To Appeal or Not to Appeal

MCC: What are the important factors in determining whether to appeal?

Wheaton: “To Appeal or Not to Appeal” is the title of a presentation I've given to different audiences, and there are many things to consider. The first question is not “should I appeal” but “can I appeal?” You'd be surprised how many people think you can immediately appeal any and all adverse decisions. That is not the case. Interlocutory appeals are rarely allowed or accepted, except for specific, narrow types of rulings, and there is a good reason for that: courts don’t want cases ping-ponging from one court to another; they generally want cases to finish completely at the trial court before going to the next level. That is not to say that interlocutory appeals should never be considered. Some issues are important enough and will have enough impact on the remainder of the case that you should seriously consider an immediate appeal, such as the grant or denial of injunctive relief, class action certification or decisions about where a case will proceed.

Assuming you can appeal, actually taking an appeal should not be a knee-jerk reaction. There are many things to consider. First is the likelihood of success on appeal – what is the standard of review: is the appellate court required to give deference to the trial court or will it review the decision on a clean slate? What is the reputation in the appellate court of your trial court judge? Are they usually affirmed and therefore carry a presumption of correctness on appeal? Remember that reversals are the exception and not the rule, and that it is always an uphill battle for an appellant. You should also consider the larger business consequences of continuing to pursue a case; for example, is this a commercial dispute with a company that you're still doing business with? If so, would it be better going forward to make peace and put this one behind you? If there is a likelihood of settling this case, would an appeal help push it towards settlement or away? Did you prevail on certain issues that will now also be at risk if the other side files a cross-appeal?

Of course, the costs of an appeal must also be considered. There will be additional legal fees, and if there is a judgment against the client, it will likely be required to post a bond or another form of security pending appeal. Are they able to do so, and how will that impact the business?

Finally, the issue involved might be a fight you want to fight, but is this the case in which to do it? Are there related cases in your client’s pipeline that might deliver a better result? So the questions “can we do this” and then “should we do this” are distinct, and both need to be answered, in that order, before proceeding.

MCC: I see how that connects with the idea of managing a nationwide team.

Wheaton: Exactly. Our more sophisticated clients – very large corporations that do business throughout the United States – are aware of this too. They want to make the law in their industry. You always have to keep the bigger picture in mind. For example, a client may have adverse decisions in three states, all about the same product or legal issue; therefore, as to an appeal, we will ask, which case has the best facts for the client; which state has the best law for the client; and where is the composition of the appellate court most advantageous for the client? In other words, in which of these cases do we have the best chance of making good law and the lowest risk of setting bad precedent? That's the one you pursue. If that means you settle the other two or take a loss on them, then so be it.

MCC: What about a connection with business issues?

Wheaton: Deciding whether or not to appeal absolutely ties in with business issues. The first priority is determining the best strategy for the business overall; business matters should drive legal matters wherever possible, not the other way around. This ties in with the bigger picture we just discussed: how will an appellate victory or loss affect the business, the client’s relationships with customers and suppliers, its public image, and future cases and claims?

MCC: Why should companies consider bringing in a new attorney at the appellate level? What is the value of a fresh perspective?

Wheaton: It's absolutely crucial at the appellate level to get an appellate attorney involved. Appellate law is very rule bound, and the importance of familiarity with the appellate court’s rules and preferences and, by the same token, the appellate court’s familiarity with appellate counsel cannot be overstated. It’s never too early to get appellate counsel involved, particularly in significant cases that are likely to end up on appeal. Appellate counsel should be part of the team from the outset to dot the i’s and cross the t’s and ensure that everything necessary to preserve issues for appeal is being done.

Often we are brought into cases that nobody thought were going to be especially significant, but they suddenly have become important because the jury came back with an unexpectedly large verdict or the judge made a ruling that will have a wide-ranging impact. It’s good to then get new counsel involved, whether that attorney is at your trial counsel's firm or from a totally different firm, because unlike trial counsel, an appellate specialist can approach a case with the same perspective that the appellate court will take.

If you've tried a case, you have lived that case. You're very emotional about it. You have pet issues and an understanding that often took years to achieve. Trial lawyers usually assume that the appellate court has the same insights. It doesn’t. So you have to take a step back and be able to explain this case in a way that someone new to it will understand. A Michigan Court of Appeals judge once described it in a way that for me creates the perfect image. He said that being an appellate judge when the trial lawyer writes the brief or argues the case is like being at a cocktail party where you are at the fringe of a conversation that involves shorthand and first names and inside jokes. They all get it, but you really don't know what they're talking about. Then they turn to you and ask, “what do you think, what should we do?”

I think of that story every time I write an appellate brief, because it reminds me that I have to start from scratch and explain in elementary terms, for instance, that this is a personal injury case, these are the relevant facts, this is what happened below, and these are the tests under the applicable law. You have to remember that in one day, an appellate judge may hear a criminal case, a personal injury case and a sophisticated contract dispute. Trial lawyers generally assume a familiarity with the facts and the area of the law because they have lived the case with trial judges who are equally familiar or who practice in this niche area all the time. So the value of fresh eyes for the appellate lawyer is that we are used to looking at the case through the same lens as the new judges. We can also help narrow the issues for the next level of litigation as we are not as emotionally involved as trial attorneys.

MCC: Let’s talk about some cases.

Wheaton: I worked on a significant case last year for Chrysler involving when a dealer can prevent a manufacturer like Chrysler, Ford or Honda from opening another dealership within the same general vicinity. The case addressed whether an amendment to the Michigan Motor Vehicle Dealers Act that enlarged the dealer’s exclusive territory was retroactive. The Court of Appeals answered yes, and we were able to convince the Michigan Supreme Court to take the case and on appeal reverse. It was a big victory for Chrysler and other car manufacturers.

I have also had a series of recent cases in the Michigan Supreme Court, Michigan Court of Appeals, and the federal Sixth Circuit Court of Appeals regarding challenges to mortgage foreclosures. Unfortunately, many borrowers have defaulted on their mortgage loans. The lenders foreclose, and borrowers’ attorneys have been very creative in coming up with theories to set aside foreclosures. It is sad, but a mortgage is a contract, and the banks have rights in collateral that they should be able to exercise. We have been able to strictly limit those challenges. At a recent hearing, the court asked a borrower’s attorney if the Saurman, Kim and Bryan cases required that his claims be dismissed, and I realized those were all Dykema cases. So within this area of financial services, we have made law in Michigan and the Sixth Circuit, to the advantage of our clients such as Bank of America, JP Morgan Chase and Wells Fargo, among others.

MCC: Let's talk about Dykema’s National Trial Team. What is the current landscape for case outcomes, and what is the significance of the team’s experience in having taken more than 650 cases to verdict?

Wheaton: Trying that many cases is very unusual. I don't know the exact percentages, but over 90 percent of cases settle before trial. That’s just the way it goes, because it is the less expensive alternative in our system. Even if you know you are right, even if you know you are likely going to win, it's still cheaper to settle then to litigate a case to victory because the loser doesn’t pay the other side's attorneys’ fees. Alternatively, not all claims are meritless. Your client may be in the wrong, or even if not, for one reason or another there may a good chance they will not prevail, and settling reduces that risk or provides compensation where compensation is due.

Litigation, meaning preparing for a trial, is strange because in most cases, you're preparing for something that will never happen; nevertheless, you still have to prepare. That preparation is not wasted, however, as it can get the case ready for a dispositive motion or a favorable settlement on the courthouse steps that would not otherwise have been reached. It is precisely because so few cases are tried that having the kind of trial experience my partners can claim is unique and invaluable. In the event your case actually does go to trial, you want to have experienced trial attorneys on your side, not attorneys who have simply prepared for the “big day.”

MCC: Does this kind of trial experience make a difference when you're talking through issues with clients during the early stages of a case?

Wheaton: Absolutely. The first thing we evaluate in any case is whether we can get the case dismissed as a matter of law from the outset, which requires a familiarity with the legal elements of a claim; drafting jury instructions and opening and closing arguments gives you that familiarity. If that does not work or is not possible, we will proceed through discovery, again with an eye towards preparing the case for summary judgment. That requires gathering the relevant evidence and deposition testimony. An attorney experienced with witness examination and cross-examination, as is gained by trying cases, can do this best. An experienced trial attorney also knows the theories and defenses that will resound with a jury, which will shape overall case strategy and development going forward.