Salix Pharmaceuticals, Ltd., et al. v. Norwich Pharmaceuticals Inc.

This petition concerns core appellate procedure. In reviewing bench trials, the courts of appeals must “discuss” and “analyze” the district court’s findings, not make factual findings on their own. Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986). The Federal Circuit disregards this limitation. In the decision below, the panel majority affirmed a judgment based on evidence never credited by the district court. Crediting this evidence required the panel majority to decide a critical factual dispute left unresolved in the district court’s findings. The panel majority’s willingness to find facts in the first instance led to a second error: the district court relied heavily on an impermissible piece of evidence. The decision below holds that this error was harmless because, according to the panel majority’s findings, other evidence “established” the disputed fact. The questions presented are:

1. When a district court’s findings of fact are unsupported by the evidence the district court relied on, may a court of appeals affirm based on other evidence in the record, particularly when the relevance of that evidence depends on unresolved factual disputes.

2. When a district court’s findings of fact rely on impermissible evidence, what standard applies to determine whether the error is harmless.