is defined by statute and "generally is limited to appeals from final judgments of the district court pursuant to 28 U.S.C. § 1291 and from certain interlocutory orders pursuant to 28 U.S.C. § 1292." Kahn v. Chase Manhattan Bank, N.A., 91 F.3d 385, 387 (2d. Cir. 1996). Where the appeal is from a final judgment, the district court can take only limited action during pendency of the appeal. For example, the district court is free to correct clerical errors in a judgment or order without leave of the court of appeals prior to the docketing of the appeal, see Rule 60(a), Fed.R.Civ.P.; Burger King, 893 F.2d at 527, and to take actions in aid of the appeal, see Rule 7, 8, Fed. R.App. P. A district court may also, without leave, grant relief to preserve the status quo pending appeal. See Rule 62(c), Fed. R.Civ.P.; Kidder, Peabody & Co. v. Maxus Energy Corp., 925 F.2d 556, 565 (2d Cir. 1991); International Ass'n of Machinists & Aerospace Workers, AFL-CIO v. Eastern Air Lines, Inc., 847 F.2d 1014, 1018 (2d Cir. 1988). The district court may deny a Rule 60(b) motion after the filing of the notice of appeal, although it lacks jurisdiction to grant such a motion. See Selletti v. Carey, 173 F.3d 104, 109 (2d Cir. 1999) (citing Toliver v. County of Sullivan, 957 F.2d 47, 49 (2d Cir. 1992)). Finally, where the final judgment entered by the district court does not reach the question of attorney's fees, the district court may proceed to award fees during pendency of the appeal. See Toliver, 957 F.2d at 49; 15B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 3915.6 (2d ed. 1992). See also Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A., 527 F.2d 966, 973 (2d Cir. 1975) (district may order consolidation unrelated to final order during pendency of the appeal).

Appeals from interlocutory orders are generally authorized by the "collateral order" exception to the final order rule and by 28 U.S.C. § 1292(a)-(b). See Rein v. Socialist People's Libyan Arab Jamahiriya, 162 F.3d 748, 755 (2d Cir. 1998). In such cases, jurisdiction is divested only with respect to "issues decided in the order being appealed." Webb v. GAF Corp., 78 F.3d 53, 55 (2d Cir. 1996). There is no complete divestiture of jurisdiction where "the judgment appealed from does not determine the entire action, in which case the district court may proceed with those matters not involved in the appeal." New York State Nat'l Org. for Women v. Terry, 886 F.2d 1339, 1350 (2d Cir. 1989). As a result, an appeal from an interlocutory order granting or denying a preliminary injunction, which is appealable under 28 U.S.C. § 1292(a), does not divest the district court of jurisdiction, and the case proceeds on the merits unless otherwise ordered. See, e.g., Webb, 78 F.3d at 55; Terry, 886 F.2d at 1350. In addition, in at least some circumstances, the district court may proceed with the merits where there is a frivolous appeal from an interlocutory order. See Salerno, 868 F.2d at 540 (frivolous interlocutory appeal on double jeopardy grounds did not displace jurisdiction to proceed to trial).

As discussed in greater detail in this Court's May 27, 1999 Opinion and Order, the agreements at issue fall within the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention"), 9 U.S.C. § 201-208. Enacted in 1988, Section 16(a) of the Federal Arbitration Act ("FAA") authorizes an immediate appeal from an interlocutory order "denying an application under section 206 [of the Convention] to compel arbitration" and from an "interlocutory order granting . . . an injunction against an arbitration that is subject to this title. . . ." 9 U.S.C. § 16(a). The purpose of Section 16 is "`to promote appeals from orders barring arbitration and limit appeals from orders directing arbitration.'" Augustea Impb Et Salvataggi v. Mitsubishi Corp., 126 F.3d 95, 98 (2d Cir. 1997) (quoting Filanto S.p.A. v. Chilewich Int'l Corp., 984 F.2d 58, 60 (2d Cir. 1993)). "Section 16 `is a pro-arbitration statute designed to prevent the appellate aspect of the litigation process from impeding the expeditious disposition of an arbitration.'" Id. at 99 (quoting David D. Siegel, Practice Commentary: Appeals from Arbitrability Determinations, 9 U.S.C.A. § 16, at 352 (West Supp. 1997)).

There is a circuit split as to whether a district court retains jurisdiction once an appeal has been filed under Section 16(a) of the FAA. In Britton v. Co-op Banking Group, 916 F.2d 1405, 1411 (9th Cir. 1990), a defendant appealed a district court's denial of his motion to compel arbitration. After the filing of the notice of appeal, proceedings in the district court continued, resulting in the entry of a default judgment because of a failure by the defendant to engage in discovery. On appeal, the Ninth Circuit viewed the case as one in which the district court was entitled to proceed with respect to matters not involved in the appeal, and "[s]ince the issue of arbitrability was the only substantive issue presented in this appeal, the district court was not divested of jurisdiction to proceed with the case on the merits." Id. at 1412. As a policy basis for its decision, the Ninth Circuit noted that

  the rule urged . . . would allow a defendant to stall
  a trial simply by bringing a frivolous motion to
  compel arbitration. The system created by the Federal
  Arbitration Act allows the district court to evaluate
  the merits of the movant's claim, and if, for
  instance, the court finds that the motion presents a
  substantial question, to stay the proceedings pending
  an appeal from its refusal to compel arbitration.

Id. (emphasis supplied). Under the Ninth Circuit approach, the district court has discretion whether to proceed once a notice of appeal from a denial of a motion ...

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