On February 17, 2016, in Ramara, Inc. v. Westfield Insurance Co., the US Court of Appeals for the Third Circuit held that an order requiring an insurer to pay its policyholder for costs incurred during litigation and ordering that it provide legal defense to its policyholder going forward was an injunctive order, and therefore immediately appealable despite not being a final judgment ( (3d Cir. Feb. 17, 2016).

In April 2012, Anthony Axe was injured while working construction at a parking garage owned by appellee Ramara, Inc. Axe sued Ramara, as well as the general contractor responsible for the construction work, seeking damages for his injuries.

Ramara was insured by Westfield Insurance. When Ramara sought a defense from Westfield, Westfield refused, contending that the policy did not insure Ramara for Axe's claims. Ramara moved for partial summary judgment, claiming that Westfield had a duty to defend it. The district court granted the motion and ordered that if Ramara sought reimbursement for its costs it had to submit an itemized list of expenses. Ramara submitted the list, and the district court issued a supplemental order entering judgment against Westfield for the already-accrued legal fees of Ramara's defense and mandating that Westfield prospectively provide defense to Ramara in the underlying action. Westfield appealed, and Ramara argued that the Third Circuit lacked jurisdiction over the appeal of an interlocutory order.

The Third Circuit held that it had jurisdiction over the appeal because the order being appealed was an injunctive order. An injunctive order, even if it is not a final judgment, is immediately appealable under 28 U.S.C. § 1292(a).

The Third Circuit noted that how a district court characterizes its order is not determinative. The Third Circuit applies a functional test to determine whether an order is injunctive. An order is injunctive if it:

Applying the above test, the Third Circuit found that the district court's order adjudicated some of the relief Ramara sought by requiring the insurer to provide a legal defense going forward, and was enforceable pendente lite. Even though the court in part directed specific payment of costs, relief which is legal in nature, the further mandate that Westfield defend Ramara prospectively was an order of payment that was forward-looking and indeterminate, making it in part equitable relief consistent with an injunction.

Practitioners should be aware that how a district court characterizes an order is not determinative of how it will be treated by an appellate court.