## Facts

- Desktop Direct, Inc. used the trade name “Desktop Direct” in selling computers and related equipment.
- Digital Equipment Corporation began using the name “Desktop Direct from Digital” to market a new service.
- Desktop filed a federal trademark action against Digital in the District of Utah alleging unlawful use of the “Desktop Direct” name.
- The parties reached a confidential settlement in March 1992 under which Digital paid for the right to use the name and Desktop waived damages and agreed to dismissal.
- Desktop filed a notice of dismissal in district court pursuant to the settlement.
- Months later, Desktop moved to vacate the dismissal and rescind the settlement, alleging Digital misrepresented or failed to disclose material facts during negotiations.
- The district court granted the motion, vacated the dismissal, and allowed the litigation to proceed.
- Digital sought an immediate appeal, claiming the settlement gave it a contractual “right not to stand trial.”

## Issues

1. Whether an order vacating a settlement-based dismissal and refusing to enforce the settlement is immediately appealable as a collateral order under 28 U.S.C. § 1291.
2. Whether a contract-based claim of a “right not to stand trial” is sufficiently important and effectively unreviewable after final judgment to satisfy the collateral order doctrine.

## Decision

- The Supreme Court affirmed the dismissal of Digital’s appeal for lack of appellate jurisdiction.
- The Court held that an order denying effect to a settlement agreement and reopening the case is not immediately appealable under § 1291’s collateral order doctrine.
- The Court treated the collateral order doctrine as a narrow exception to the final-judgment rule and declined to expand it to settlement-enforcement disputes.

## Legal Principles

- Under § 1291, appellate jurisdiction generally requires a final decision resolving the case; interlocutory review is limited.
- The collateral order doctrine permits immediate appeal only for a small class of orders that (1) conclusively determine the question, (2) resolve an important issue separate from the merits, and (3) are effectively unreviewable after final judgment.
- Whether an order is collateral-order appealable is assessed by category, not by case-specific convenience or perceived unfairness from waiting.
- Contractual expectations arising from private settlement agreements do not equate to constitutional, statutory, or public-policy-based immunities that may justify immediate appeal.
- A refusal to enforce a settlement is ordinarily reviewable after final judgment, when an appellate court can correct error by ordering enforcement and undoing improper proceedings.
- Allowing collateral-order appeals for settlement enforcement would risk piecemeal appeals and weaken the final-judgment rule.

## Conclusion

The Court held that a district court order vacating a settlement-based dismissal and refusing to enforce the settlement is not immediately appealable as a collateral order because the asserted contract-based “right not to stand trial” lacks the required public-law importance and can be reviewed effectively after final judgment.


Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994)