Izumi Seimitsu Kogyo Kabushiki Kaisha v. U. S. Philips Corp.

1993-11-30

Headline: Court dismisses review of whether settling parties can vacate trial judgments, refusing to decide if a nonparty indemnitor can intervene, leaving vacatur practice unchanged and affecting third-party rights.

Holding: The Court dismissed the writ of certiorari as improvidently granted because Izumi’s separate question about being allowed to intervene on appeal was not presented in its petition, so the Court would not decide the vacatur issue.

Real World Impact:

Limits nonparty indemnitors’ ability to block vacatur of settled judgments on appeal.
Leaves appellate vacatur practice unchanged for now, affecting third-party rights.
Makes it harder for third parties to obtain Supreme Court review after denied intervention.

Topics: appeals procedure, settlement effects, third-party intervention, vacating trial judgments

Summary

Background

A Japanese razor maker (Izumi) had backed U.S. distributors that were sued by a rival (Philips). After lengthy Florida litigation produced a big judgment for the distributors, Philips and one distributor (Windmere) settled on appeal and jointly asked the appeals court to vacate the trial-court judgments. Izumi tried to intervene on appeal to oppose vacatur because the judgment mattered for related litigation and for its indemnity obligations, but the Federal Circuit denied intervention and granted vacatur.

Reasoning

The single question Izumi put before the Supreme Court asked whether appeals courts should routinely vacate final trial judgments when the parties settle on appeal. Izumi later raised a separate question about whether it should have been allowed to intervene to oppose vacatur. The Court said that issue was not fairly included in Izumi’s petition and that the Court will consider unpresented questions only in rare cases. Treating the intervention question as a threshold, standing-like issue distinct from the vacatur question, the Court declined to decide it and dismissed the writ of certiorari as improvidently granted.

Real world impact

The decision leaves in place the appeals-court handling of joint vacatur motions for now and prevents Izumi from getting Supreme Court review of the intervention denial. That means nonparty indemnitors and other third parties remain limited in their ability to challenge vacatur after their motion to intervene is denied, at least in this case. Because this was a dismissal, the Court did not resolve the broader rule on vacatur or intervention and the issue could return in another case.

Dissents or concurrances

Justice Stevens (joined by Justice Blackmun) dissented, arguing the intervention question was fairly included and that courts should be cautious about routinely vacating judgments that affect third parties and the public interest.